U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form for Registration of Securities
of Small Business Issuers Under Section 12(b)
or 12(g) of the Securities Act of 1934
PELICAN PROPERTIES INTERNATIONAL, CORP.
(Name of Small Business Issuer in its Charter)
Florida 65-0616879
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
38801 OVERSEAS HIGHWAY, BIG PINE KEY, FLORIDA 33043
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(Address of Principal Executive Offices) (Zip Code
(305) 872-2217
(Issuer's Telephone Number)
Securities to be registered under Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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Securities to be registered under Section 12(g) of the Act:
Common Stock, par value .001 par share
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(Title of Class)
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(Title of Class)
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Generally
The Company, through its predecessor is engaged in the ownership and
management of a recreational property in Ohio Key, Florida. The Company's
primary objective is the management of its existing property and the acquisition
and management of additional properties, in the United States or abroad, in the
recreational and leisure industry's "resort destination" segment. Through the
acquisition of all of the limited partnership interest and assets in Sunshine
Key Associates Limited Partnership, a Florida limited partnership (the
"Partnership") (collectively with Pelican the "Company") the Company presently
owns and operates a resort known as the Sunshine Key RV Resort and Marina
located on 75 acres which encompasses all of Ohio Key, Florida (the "Resort").
The Resort includes 405 recreational vehicle and camping sites, a 172-slip deep
water floating dock marina, a convenience store, bait and tackle shop, gas and
propane station, dive shop, laundry, food service snack bar and ice plant.
Recreational facilities include a swimming pool, tennis courts, shuffleboard
courts, playground, recreational hall, outdoor theater and several private
beaches.
Background
Pelican Properties International, Corp. was incorporated under the laws of
the state of Florida on June 1, 1990 under the name Optimum Computing Inc. The
Company was organized to acquire business opportunities through the acquisition
of assets or the capital stock of existing businesses.
The Resort, which was established in 1971, was acquired by the Partnership
in 1988. Financing for the acquisition was provided by NCNB, predecessor to
NationsBank of Florida, N.A. ("NationsBank"). In 1991 the Partnership filed a
petition for reorganization under Chapter 11 of the United States Bankruptcy
Code. The Resort was operated under the protection of the Bankruptcy Court until
November 1, 1991 when it was discharged.
Effective August 31, 1995, the Company entered into a Share Exchange
Agreement with the limited partners of the Partnership, whereby 99% interest in
the Partnership, which owned and operated the Resort until December 31, 1996 (as
discussed below), was acquired by the Company in exchange for 3,010,000 shares
of the Company's Common Stock, which amounted to approximately 69.7% ownership
of the Company.
Following the acquisition of a 99% interest in the Partnership in August
1995 and a subsequent default of the Partnership obligations to NationsBank in
December 1995, the Partnership on January 11, 1996 filed a petition for
reorganization under Chapter 11 and a Plan of Reorganization was filed March 5,
1996. On October 29, 1996, a Modified Third Amended
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Plan of Reorganization ("Plan") was confirmed by the Bankruptcy Court. The
Partnership was discharged on October 29, 1996.
On December 31, 1996, the Partnership entered into agreements with Ohio Key
I, Inc. and Ohio Key II, Inc., both wholly-owned subsidiaries of the Company
(the "Subsidiaries") pursuant to which the Subsidiaries were assigned and
assumed the assets and liabilities of the Partnership, excluding the
Partnership's interest in the proceeding again Monroe County Code Enforcement
Board. (See "Legal Proceedings.")
In connection therewith, the Subsidiaries and the Partnership entered into
a Loan Restructuring Agreement (the "Restructuring Agreement") and a Restated
Mortgage and Assumption Agreement (the "Agreement") with WAMCO XXII, LTD. (the
"Lender")(successor to NationsBank). The Restructured Loan in the amount of Four
Million Seven Hundred Thousand Dollars ($4,700,000) is evidenced by the Restated
Promissory Note and redocuments the indebtedness evidenced by the Final Judgment
to reflect the terms of the Stipulation, the Plan and Confirmation Order. The
restated mortgage and assumption agreement reflects the terms of the
"Restructuring Agreement". (See "Partnership's Outstanding Indebtedness;
Bankruptcy").
Sunshine Key Resort
The Company, through the Subsidiaries, owns and operates the Resort located
in the Florida Keys. The Sunshine Key Resort is the closest resort of its kind
to Looe Key National Sanctuary; considered to be the premiere location for
marine activities with two fishing bridges on either end of the property and a
diverse variety of coral and fish. The Resort enjoys publicity from ESPN sports
channel, as 2-3 fishing shows are broadcast each year from the marina at
Sunshine Key resort. The Resort offers the air, land and waterborne visitor a
home base near Key West, Florida. Located on Ohio Key at Mile Marker 39 on the
Overseas Highway (U.S. Route 1) and at Marker 20 on the Intracoastal Waterway,
the Resort destination offers a complete on-site rest and relaxation or vacation
experience, while being close enough to Marathon and Key West for airport access
as well as day and evening excursions.
The Marina portion of the Resort can accommodate boats up to 100' and has
172 boat slips, of which approximately 20% are occupied on full year leases, 50%
are occupied on a six-month lease basis, and 30% are available for the transient
visitors. There is boat storage for the regular visitors who do not require
regular access of a slip. A small marina store offers groceries, bait and tackle
and a dive shop that offers scuba/snorkel trips daily or sunset cruises and
kayaking. While repair service is not offered due to the limited demand and the
availability of competing services in the area, a forklift and work area is
provided to owners for do-it-yourself repairs and maintenance. There is a boat
ramp for those motorists who bring their own boat, but those without a boat of
their own can lease fishing boats and tackle or charter a captain from the
Resort. Marina customers can use the hot showers and Laundromat available at the
campground.
The campground portion of the Resort has 405 sites, including five
double-wide sites. Catering to recreational vehicles ("RVs"), the facility has
40 consigned rental units for non-
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owners. While most visitors do their own cooking, there is a small pool
side restaurant at the Resort which offers breakfast, lunch and an occasional
dinner.
On the road entrance to the Resort, the facility has a Chevron gasoline and
convenience store for travelers on U.S. 1 as well as guests at the Resort.
Management offices, including the check-in guard gate, are prominently located
at the road entrance.
While most people associate the Florida Keys with the immediate
availability of the Gulf of Mexico on the North and the Atlantic Ocean on the
South, with its boating, fishing, scenic views and incomparable sunrises and
sunsets, the Resort offers the visitor a wide variety of on-site recreation
facilities and amenities as well. Water-based recreation is the primary
attraction which the Resort exploits to the full potential. In addition to the
salt water bathing at its private beach, the Resort has a large freshwater
swimming pool with ample tanning and pool-side lounging area. Snorkeling and
diving opportunities are available and from its Marina, the Resort offers sunset
cruises and kayaking. There are also tennis and basketball courts, as well as
shuffleboard courts. As a family resort, the Resort caters to every age group,
with adult recreation rooms, a Teen Recreation Hall, and a children's
playground. The Resort is equipped with a dog kennel for families traveling with
pets. Promoting the community aspects of this mini-village, the Resort has two
outdoor theaters which are used for various special events, for the regular
fishing contests and for the full activities program. Subject to available
financing, the Company's management plans further enhancements and expansion to
the Resort.
Growth and Development; Business Strategy
The Company intends to pursue a strategy of growth and is seeking to expand
its operations through acquisitions of additional resort type properties.
Subject to the availability of financing and recognizing that major portions of
the "resort destination" market are "family owned" operations which can benefit
from the efficiencies of experienced central management and the availability of
financial resources to achieve full potential, management is focused on those
properties which will provide internal growth and increased profitability. The
Company intends to fund the acquisition of additional properties through the
public or private sale of its securities or by obtaining financing from
institutional or other financing firms.
As with the existing Resort, the Company will target locations where nature
and the environment are the primary appeal of the location. The targeted
properties in the recreational and leisure industry will be geographically
situated to have at least one property in season at all times. The Company will
seek to upgrade the facilities at each location to be in a position to attract
recreational visitors. A prime requisite for a newly acquired property will be
to incorporate all the natural beauty of the area.
A second type of target property considered will be in areas that have
endured as a tourist destination because of specific natural surroundings, or
areas that are situated in close proximity to public transportation with unique
natural beauty. These properties will be either RV Parks,
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Hotels, and/or resort accommodations. These locations may be within the
continental United States or abroad, and they will be well positioned in a
rapidly expanding tourist destination.
The third type of property to be targeted by the Company is under utilized,
over leveraged or capital deficit companies where current owners are financially
immobilized because of capital, liquidity, and tax requirements. These types of
investments will be structured so that long term value will be restored in the
target property through increased utilization accomplished through marketing and
capital improvements.
Marketing
Substantial advertising and marketing efforts by the former majority owners
of the Partnership have provided "name recognition" and a strong presence in the
industry for the Resort as a year-round destination. Currently, marketing is
conducted through the efforts of the Company's management. The Company has used
various marketing methods, including direct mailing, trade shows and RV
association publications, in-person solicitation and full color brochures and
printed advertising. The Resort also obtains guests through recommendations and
referrals from existing and former guests. In addition, the Company has entered
into a membership with a discount RV and camping club to market the Resort in
the off-season. The Partnership's management devotes substantial time and effort
to maintain continuing guest relationships. Management recognizes that
additional marketing is needed and intends to provide at least one full-time
employee to implement new marketing strategies for the Resort.
In that regard, management will seek to (i) maximize sales with an
extensive campaign to promote the Resorts to targeted groups, (ii) up-grade the
facilities to provide the most modern conferences and workshops, while
maintaining all the amenities for the level of comfort required by the guest,
(iii) add specialists to the Resort staff to support and sustain prolonged
growth under the marketing plan, and (iv) increase research efforts, through
consultants, to create additional follow-up programs as well as further
refinement of the Resort's competitive advantages.
Seasonality
The Company's business is considered seasonal with a large portion of its
revenues and profits being derived between December and April, and between July
and August. There can be no assurances that revenues received during these
periods will support the Company's operations for the rest of the year.
Competition
The Company is engaged in a highly competitive segment of the hotel and RV
resort industry. The Company competes directly or indirectly with many
companies, a number of which are larger, better capitalized and more
established. Although the Company believes it has a competitive advantage
because of its location and long time presence and existence, as well as a
constant focus on upgrading and maintaining the existing facilities in order to
enhance the
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available recreational opportunities, there can be no assurance that the
Company will be able to compete favorably in the future.
Employees
The Company currently has two employees consisting of its President and
Chief Financial Officer. Management believes that its present employees are
adequate to support its current operations although the Company intends to hire
additional employees upon the acquisition of additional properties. The Company
currently has approximately 45 employees, most of which are leased through the
employment agency of Staff Leasing.
Partnership's Indebtedness and Bankruptcy
To finance the cost of the acquisition of the Resort, in 1989 and 1990 the
Partnership (prior to the acquisition by the Company) incurred indebtedness (the
"Loan") of approximately $7,100,000 with NationsBank pursuant to a consolidated
loan agreement ("Loan Agreement"). As a result of certain actions of the former
general partner of the Partnership, Capital Equities Corp., the Loan was in
default in 1991, at which time the Partnership filed a petition for
reorganization under Chapter 11 of the United States Bankruptcy Code. From 1991
to 1994, the Partnership remained current on its obligations to its creditors
through revenues generated from the Resort. In 1994, NationsBank refused to
fulfill its agreement to extend the maturity date of the Loan, and the
Partnership thereafter entered into a settlement agreement ("Settlement
Agreement") with NationsBank wherein the Partnership was obligated to pay
NationsBank the sum of $5,300,000 on or before November 15, 1995. Thereafter, on
December 5, 1995, NationsBank and the Partnership entered into a modification
agreement ("Modification Agreement"). Following a default by the Partnership on
December 16, 1995, NationsBank gave notice of acceleration of the Note and its
intention to seek judgment against the Partnership and foreclose on its security
interest in the Resort. On January 11, 1996 the Partnership filed a petition for
reorganization under Chapter 11 of the United States Bankruptcy Code seeking
relief from its creditors. On February 23, 1996, NationsBank filed a Motion to
Dismiss, which was denied. On March 5, 1996, the Partnership filed its Plan with
the court, which Plan was confirmed by the court and the Partnership was
discharged on October 29, 1996.
Pursuant to the Confirmation Order, Lender has the principal claim and is
secured by a first priority lien in and upon the real property owned by the
Subsidiaries and upon which it operates the Resort. Under the Plan, the
Subsidiaries made cash payments of approximately $1 million and the notes were
consolidated and restated in a single note in the principal amount of $4,700,000
with the following payment terms:
(i) During the period commencing on December 29, 1996 and ending on
August 29, 1997, the restated note will not bear interest. In lieu of the
interest, the Subsidiaries will make monthly payments of $5,000 each commencing
on May 29, 1996 through and including August 29, 1997 to compensate the Lender
for its agreement to waive interest on the restated note during this period.
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(ii) Commencing on August 30, 1997, the restated note will bear interest
at nine (9%) percent per annum. On September 29, 1997 through and including
September 29, 1999, the Subsidiaries will make equal amortizing monthly payments
of principal and interest on the restated note determined by reference to
standard amortization tables using an interest rate of nine (9%) percent per
annum, the principal balance of the restated note on October 30, 1996 and an
amortization period of twenty-five (25) years. Assuming the principal balance is
$4,700,000, the monthly payment amount will be $39,442.23. The restated note
will mature on October 30, 1999, at which time the outstanding principal balance
and all accrued interest will be due and payable in full.
(iii) If the restated note is repaid in full before November 30, 1997,
the Subsidiaries will receive an early payment discount equal to eight (8%)
percent of the outstanding principal balance of the restated note on the date of
repayment. In order to receive the discount, the Subsidiaries must repay all
outstanding accrued interest and any other sums owed to the Lender on the date
of early payment.
(iv) If the restated note is repaid in full after November 30, 1997 and
before November 30, 1998, the Subsidiaries will receive an early payment
discount equal to five (5%) percent of the outstanding principal balance of the
restated note on the date of repayment. In order to receive the discount, the
Subsidiaries must repay all outstanding accrued interest and any other sums owed
to the Lender on the date of early payment.
(v) No early payment discount will be available after November 30, 1998.
(c) The Subsidiaries will have a one-time option to extend the maturity
of the restated note until October 30, 2002 as long as they comply with the
following conditions:
(i) On or before October 29, 1999, the Subsidiaries must pay the Lender
an extension fee equal to one (1%) percent of the outstanding principal balance
of the restated note and reduce the principal balance of the restated note by
$500,000.
(ii) The Subsidiaries must provide the Lender with written notice of its
election to exercise the extension option by September 30, 1999.
(d) If the Subsidiaries elect to exercise the extension option and meets
all conditions required by the Lender for the exercise thereof, the following
terms will apply during the extended term of the restated note:
(i) The Subsidiaries will execute a renewal of the restated note (the
"Renewal Note") which will bear an interest rate of 9.75% per annum commencing
on October 30, 1999.
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(ii) November 29, 1999 through and including September 29, 2002, the
Subsidiaries will make equal amortized monthly payments of principal and
interest on the Renewal Note determined by reference to standard amortization
tables using an interest rate of 9.75% per annum, the outstanding principal
balance of the restated note on October 30, 1999 and amortization period of
twenty (20) years period. The restated note will mature on October 30, 2002 at
which time the outstanding principal balance plus accrued interest will be due
and payable in full.
The Company also entered into a promissory note for $1,000,000 at 12% per
annum. This note is payable in 23 consecutive monthly installments of interest
only commencing on February 1997 and ending December 1998, at which time the
outstanding principal balance and accrued interest will become due and payable
in full.
Legal Proceedings
The Company knows of no material litigation or claim pending, threatened or
contemplated to which the Company is or may become a party.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with the
consolidated financial statements of the Company and the Notes thereto. The
Company has a single asset that operates as a wholly owned subsidiary, Ohio Key
I, Inc. The references to operations generally refer to this subsidiary unless
otherwise noted. Prior to the December 31, 1996 acquisition by Ohio Key I, Inc.,
the asset was owned by Sunshine Key Associates, Limited Partnership.
Results of Operations
Six Months Ended June 30, 1997 Compared to Six Months Ended June 30, 1996
For six months ended June 30, 1997 revenues increased by $376,230 or 19.42%
as compared to the six months ended June 30, 1996. The increase was primarily
attributable to an increase in the Company's site rental operation that
increased $192,521 or 19.38%. The significance of this rental increase can also
be emphasized by the fact that there was not a rate increase in 1997. The
convenience store merchandise & fuel sales also increased by $97,447 or 22.99%.
Included in this period's increase is a $45,000 insurance claim settlement from
1995 that required litigation to resolve.
The six months ended June 30, 1997 Cost of Revenues was $668,823 that was
an increase over the $618,530 for the six months ended June 30, 1996. This
represents an increase of $50,293 or 8.13%. This is attributable to an increase
in revenues and an increase in the cost and amount of fuel sold.
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For the purposes of this comparison, Operating and General & Administrative
costs will be referred to as Operating and G/A expenses. Management automated
the internal accounting functions during 1996 and reclassified expense items
between the two cost classifications. Six months ended June 30, 1997 Operating
and G/A expense increased $83,999 or 8.40% from $1,000,269 in 1996 to
$1,084,268. This increase is partially attributed to increased legal expenses,
as well as a combination of several other line items that individually amount to
insignificant amounts. The increased legal expenses are related to the prior
partnership's bankruptcy and litigation that have been resolved.
Interest expense for the six months ended June 30, 1997 decreased $103,939
from $197,517 in 1996 to $93,578. The decrease is primarily due to lower
negotiated interest payments included in the settlement agreement with the first
mortgage holder, WAMCO XXII as opposed to the higher payments to NationsBank.
Income from Operations increased $315,007 from a loss of $9,210 in the six
months ended June 30, 1996 to a gain of $305,797 in the six months ended June
30, 1997. This was primarily the result of increased revenues.
The Company's working capital decreased from the December 31, 1996 deficit
of $504,767 to a deficit of $525,836 as of June 30, 1997. Accounts receivable
decreased $50,175 to $36,841 as of June 30, 1997 as compared to December 31,
1996. This was the result of increased collection efforts. Accounts payable and
accrued expense was reduced $60,305 to $188,921 as of June 30, 1997 as compared
to December 31, 1996.
A total cash outlay of $100,878 has been utilized for capital expenditures
of property and equipment in the first six months of 1997. These expenditures
were primarily for the continuation of the replacement and upgrade of the park's
electrical system and the state mandated replacement of the fuel containers
located at the marina. These fuel containers will provide for greater sales
control as well as a more reliable and efficient container system that
significantly reduces losses due to evaporation as well as environmental
concerns.
As of June 30, 1997, the Company further converted approximately $300,000
in debt owed to pre-petition debt and the former general partner to equity
through the issuance of Series A Preferred Stock.
In January 1997 the mortgage note payable to WAMCO XXII, Ltd. was
restructured and restated to December 31, 1996. The new agreement provides for
interest payments of $5,000 to be paid monthly through August 30, 1997.
Commencing on August 30, 1997, the Note will bear interest at the rate of 9% per
annum. Beginning on September 30, 1997, principal and interest payments will
begin on the outstanding principal balance of $4,700,000. The note will mature
on October 30, 1999 at which time the outstanding principal balance and all
accrued interest will become due and payable in full. At maturity, the Company
has a one-time option to extend the maturity of the restated note until October
30, 2002 if certain conditions are met. The Company also has provisions in the
agreement for an early payment discount equal to 8% of the
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outstanding principal balance of the restated note if repaid before
November 30, 1997 and a 5% discount if the note is repaid in full after November
30, 1997 and before November 30, 1998. The Company also entered into a
promissory note for $1,000,000 at 12% per annum. This note is payable in 23
consecutive monthly installments of interest only commencing February 1997 and
ending December 1998, at which time the outstanding principal balance and
accrued interest will become due and payable in full. As part of the bankruptcy
settlement, the Company also restructured an existing note payable to the Small
Business Administration. This $326,401 note is now payable over ten years at a
4% per annum with the first 24 months principal and interest payments fixed at
$2,000. Thereafter, the outstanding principal balance will be amortized over a
period of eight years at 4% per annum.
Year Ended December 31, 1996 Compared to Year Ended December 31, 1997
For the year ended December 31, 1996, revenues increased by $197,378 or
6.28%, from $3,144,932 in 1995 to $3,342,310 in 1996. The increase was primarily
attributable to an increase in the Company's rental operation that increased
$309,168 or 26.71%. This increase was a result of increased marketing efforts
and better management.
Costs of Revenues modestly increased from $1,001,070 in 1995 to $1,022,029
in 1996 or 2.09%. Costs of Revenues were 31.83% of total revenue for 1995 and
30.58% of total revenue for 1996. The Gross Profit increased from $2,143,862 in
1995 to $2,320,281 in 1996 resulting in an increase of $176,419 or 8.23%. During
1996, fuel costs increased due to the change in the collection method of the
state of Florida gasoline tax. This tax was previously expensed and is presently
incorporated in the per gallon price paid to the distributor.
Total Operating and G/A expenses decreased $9,594 or .53% from $1,802,804
in 1995 to $1,793,210 in 1996. The decreases in 1996 office expenses, bank
charges and legal expenses along with the elimination of the gasoline tax
expense was offset by increases in maintenance and repairs, and corporate
overhead costs (including federal and state income tax expense) not incurred in
1995. The increase in maintenance and repair were a direct effort of management
to upgrade and improve the property.
Interest expense decreased $1,402,761 from $1,646,650 in 1995 to $243,889
in 1996. Interest expense for 1995 was accrued primarily at the stated loan
default rates ranging from 18% to 25% per annum. The first 11 days of 1996 are
calculated at this default rate and represent approximately $45,000 of the 1996
interest. The default interest rates were not accrued for the remainder of 1996
due to the filing of Chapter 11 Bankruptcy. The remaining interest expense in
1996 represent interest only payments.
Income from operations increased $1,652,901 from a loss of $1,581,887 to a
gain of $71,014 in 1996. This increase is primarily the result of the
elimination of accrued interest associated with the restructured loan that
resulted in approximately $1,400,000 of the increase. The remaining gain is
attributed to increased gross profit.
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The Company incurred an extraordinary gain as of December 31, 1996 from
forgiveness of debt in the total amount of $1,940,424. This amount is comprised
of a principal forgiveness reduction in the mortgage note of $616,854 and an
accrued interest forgiveness reduction of $1,323,570. This was the result of the
Company=s effort to negotiate a settlement of a long standing dispute with WAMCO
XXII, Ltd. (formerly held by NationsBank). The plan included a refinancing in
order to reduce the obligation to WAMCO to $4,700,000. As per the agreement, the
Company paid WAMCO a total amount of $1,000,000 towards principal, of which
$100,000 was paid directly by the company in January 1997.
The Company's working capital increased from a deficit of $9,506,212 at
December 31, 1995 to a deficit of $504,767 at December 31, 1996. The increase
was primarily due to the restructuring of two matured loans one formerly held by
NationsBank with accrued interest and the other loan to the Small Business
Administration. The increase was also attributed to the conversion of debt to a
former and current general partner to equity as well as an increase of current
assets.
At December 31, 1996 the Company had accounts receivable of $87,016 as
compared to $77,263 at December 31, 1995. This increase is considered
inconsequential since this is comprised of community fees and storage charges
collected from long term customers and credit card charges in transit, all of
which have not been an area of concern in prior years.
At December 31, 1996 the Company had accounts payable and accrued expenses
of $249,226 as compared to $1,843,831 at December 31, 1995. This decrease of
$1,594,605 was directly attributable to the elimination of accrued interest
associated with the restructured loan as well as a reduction in accounts payable
specifically related to the conversion of accounts payable to pre-petition debt.
Cash outlays for capital expenditures of property and equipment totaled
$144,319 for the 1996 fiscal year compared to $160,508 for the 1995 fiscal year.
Major expenditures included outlays for the continuing project of the
replacement and upgrade of the park's electrical system, renovation and
improvements to the marina, the complete restoration of the park's tennis
courts, upgrades and expansion to the park's sewer system and other upgrades and
renovations to the park's facilities. As of December 31, 1996, the Company was
able to convert over $800,000 in debt owed the former and present general
partners as well as one limited partner to equity through the issuance of shares
of Common Stock.
Outlook
Management believes that the resort destination industry and more
specifically the recreation vehicle (RV) industry are expected to grow
substantially because of: (i) a shift in recreation vehicle ownership patterns
toward the enormous baby boom population; (ii) expectations of the baby boom
population to increase 34% between 1995 and 2005 and the over 65 population
increasing an estimated 24% to 40 million by 2010; (iii) in 1996, over 466,000
new RV's were shipped with a total value of $10 billion, constituting the
highest annual dollar
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value to date; (iv) according to the University of Michigan Survey Research
Group, RV ownership rates are highest in the 50-65 age group and are expected to
grow by 40% over the next ten years; (v) the rate of growth, between 1986 and
1996, in recreational spending ranked third in the nation with an annual average
of 6.5%.
The Company will seek to take advantage of the growing resort destination
industry through its strategy of expanding through acquisitions. The Company
intends to further take advantage of this growing industry by targeting
locations where nature and the environment are the primary appeal of the
location. This will take advantage of the above stated industry outlook as well
as the growing eco-tourism sector. The Company will emphasize, as initial
targets, acquisitions that complement its existing operation with alternate
seasonality. This will provide the Company with a consistent cash flow from
operations and ensure that an operation is in season at all times throughout the
year.
Ohio Key I, Inc. Subsidiary
Management anticipates increases in revenue for the remainder of 1997 as
well as 1998. Several factors will influence this increase. Since the majority
of the peak-season falls within the first quarter, which represents
approximately 40% of the yearly revenues, management feels there is a tremendous
potential for increased sales in the off-peak season. A more focused marketing
effort targeted to improve operations in the off-peak season has recently been
implemented. The many capital improvements undertaken in the last several years
along with present projects is believed to improve the overall appeal of the
park and thus increase sales. One project in particular, the complete electrical
upgrade of the park, will have several major positive effects on operations. It
will increase power efficiency resulting in anticipated power cost savings of
approximately $75,000 a year and a reduction in responsibility for the primary
electrical system that the local electric utility company will assume at the
completion of the project. This improvement will also allow the Company to meter
and bill individual sites occupied by longer term residents thus increasing
revenues as well as eliminating the existing brownouts that occur periodically.
Significant efforts have been made in 1997 to expand the number and quality of
amenities offered at the resort. The Company entered into agreements with two
separate entities that have significantly upgraded our recreational water
amenities. The first was the rental use of three boats owned and maintained by
an outside source. This replaced the two existing boats with modern boats and
eliminated the costly maintenance operation. The second was the opening of a
state of the art scuba diving facility on the property offering retail
merchandise, instruction and a wide variety of aquatic recreation. The business
is owned and operated by an outside individual with an industry wide reputation
and existing client base. The rental boats and dive facilities are anticipated
to increase the overall appeal of the park, as well as increase revenues through
our profit sharing and space leasing arrangements.
Management does not anticipate any significant fluctuations in Operating
and General & Administrative expenses for the remainder of 1997. The Company
expects interest expense to increase in the remainder of 1997 due to contractual
obligations for existing debt. Management believes that since the property has
an estimated appraisal of $11,000,000 and has received a
12
<PAGE>
purchase interest for $12,000,000 a refinancing of the existing debt in
1997 is possible. The company is currently pursing alternative debt financing to
take advantage of a recently negotiated discounted payoff amount of $4,000,000
by November 28, 1997 of the $4,700,000 note held by Bosque Asset Group (formerly
WAMCO XXII, Ltd.) This would result in a principal reduction of $369,000 more
than the previously agreed upon early payment discount of 8% for the same time
period. Management is confident that financing will be available to take
advantage of this reduction.
In 1997, the Company won an appeal of a previous Circuit Court ruling that
prohibited certain recreational park model vehicles from the park. As a result
of the favorable appeal ruling the Company plans to more forward with a
subsequent damage claim with the county. The Company also has a pending claim
with the local electric utility company regarding the non payment of billing
credits which amounts to approximately $30,000. Management feels strongly that
this claim will be settled in 1997.
The Company will continue to reinvest in ongoing capital improvements to
the property in the remainder of 1997. The electrical upgrade project is due for
completion in first quarter 1998. The replacement of the fuel containers located
at the marina is scheduled for completion in the third quarter of 1997. Other
capital improvement projects intended to elevate the property to a 5 star resort
include but are not limited to; the complete modernization of the marina
floating docks, repaving of the park's roads, an additional pool (inclusive of a
new restaurant and game room) facility and the renovation of the roadside gas
station and grocery store facility.
ITEM 3. DESCRIPTION OF PROPERTY.
The Resort and the Company's operations are conducted on 75 acres in the
Florida Keys, which encompasses all of Ohio Key, Florida. The Company's
principal offices are located on the Resort at 38801 Overseas Highway, Big Pine
Key, Florida 33043.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information regarding the Company's
Common Stock beneficially owned on September 10, 1997 for (i) each stockholder
known by the Company to be the beneficial owner of five (5%) percent or more of
the Company's outstanding Common Stock, (ii) each of the Company's executive
officers and directors, and (iii) all executive officers and directors as a
group. In general, a person is deemed to be a "beneficial owner" of a security
if that person has or shares the power to vote or direct the voting of such
security, or the power to dispose or to direct the disposition of such security.
A person is also deemed to be a beneficial owner of any securities of which the
person has the right to acquire beneficial ownership within sixty (60) days. At
September 10, 1997, there were 4,914,185 shares of Common Stock outstanding. The
address of each of the persons set forth below is 38801 Overseas Highway, Big
Pine Key, Florida 33043, except as otherwise noted.
13
<PAGE>
No. of Shares
of Common Stock
Name and Address Beneficially Owned
- ---------------- ------------------
C. John Knorr, Jr.(1) 911,561
Jane Bergman (2) 220,000
Donald E. Schupp -0-
Timothy M. Benjamin(3) 80,000
Thomas L. Callahan(4) 688,145
Linda Brauer(5) 350,698
All executive officers and directors
as a group (four persons) 1,211,561
- ----------------
(1) Includes 101,203 shares of Common Stock held by Infinity Investment Group,
Inc., the general partner of the Partnership, in which Mr. Knorr is the
sole shareholder. Does not include (i) 333,333 shares of Common Stock
issuable upon the exercise of options at a price of $.01 per share at any
time after January 1, 1998 until January 1, 2002 and (ii) 333,333 shares of
Common Stock issuable upon the exercise of options at a price of $.01 per
share at any time after January 1, 1999 until January 1, 2003.
(2) Does not include 60,000 shares of Common Stock issuable pursuant to the
Employment Agreement entered into between the Company and Ms. Bergman which
shares are issuable quarterly during the remaining nine months of
employment at a rate of 20,000 shares on the last day of each quarter
(November 30, 1997, February 28, 1998 and May 31, 1998).
(3) Includes 80,000 shares issuable pursuant to options which vest upon certain
conditions. See "Management"
(4) The address is 144 De Coursey Cove Lane, Queenstown, MD 21658.
(5) The address is 11308 Bedfordshire Avenue, Potomac, MD 20854.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The following table sets forth the names, positions with the Company and
ages of the executive officers and directors of the Company. Directors will be
elected at the Company's annual meeting of stockholders and serve for one year
or until their successors are elected and qualify. Officers are elected by the
Board of Directors and their terms of office are, except to the extent governed
by employment contract, at the discretion of the Board.
14
<PAGE>
Name Age Position
- ---- --- --------
C. John Knorr, Jr. 49 Chairman of the Board
Jane Bergman 45 President and Director
Timothy M. Benjamin 31 Chief Financial Officer
and Treasurer
Donald E. Schupp 51 Director
Unless otherwise noted, the address of each of the directors and officers
of the Company is 38801 Overseas Highway, Big Pine Key, Florida 33043.
Carl John Knorr, Jr. Since June 1, 1996 Mr. Knorr has served as the
Company's Chairman of the Board and from August 31, 1995 through May 31, 1996 as
the Company=s President. Mr. Knorr is also president and sole shareholder of
Infinity Investment Group, Inc., the general partner and management company for
the Partnership since 1991. Mr. Knorr is experienced in managing distressed real
estate properties, including resort properties and is experienced at
turn-arounds and profit development. Mr. Knorr has substantial and wide
accomplishments in the real estate industry. Graduated from the University of
Richmond, Mr. Knorr is the youngest individual in the United States to receive
professional designation of "Accredited Farm and Land Broker" ("AFLB"). He is a
Past Director and President of the Virginia Chapter of the Real Estate
Securities and Syndication Institute, and a Past Director and Regional Vice
President of the National Institute of Farm and Land Brokers. He has brokered
over $100 million in real estate and over $10 million in mortgages, as well as
having developed successful real estate limited partnerships, establishing a
strong investor base. He has served as an appraiser for major banks and law
firms and is recognized as a qualified appraising expert in the City of
Richmond, Powhaton County, Caroline County, Hanover County and the City of
Fredericksberg, as well as by the Internal Revenue Service. In 1994, NationsBank
refused to fulfill its agreement to extend the maturity date of the
Partnership's loan of approximately $7,100,000. The Partnership was unable to
resolve this matter with NationsBank, and as a consequence, the Partnership
filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy
Code. Mr. Knorr was the sole officer, director and shareholder of the corporate
general partner for the Partnership at the time the Partnership went into
bankruptcy. The Partnership thereafter entered into a settlement agreement with
NationsBank. See "Description of Business -- Partnership's Indebtedness and
Bankruptcy."
Jane E. Bergman. Since June 1, 1996, Ms. Bergman has served as President of
the Company and since February 20, 1997, as a Director of the Company. Ms.
Bergman is an accomplished professional with over 18 years of corporate
experience including upper management positions in operations, finance, and
marketing including Director of Operations for Bell Atlantic. For approximately
20 years, Ms. Bergman has owned and managed rental property. She also
15
<PAGE>
maintains ownership in several small businesses. Ms. Bergman holds a
Bachelor of Arts degree in mathematics from the College of William and Mary in
Williamsburg, Virginia.
Timothy M. Benjamin. Since October 30, 1995, Mr. Benjamin has served as the
Company's Chief Financial Officer. Mr. Benjamin received both a M.B.A. and a
B.B.A. in Finance and Economics from Florida International University. From 1989
to October 1995 Mr. Benjamin was employed with the Federal Reserve Bank of
Atlanta, Miami, Florida, as Senior Business Development Coordinator, 1994 to
October 1995, Business Development Coordinator, 1991 to 1994, and Supervisor,
1989 to 1991.
Donald E. Schupp. Mr. Schupp has served as President and Chief Operating
Officer for American Refining Group headquartered in Pittsburgh, Pennsylvania
since 1983 and is a member of the Board of Directors of the Company.
Additionally, Mr. Schupp has served as a top-level Corporate officer in several
large, multi-billion dollar, independent refining and marketing companies, with
responsibilities ranging from retail marketing to wholesale marketing, crude
acquisition, terminal operations, feedstock trading, supply and distribution,
and general management. He has a solid track record of revitalizing weak and
unprofitable operations, and is known for establishing efficiencies and high
levels of productivity in all areas of responsibility. He serves on the Board of
Directors of the National Petroleum Refiners Association, several active
committees of the Society of Independent Gasoline Marketers of America, and on
the Marketing General Committee of the American Petroleum Institute.
Graduating from the University of Richmond School of Business in 1968 with
a Bachelor of Science degree in Business Administration, Mr. Schupp majored in
Industrial Management and mathematics, with a minor in Marketing. He also
attended Clemson University, majoring in Mechanical Engineering before
transferring to Richmond.
Mr. Schupp served in the United States Army, Air Defense Branch, from 1969
to 1972, attaining the rank of Captain. His responsibilities included nuclear
missile site commander, Brigade S-2 and various duties in the U.S. and Southeast
Asia, with various decorations for service. He carried a Top Secret/Crypto
security clearance.
As additional properties are acquired, the Company anticipates attracting
additional, equally successful and qualified, directors, officers, and facility
managers.
ITEM 6. EXECUTIVE COMPENSATION.
No executive officer of the Company has had annual compensation in excess
of $100,000. The following table shows for the year ended December 31, 1996, the
cash and other compensation paid by the Company to its President and Chief
Financial Officer.
16
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Name and
Principal Other Annual All Other
Position Year Salary Bonus Compensation Compensation
- -------- ---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
Jane Bergman, 1996 $-0- $-0- $-0- $6,250(1)
President
C. John Knorr,
Chairman of the Board 1996(3) $-0- $-0- $-0- $-0-
and former President 1995(2) $-0- $-0- $-0- $-0-
</TABLE>
(1) Represents the fair value of 100,000 shares of Common Stock earned from the
commencement of Ms. Bergman's employment with the Company on June 1, 1996
through December 31, 1996 pursuant to the employment agreement between the
Company and Ms. Bergman.
(2) Mr. Knorr commenced employment with the Company as President on August 31,
1995.
(3) Mr. Knorr resigned as President of the Company on June 1, 1996.
Employment Agreements
On June 1, 1997 the Company entered into a one (1) year employment
agreement with Jane Bergman, the Company's President, which agreement may
automatically be renewed for up to one (1) year, upon the mutual consent of the
parties thereto. The agreement provides for an initial base salary of up to an
aggregate of 80,000 shares of the Company's Common Stock per year, medical
benefits, insurance and other fringe benefits. The shares of Common Stock to be
issued to Ms. Bergman shall be issued as follows: Twenty Thousand (20,000)
shares to be issued on the last day of the completion of the first quarter
following the signing of the agreement, Twenty Thousand (20,000) shares to be
issued at the completion of the second quarter following the signing of the
agreement, Twenty Thousand (20,000) shares to be issued on the last day of the
completion of the third quarter following the signing of the agreement, and
Twenty Thousand (20,000) to be issued on the last day of the completion of the
final quarter following the signing of the agreement. The employment agreement
provides for full time employment and contains a provision that the employee
will not compete or engage in a business competitive with the current or
anticipated business of the Company for the term of the agreement and in the
event Ms. Bergman is terminated for cause or voluntarily resigns, she shall be
subject to the non-competition clause for a period of one (1) year after
termination or resignation.
The Company has entered into a one (1) year employment agreement with
Timothy M. Benjamin, the Company's Chief Financial Officer, which agreement may
be automatically renewed for up to one (1) year period upon the mutual consent
of the parties thereto. The agreement provides an initial base salary of $50,000
a year, medical benefits, insurance and other fringe benefits, and stock
options. The stock options are exercisable for a period of five years
17
<PAGE>
from the date of vesting at an exercise price of (i) the greater of $2.50,
or the average bid price per share of Common Stock for the year 1997 determined
by averaging the bid prices as of March 31, 1997, June 30, 1997, September 30,
1997 and December 31, 1997, for any options vesting on December 31, 1997; and
(ii) the greater of $2.50 per option or the average bid price per share of
Common Stock for the year 1998, determined by averaging the bid prices as of
March 31, 1998, June 30, 1998, September 30, 1998 and December 31, 1998 for any
options vesting on December 31, 1998. Subject to the provisions of the
employment agreement, the total of up to 40,000 option shares for each of (i)
1997 and (ii) 1998 shall vest provided that during each of those years; (1) as
of December 31, the Company shall have attained no less than a 20% increase in
its Earnings Before Income Tax over the previous December 31 year-end; and/or
(2) as of December 31, the weighted average earnings per share of the Company's
Common Stock shall have increased by no less than 20% over the previous years
weighted average earnings per share, which shall be determined by the sum of the
average outstanding shares during the relevant year as of March 31, June 30,
September 30, and December 31, divided by four, and comparing that number to the
previous years number, calculated in a like manner; and/or (3) as of December
31, the average bid price of the Common Stock shall have increased by no less
than 20% over the previous years average bid price, which shall be determined by
the average bid price of the Common Stock for the five consecutive business days
commencing December 1. The Employment Agreement provided for full time
employment and contains a provision that the employee will not compete or engage
in a business competition with the current or anticipated business of the
Company for the term of the agreement and in the event Mr. Benjamin is
terminated for cause or voluntarily resigns, he shall be subject to the
non-competition clause for a period of one (1) year after termination or
resignation.
Option Grants in Last Fiscal Year
The Company granted no options to purchase shares of Common Stock during
the fiscal year ended December 31, 1996. The following table sets forth
information with respect to the grant of options during the fiscal year ended
December 31, 1996 to each person named in the Summary Compensation
Table.
<TABLE>
<CAPTION>
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted(#) Fiscal Year ($/Shares) Date
- ---- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Jane Bergman, President -0- -0- -0- -0-
C. John Knorr, Jr.,
former President -0- -0- -0- -0-
</TABLE>
18
<PAGE>
Incentive and Nonqualified Stock Option Plan
The Board of Directors of the Company intends to propose to the Company's
shareholders at the next annual meeting of shareholders the adoption of the
Company's proposed 1997 Stock Option Plan (the "Plan").
The Plan will work to increase the employees', consultants' and
non-employee directors' proprietary interest in the Company and to align more
closely their interests with the interests of the Company's shareholders. The
Plan will also maintain the Company's ability to attract and retain the services
of experienced and highly qualified employees and non-employee directors.
Under the Plan, the Company intends to reserve an aggregate of 1,000,000
shares of Common Stock for issuance pursuant to options granted under the Plan
("Plan Options"). The Board of Directors or a Committee of the Board of
Directors (the "Committee") of the Company will administer the Plan including,
without limitation, the selection of the persons who will be granted Plan
Options under the Plan, the type of Plan Options to be granted, the number of
shares subject to each Plan Option and the Plan Option price.
Plan Options granted under the Plan may either be options qualifying as
incentive stock options ("Incentive Options") under Section 422 of the Internal
Revenue Code of 1986, as amended, or options that do not so qualify
("Non-Qualified Options"). In addition, the Plan also allows for the inclusion
of a reload option provision ("Reload Option"), which permits an eligible person
to pay the exercise price of the Plan Option with shares of Common Stock owned
by the eligible person and receive a new Plan Option to purchase shares of
Common Stock equal in number to the tendered shares. Any Incentive Option
granted under the Plan must provide for an exercise price of not less than 100%
of the fair market value of the underlying shares on the date of such grant, but
the exercise price of any Incentive Option granted to an eligible employee
owning more than 10% of the Company's Common Stock must be at least 110% of such
fair market value as determined on the date of the grant. The term of each Plan
Option and the manner in which it may be exercised is determined by the Board of
the Directors or the Committee, provided that no Plan Option may be exercisable
more than 10 years after the date of its grant and, in the case of an Incentive
Option granted to an eligible employee owning more than 10% of the Company's
Common Stock, no more than five years after the date of the grant.
The exercise price of Non-Qualified Options shall be determined by the
Board of Directors or the Committee.
The per share purchase price of shares subject to Plan Options granted
under the Plan may be adjusted in the event of certain changes in the Company's
capitalization, but any such adjustment shall not change the total purchase
price payable upon the exercise in full of Plan Options granted under the Plan.
Officers, directors, key employees and consultants of the Company and its
subsidiaries (if applicable in the future) will be eligible to receive
Non-Qualified Options under the Plan. Only
19
<PAGE>
officers, directors and employees of the Company who are employed by the
Company or by any subsidiary thereof are eligible to receive Incentive Options.
All Plan Options are nonassignable and nontransferable, except by will or
by the laws of descent and distribution, and during the lifetime of the
optionee, may be exercised only by such optionee. If an optionee's employment is
terminated for any reason, other than his death or disability or termination for
cause, or if an optionee is not an employee of the Company but is a member of
the Company's Board of Directors and his service as a Director is terminated for
any reason, other than death or disability, the Plan Option granted to him shall
lapse to the extent unexercised on the earlier of the expiration date or 30 days
following the date of termination. If the optionee dies during the term of his
employment, the Plan Option granted to him shall lapse to the extent unexercised
on the earlier of the expiration date of the Plan Option or the date one year
following the date of the optionee's death. If the optionee is permanently and
totally disabled within the meaning of Section 22(c)(3) of the Internal Revenue
Code of 1986, the Plan Option granted to him lapses to the extent unexercised on
the earlier of the expiration date of the option or one year following the date
of such disability.
The Board of Directors or the Committee may amend, suspend or terminate the
Plan at any time, except that no amendment shall be made which (i) increases the
total number of shares subject to the Plan or changes the minimum purchase price
therefor (except in either case in the event of adjustments due to changes in
the Company's capitalization), (ii) affects outstanding Plan Options or any
exercise right thereunder, (iii) extends the term of any Plan Option beyond ten
years, or (iv) extends the termination date of the Plan. Unless the Plan shall
theretofore have been suspended or terminated by the Board of Directors, the
Plan shall terminate on approximately 10 years from the date of the Plan's
adoption. Any such termination of the Plan shall not affect the validity of any
Plan Options previously granted thereunder.
Option Exercises and Holdings
The following table sets forth information with respect to the exercise of
options to purchase shares of Common Stock during the fiscal year ended December
31, 1996 to each person named in the Summary Compensation Table and the
unexercised options held as of the end of the 1996 fiscal year.
20
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
- -------------------------------------------------------------------------------
Number of
Securities Value of
Underlying Unexercised
Shares Unexercised in-the-Money
Acquired Options/SARs Options/SARs
on Value at FY-End (#) at FY-End ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- -------------------------------------------------------------------------------
Jane Bergman, 0 0 0 0
President
C. John Knorr, Jr. 0 0 0 0
former President
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Number Performance Estimated Future Payouts Under
of Shares, or Other Non-Stock Price-Based Plans
Units or Period Until ------------------------------
Other Rights Maturation Threshold Target Maximum
Name (#) or Payout ($ or #) ($ or #) ($ or #)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jane Bergman, 0 0 0 0 0
President
C. John Knorr, Jr. 0 0 0 0 0
former President
</TABLE>
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Partnership and Infinity Investments Group, Inc., a Florida corporation
and general partner of the Partnership (the "Management Company") which is owned
and controlled by C. John Knorr, Chairman of the Board, entered into an
agreement under which the Management Company provided management services to the
Partnership (the "Management Agreement"). Under the terms of the Management
Agreement, the Management Company received an annual management fee equal to
three (3%) percent of front desk revenues, plus two (2%) percent of total gross
revenues, payable monthly. For the year ended December 31, 1997, the Management
Company received from the Partnership an aggregate of $106,506 for services
rendered. The Management Agreement terminated on December 31, 1996 pursuant to
the disposition by the Partnership of all of the Partnership's assets.
21
<PAGE>
As of the date hereof, there are stock options to purchase an aggregate of
666,666 shares of Common Stock outstanding, which were granted to Mr. Knorr on
October 9, 1996 in consideration for Mr. Knorr guaranteeing the payment of
$1,000,000 pursuant to the Guarantee Agreement between C. John Knorr, Jr. and
WAMCO XXII, Ltd., dated August 6, 1996.
ITEM 8. DESCRIPTION OF SECURITIES.
Common Stock
The Company is authorized to issue 100,000,000 shares of Common Stock, par
value $.001 per share, of which 4,914,185 shares were issued and outstanding as
of the date hereof. Holders of the shares are entitled to one vote per share on
each matter submitted to a vote at a meeting of shareholders. The shares of
Common Stock do not have cumulative voting rights or preemptive rights and there
are no redemption or conversion privileges attached thereto. Holders of Common
Stock are entitled to receive ratably such dividends as may be declared by the
Company and to participate ratably in the distribution of any assets legally
available for distribution with respect to the Common Stock. The Company does
not expect to pay dividends for the foreseeable future.
Preferred Stock
The Company is authorized to issue 1,000,000 shares of preferred stock, par
value $.001 per share. The Company has previously designated one series of
preferred stock consisting of 195,907 shares which were designated as Series A
Convertible Preferred Stock.
The Board of Directors of the company has the authority, without further
action by shareholders, to issue the preferred stock in one or more series, and
to fix for any series the dividend rate, redemption price, liquidation or
dissolution preferences, conversion rights, voting rights and other preferences
and privileges.
Series A Preferred Stock
The Series A Preferred Stock have the following rights, preferences and/or
limitations:
Dividend Rights. The holders of shares of Series A Preferred Stock shall be
entitled to receive a cumulative annual dividend of 6% of the stated value of
the Series A Preferred Stock of $1.50 per share (AStated Value@) on January 1 of
each year commencing January 1, 1998, or $.09 per share, payable in cash or
Common Stock of the Company (i.e., based on the equivalent fair market value of
Common Stock of the Company).
22
<PAGE>
Conversion Rights. Holders of the Series A Preferred Stock will have the
right to convert each share of Series A Preferred Stock into the Company=s
Common Stock (calculated as to each conversion to the nearest share) at any time
at a conversion rate of one share of Series A Preferred Stock for one share of
Common Stock. In the event the Series A preferred Stock is not converted by
December 31, 1999, the Company shall have the right to cause the remaining
outstanding shares of Series A Preferred Stock to be converted into Common Stock
of the Company at the aforementioned conversion rate. In the event the Series A
Preferred Stock is not converted by either of the holders thereof or by the
Company, the Series A Preferred Stock will continue to subsist as established.
No fractional share or scrip representing a fractional share will be issued upon
conversion of the Series A Preferred Stock. In the event of any
reclassification, merger, consolidation or change of shares of the series A
Preferred Stock and/or the Common Stock of the Company, the Company shall make
adjustments to the conversion ratio which shall be as nearly equivalent to that
stated above as may be practical.
The conversion price will be subject to adjustment in certain events,
including (i) the issuance of capital stock as a dividend or distribution on
Common Stock, (ii) subdivision, combinations, reverse stock splits and
reclassification of the Common Stock, and (iii) the fixing of a record date for
the distribution to all holders of Common Stock of evidence of indebtedness or
assets (other than cash dividends) of the Company or subscription rights or
warrants.
Adjustment in the conversion price may be postponed until the cumulative
effect of any adjustments amount to 1% or more of the conversion price. The
Company agrees to use its best efforts at all times to reserve or hold available
a sufficient number of shares of Common Stock to cover the number of shares
issuable on conversion of the Series A Preferred Stock.
The holder shall effect conversion by surrendering the certificate or
certificates representing the shares of Series A Preferred Stock to be converted
to the legal counsel for the Company, with a copy thereof to the Company,
together with the form of conversion notice attached to the certificate. Each
conversion notice shall specify the number of shares of Preferred Stock to be
converted and the date on which such conversion is to be effected, which date
may not be prior to the date the holder delivers such conversion notice by
facsimile (the AConversion Date@). If no Conversion Date is specified in a
conversion notice, the Conversion Date shall be the date that the conversion
notice is delivered. Each conversion notice, once given, shall be irrevocable.
If the holder is converting less than all shares of Series A Preferred Stock
represented by the certificate or certificates tendered by the holder with the
conversion notice, o if a conversion hereunder cannot be effected in full for
any reason, the Company shall convert up to the number of shares of Series A
Preferred Stock which can be so converted and shall promptly deliver to such
holder a certificate for such number of shares as have not been converted.
Shares of Series A Preferred Stock converted into Common Stock shall be
canceled and shall have the status of authorized by unissued shares of
undesignated Preferred Stock.
23
<PAGE>
Redemption. The Company shall have the right, exercisable at any time upon
ten (10) trading days notice to the holders of the Series A Preferred Stock
given at any time to redeem, from funds legally available therefor at the time
of such redemption, all or any portion of the shares of Series A Preferred Stock
which have not previously been converted or redeemed, at a price equal to 117.6%
of the produce of (i) the number of shares of Preferred Stock then held by the
holder and (ii) the Stated Value, subject to adjustment pursuant to the terms
hereof. The entire redemption price shall be paid in cash. The holders of the
Series A Preferred Stock do not have the right to require the Company to redeem
their shares of Series A Preferred Stock.
Voting Rights. Except as provided by law, the Series A Preferred Stock
shall not be entitled to vote on matters submitted to a vote of the shareholders
of the Company. Unless the vote or consent of the holders of a greater number of
shares is required by law, the consent of the holders of at least a majority of
all of the Series A Preferred Stock at the time outstanding shall be necessary
to change, alter or revoke the rights and preferences conferred on the Series A
Preferred Stock by the Articles of Incorporation or to adopt any amendment to
the Articles of Incorporation materially adversely affecting the rights of the
holders of the Series A Preferred Stock.
Liquidation Rights. In the event of any liquidation, dissolution or winding
up of the Company, holders of the Series A Preferred Stock shall be entitled to
receive, after due payment or provision for payment for the debts and other
liabilities of the Company, a liquidating distribution before any distribution
may be made to holders of Common Stock of the Company. The holders of the Series
A Preferred Stock outstanding shall be entitled to receive an amount equal to
$1.50 per share, plus declared dividends to the date of the final distribution,
whether or not such liquidation, dissolution or winding up is voluntary or
involuntary on the part of the Company.
Miscellaneous. The Series A Preferred Stock has no preemptive rights. The
Company reserves the right to issue up to an additional 804,093 shares of
Preferred Stock, representing the balance of the authorized Preferred Stock,
with designations and preferences as the Board of Directors shall determine. The
Series A Preferred Stock and the Common into which such Series A Preferred Stock
is convertible, when issued will be legally issued, fully paid and
non-assessable.
Any and all notices or other communications or deliveries to be provided by
the holders of the Series A Preferred Stock hereunder, including, without
limitation, any conversion notice, shall be in writing and delivered personally,
by facsimile, sent by a nationally recognized overnight courier service or sent
by certified or registered mail, postage prepaid, addressed to the attention of
the Chief Executive Officer of the Company at the facsimile telephone number or
address of the principal place of business of the Company. Any and all notices
or other communications or deliveries to be provided by the Company hereunder
shall be in writing and delivered personally, by facsimile, sent by a nationally
recognized overnight courier service or sent by certified or registered mail,
postage prepaid, addressed to each holder of Series A Preferred Stock at the
facsimile telephone number or address of such holder appearing on the
24
<PAGE>
books of the Company, or if no such facsimile telephone number or address
appears, at the principal place of business of the holder. Any notice or other
communication or deliveries hereunder shall be deemed given and effective on the
earlier of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Section prior to 4:30 p.m. (Eastern Time), (ii) the date after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section later than 4:30 p.m.
(Eastern Time) on any date and earlier than 11:50 p.m. (Eastern Time) on such
date, (iii) four days after deposit in the United States mails, (iv) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (v) upon actual receipt by the party to whom such
notice is required to be given.
Class A Common Stock Purchase Warrants
The Company currently has 200,000 Class A Common Stock Purchase Warrants
("Class A Warrants") outstanding. The holders of each Class A Warrant are
entitled to purchase one share of Common Stock of the Company at an exercise
price of $5.00 per share. The Class A Warrants are exercisable any time after
issuance until March 19, 2000 and are subject to redemption by the Company, on
not less than thirty days written notice, at a price of $.005 per Class A
Warrant. Holders of the Class A Warrants will automatically forfeit their rights
to purchase the shares of Common Stock of the Company issuable upon exercise of
Class A Warrants unless the Class A Warrants are exercised before they are
redeemed. The Class A Warrants obtain provisions that protect the holders
against dilution by adjustment of the exercise price, in certain events,
including stock dividends, stock splits, mergers and for other unusual events.
The Company is not required to issue fractional shares and fractional shares
equal to or exceeding one-half of a share shall be rounded to the nearest whole
share, while fractional shares equaling less than one-half of a share shall be
disregarded. The holders of the Class A Warrants will not possess any rights as
shareholders of the Company unless and until the Warrants are exercised.
Class B Common Stock Purchase Warrants
The Company currently has 200,000 Class B Common Stock Purchase Warrants
("Class B Warrants") outstanding. The holders of each Class B Warrant are
entitled to purchase one share of Common Stock of the Company at an exercise
price of $5.00 per share. The Class B Warrants are exercisable any time after
issuance until March 19, 2001 and are subject to redemption by the Company, on
not less than thirty days written notice, at a price of $1.00 per Class B
Warrant. Holders of the Class B Warrants will automatically forfeit their rights
to purchase the shares of Common Stock of the Company issuable upon exercise of
Class B Warrants unless the Class B Warrants are exercised before they are
redeemed. The Class B Warrants obtain provisions that protect the holders
against dilution by adjustment of the exercise price in certain events,
including stock dividends, stock splits, mergers and for other unusual events.
The Company is not required to issue fractional shares and fractional shares
equal to or exceeding one-half of a share shall be rounded to the nearest whole
share, while fractional shares
25
<PAGE>
equaling less than one-half of a share shall be disregarded. The holders of
the Class B Warrants will not possess any rights as shareholders of the Company
unless and until the Warrants are exercised.
Shares Eligible For Future Sales
As of September 10, 1997, the Company has outstanding an aggregate of
4,914,185 shares of Common Stock. Of the total outstanding shares of Common
Stock, 552,490 shares of Common Stock are freely tradable without restriction or
further registration under the Act, 3,010,000 shares of Common Stock were
eligible for resale after August 31, 1997 under Rule 144, and the remaining
1,351,695 shares of Common Stock will be eligible for resale on various dates
thereafter.
Under Rule 144, a person (or persons whose shares are aggregated) who has
beneficially owned restricted securities for at least one year, including the
holding period of any prior owner except an affiliate, would be generally
entitled to sell within any three month period a number of shares that does not
exceed the greater of (i) 1% of the number of then outstanding shares of the
Common Stock or (ii) the average weekly trading volume of the Common Stock in
the public market during the four calendar weeks preceding such sale. Sales
under Rule 144 are also subject to certain manner of sale provisions, notice
requirements and the availability of current public information about the
Company. Any person (or persons whose shares are aggregated) who is not deemed
to have been an affiliate of the Company at any time during the three months
preceding a sale, and who has beneficially owned shares for at least two years
(including any period of ownership of preceding nonaffiliated holders), would be
entitled to sell such shares under Rule 144(k) without regard to the volume
limitations, manner-of-sale provisions, public information requirements or
notice requirements.
Florida Anti-Takeover Statutes; Indemnification
Florida has enacted legislation that may deter or frustrate a take-over of
a Florida corporation. The Florida Control Share Act generally provides that
shares of Common Stock acquired in excess of certain specified thresholds will
not possess any voting rights unless such voting rights are approved by a
majority of the corporation's disinterested shareholders. The Florida Affiliated
Transactions Act generally requires super majority approval by disinterested
directors or shareholders of certain specified transactions between a
corporation and holders of more than 10% of the outstanding voting shares of the
corporation (or their affiliates). The Florida law permits in the Company's
Articles of Incorporation to require the Company to indemnify the Company's
directors, officers, employees and agents.
Options
As of the date hereof, there are stock options to purchase an aggregate of
666,666 shares of Common Stock outstanding, which were granted to C. John Knorr,
Jr., Chairman of the Board of this Company, on October 9, 1996 in consideration
for Mr. Knorr guaranteeing the payment of $1,000,000 pursuant to the Guarantee
Agreement between C. John Knorr, Jr. and WAMCO XXII, Ltd., dated August 6, 1996.
Additionally, warrants or options to purchase shares of Common Stock may be
expected to be provided to key employees, members of management, directors, and
consultants to the Company in the future under the Company's proposed Plan,
other option programs and agreements.
26
<PAGE>
Transfer Agent
The transfer agent for the Company's Shares of Common Stock is Florida
Atlantic Stock Transfer, Tamarac, Florida.
27
<PAGE>
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER STOCKHOLDER MATTERS.
As of September 10, 1997, there were approximately 285 stockholders of
record of the Company's Common Stock. The Company's Common Stock is currently
listed for trading on the over-the-counter bulletin board under the symbol
"PELP". The following table sets forth, for the period since October 20, 1995,
the high and low closing sales prices for the Common Stock as reported by the
OTC Bulletin Board.
Common Stock
------------
High Low
---- ---
1995
Fourth Quarter 8-1/16 6-5/8
(commencing October 20, 1995) 8-1/2 6-3/4
1996
First Quarter 8-1/2 .50
Second Quarter 6 .25
Third Quarter 2-1/2 .06
Fourth Quarter 2 .06
1997
First Quarter 1.875 .12
Second Quarter 2.875 1
Third Quarter (through August 30, 1997) 2 .50
The transfer agent for the Company's Common Stock is Florida Atlantic Stock
Transfer, Inc., 5701 N. Pine Island Road, Tamarac, Florida 33321.
The Company has never paid cash dividends on its Common Stock. The Company
presently intends to retain future earnings, if any, to finance the expansion of
its business and does not anticipate that any cash dividends will be paid in the
foreseeable future. The future dividend policy will depend on the Company's
earnings, capital requirements, expansion plans, financial condition and other
relevant factors.
ITEM 2. LEGAL PROCEEDINGS.
The Partnership is involved in a Code Enforcement proceeding against the
Monroe County Code Enforcement Board in connection with the use of camping on
the south side of Sunshine Key. The Partnership is currently seeking damages in
connection with a judgment rendered in favor of the Partnership from the Third
District Court of Appeal. The Company has a 99%
28
<PAGE>
interest in any damages recovered by the Partnership by virtue of the
Company's 99% limited partnership interest in the Partnership.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
Not applicable.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
On June 11, 1990, the Company issued 1,000 shares of Common Stock to the
Company's incorporator, Rene Gomez, for consideration of $500 plus services
rendered. The issuance of such shares was exempt from the registration
requirements of the Act pursuant to Section 4(2) of the Act.
On June 20, 1990, the Company issued an aggregate of 600,000 shares and
200,000 Class A Warrants to eight of the founders of the Company in
consideration of an aggregate of $6,000 and 3,000,000 shares to the ninth
founder of the Company for consideration of $3,000. The Class A Warrants are
exercisable until March 19, 2000 on a one for one basis to Common Stock at an
exercise price of $5.00 per share. The issuance of such shares and warrants was
exempt from the registration requirements of the Act pursuant to Section 4(2) of
the Act.
On August 13, 1990, the Company issued an aggregate of 200,000 Class B
Warrants to four of the founders of the Company for services rendered. The
Warrants are exercisable until March 19, 2000 on a one for one basis to common
stock at an exercise price of $5.00 per share. The issuance of such warrants was
exempt from the registration requirements of the Act pursuant to Section 4(2) of
the Act.
Between approximately September 15, 1990 and November 23, 1990, the Company
issued an aggregate of 10,000 shares of Common Stock to investors in a private
offering of the Company's Common Stock. The Company received gross proceeds of
$10,000 from this private offering. The issuance of such shares was exempt from
the registration requirements of the Act pursuant to Rule 504 and Section 4(2)
of the Act.
On August 31, 1995, the Company issued an aggregate of 3,010,000 shares of
Common Stock to the 36 limited partners of Sunshine Key Associates Limited
Partnership pursuant to a Share Exchange Agreement. The issuance of such shares
was exempt from the registration requirements of the Act pursuant to Section
4(2) of the Act.
On April 3, 1997, the Company issued 200,000 shares of Common Stock to
certain consultants of the Company in satisfaction for services rendered was
exempt from the registration requirements of the Act pursuant to Section 4(2) of
the Act.
29
<PAGE>
On May 7, 1997, the Company issued 6,667 shares of Common Stock to La
Regional Corporation. The issuance of such shares was pursuant to a capital
contribution of $10,000 by La Regional Corporation and was exempt from the
registration requirements of the Act pursuant to Section 4(2) of the Act.
On June 3, 1997, the Company issued an aggregate of 1,067,362 shares of
Common Stock in consideration for the satisfaction of certain outstanding loans,
as follows: 425,093 shares were issued to Carl J. Knorr, Jr. Of the total issued
to Mr. Knorr, 91,760 shares were the result of debt being transformed into
equity, and 333,333 shares were in consideration for a guarantee of a $1,000,000
commitment made by the Company. 101,203 shares were issued to Infinity
Investment Group, Inc. and were also the result of debt being transferred into
equity. 210,733 shares were issued to Thomas L. Callahan, and the issuance was
also the result of debt being transformed into equity. 130,333 shares were
issued to Workout Associates and were the result of debt being transferred to
equity. 200,000 shares were issued to Jane Bergman and were the result of
compensation for an Employment Contract.
On June 11, 1997, 20,166 shares were issued by the Company at a purchase
price of $1.50 per share to two investors. The issuance of such shares was
exempt from the Registration requirements of the Act pursuant to Section 4(2) of
the Act.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Florida Business Corporation Act (the "Corporation Act") permits the
indemnification of directors, employees, officers and agents of Florida
corporations. The Company's Articles of Incorporation (the "Articles") and
Bylaws provide that the Company shall indemnify its directors and officers to
the fullest extent permitted by the Corporation Act. Insofar as indemnification
for liabilities arising under the Act may be permitted to directors, officers or
persons controlling the Company pursuant to the foregoing provisions, the
Company has been informed that, in the opinion of the Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
PART F/S
The financial statements and supplementary data are included herein.
FINANCIAL STATEMENTS AND EXHIBITS
The following audited Financial Statements for the Company, including the
audited balance sheet at December 31, 1995 and 1996 and the related audited
statements of operations, changes in capital deficiency, and cash flows for each
of the years ended December 31, 1995 and 1996 and the unaudited balance sheet at
June 30, 1997 and the related unaudited statements of operations, changes in
capital deficiency, and cash flows for each of the six months ended June 30,
1997 and June 30, 1996.
30
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
Exhibits Description of Document
- -------- -----------------------
3.1 Articles of Incorporation dated 5/30/90
3.2 Articles of Incorporation Amendment to the Articles
of Incorporation dated 6/29/95(1)
3.3 Articles of Incorporation Amendment to the Articles
of Incorporation dated 6/20/90(1)
3.4 Articles of Incorporation Amendment to the Articles
of Incorporation dated 8/15/95(1)
3.5 Ohio Key I Articles of Incorporation dated 12/16/96(1)
3.6 Ohio Key II Articles of Incorporation dated 12/16/96(1)
3.7 Bylaws(1)
3.8 Ohio Key I Bylaws(1)
3.9 Ohio Key II Bylaws(1)
4.1 Specimen Common Stock Certificate(1)
4.2 Specimen Class A Common Stock Purchase Warrant(1)
4.3 Specimen Class B Common Stock Purchase Warrant(1)
10.1 Share Exchange Agreement between the Company and all of the
limited partners of Sunshine Key Associates Limited Partnership
effective August 30, 1995(1)
10.2 Loan Restructuring Agreement between Ohio Key I, Inc.; WAMCO
XXII Ltd. and Sunshine Key Associates Limited Partnership
dated 1/31/96(1)
10.3 Promissory Note between WAMCO XXII, Ltd., Ohio Key I, Inc. and
Ohio Key II, Inc. dated 12/31/96(1)
10.4 Restated Mortgage and Assumption Agreement(1)
10.5 Assignment for Assumption of Leases between Ohio Key I, Inc
and Sunshine Key Associates Limited Partnership dated 1/24/97(1)
10.6 Agreement for Assumption of Liabilities between Ohio Key I, Inc.
and Sunshine Key Associates Limited Partnership dated 1/24/97(1)
10.7 Assignment and Assumption of Contracts between Ohio Key I, Inc.
and Sunshine Key Associates Limited Partnership dated 1/24/97(1)
10.8 Assignment between Ohio Key I, Inc. and Sunshine Key Associates
Limited Partnership dated 1/24/97(1)
10.9 Employment Agreement between the Company and Timothy Benjamin
dated 10/31/96(1)
10.10 Employment Agreement between the Company and Jane E. Bergman
dated 6/1/97(1)
- ---------------
(1) Filed herewith
31
<PAGE>
10.11 Stock Option Agreement between the Company and Timothy Benjamin
dated 10/01/96.(1)
99.1 Order Confirming Debtor's Modified Third Amended Plan of
Reorganization, Case No. 96-10174-BKC-RAM in the United States
Bankruptcy Court, Southern District of Florida(1)
99.2 Company's Modified Third Amended Plan of Reorganization(1)
32
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
PELICAN PROPERTIES
INTERNATIONAL, CORP.
Date: September 11, 1997 By: /s/ Jane E. Bergman
-----------------------
Jane E. Bergman, President
33
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this Amendment to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
PELICAN PROPERTIES
INTERNATIONAL, CORP.
Date: ____________, 1997 By:
-----------------------
Jane E. Bergman, President
34
<PAGE>
PELICAN PROPERTIES,
INTERNATIONAL CORP.
AND SUBSIDIARY
(FORMERLY KNOWN AS OPTIMUM COMPUTING, INC.)
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1996 AND 1995
GARCIA, ESPINOSA, MIYARES & CO.
"A Partnership of Professional Associations"
Certified Public Accountants
100 Almeria Avenue, Suite 230
Coral Gables, FL 33134
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
(FORMERLY KNOWN AS OPTIMUM COMPUTING, INC.)
Table of Contents
Page
----
Independent Auditors' Report 1-2
Consolidated Balance Sheet 3
Consolidated Statements of Operations 4
Consolidated Statements of Stockholders' Equity (Deficiency) 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7-24
<PAGE>
GARCIA, ESPINOSA, MIYARES, & CO.
"A PARTNERSHIP OF PROFESSIONAL ASSOCIATIONS" Certified Public Accountants
================================================================================
Roy A. Garcia, C.P.A. 100 Almeria Avenue, Suite #230
Rafael A. Espinosa, C.P.A. Coral Gables, Florida 33134
Leonardo Miyares, C.P.A. Telephone: (305) 529-0345
Fax: (305) 529-5401
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Pelican Properties, International Corp. and Subsidiary
(Formerly known as Optimum Computing, Inc.)
Miami, Florida
We have audited the accompanying consolidated balance sheet of Pelican
Properties, International Corp. and Subsidiary (the "Company") as of December
31, 1996, and the related consolidated statements of operations, stockholders'
equity (deficiency) and cash flows for the years ended December 31, 1996 and
1995. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Pelican
Properties, International Corp. (Formerly known as Optimum Computing, Inc.) and
Subsidiary at December 31, 1996, and the results of their operations and their
cash flows for the years ended December 31, 1996 and 1995 in conformity with
generally accepted accounting principles.
As discussed in Note 6 to the financial statements, Sunshine Key Associates
Limited Partnership (the "Subsidiary"), which represents the majority of the
Company's assets and liabilities, initiated a voluntary petition under Chapter
11 of the United States Bankruptcy Code in January of 1996. This action was
taken primarily as a response to the foreclosure action initiated by
Nationsbank, N.A. with respect to the real property owned by the Subsidiary. In
May of 1996 the claims of Nationsbank were acquired by WAMCO XXII, Limited
("WAMCO"). On or about July 1996 WAMCO and Sunshine Key entered into a
Stipulation for Settlement. Under the terms of the Settlement Agreement,
1
<PAGE>
Pelican Properties, International Corp. and Subsidiary
(Formerly known as Optimum Computing, Inc.)
Miami, Florida
(Continued)
WAMCO agreed to accept the sum of $5,700,000 as a discounted balance of the
indebtedness owed by Sunshine Key, as reflected in the modified Third Amended
Plan of Reorganization as of October 29, 1996. Sunshine Key emerged from the
bankruptcy proceeding and is now operating as the Reorganized Debtor and
responsible for its pre-petition liabilities as provided by the plan.
Furthermore, as also stated in Note 6 to the financial statements, as a result
of the bankruptcy plan and related debt restructuring, substantially all assets
and liabilities of the Subsidiary were merged into Ohio Key I, Inc. and Ohio Key
II, Inc. on January 1, 1997. Ohio Key I, Inc. and Ohio Key II, Inc. are wholly
owned subsidiaries of Pelican Properties, International Corp., which were
created in January of 1997.
/s/ GARCIA, ESPINOSA, MIYARES & CO.
GARCIA, ESPINOSA, MIYARES & CO.
Certified Public Accountants
Coral Gables, Florida
April 9, 1997
2
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
AND SUBSIDIARY
Consolidated Balance Sheet
December 31, 1996
ASSETS
CURRENT ASSETS
Cash $105,342
Accounts receivable 87,016
Inventories 56,325
Other current assets 279,701
-----------
Total current assets $528,384
PROPERTY, PLANT AND EQUIPMENT, NET OF
ACCUMULATED DEPRECIATION OF $2,458,114 6,116,603
OTHER ASSETS 453,248
-----------
TOTAL ASSETS $7,098,235
===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES
Accounts payable and accrued expenses $249,226
Deferred revenues 216,345
Current portion of pre-petition debt 54,982
Other current liabilities 396,834
Current maturities of long-term debt 115,764
-----------
Total current liabilities 1,033,151
-----------
LONG TERM LIABILITIES
Long term debt 6,010,637
Deferred income taxes 977
Other Long Term Liabilities 801,670
-----------
Total long term liabilities 6,813,284
-----------
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common stock, par value $.001; 100,000,000
shares authorized; 4,578,362 shares issued 4,578
Additional paid in capital 3,169,609
Accumulated deficit (3,922,382)
Less 4,906 shares in treasury, at par (5)
-----------
Total stockholders' equity (deficiency) (748,200)
-----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIENCY) $7,098,235
==========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
AND SUBSIDIARY
Consolidated Statements of Operations
For the years ended December 31, 1996 and 1995
1996 1995
REVENUES $ 3,342,310 $ 3,144,932
COST OF REVENUES 1,022,029 1,001,070
----------- -----------
GROSS PROFIT 2,320,281 2,143,862
EXPENSES
Operating 1,272,766 802,398
General and administrative 520,444 1,000,406
Interest 243,889 1,646,650
Depreciation 212,168 276,295
----------- -----------
Total Expenses 2,249,267 3,725,749
----------- -----------
INCOME (LOSS) FROM OPERATIONS 71,014 (1,581,887)
OTHER INCOME 3,422 --
----------- -----------
INCOME (LOSS)BEFORE
INCOME TAXES 74,436 (1,581,887)
PROVISION FOR INCOME TAXES 60,101 --
----------- -----------
INCOME BEFORE MINORITY INTEREST
AND EXTRAORDINARY GAIN 14,335 (1,581,887)
MINORITY INTEREST IN INCOME
(LOSS) FROM SUBSIDIARY (2,181) 23,095
----------- -----------
INCOME (LOSS) BEFORE
EXTRAORDINARY GAIN 12,154 (1,558,792)
EXTRAORDINARY GAIN -
(Net of minority interest of $28,331) 1,912,093 --
----------- -----------
NET INCOME (LOSS) $ 1,924,247 $(1,558,792)
=========== ===========
NET INCOME (LOSS) PER
COMMON SHARE, BEFORE
EXTRAORDINARY INCOME $ .003 $ (.43)
=========== ===========
NET INCOME (LOSS) PER
COMMON SHARE $ .460 $ (.43)
=========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 4,184,481 3,609,361
=========== ===========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
<TABLE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
AND SUBSIDIARY
Consolidated Statement of Stockholders' Equity (Deficiency)
For the Years Ended December 31, 1996 and 1995
<CAPTION>
Additional
Common Stock Paid in Accumulated Treasury Stock Total
Shares Amount Capital Deficit Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C>
Bal. January 1, 1995 10,000 -- 1,989,500 (4,287,837) -- -- (2,298,337)
Conversion of pre-petition
debt to equity -- -- 311,891 -- -- -- 311,891
Number of authorized shares
increased to 100,000,000
with par value of $.001 -- -- -- -- -- -- --
Forward stock split, 361.1
shares per common share 3,601,000 3,611 (3,611) -- -- -- --
Treasury stock contribution -- -- 3,001 -- (3,001,000) (3,001) --
Treasury stock issued in
exchange for interest in
subsidiary -- -- -- -- 2,996,094 2,996 2,996
Issue of common stock
options -- -- -- -- -- -- --
Net loss for the year -- -- -- (1,558,792) -- -- (1,558,792)
----------- ------- ----------- ----------- ----------- ----------- -----------
Bal. December 31, 1995 3,611,000 $ 3,611 $ 2,300,781 ($5,846,629) (4,906) ($ 5) ($3,542,242)
----------- ------- ----------- ----------- ----------- ----------- -----------
Conversion of 1996 pre-petition
debt to equity 534,029 534 800,511 -- -- -- 801,045
Issue of stock compensation 100,000 100 6,150 -- -- -- 6,250
Issue of stock compensation 333,333 333 20,500 -- -- -- 20,833
Issue of common stock
options-loan origination -- -- 41,667 -- -- -- 41,667
Net income for the year -- -- -- 1,924,247 -- -- 1,924,247
----------- ------- ----------- ----------- ----------- ----------- -----------
Bal. December 31, 1996 4,578,362 $ 4,578 $ 3,169,609 ($3,922,382) (4,906) ($ 5) ($ 748,200)
=========== ======= =========== =========== =========== =========== ===========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>
5
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Consolidated Statements of Cash Flows
For the years ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income (loss): $ 1,924,247 $(1,558,792)
Adjustments to reconcile net income
(loss) to net cash (used) provided
by operating activities:
Depreciation 212,168 276,295
Extraordinary gain - forgiveness of debt (1,940,424) --
Non-cash compensation 6,250
Decrease (Increase) in accounts receivable (9,753) 27,731
Decrease (Increase) in inventories (9,481) 59,609
Decrease (Increase) in other receivable (2,473) 4,985
Decrease (Increase) in other current assets 68,789 (264,529)
Increase (Decrease) in accounts payable and
accrued expenses (271,036) 626,416
Increase in deferred revenues 3,108 2,298
Increase in other current liabilities 53,107 317,781
Increase in due to affiliate 102,272
Increase in deferred tax liability 977
Increase (Decrease)in Pre-Petition Chapter 11 debt 442,979 (52,697)
----------- -----------
Net adjustments (1,343,517) 997,889
----------- -----------
Net cash (used) provided by operating activities 580,730 (560,903)
----------- -----------
Cash flows from investing activities:
Capital expenditures (144,319) (160,508)
----------- -----------
Net cash (used) by investing activities (144,319) (160,508)
----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt (300,000) (65,569)
Loan proceeds from the Small
Business Administration -- 30,400
Proceeds from other loans 70,252 --
Proceeds from partner loans -- 557,249
----------- -----------
Net cash (used) provided by
financing activities (229,748) 522,080
----------- -----------
Net increase (decrease) in cash and cash equivalents 206,663 (199,331)
Cash and cash equivalents, beginning of year (101,321) 98,010
----------- -----------
Cash and cash equivalents, end of year $ 105,342 $ (101,321)
=========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 1 - Summary of significant accounting policies
Business Activity and Business Risk
Pelican Properties, International Corp. was incorporated in the State of Florida
under its previous name "Optimum Computing, Inc." in June of 1990. Optimum
Computing, Inc. applied for, and successfully received, a name change for said
corporation. The new name was made effective as of June of 1995. The Company is
in the business of acquiring suitable business ventures primarily in the travel
and leisure industry. Sunshine Key Associates, Ltd. Partnership, ("The
Subsidiary") was formed in 1987 and commenced operations in February 1988. The
Subsidiary owns and operates a recreational vehicle and camping resort as its
primary business. It additionally owns and operates a convenience store, gas
station, bait and tackle shop, and marina on its premises. In August of 1995 an
agreement was consummated whereby the majority of Limited Partners of the
Subsidiary exchanged limited partnership interests for shares of the common
stock in Pelican Properties, International Corp. ("Pelican"). The Company did
not acquire any part of the general partnership interest in the Subsidiary. As
of December 31, 1996 the Subsidiary represented the majority of the Company's
assets and liabilities. Furthermore, as also stated in Note 6 to the financial
statements, as a result of the bankruptcy plan and related debt restructuring,
substantially all assets and liabilities of the Subsidiary were merged into Ohio
Key I, Inc. and Ohio Key II, Inc. on January 1, 1997. Ohio Key I, Inc. and Ohio
Key II, Inc. are newly formed, wholly owned subsidiaries of Pelican Properties,
International Corp. incorporated in January of 1997. No pro forma information
has been presented as if the merger took place on December 31, 1996 because Ohio
Key I, Inc. and Ohio Key, II, Inc. were formed exclusively to succeed the
business of Sunshine Key, and thus, the merger has no material impact on the
consolidated financial statements of the Company.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires that management make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the financial statements of
Pelican Properties, International Corp. and its 98.54% owned Subsidiary,
Sunshine Key Associates Limited Partnership ("The Company"). All material
intercompany transactions and balances have been eliminated.
7
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 1 - Summary of significant accounting policies
(Continued)
On August 31, 1995, Pelican Properties, International Corp. acquired 98.54% of
the partnership interests in Sunshine Key Associates Limited Partnership (the
Subsidiary). For accounting purposes the acquisition has been treated as a
recapitalization of Sunshine Key with Sunshine Key as the acquirer (reverse
acquisition). The historical financial statements prior to August 31, 1995 are
those of Sunshine Key. The financial statements as of December 31, 1996 and for
the years ended December 31, 1996 and 1995 are presented as if the acquisition
took place January 1, 1994. No pro forma information is shown because Pelican
Properties, International Corp. had no material activity before the acquisition.
Cash and Cash Equivalents
Cash and cash equivalents are defined as highly liquid financial instruments
with maturities of three months or less. The Company maintains its cash and cash
equivalents with high quality financial institutions. At times, such balances
may be in excess of the federally insured limit of $100,000.
Inventories
Inventories consisting of groceries, gift shop items, bait and tackle, gas, oil,
and other supplies are valued at the lower of cost or market. Cost is determined
using the first in, first-out (FIFO) method.
Property, plant and equipment
Property, plant and equipment are recorded at cost. Depreciation is provided
using the straight-line method over the estimated useful lives (5-31 years) of
the respective assets. Expenditures for major improvements and additions are
capitalized while replacements, maintenance and repairs which do not improve or
extend the lives of the respective assets are expensed as incurred.
Income Taxes
Deferred income taxes are provided in amounts sufficient to give effect to
temporary differences between financial and tax reporting, in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes". However, no tax benefit or deferred tax asset is reflected in the
accompanying financial statements
8
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 1 - Summary of significant accounting policies
(Continued)
for the year ended December 31, 1995 because management does not believe that
under current tax law it will be able to carry forward the Company's 1995 net
operating losses. Furthermore, management does not believe that any part of the
extraordinary gain for the year ended December 31, 1996, resulting in its
entirety from the forgiveness of debt incurred by the Subsidiary under its
Chapter 11 Plan of Reorganization, will be taxable to the Company under the
bankruptcy exception, as provided in Code Section 108 of the Internal Revenue
Code. The entire gain has been treated as a permanent difference for the 1996
income tax expense calculation. In the event that the Internal Revenue Service
would deem that all, or part of the extraordinary gain is taxable, the Company
may incur an additional, material tax liability. The financial statements do not
include any adjustments that may result from this uncertainty.
Offering expenses
The Company capitalizes expenses incurred in connection with its public offering
of securities. Such expenses are included in "Other Assets". At December 31,
1996 capitalized offering expenses amounted to $205,548. Upon finalization of
the public offering, capitalized offering expenses will be charged to paid in
capital.
Net income (loss) per share
The net income (loss) per share is computed by dividing the net income or (loss)
for the period by the weighted average number of shares outstanding (as adjusted
retroactively for the dilutive effect of prior year common stock options) for
the period plus the dilutive effect of outstanding common stock options and
warrants considered common stock equivalents. Stock options and other common
stock equivalents are excluded from the 1995 net loss per share calculation as
their effect would be antidilutive. The difference between primary and fully
diluted earnings per share is not material.
9
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 1 - Summary of significant accounting policies
(Continued)
New Accounting Pronouncements
The Company adopted the following Statements of Financial Accounting Standards
("SFAS") in the year ending December 31, 1996:
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" establishes accounting standards for the
impairment of long-lived assets, certain identifiable intangibles, and goodwill
related to those assets to be held and used for long-lived assets and certain
identifiable intangibles to be disposed of. Long-Lived assets and certain
identifiable intangibles to be held and used by a Company are required to be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Measurement of and
impairment loss for such long-lived assets and identifiable intangibles should
be passed on to the fair value of the asset. Long-Lived assets and certain
identifiable intangibles to be disposed of are required to be reported generally
at the lower of the carrying amount or fair value less the cost to sell. SFAS
No. 121 is effective for fiscal years that begin after December 15, 1995.
Adoption of this Statement had no impact on the Company's financial position,
results of operations, or liquidity.
SFAS No. 123, "Accounting for Stock-Based Compensation," establishes financial
accounting and reporting standards for stock-based employee compensation plans,
including stock options, stock purchase plans, restricted stock and stock
appreciation rights. SFAS No. 123 defines and encourages the use of the fair
value method of accounting for employee stock-based compensation. Continuing use
of the intrinsic value based method of accounting prescribed in Accounting
Principles Board Opinion No. 25 (APB 25") for measurement of employee
stock-based compensation is allowed with pro-forma disclosures of net income and
earnings per share as if their value method of accounting had been applied.
Transactions in which equity instruments are issued in exchange for goods or
services from non-employees must be accounted for based on the fair value of the
consideration received or of the equity instrument issued, whichever is more
reliably measurable. SFAS No. 123 is effective for transactions entered into in
fiscal years that begin after December 15, 1995. Adoption of this Statement did
not have a material impact on the Company's financial position, results of
operations, or liquidity.
10
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 2 - Accounts Receivable
Accounts receivable at December 31, 1996 consisted of community fees, credit
card charges, and storage fees.
Note 3 - Other current assets
At December 31, 1996 Other current assets consisted of the following:
Due from employees $ 2,473
Due from American Capital and Equity Corporation 277,228
--------
$279,701
========
The amount due from American Capital and Equity Corporation is the excess of
proceeds paid out of the respective $1,000,000 loan from American Capital. The
$1,000,000 loan was transacted retroactive to December 31, 1996.
Note 4 - Property, plant and equipment
Property, plant and equipment at December 31, 1996 consisted of the following:
Life
----
Land - $3,814,761
Buildings and improvements 15-31 years 3,267,077
Machinery and equipment 5-7 971,263
Furniture and fixtures 7 179,577
Vehicles and trailers 5-7 200,540
Pools, courts, etc. 7 133,134
Computer software 5 8,365
----------
8,574,717
Less accumulated depreciation 2,458,114
----------
$6,116,603
==========
Depreciation expense for the years ended December 31, 1996 and 1995 was $212,168
and $276,295, respectively.
Property, plant and equipment are pledged as collateral as described in Note 6
to the financial statements.
Property, plant, and equipment are located primarily in Monroe County, Florida.
11
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 5 - Other assets (Long Term)
At December 31, 1996, Other Assets consisted of the following:
Security Deposits $ 37,105
Minority Interest 21,970
Loan Origination Costs 185,272
Offering Expenses 205,548
Other receivable 3,353
--------
$453,248
Beginning in 1997 Loan Origination Costs are to be amortized over 23 months.
Note 6 - Long-term debt
Mortgage note payable to WAMCO XXII, LTD.
The Note was restructured and restated in January of 1997 retroactive to
December 31, 1996. The new agreement provides for interest payments of
$5,000 to be paid monthly through August 30, 1997. Commencing on August 30,
1997, the Note will bear interest at the rate of 9% per annum. Beginning on
September 30, 1997, the Subsidiary will make payments of principal and
interest in the amount of $39,442. The Note will mature on October 30, 1999
at which time the outstanding principal balance hereof and all accrued
interest hereon will become due and payable in full. On January 1, 1997,
the note and property were merged into Ohio Key I, Inc. and Ohio Key II,
Inc., wholly owned subsidiaries of Pelican Properties, International Corp.
The Note is secured by a mortgage and by substantially all property and
equipment and is guaranteed by the general partner of the Subsidiary.
$4,800,000
12
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 6 - Long-term debt (continued)
Promissory note payable c/o America Capital & Equity Corp.
Eleven notes payable at 12% per annum. Such principal sums shall be payable
in 23 consecutive monthly installments of interest only commencing February
1997 and ending December 1998, at which time the outstanding principal
balance hereof and all accrued interest hereon will become due and payable
in full. On January 1, 1997, the note and property are merged into Ohio Key
I, Inc. and Ohio Key II, Inc., wholly owned subsidiaries of Pelican
Properties, International Corp. The Note is secured by a mortgage and by
substantially all property and equipment and is guaranteed by the general
partner of the Subsidiary.
$1,000,000
Notes payable to Small Business Administration
Two notes payable to the Small Business Administration were reorganized as
a result of the Modified Third Amended Plan of Reorganization. The notes
shall be paid over ten years and shall accrue interest at the rate of 4%
per annum. For the first 24 months, commencing January 1997, the SBA shall
receive monthly interest only payments of $2,000. Thereafter, the
outstanding principal balance hereof and all accrued interest hereon shall
be amortized over a period of eight years. On January 1, 1997, the note and
property are merged into Ohio Key I, Inc. and Ohio Key II, Inc., wholly
owned subsidiaries of Pelican Properties, International Corp.
The Notes are secured by a mortgage on substantially all property and equipment.
$ 326,401
----------
6,126,401
Less: Current maturities (115,764)
----------
Long Term debt $6,010,637
----------
13
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 6 - Long-term debt (continued)
The aggregate maturities of long term debt subsequent to December 31, 1996 are
as follows:
1997 $ 115,764
1998 1,053,913
1999 4,665,653
2000 - 2007 291,071
----------
Total $6,126,401
On January 11, 1996, Sunshine Key Associates Limited Partnership (the
"Subsidiary") initiated a voluntary petition under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for the Southern
District of Florida. The case was filed in response to the foreclosure action
initiated by Nationsbank, N.A. with respect to the real property owned by
Sunshine Key. In May of 1996 the claims of Nationsbank were acquired by WAMCO
XXII, Limited ("WAMCO"). Following various contested matters before the
Bankruptcy Court, Sunshine Key was ultimately able to negotiate a settlement of
the bankruptcy case with WAMCO XXII, Ltd. (a Texas limited partnership) . The
agreement was reflected in the Modified Third Amended Plan of Reorganization
proposed by Sunshine Key in the case. The plan called for an effective date of
December 20, 1996. On January of 1997, Sunshine Key undertook the transactions
necessary to make the Plan effective, including a refinancing of the Property in
order to reduce the obligation to WAMCO to $4.7 million dollars. As per the
agreement, Sunshine Key paid WAMCO a total amount of $1 million dollars towards
principal, of which one hundred thousand dollars were paid directly by Sunshine
Key in January 1997. The discounted obligation was evidenced by a Restated Note
and Mortgage which were executed by Sunshine Key in January 1997 retroactive to
December 31, 1996.
In exchange for said concessions, the Subsidiary agreed, to grant WAMCO (XXII)
continuing relief from the Automatic Stay to complete Foreclosure in the event
of a default by the Subsidiary or the Obligor under the terms of the agreement
or the occurrence of a bankruptcy filing by or against the Obligor and (ii) full
relief from the Automatic Stay to foreclose the mortgage securing the
restructured debt in the event of any future bankruptcy filing by or against the
Obligor.
14
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 6 - Long-term debt (continued)
Aside from the treatment of the mortgage claims, the Plan also proposes to
re-amortize the indebtedness evidenced by the second mortgage on the property
and that the assets and liabilities of the Subsidiary be transferred to wholly
owned subsidiaries of Pelican Properties, International Corporation. As of
January 1, 1997, the Subsidiary's assets and liabilities are merged into Ohio
Key I, Inc. and Ohio Key II, Inc. wholly owned subsidiaries of Pelican
Properties, International Corp. Under the Modified Third Amended Plan of
Reorganization, Sunshine Key will pay unsecured creditors in full, in cash, over
a period of 48 months.
Pursuant to Section 1141 of the Bankruptcy Code, the entry of the Confirmation
Order discharges Sunshine Key of any and all liabilities listed on the
Schedules, except as otherwise provided in the Plan. As of October 29, 1996
Sunshine Key emerged from the bankruptcy proceeding and is now operating as the
Reorganized Debtor. It is management's opinion that they have complied, to date,
with all transactions pursuant to the Plan, and necessary to refinance the
Mortgage held by WAMCO XXII, Ltd.
Interest expense for 1996 amounted to $243,889. Interest expense for 1996 was
the aggregate of 11 days of interest accrued on notes payable prior to Sunshine
Key filing for bankruptcy and adequate protection payments paid to the various
creditors as indicated by the court. Creditors are entitled to post petition
interest accrual only if they are oversecured creditors. The court determined
that the fair market value of the property was less than that of the mortgage
note creditor claims (for purposes of stay relief only) and thus interest did
not accrue on mortgage notes during the term of the Partnership's bankruptcy.
Interest expense for 1995 amounted to $1,646,650. Interest expense for 1995 was
accrued primarily at the stated loan "default" rates ranging from 18% to 25% per
annum. Most of this interest was eventually forgiven when the notes were
restructured (see note 19).
15
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 7 - Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses at December 31,1996 consisted of the
following:
Accounts payable $ 77,523
Wages & payroll taxes payable 19,841
Sales taxes payable 23,135
Accrued interest 25,637
Accrued personal property taxes 7,005
Accrued real estates taxes 96,085
--------
$249,226
========
Note 8 - Other Current Liabilities
Other current liabilities at December 31, 1996 consisted of the following:
Due to affiliate $ 2,491
Rents payable to park model owners 7,560
Reservation deposits 327,659
Income taxes payable 59,124
--------
$396,834
========
Note 9 - Other Long Term Liabilities
Other long term liabilities at December 31, 1996 consisted of the following:
Due to affiliate $102,272
Pre-petition debt, net of current portion 387,995
Other Loans payable 77,250
Loans payable to former partners 234,153
--------
$801,670
========
16
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 10 - Income taxes
The net current and non current deferred tax liability as presented in the
accompanying balance sheet consist of the following amounts of deferred tax
liabilities:
Current deferred tax liability $ 0
Non-current deferred tax liability 977
----
$977
====
The deferred tax liability balance is the result of differences using
accelerated depreciation methods and elections for federal and state tax
purposes.
The components for income taxes for the year ended December 31, 1996
are as follows:
Current
Federal $ 49,553
State 9,571
--------
Net current income taxes 59,124
Deferred
Federal 822
State 155
--------
Net deferred income taxes 977
Total income taxes $ 60,101
========
17
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 10 - Income taxes (continued)
On August 31, 1995 Pelican Properties acquired 98.54% of the Partnership
interest of Sunshine Key as a recapitalization of Sunshine Key with Sunshine Key
as the acquirer, subjecting the majority of the Subsidiary's net income or loss
to corporate federal and state income taxes. Accordingly, there was no
cumulative effect of adopting SFAS No. 109 and prior year financial statements
were not restated. In accordance with the provision SFAS No. 109, deferred
income taxes reflect the temporary tax consequences of future years of
differences between the tax and financial reporting basis of assets and
liabilities. The 1996 income tax expense is disproportionately high in
comparison to 1996 net income before taxes due to permanent differences
resulting from lower tax depreciation on company assets whose depreciation was
accelerated for tax purposes in years prior to the acquisition.
Note 11 - Related Parties Transactions
Infinity Investments Group, Inc. ("the General Partner") is a Florida
corporation and the general partner of the Subsidiary. As per terms of a
management agreement dated January 2, 1990 between the General Partner and the
Subsidiary, the Company is to provide management services to the Subsidiary in
exchange for a management fee equaling three percent (3%)of front desk revenues,
plus two percent (2%) of total gross revenues, payable monthly.
Management fees incurred for the years ended December 31, 1996 and 1995 were
$106,506 and $95,249, respectively.
Included in due to affiliates under other long term liabilities is $102,272 due
to the General Partner at December 31, 1996.
18
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 12 - Revenues
Revenues for the years ended December 31, 1996 and 1995 consist of the
following:
1996 1995
Site rentals $1,466,699 $1,157,531
Merchandise sales 1,444,373 1,375,390
Other 431,238 612,011
---------- ----------
$3,342,310 $3,144,932
========== ==========
Other revenues consist of community fees and rental management income.
Note 13 - Contingencies and Subsequent Events
Sunshine Key vs. LifeCo. On or about February 1995, litigation was commenced by
Sunshine Key Associates Limited Partnership for damages and court costs against
Nations One Mortgage Services, Inc., f/k/a LifeCo. Mortgage Services, Inc. for
failure to close upon its mortgage loan commitment and its failure to return to
Sunshine Key commitment fees in the amount of $30,000. The defendants have
responded to the lawsuit and discovery has been completed. Said amount was
charged to interest expense for the year ended December 31, 1994. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Monroe County Code Enforcement Board vs. Sunshine Key. This is a Code
Enforcement case arising out of the use of camping on the south side of Sunshine
Key. This also resulted in an adverse ruling and a lien against Sunshine Key's
property. This matter was on appeal and in June of 1996 the Court ruled that the
essential requirements of law had been met by the Code Enforcement Board and
upheld the decision of the Code Enforcement Board. This case is on appeal
pending before the Third District Court of Appeal. Despite the pendency of this
appeal Sunshine Key has reached an agreement with Monroe County that in the
event the appeal is lost they will be required to pay Monroe County $20,000 plus
$7,500 in legal expenses in full settlement of all claims. The financial
statements include a charge to expenses in 1996 in the full amount of $27,500
accrued under "Pre-petition debt".
19
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 13 - Contingencies and Subsequent Events (continued)
Sunshine Key vs. American Southern Home Insurance. In September of 1995,
litigation was commenced by Sunshine Key Associates Limited Partnership against
American Southern Home Insurance Company ("Southern"). Sunshine Key brought suit
against Southern for the recovery of damages, court costs and reasonable
attorneys' fees based upon Southern's failure to pay Sunshine Key for a loss
which was covered by an insurance policy issued by Southern for the benefit of
Sunshine Key. The case was settled during January 1997 and it is anticipated
that settlement proceeds will be received. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Legal fee expenses incurred for the years ended December 31, 1996 and 1995 were
approximately $84,000 and $163,230, respectively.
As previously stated in Note 6 to the financial statements, as a result of the
bankruptcy plan and related debt restructuring, all assets and liabilities of
the Subsidiary were merged into Ohio Key I, Inc. and Ohio Key II, Inc., wholly
owned subsidiaries of Pelican Properties, International Corp. at January 1,
1997. While the Subsidiary and its successors are currently paying the mortgage
holders under the terms of all of the various restructured and new notes
payable, foreclosure by any of the mortgage holders upon default of any of the
terms and conditions of the agreements (see note 6), may at that time, terminate
the Company's ability to satisfy their remaining obligations and pose
substantial doubt about its ability to continue as a going concern in future
years. The financial statements do not include any adjustments that might result
from the outcome of these uncertainties.
Note 14 - Commitments
Pelican rents office facilities in Miami, Florida on a month to month basis.
Monthly rent expense was approximately $400 a month for rented months during
1996. Pelican Properties, International Corp.'s rent expense was $3,000 and
$1,600 for 1996 and 1995 respectively.
20
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 15 - Supplemental cash flow information
Supplemental disclosure of cash flows information:
Cash paid for interest for the years ended December 31, 1996 and 1995 was
$179,750 and $889,806, respectively.
Supplemental non-cash financing activities information:
During 1995, the Company effected a 361.1-for-one share forward stock split
resulting in a $3,611 increase in "Common Stock" and respectively a $3,611
decrease in "Additional Paid in Capital". Additionally, during 1995 the
Company's majority shareholder at the time contributed $3,001 of common stock to
the Company (treasury stock). The Company subsequently issued $2,996 of shares
held in treasury in order to acquire the Subsidiary. During 1995 various of the
former partners of Sunshine Key converted pre-petition debt into partners
capital resulting in a $311,891 increase in "Additional Paid in Capital" upon
consolidation.
During 1996, the Company had non-cash transactions relating to the $1,000,000
loan from American Capital and Equity Corporation as follows: a receivable of
$277,228 included in other current assets, a principal reduction of the note
payable to WAMCO in the amount of $600,000, and loan origination costs in the
amount of $122,772. As compensation for guaranteeing the loan, both stock and
options were issued resulting in a $333 increase to common stock and a $62,167
increase to "additional paid in capital".
During 1996, Sunshine Key had non-cash transactions relating to conversion of
debt to partners capital in the amount of $801,045.
Additionally, during 1996, $1,940,424 of non-cash income from the extraordinary
gain on forgiveness of debt was reduced from net income in arriving at net cash
flow from operating activities.
Note 16 - Acquisition of Subsidiary
On August 31, 1995 Pelican Properties, International Corp. acquired a 99.54%
Limited Partnership interest in Sunshine Key Associates Limited Partnership
("the Subsidiary"). In as much as the general partner of the Subsidiary was not
a party to the Agreement and owns 1% of Sunshine Key, the Company, as a limited
partner, owns 98.54% of the Partnership. The Company issued 2,996,094 shares of
its $.001 par value common stock held in treasury at the time.
21
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 16 - Acquisition of Subsidiary (continued)
The acquisition has been accounted for as a recapitalization of Sunshine Key
with Sunshine Key as the acquirer (reverse acquisition). The historical
financial statements prior to August 31, 1995 are those of Sunshine Key. The
financial statements as of December 31, 1996 and for the years ended December
31, 1996 and 1995 are presented as if the acquisition took place January 1,
1994. These financial statements do not purport to indicate the results of
operations which would actually have occurred had the acquisition been in effect
at January 1, 1994, or which may occur in the future. No pro forma information
is shown because Pelican Properties, International Corp. had no material
activity before the acquisition.
Note 17 - Stockholders' Equity (Deficiency)
On June 1, 1990, the Corporation filed its Articles of Incorporation with the
State of Florida providing for, among other things, 10,000 shares of Common
Stock with no par value, to be authorized for issuance by the Corporation. In
that same year, by resolution of the Board of Directors and sole shareholder,
the Corporation contemplated increasing its authorized number of shares of
Common Stock from 10,000 shares to 100,000,000 shares with a par value of $.001,
however the Corporation inadvertently failed at that time to file its articles
of amendment to the articles of incorporation with the Secretary of the State of
Florida. Although on June 11, 1990, June 20, 1990, and November 23, 1990, the
Board of Directors approved the issuance and did issue an aggregate amount of
3,611,000 shares of common stock and accordingly, the issuance of each
shareholder was administratively reduced on a pro rata basis equal to
one-for-361.1 shares of common stock.
On August 7, 1995, the Corporation filed with the Secretary of the State of
Florida, its articles of amendment of its articles of incorporation increasing
the authorized number of shares of common stock to 100,000,000 shares with a par
value of $.001 per share. The Corporation effected a forward stock split on all
outstanding shares of stock held by each holder of record as of August 15, 1995
and for each share of common stock to be automatically increased at a rate of
361.1-for-one share of common stock totaling an aggregate amount of 3,611,000
shares of common stock.
22
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 17 - Stockholders' Equity (Deficiency) (continued)
On August 31, 1995, the Company's majority shareholder at the time, contributed
3,001,000 shares of common stock (accounted for at par) in order to consummate
the exchange agreement with Sunshine Key. Subsequently the Company issued
2,996,094 common shares held in treasury, in order to acquire its 98.54%
interest in Sunshine Key.
During 1996, the Company issued 100,000 shares of common stock to a key
executive as compensation.
On December 6, 1996, the Company issued 534,029 shares of common stock in
conversion of $801,045 of Chapter 11 Pre-petition debt to equity.
On or about December 31, 1996, the Company issued 333,333 shares of common stock
to the Subsidiary's general partner as compensation for personally guaranteeing
said loan c/o America Capital and Equity Corp. Additionally, 666,667 options to
purchase common stock were granted at an exercise price of $.01. One half of the
total options are exercisable on January 1, 1998, and the remaining half
exercisable on January 1, 1999.
On June 20, 1990 the Company issued 200,000 warrants with an exercise price of
$5.00 per share expiring 3/19/2000 for no consideration. On August 13, 1990 the
Company issued 200,000 warrants with an exercise price of $5.00 per share
expiring 3/19/2001 for no consideration.
23
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1996 and 1995
Note 18 - Pre-petition debt and related equity conversion
Under the Modified Third Plan of Reorganization, Sunshine Key is responsible to
pay debtor claims as set forth by the respective class of each creditor.
Included in pre-petition debt at December 31, 1996 are claims of pre-petition
professionals in the amount of $264,739 which will be paid after unsecured
creditors are paid in full.
During 1996, $801,045 of pre-petition debt owed to the general partner, a former
partner and a former general partner was converted into common shares of Pelican
Properties, International Corp. as an additional investment in the Partnership
and subsequently credited to Partners' Capital in Sunshine Key.
Note 19 - Extraordinary Gain - forgiveness of debt
Sunshine Key was ultimately able to negotiate a settlement of the bankruptcy
case with WAMCO XXII, Ltd. (See note 6). The plan included a refinancing of the
Property in order to reduce the obligation to WAMCO to $4.7 million dollars. As
per the agreement, Sunshine Key paid WAMCO a total amount of $1 million dollars
towards principal, of which one hundred thousand dollars were paid directly by
Sunshine Key in January 1997. As a result of the discounted obligation, Sunshine
Key incurred an extraordinary gain from forgiveness of debt in the total amount
of $1,940,424. This amount is comprised of a principal forgiveness reduction in
the mortgage note of $616,854 and an accrued interest forgiveness reduction of
$1,323,570.
24
<PAGE>
PELICAN PROPERTIES,
INTERNATIONAL CORP.
AND SUBSIDIARIES
(FORMERLY KNOWN AS OPTIMUM COMPUTING, INC.)
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED
JUNE 30, 1997 AND 1996
(Compilation)
GARCIA, ESPINOSA, MIYARES & CO.
"A Partnership of Professional Associations"
Certified Public Accountants
100 Almeria Avenue, Suite 230
Coral Gables, Fl. 33134
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARIES
(FORMERLY KNOWN AS OPTIMUM COMPUTING, INC.)
Table of Contents
Page
----
Accountants' compilation report 1
Condensed consolidated Balance Sheets--
June 30, 1997 and December 31, 1996 2
Condensed Consolidated Statements of Operations--
Three Months and Six months Ended June 30, 1997
and June 30, 1996 3
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 1997 and June 30, 1996 4
Condensed Notes to Consolidated Financial Statements 5-7
<PAGE>
GARCIA, ESPINOSA, MIYARES, & CO.
"A PARTNERSHIP OF PROFESSIONAL ASSOCIATIONS" Certified Public Accountants
================================================================================
Roy A. Garcia, C.P.A. 100 Almeria Avenue, Suite #230
Rafael A. Espinosa, C.P.A. Coral Gables, Florida 33134
Leonardo Miyares, C.P.A. Telephone: (305) 529-0345
Fax: (305) 529-5401
To the Board of Directors and Shareholders
Pelican Properties, International Corp.
and Subsidiaries
(Formerly Known as Optimum Computing, Inc.)
Miami, Florida
We have compiled the accompanying condensed consolidated balance sheet of
Pelican Properties, International Corp. and Subsidiaries (the "Company") as of
June 30, 1997 and December 31, 1996, and the related condensed consolidated
statements of operations for the three and six months ended June 30, 1997 and
June 30, 1996 and cash flows for the six months ended June 30, 1997 and June 30,
1996, in accordance with Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, we do not
express an opinion or any other form of assurance on them.
/s/ GARCIA, ESPINOSA, MIYARES & CO.
GARCIA, ESPINOSA, MIYARES & CO.
"A Partnership of Professional Associations"
Certified Public Accountants
Coral Gables, Florida
July 22, 1997
1
<PAGE>
<TABLE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
<CAPTION>
June 30, December 31,
1997 1996
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 95,886 $ 105,342
Accounts receivable 36,841 87,016
Inventories 59,955 56,325
Other current assets 16,616 279,701
----------- -----------
Total current assets $ 209,298 $ 528,384
PROPERTY, PLANT AND EQUIPMENT,
NET OF ACCUMULATED DEPRECIATION OF
$2,458,114 IN 1996 AND $2,541,864 IN 1997
6,099,267 6,116,603
OTHER ASSETS 587,777 453,248
----------- -----------
TOTAL ASSETS $ 6,896,342 $ 7,098,235
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 188,921 $ 249,226
Deferred revenues 72,115 216,345
Current portion of pre-petition debt 31,230 54,982
Other current liabilities 400,751 396,834
Current maturities of long-term debt 42,117 115,764
----------- -----------
Total current liabilities 735,134 1,033,151
----------- -----------
LONG TERM LIABILITIES
Long term debt 5,984,283 6,010,637
Deferred income taxes 1,080 977
Other Long Term Liabilities $ 390,870 801,670
----------- -----------
Total long term liabilities 6,376,233 6,813,284
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIENCY)
6% Preferred Stock, par value $.001; 1,000,000 shares
authorized and 195,907 issued as of June 30, 1997 196 --
Common stock, par value $.001; 100,000,000 shares
authorized; 4,578,362 shares issued as of December 31, 1996
and 4,905,195 shares issued as of June 30, 1997
4,905 4,578
Additional paid in capital 3,534,448 3,169,609
Accumulated deficit (3,754,569) (3,922,382)
Less 4,906 shares in treasury, at par (5) (5)
----------- -----------
Total stockholders' equity (deficiency) (215,025) (748,200)
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
(DEFICIENCY) $ 6,896,342 $ 7,098,235
=========== ===========
SEE ACCOUNTANTS' COMPILATION REPORT AND ACCOMPANYING NOTES
</TABLE>
2
<PAGE>
<TABLE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
REVENUES $ 768,330 $ 687,771 $ 2,313,468 $ 1,937,238
COST OF REVENUES 290,097 339,845 668,823 618,530
----------- ----------- ----------- -----------
GROSS PROFIT 478,233 347,926 1,644,645 1,318,708
EXPENSES
Operating 326,468 418,211 732,278 789,861
General and administrative 169,144 107,705 351,990 210,408
Interest 55,314 46,314 93,578 197,517
Depreciation and Amortization 78,699 77,090 161,002 130,132
----------- ----------- ----------- -----------
Total Expenses 629,625 649,320 1,338,848 1,327,918
----------- ----------- ----------- -----------
INCOME (LOSS) FROM
OPERATIONS (151,392) (301,394) 305,797 (9,210)
OTHER INCOME (EXPENSE) 199 928 (13,586) 1,653
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE
INCOME TAXES (151,193) (300,466) 292,211 (7,557)
PROVISION (BENEFIT) FOR
INCOME TAXES (34,071) (117,801) 124,398 (1,134)
----------- ----------- ----------- -----------
INCOME BEFORE MINORITY
INTEREST (117,122) (182,665) 167,813 (6,423)
MINORITY INTEREST IN INCOME
(LOSS) FROM SUBSIDIARY 0 4,335 0 (32)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (117,122) $ (178,330) $ 167,813 $ (6,455)
=========== =========== =========== ===========
NET INCOME (LOSS) PER
COMMON SHARE $ (.024) $ (.049) $ .031 $ (.002)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 4,832,976 3,606,094 5,367,940 3,606,094
=========== =========== =========== ===========
SEE ACCOUNTANTS' COMPILATION REPORT AND ACCOMPANYING NOTES
</TABLE>
3
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 1997 and June 30, 1996
(Unaudited)
June 30, June 30,
1997 1996
Cash flows from operating activities:
Net income(loss): $ 167,813 $ (6,455)
Adjustments to reconcile net income
(loss) to net cash (used) provided
by operating activities:
Depreciation and amortization 161,001 130,132
Non-cash compensation 6,250 --
Loss on disposal of asset 14,933 --
Decrease (Increase) in accounts receivable 50,176 51,499
Decrease (Increase) in inventories (3,630) (2,075)
Decrease (Increase) in other receivable 292 --
Decrease (Increase) in other assets 95,542 135,153
Increase (Decrease) in accounts payable and
accrued expenses (60,305) (910,956)
Increase (Decrease) in deferred revenues (144,230) (100,380)
Increase (Decrease) in other current liabilities 3,916 (344,110)
Increase (Decrease) in Due to affiliate (13,304) --
Increase (Decrease) in deferred tax liability 103 --
Increase (Decrease) in Pre-Petition Chapter 11 debt (57,135) 1,426,030
---------- -----------
Net adjustments 53,609 385,293
---------- -----------
Net cash (used) provided by operating activities 221,422 378,838
---------- -----------
Cash flows from investing activities:
Capital expenditures (100,878) (72,443)
---------- -----------
Net cash (used) by investing activities (100,878) (72,443)
---------- -----------
Cash flows from financing activities:
Principal payments on long-term debt (100,000) (200,000)
Repayment of loan (30,000) --
---------- -----------
Net cash (used) provided by
financing activities (130,000) (200,000)
---------- -----------
Net increase (decrease) in cash and cash equivalents (9,456) 106,395
Cash and cash equivalents, beginning of year 105,342 (101,321)
---------- -----------
Cash and cash equivalents, end of year $ 95,886 $ 5,074
========== ===========
SEE ACCOUNTANTS' COMPILATION REPORT AND ACCOMPANYING NOTES
4
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 1997
Note 1 - Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The quarterly financial information included herein is
unaudited. However, in the opinion of management, all adjustments, consisting of
normal recurring accruals, considered necessary for a fair presentation have
been included. Operating results for the six months ended June 30, 1997, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1997. A description of the Company's accounting policies and other
financial information is included in its audited consolidated financial
statements for the year ended December 31, 1996.
The June 30, 1997 condensed consolidated financial statements include the
accounts of Pelican Properties, International Corp. and its wholly owned
subsidiaries Ohio Key I, Inc. and Ohio Key II, Inc. and its 98.54% owned
subsidiary, Sunshine Key Associates Limited Partnership, an inactive Partnership
after December 31, 1996. The June 30, 1996 condensed consolidated financial
statements include the accounts of Pelican Properties, International Corp. and
its 98.54% owned subsidiary, Sunshine Key Associates Limited Partnership. As
stated in Note 6 to the December 31, 1996 audited financial statements, as a
result of the bankruptcy plan and related debt restructuring, substantially all
assets and liabilities of Sunshine Key were merged into Ohio Key I, Inc. and
Ohio Key II, Inc. on January 1, 1997. Ohio Key I, Inc. and Ohio Key II, Inc. are
newly formed, wholly owned subsidiaries of Pelican Properties, International
Corp. incorporated in January of 1997. No pro forma information has been
presented because Ohio Key I, Inc. and Ohio Key, II, Inc. were formed
exclusively to succeed the business of Sunshine Key and thus the merger has no
material impact on the consolidated financial statements of the Company.
Note 2 - Amortization
Beginning in January of 1997, loan origination costs approximating $222,000 are
being amortized over 23 months.
5
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 3 - Stock compensation
On March 31, 1997 and on June 30, 1997 the Company issued 50,000 shares of
common stock as compensation resulting in a $50 increase to "Common stock" and a
$3,075 increase to "Additional paid in capital" each quarter. During 1996, the
Company adopted SFAS No. 123, "Accounting for Stock-Based Compensation," which
establishes financial accounting and reporting standards for stock-based
employee compensation plans, including stock options, stock purchase plans,
restricted stock and stock appreciation rights. SFAS No. 123 defines and
encourages the use of the fair value method of accounting for employee
stock-based compensation.
Note 4 - Seasonal fluctuations
The Company generally derives 35% to 40% of its revenue during the three months
ended March 31 of each year. The current financial statements for the six months
ended June 30, 1997, therefore, reflect results of operations during the
Company's peak season.
Note 5 - Minority interest
No minority interest is reflected for the six months ended June 30, 1997 due to
the merger of Sunshine Key's operations into Ohio Key I, Inc. and Ohio Key II,
Inc., wholly owned subsidiary's of Pelican Properties., as of January 1, 1997.
Sunshine Key will have no income or expenses after December 31, 1996.
Note 6 - Net income (loss) per share
The net income (loss) per share is computed by dividing the net income or (loss)
for the period by the weighted average number of shares outstanding (as adjusted
retroactively for the dilutive effect of prior years common stock options) for
the period plus the dilutive effect of outstanding common stock options,
warrants, and preferred shares considered common stock equivalents.
6
<PAGE>
PELICAN PROPERTIES, INTERNATIONAL CORP.
and SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 7 - Commitments
Effective January 31, 1997 Ohio Key I, Inc. is to pay a monthly amount of
$10,500 for corporate overhead expenses to its parent company Pelican
Properties.
During the second quarter of 1997, the Company entered into an agreement for
consulting services in order to help the Company in its pursuit of effective
communications to the financial community and to heighten the financial public
and broker awareness of the existence and merits of the Company.
Note 8 - Preferred Stock
On June 24, 1997, the Company authorized to issue, 1,000,000 shares of preferred
stock, par value $.001 per share. The Company has designed one series of
preferred stock consisting of 195,907 shares as Series A. Series A Preferred
Stock shall be entitled to receive a cumulative annual dividend of 6% of the
stated value of the Series A Preferred Stock of $1.50 per share. Holders of the
Series A Preferred Stock will have the right to convert each share of Series A
Preferred Stock into one share of the Company's Common Stock.
Note 9 - Debt to Equity Conversion
On June 30, 1997, the Company issued 195,907 shares of Series A Preferred Stock
in exchange for payment of $293,862 of debt, $223,862 of which was included in
Pre-petition debt and $70,000 was owed to a related party.
7
3.1
ARTICLES OF INCORPORATION
<PAGE>
ARTICLES OF INCORPORATION
of OPTIMUM COMPUTING, INC., a CORPORATION NOT FOR PROFIT formed under the
Florida General Corporation Act.
Article 1: Name of the Corporation: OPTIMUM COMPUTING, INC.
Address of the Corporation: 19026 N.W. 78th COURT
MIAMI, FLORIDA 33015
Article 2: DURATION: Term of existence of the corporation is perpetual.
Article 3: PURPOSE: The Corporation may transfer any and all lawful business
for which corporations may be incorporated under the Laws of the
UNITED STATES and the STATE OF FLORIDA.
Article 4: CAPITAL STOCK: The maximum number of shares which the corporation
has authorized is 10,000 common stock with NONE par value.
Article 5: REGISTERED OFFICE: The street address of the initial registered
office of the corporation shall be: JOSE M. HERNANDEZ JR. 5055
N.W. 195th Terr. MIAMI, FL. 33055, and the name of the initial
registered agent at such address is JOSE M. HERNANDEZ, JR.
I do hereby accept the position of
REGISTERED AGENT.
/s/ Jose M. Hernandez, Jr.
-----------------------------
Signature of Registered Agent
JOSE M. HERNANDEZ JR.
Article 6: The shareholders shall have Pre-Emptive Rights.
Article 7: The board of directors are as follows:
The name and address of the Initial Director: (All persons listed
after the first are additional directors)
RENE GOMEZ 19026 N.W. 78TH COURT MIAMI, FLORIDA 33015
JOSE M. HERNANDEZ, JR. 5055 N.W. TERRACE MIAMI, FLORIDA 33055
Article 8: The Name and address of the incorporator is:
JOSE M. HERNANDEZ, JR. 5055 N.W. 195th TERRACE MIAMI,
FLORIDA 33055
In witness whereof I have subscribed my name /s/ Jose M. Hernandez, Jr.
---------------------------------
Signature of Incorporator
JOSE M. HERNANDEZ, JR.
State of Florida
County of Dade
Before me personally appeared JOSE M. HERNANDEZ, JR. Known by me to be the
person described herein and said person acknowledged executing these articles.
In witness whereof, I hereunto set my hand and official seal on this Date May
30, 1990
Notary Public, State of Florida Essie Thompson My Commission expires: March
15, 1993.
Signature
3.2
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
OPTIMUM COMPUTING, INC.
Pursuant to the provisions of section 607.1006, Florida Statutes, this
corporation adopts the following articles of amendment to its articles of
incorporation:
It was decided to amend the original charter and the Articles of
Incorporation to reflect a corporate name change, from Optimum Computing, Inc.,
to PELICAN PROPERTIES, INTERNATIONAL CORP.
This became effective as of June 29, 1995, In accordance with the minutes
of the meeting of the Board of Directors held on June 29, 1995.
Adoption of Amendment(s):
The amendment(s) were adopted by the shareholders on June 29, 1995. The
number of votes cast for the amendment(s) were sufficient for approval.
Signed this 18th day of July, 1995.
/s/ Rene Gomez
-------------------------------------
RENE GOMEZ, Chairman of the Board of
Directors
3.3
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
OPTIMUM COMPUTING, INC.
Pursuant to the provisions of section 607.1006, Florida Statutes, this
corporation adopts the following articles of amendment to its articles of
incorporation:
Article IV: This Corporation shall be authorized to issue 100,000,000
shares of common stock with each share having a par value of $.001.
This amendment became effective as of June 20, 1990. In accordance with the
minutes of the meeting of the Board of Directors held on June 15, 1990 and the
subsequent shareholder's meeting held the same day.
Adoption of Amendment(s):
The amendment(s) were adopted by the shareholders on June 15, 1990 with an
effective date of June 20, 1990. The number of votes cast for the amendment(s)
were sufficient for approval.
Signed this 18th day of July, 1995.
/s/ Rene Gomez
------------------------------------
RENE GOMEZ, Chairman of the Board of
Directors
3.4
AMENDMENT TO THE ARTICLES OF INCORPORATION
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
PELICAN PROPERTIES, INTERNATIONAL CORP.
A Florida Corporation
Pursuant to Section 607.1006 of the Business Corporation Act of the State
of Florida, the undersigned as President and Secretary of Pelican Properties,
International Corp., a corporation organized and existing under and by virtue of
the Business Corporation Act of the State of Florida, does hereby certify that
pursuant to Written Consent of the sole Director and Majority Shareholder of the
Corporation on August 15, 1995 the sole Director and such holder approved the
amendments to the Corporation's Articles of Incorporation as follows:
"Article 6: The shareholders shall have no preemptive rights."; and
"Article 9: This Corporation expressly elects not to be governed by
Section 607.0901 of the Florida Business Corporation Act, as amended
from time to time, relating to affiliated transactions."
The number of votes cast by the majority holder of the Common Stock in
favor of amending the Corporation's Articles of Incorporation as provided for
herein was sufficient for approval.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment to the Articles of Incorporation on August 17, 1995 to be effective
upon the date of filing hereof.
/s/ Rene Gomez
----------------------------------
Rene Gomez, President
3.5
OHIO KEY I ARTICLES OF INCORPORATION
<PAGE>
ARTICLES OF INCORPORATION
OF
OHIO KEY I, INC.
The undersigned, a natural person competent to contract, does hereby make,
subscribe and file these Articles of Incorporation for the purpose of organizing
a corporation under the laws of the State of Florida.
ARTICLE I
CORPORATE NAME
The name of this Corporation shall be: OHIO KEY I, INC.
ARTICLE II
PRINCIPAL OFFICE AND MAILING ADDRESS
The principal office and mailing address of the Corporation is 3191
Coral Way, Suite 115-A, Coral Gables, Florida 33145.
ARTICLE III
NATURE OF CORPORATE BUSINESS AND POWERS
The general nature of the business to be transacted by this Corporation
shall be to engage in any and all lawful business permitted under the laws of
the United States and the State of Florida.
ROXANNE BEILLY FL BAR # 851450
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, Florida 33301
(954) 763-1200
<PAGE>
ARTICLE IV
CAPITAL STOCK
The maximum number of shares that this Corporation shall be authorized to
issue and have outstanding at any one time shall be 1,000 shares of common
stock, par value $.001 per share.
ARTICLE V
TERM OF EXISTENCE
This Corporation shall have perpetual existence.
ARTICLE VI
REGISTERED AGENT AND
INITIAL REGISTERED OFFICE IN FLORIDA
The Registered Agent and the street address of the initial Registered
Office of this Corporation in the State of Florida shall be:
South Florida Registered Agents
200 E Las Olas Boulevard, Suite 1900
Fort Lauderdale, Florida 33301
ARTICLE VII
BOARD OF DIRECTORS
This Corporation shall have one (1) Director initially.
ARTICLE VIII
INITIAL DIRECTOR
The name and address of the initial Director of this Corporation is:
C. John Knorr, Jr.
Route 1, Box 790
Big Pine Key, Florida 33043.
2
<PAGE>
The person named as initial Director shall hold office for the first three
years of existence of this Corporation pursuant to the terms of this
Corporations By-Laws, or until his or her successor is elected or appointed and
has qualified, whichever occurs first.
ARTICLE IX
INCORPORATOR
The name and address of the person signing these Articles of Incorporation
as the Incorporator is C. John Knorr, Jr., Route 1, Box 790, Big Pine Key,
Florida 33043.
ARTICLE X
INDEMNIFICATION
This Corporation may indemnify any director, officer, employee or agent of
the Corporation to the fullest extent permitted by Florida law.
ARTICLE XI
AFFILIATED TRANSACTIONS
This Corporation expressly elects not to be governed by Section 607.0901 of
the Florida Business Corporation Act, as amended from time to time, relating to
affiliated transactions.
IN WITNESS WHEREOF, the undersigned Incorporator has executed the
foregoing Articles of Incorporation on the day of December, 1996.
/s/ C. John Knorr, Jr.
-----------------------------
C. John Knorr, Jr., Incorporator
3
<PAGE>
CERTIFICATE DESIGNATING REGISTERED AGENT
AND OFFICE FOR SERVICE OF PROCESS
OHIO KEY I, INC., a corporation existing under the laws of the State of
Florida with its principal office and mailing address at 3191 Coral Way, Suite
115-A, Coral Gables, Florida 33145, has named South Florida Registered Agents,
Inc. whose address is c/o 200 East Las Olas Boulevard, Suite 1900, Fort
Lauderdale, Florida 33301 as its agent to accept service of process within the
State of Florida.
ACCEPTANCE:
Having been named to accept service of process for the above named
Corporation, at the place designated in this Certificate, I hereby accept the
appointment as Registered Agent, and agree to comply with all applicable
provisions of law. In addition, I hereby am familiar with and accept the duties
and responsibilities as Registered Agent for said Corporation.
SOUTH FLORIDA REGISTERED AGENTS, INC.
a Florida corporation
By: /s/ Beverly F. Bryan, President
--------------------------------------
Beverly F. Bryan, President
4
3.6
ARTICLES OF INCORPORATION
OF
OHIO KEY II, INC.
The undersigned, a natural person competent to contract, does hereby
make, subscribe and file these Articles of Incorporation for the purpose of
organizing a corporation under the laws of the State of Florida.
ARTICLE I
CORPORATE NAME
The name of this Corporation shall be: OHIO KEY II, INC.
ARTICLE II
PRINCIPAL OFFICE AND MAILING ADDRESS
The principal office and mailing address of the Corporation is 3191
Coral Way, Suite 115-A, Coral Gables, Florida 33145.
ARTICLE III
NATURE OF CORPORATE BUSINESS AND POWERS
The general nature of the business to be transacted by this Corporation
shall be to engage in any and all lawful business permitted under the laws of
the United States and the State of Florida.
ROXANNE BEILLY FL BAR # 851450
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, Florida 33301
(954) 763-1200
<PAGE>
ARTICLE IV
CAPITAL STOCK
The maximum number of shares that this Corporation shall be authorized
to issue and have outstanding at any one time shall be 1,000 shares of common
stock, par value $.001 per share.
ARTICLE V
TERM OF EXISTENCE
This Corporation shall have perpetual existence.
ARTICLE VI
REGISTERED AGENT AND
INITIAL REGISTERED OFFICE IN FLORIDA
The Registered Agent and the street address of the initial Registered
Office of this Corporation in the State of Florida shall be:
South Florida Registered Agents
200 E Las Olas Boulevard, Suite 1900
Fort Lauderdale, Florida 33301
ARTICLE VII
BOARD OF DIRECTORS
This Corporation shall have one (1) Director initially.
ARTICLE VIII
INITIAL DIRECTOR
The name and address of the initial Director of this Corporation is:
C. John Knorr, Jr.
Route 1, Box 790
Big Pine Key, Florida 33043.
2
<PAGE>
The person named as initial Director shall hold office for the first
three years of existence of this Corporation pursuant to the terms of this
Corporations By-Laws, or until his or her successor is elected or appointed and
has qualified, whichever occurs first.
ARTICLE IX
INCORPORATOR
The name and address of the person signing these Articles of
Incorporation as the Incorporator is C. John Knorr, Jr., Route 1, Box 790, Big
Pine Key, Florida 33043.
ARTICLE X
INDEMNIFICATION
This Corporation may indemnify any director, officer, employee or agent
of the Corporation to the fullest extent permitted by Florida law.
ARTICLE XI
AFFILIATED TRANSACTIONS
This Corporation expressly elects not to be governed by Section
607.0901 of the Florida Business Corporation Act, as amended from time to time,
relating to affiliated transactions.
IN WITNESS WHEREOF, the undersigned Incorporator has executed the
foregoing Articles of Incorporation on the day of December, 1996.
/s/ C. John Knorr, Jr.
-----------------------------------
C. John Knorr, Jr., Incorporator
3
<PAGE>
CERTIFICATE DESIGNATING REGISTERED AGENT
AND OFFICE FOR SERVICE OF PROCESS
OHIO KEY II, INC., a corporation existing under the laws of the State
of Florida with its principal office and mailing address at 3191 Coral Way,
Suite 115-A, Coral Gables, Florida 33145, has named South Florida Registered
Agents, Inc. whose address is c/o 200 East Las Olas Boulevard, Suite 1900, Fort
Lauderdale, Florida 33301 as its agent to accept service of process within the
State of Florida.
ACCEPTANCE:
Having been named to accept service of process for the above named
Corporation, at the place designated in this Certificate, I hereby accept the
appointment as Registered Agent, and agree to comply with all applicable
provisions of law. In addition, I hereby am familiar with and accept the duties
and responsibilities as Registered Agent for said Corporation.
SOUTH FLORIDA REGISTERED AGENTS, INC.
a Florida corporation
By: /s/ Beverly F. Bryan
---------------------------------
Beverly F. Bryan, President
4
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3.7
BYLAWS
<PAGE>
CORPORATE BYLAWS
ARTICLE I. MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The annual shareholder meeting of the above
named corporation will be held on the 28th day of December of each year or at
such other time and place as designated by the Board of Directors of the above
named corporation provided that if said day falls on a Sunday or legal holiday,
then the meeting will be held on the first business day thereafter. Business
transacted at said meeting will include the election of directors of the above
named corporation.
Section 2. Special Meetings. Special meetings of the shareholders will be
held when directed by the President, Board of Directors, or the holders of not
less than 10 percent of all the shares entitled to be cast on any issue proposed
to be considered at the proposed special meeting; provided that said persons
sign, date and deliver to the above named corporation one or more written
demands for the meeting describing the purposes(s) for which it is to be held. A
meeting requested by shareholders of the above named corporation will be called
for a date not less than 10 nor more than 60 days after the request is made,
unless the shareholders requesting the meeting designate a later date. The call
for the meeting will be issued by the Secretary, unless the President, Board of
Directors or shareholders requesting the meeting designate another person to do
so.
Section 3. Place. Meetings of shareholders will be held at the principal
place of business of the above named corporation or at such other place as is
designated by the Board of Directors.
Section 4. Record Date and List of Shareholders. The Board of Directors of
the above named corporation shall fix the record date; however, in no event may
a record date fixed by the Board of Directors be a date prior to the date on
which the resolution fixing the record date is adopted.
After fixing a record date for a meeting, the Secretary shall prepare an
alphabetical list of the names of all the above named corporation's shareholders
who are entitled to notice of a shareholders' meeting, arranged by voting group
with the address of and the number and class and series, if any, of shares held
by each. Said list shall be available for inspection in accordance with Florida
Law.
Section 5. Notice. Written notice stating the place, day and hour of the
meeting, and the purpose(s) for which said special meeting is called, will be
delivered not less than 10 nor more than 60 days before the meeting, either
personally or by first class mail, by or at the direction of the President, the
Secretary or the officer or persons calling the meeting to each shareholder of
record entitled to vote at such meeting. If mailed, such notice will be deemed
to be effective when deposited in the United States mail and
<PAGE>
addressed to the shareholder at the shareholder's address as it appears on the
stock transfer books of the above named corporation, with postage thereon
prepaid.
The above named corporation shall notify each shareholder, entitled to a
vote at the meeting, of the date, time and place of each annual and special
shareholders' meeting no fewer than 10 or more than 60 days before the meeting
date. Notice of a special meeting shall describe the purpose(s) for which the
meeting is called. A shareholder may waive any notice required hereunder either
before or after the date and time stated in the notice; however, the waiver must
be in writing, signed by the shareholder entitled to the notice and be delivered
to the above named corporation for inclusion in the minutes or filing in the
corporate records.
Section 6. Notice of Adjourned Meeting. When a meeting is adjourned to
another time or place, it will not be necessary to give any notice of the
adjourned meeting provided that the time and place to which the meeting is
adjourned are announced at the meeting at which the adjournment is taken. At
such an adjourned meeting, any business may be transacted that might have been
transacted on the original date of the meeting. If, however, a new record date
for the adjourned meeting is made or is required, then, a notice of the
adjourned meeting will be given on the new record date as provided in this
Article to each shareholder of record entitled to notice of such meeting.
Section 7. Shareholder Quorum and Voting. A majority of the shares entitled
to vote, represented in person or by proxy, will constitute a quorum at a
meeting of shareholders.
If a quorum, as herein defined, is present, the affirmative vote of a
majority of the shares represented at the meeting and entitled to vote on the
subject matter thereof will be the act of the shareholders unless otherwise
provided by law.
Section 8. Voting of Shares. Each outstanding share will be entitled to one
vote on each matter submitted to a vote at a meeting of shareholders.
Section 9. Proxies. A shareholder may vote either in person or by proxy
provided that any and all proxies are executed in writing by the shareholder or
his duly authorized attorney-in-fact. No proxy will be valid after the duration
of 11 months from the date thereof unless otherwise provided in the proxy.
Section 10. Action by Shareholders Without a Meeting. Any action required
or permitted by law, these bylaws, or the Articles of Incorporation of the above
named corporation to be taken at any annual or special meeting of shareholders
may be taken without a meeting, without prior notice and without a vote,
provided that the action is taken by the holders of outstanding stock of each
voting group entitled to vote thereon having not less than the minimum number of
votes with respect to each voting group that
2
<PAGE>
would be necessary to authorize or take such action at a meeting at which all
voting groups and shares entitled to vote thereon were present and voted, as
provided by law. The foregoing actions(s) shall be evidenced by written consents
describing the action taken, dated and signed by approving shareholders having
the requisite number of votes of each voting group entitled to vote thereon and
delivered to the above named corporation in accordance with Florida Law. Within
10 days after obtaining such authorization by written consent, notice shall be
given to those shareholders who have not consented in writing or who are not
entitled to vote. Said notice shall fairly summarize the material features of
the authorized action and if the action requires the providing of dissenters'
rights, said notice shall comply with the disclosure requirements pertaining to
dissenters' rights of Florida Law.
ARTICLE II. DIRECTORS
Section 1. Function. All corporate powers, business, and affairs will be
exercised, managed and directed under the authority of the Board of Directors.
Section 2. Qualification. Directors must be natural persons of 18 years of
age or older but need not be residents of this state and need not be
shareholders of the above named corporation.
Section 3. Compensation. The Board of Directors will have authority to fix
the compensation for directors of the above named corporation.
Section 4. Presumption of Assent. A director of the above named corporation
who is present at a meeting of the Board of Directors at which action on any
corporate matter is taken will be presumed to have assented to the action taken
unless such director votes against such action or abstains from voting in
respect thereto because of an asserted conflict of interest.
Section 5. Number. The above named corporation will have 3 director(s).
Section 6. Election and Term. Each person named in the Articles of
Incorporation as a member of the initial Board of Directors will hold office
until said directors will have been qualified and elected at the first annual
meeting of shareholders, or until said directors earlier resignation, removal
from office or death.
At the first annual meeting of shareholders and at each annual meeting
thereafter, the shareholders will elect directors to hold office until the next
annual meeting. Each director will hold office for a term for which said
director is elected until said director's successor will have been qualified and
elected, said director's prior resignation, said director's removal from office
or said directors death.
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Section 7. Vacancies. Any vacancy occurring in the Board of Directors will
be filled by the affirmative vote of a majority of the shareholders or of the
remaining directors even though less than a quorum of the Board of Directors. A
director elected to fill a vacancy will hold office only until the next election
of directors by the shareholders.
Section 8. Removal and Resignation of Directors. At a meeting of
shareholders called expressly for that purpose, any director or the entire Board
of Directors may be removed, with or without cause, by a vote of the holders of
a majority of the shares then entitled to vote at an election of directors.
A director may resign at any time by delivering written notice to the Board
of Directors or its chairman or to the above named corporation by and through
one of its officers. Such a resignation is effective when the notice is
delivered unless a later effective date is specified in said notice.
Section 9. Quorum and Voting. A majority of the number of directors fixed
by these Bylaws shall constitute a quorum for the transaction of business. The
act of a majority of the directors present at a meeting at which a quorum is
present will be the act of the Board of Directors.
Section 10. Executive and Other Committees. A resolution, adopted by a
majority of the full Board of Directors, may designate from among its members an
executive committee and/or other committee(s) which will have and may exercise
all the authority of the Board of Directors to the extent provided in such
resolution, except as is provided by law. Each committee must have two or more
members who serve at the pleasure of the Board of Directors. The Board may, by
resolution adopted by a majority of the full Board of Directors, designate one
or more directors as alternate members of any such committee who may act in the
place and instead of any absent member or members at any meeting of such
committee.
Section 11. Place of Meeting. Special or regular meetings of the Board of
Directors will be held within or without the State of Florida.
Section 12. Notice, Time and Call of Meetings. Regular meetings of the
Board of Directors will be held without notice on such dates as are designated
by the Board of Directors. Written notice of the time and place of special
meetings of the Board of Directors will be given to each director by either
personal delivery, telegram or cablegram at least two (2) days before the
meeting or by notice mailed to the director at least five (5) days before the
meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting will constitute a waiver of notice of such
meeting and waiver of any and all
4
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objections to the place of the meeting, the time of the meeting, or the manner
in which it has been called or convened, except when a director states, at the
beginning of the meeting, any objection to the transaction of business because
the meeting is not lawfully called or convened.
Neither the business to be transacted nor the purpose of, regular or
special meetings of the Board of Directors need be specified in the notice or
waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists, may
adjourn any meeting of the Board of Directors to another time and place. Notice
of any such adjourned meeting will be given to the directors who were not
present at the time of the adjournment.
Meetings of the Board of Directors may be called by the Chairman of the
Board, the President of the above named corporation or any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 13. Action Without a Meeting. Any action required to be taken at a
meeting of the Board of Directors, or any action which may be taken at a meeting
of the Board of Directors or a committee thereof, may be taken without a meeting
if a consent in writing, setting forth the action to be so taken, signed by all
the directors, or all the members of the committee, as the case may be, is filed
in the minutes of the proceedings of the board or of the committee. Such consent
will have the same effect as a unanimous vote.
ARTICLE III. OFFICERS
Section 1. Officers. The officers of the above named corporation will
consist of a president, a vice president, a secretary and a treasurer, each of
whom will be elected by the Board of Directors. Such other officers and
assistant officers and agents as may be deemed necessary may be elected or
appointed by the Board of Directors from time to time. Any two or more offices
may be held by the same person.
Section 2. Duties. The officers of the above named corporation will have
the following duties:
The President will be the chief executive officer of the above named
corporation, who generally and actively manages the business and affairs of the
above named
5
<PAGE>
corporation subject to the directions of the Board of Directors. Said officer
will preside at all meetings of the shareholders and Board of Directors.
The Vice President will, in the event of the absence or inability of the
President to exercise his office, become acting president of the organization
with all the rights, privileges and powers as if said person had been duly
elected president.
The Secretary will have custody of, and maintain all of the corporate
records except the financial records. Furthermore, said person will record the
minutes of all meetings of the shareholders and Board of Directors, send all
notices of meetings and perform such other duties as may be prescribed by the
Board of Directors or the President. Furthermore, said officer shall be
responsible for authenticating records of the above named corporation.
The Treasurer shall retain custody of all corporate funds and financial
records, maintain full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of shareholders and whenever else
required by the Board of Directors or the President, and perform such other
duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal and Resignation of Officers. An officer or agent elected
or appointed by the Board of Directors may be removed by the Board of Directors
whenever in the Board's judgment the best interests of the above named
corporation will be served thereby.
Any officer may resign at any time by delivering notice to the above named
corporation. Said resignation is effective upon delivery unless the notice
specifies a later effective date.
Any vacancy in any office may be filled by the Board of Directors.
ARTICLE IV. STOCK CERTIFICATES
Section 1. Issuance. Every holder of share(s) in the above named
corporation will be entitled to have a certificate representing all share(s) to
which he is holder. No certificate representing share(s) will be issued until
such share(s) is/are fully paid.
Section 2. Form. Certificates representing share(s) in the above named
corporation will be signed by the President or Vice President and the Secretary
or an Assistant Secretary and will be sealed with the seal of the above named
corporation.
Section 3. Transfer of Stock. The above named corporation will register a
stock certificate presented for transfer if the certificate is properly endorsed
by the holder of record or by his duly authorized agent.
6
<PAGE>
Section 4. Lost, Stolen, or Destroyed Certificates. If a shareholder claims
that a stock certificate representing shares issued and recorded by the above
named corporation has been lost or destroyed, a new certificate will be issued
to said shareholder, provided that said shareholder presents an affidavit
claiming the certificate of stock to be lost, stolen or destroyed. At the
discretion of the Board of Directors, said shareholder may be required to
deposit a bond or other indemnity in such amount and with such sureties, if any,
as the board may require.
ARTICLE V. BOOKS AND RECORDS
Section 1. Books and Records. The above named corporation shall keep as
permanent records minutes of all meetings of its shareholders and Board of
Directors, a record of all actions taken by the shareholders or Board of
Directors without a meeting, and a record of all actions taken by a committee of
the Board of Directors in place of the Board of Directors on behalf of the above
named corporation. Furthermore, the above named corporation shall maintain
accurate accounting records. Furthermore, the above named corporation shall
maintain the following:
(i) a record of its shareholders in a form that permits preparation of a
list of the names and addresses of all shareholders in alphabetical order by
class of shares showing the number and series of shares held by each;
(ii) The above named corporation's Articles or Restated Articles of
Incorporation and all amendments thereto currently in effect;
(iii) The above named corporation's Bylaws or Restated Bylaws and all
amendments thereto currently in effect;
(iv) Resolutions adopted by the Board of Directors creating one or more
classes or series of shares and fixing their relative rights, preferences and
limitations if shares issued pursuant to those resolutions are outstanding;
(v) The minutes of all shareholders' meetings and records of all actions
taken by shareholders without a meeting for the past 3 years; (vi) Written
communications to all shareholders generally or all shareholders of a class or
series within the past 3 years including the financial statements furnished for
the past 3 years to shareholders as may be required under Florida Law;
(vii) A list of the names and business street addresses of the above named
corporation's current directors and officers; and
(viii) A copy of the above named corporation's most recent annual report
delivered to the Department of State.
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Any books, records and minutes may be in written form or in any other form
capable of being converted into written form.
Section 2. Shareholder's Inspection Rights. A shareholder of the above
named corporation (including a beneficial owner whose shares are held in a
voting trust or a nominee on behalf of a beneficial owner) may inspect and copy,
during regular business hours at the above named corporation's principal office,
any of the corporate records required to be kept pursuant to Section 1, of this
Article of these Bylaws, if said shareholder gives the above named corporation
written notice of such demand at least 5 business days before the date on which
the shareholder wishes to inspect and copy. The foregoing right of inspection is
subject however to such other restrictions as are applicable under Florida Law,
including, but not limited to, the inspection of certain records being permitted
only if the demand for inspection is made in good faith and for a proper purpose
(as well as the shareholder describing with reasonable particularity the purpose
and records desired to be inspected and such records are directly connected with
the purpose).
Section 3. Financial Information. Unless modified by resolution of the
shareholders within 120 days of the close of each fiscal year, the above named
corporation shall furnish the shareholders annual financial statements which may
be consolidated or combined statements of the above named corporation and one or
more of its subsidiaries as appropriate, that include a balance sheet as of the
end of the fiscal year, an income statement for that year, and a statement of
cash flow for that year. If financial statements are prepared on the basis of
generally accepted accounting principles, the annual financial statements must
also be prepared on that basis. If the annual financial statements are reported
on by a public accountant, said accountant's report shall accompany said
statements. If said annual financial statements are not reported on by a public
accountant, then the statements shall be accompanied by a statement of the
president or the person responsible for the above named corporation's accounting
records (a) stating his reasonable belief whether the statements were prepared
on the basis of generally accepted accounting principles and if not, describing
the basis of preparation; and (b) describing any respects in which the
statements were not prepared on a basis of accounting consistent with the
statements prepared for the preceding year. The annual financial statements
shall be mailed to each shareholder of the above named corporation within 120
days after the close of each fiscal year or within such additional time as is
reasonably necessary to enable the above named corporation to prepare same, if,
for reasons beyond the above named corporation's control, said annual financial
statement cannot be prepared within the prescribed period.
Section 4. Other Reports to Shareholders. The above named corporation shall
report any indemnification or advanced expenses to any director, officer,
employee, or agent (for indemnification relating to litigation or threatened
litigation) in writing to the shareholders with or before the notice of the next
shareholders, meeting, or prior to such meeting if the indemnification or
advance occurs after the giving of such notice but prior
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to the time such meeting is held, which report shall include a statement
specifying the persons paid, the amounts paid, and the nature and status, at the
time of such payment, of the litigation or threatened litigation.
Additionally, if the corporation issues or authorizes the issuance of
shares for promises to render services in the future, the above named
corporation shall report in writing to the shareholders the number of shares
authorized or issued and the consideration received by the above named
corporation, with or before the notice of the next shareholders' meeting.
ARTICLE VI. DIVIDENDS
The Board of Directors of the above named corporation may, from time to
time declare dividends on its shares in cash, property or its own shares, except
when the above named corporation is insolvent or when the payment thereof would
render the above named corporation insolvent, subject to Florida Law.
ARTICLE VII. CORPORATE SEAL
The Board of Directors will provide a corporate seal which will be in
circular form embossing in nature and stating "Corporate Seal", "Florida", year
of above named incorporation and name of said above named corporation.
ARTICLE VIII. AMENDMENT
These Bylaws may be altered, amended or repealed, and altered, amended or
new Bylaws may be adopted by a majority vote of the full Board of Directors.
ARTICLE IX. CORPORATE INDEMNIFICATION PLAN
The above named corporation shall indemnify any person:
(1) Who was or is a party, or is threatened to be made a party, to any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative (other than an action by, or in the
right of, the above named corporation) by reason of the fact that he is or was a
director, officer, employee, or agent of the above named corporation or is or
was serving at the request of the above named corporation as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise against such costs and expenses, and to the extent
and in the manner provided under Florida Law.
(2) Who was or is a party, or is threatened to be made a party, to any
threatened, pending, or completed action or suit by or in the right of the above
named corporation to procure a judgment in its favor by reason of the fact that
he is or was a
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director, officer, employee, or agent of the above named corporation or is or
was serving at the request of the above named corporation as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise against such costs and expenses, and to the extent
and in the manner provided under Florida Law.
The extent, amount, and eligibility for the indemnification provided herein
will be made by the Board of Directors. Said determinations will be made by a
majority vote to a quorum consisting of directors who were not parties to such
action, suit, or proceeding or by the shareholders by a majority vote of a
quorum consisting of shareholders who were not parties to such action, suit, or
proceeding.
The above named corporation will have the power to make further
indemnification as provided under Florida Law except to indemnify any person
against gross negligence or willful misconduct.
The above named corporation is further authorized to purchase and maintain
insurance for indemnification of any person as provided herein and to the extent
provided under Florida Law.
10
3.8
OHIO KEY I BYLAWS
<PAGE>
BY-LAWS
OF
OHIO KEY I, INC.
a Florida corporation
<PAGE>
INDEX
PAGE
----
ARTICLE I
Offices
Section 1.01 Principal Office....................................... 1
Section 1.02 Registered Office...................................... 1
Section 1.03 Other Offices.......................................... 1
ARTICLE II
Meetings of Shareholders
Section 2.01 Annual Meeting......................................... 1
Section 2.02 Special Meetings....................................... 2
Section 2.03 Shareholders' List for Meeting......................... 2
Section 2.04 Record Date............................................ 3
Section 2.05 Notice of Meetings and Adjournment..................... 3
Section 2.06 Waiver of Notice....................................... 4
ARTICLE III
Shareholder Voting
Section 3.01 Voting Group Defined................................... 5
Section 3.02 Quorum and Voting Requirements for
Voting Groups.................................... 5
Section 3.03 Action by Single and Multiple Voting
Groups........................................... 5
Section 3.04 Shareholder Quorum and Voting; Greater
or Lesser Voting Requirements.................... 6
<PAGE>
Section 3.05 Voting for Directors; Cumulative Voting................ 6
Section 3.06 Voting Entitlement of Shares........................... 7
Section 3.07 Proxies................................................ 8
Section 3.08 Shares Held by Nominees................................ 9
Section 3.09 Corporation's Acceptance of Votes...................... 10
Section 3.10 Action by Shareholders Without Meeting................. 11
ARTICLE IV
Board of Directors and Officers
Section 4.01 Qualifications of Directors............................ 11
Section 4.02 Number of Directors.................................... 11
Section 4.03 Terms of Directors Generally........................... 12
Section 4.04 Staggered Terms for Directors.......................... 12
Section 4.05 Vacancy on Board....................................... 12
Section 4.06 Compensation of Directors.............................. 12
Section 4.07 Meetings............................................... 13
Section 4.08 Action by Directors Without a Meeting.................. 13
Section 4.09 Notice of Meetings..................................... 13
Section 4.10 Waiver of Notice....................................... 13
Section 4.11 Quorum and Voting...................................... 14
Section 4.12 Committees............................................. 14
Section 4.13 Loans to Officers, Directors and
Employees; Guaranty of Obligations.............. 15
Section 4.14 Required Officers...................................... 15
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Section 4.15 Duties of Officers................................... 16
Section 4.16 Resignation and Removal of Officers.................. 16
Section 4.17 Contract Rights of Officers.......................... 16
Section 4.18 General Standards for Directors...................... 16
Section 4.19 Director Conflicts of Interest....................... 17
Section 4.20 Resignation of Directors............................. 18
ARTICLE V
Indemnification of Directors, Officers,
Employees and Agents
Section 5.01 Directors, Officers, Employees
and Agents..................................... 18
ARTICLE VI
Office and Agent
Section 6.01 Registered Office and Registered Agent............... 22
Section 6.02 Change of Registered Office or Registered
Agent; Resignation of Registered Agent........ 23
ARTICLE VII
Shares, Option, Dividends and Distributions
Section 7.01 Authorized Shares.................................... 24
Section 7.02 Terms of Class or Series Determined
by Board of Directors.......................... 24
Section 7.03 Issued and Outstanding Shares........................ 25
Section 7.04 Issuance of Shares................................... 25
Section 7.05 Form and Content of Certificates..................... 26
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Section 7.06 Shares Without Certificates............................ 27
Section 7.07 Restriction on Transfer of Shares
and Other Securities............................. 27
Section 7.08 Shareholder's Pre-emptive Rights....................... 27
Section 7.09 Corporation's Acquisition of its
Own Shares....................................... 28
Section 7.10 Share Options.......................................... 28
Section 7.11 Terms and Conditions of Stock Rights
and Options...................................... 28
Section 7.12 Share Dividends........................................ 29
Section 7.13 Distributions to Shareholders.......................... 29
ARTICLE VIII
Amendment of Articles and Bylaws
Section 8.01 Authority to Amend the Articles of
Incorporation.................................... 31
Section 8.02 Amendment by Board of Directors........................ 31
Section 8.03 Amendment of Bylaws by Board of
Directors........................................ 32
Section 8.04 Bylaw Increasing Quorum or Voting
Requirements for Directors....................... 32
ARTICLE IX
Records and Report
Section 9.01 Corporate Records...................................... 33
Section 9.02 Financial Statements for Shareholders.................. 34
Section 9.03 Other Reports to Shareholders.......................... 34
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Section 9.04 Annual Report for Department of State.................. 35
ARTICLE X
Miscellaneous
Section 10.01 Definition of the "Act"................................ 35
Section 10.02 Application of Florida Law............................. 36
Section 10.03 Fiscal Year............................................ 36
Section 10.04 Conflicts with Articles of
Incorporation................................... 36
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ARTICLE I
Offices
Section 1.01. Principal Office.
The principal office of the corporation in the State of Florida shall be
established at such places as the board of directors from time to time
determine.
Section 1.02. Registered Office.
The registered office of the corporation in the State of Florida shall be
at the office of its registered agent as stated in the articles of incorporation
or as the board of directors shall from time to time determine.
Section 1.03. Other Offices.
The corporation may have additional offices at such other places, either
within or without the State of Florida, as the board of directors may from time
to time determine or the business of the corporation may require.
ARTICLE II
Meetings of Shareholders
Section 2.01. Annual Meeting.
(1) The corporation shall hold a meeting of shareholders annually, for the
election of directors and for the transaction of any proper business, at a time
stated in or fixed in accordance with a resolution of the board of directors.
(2) Annual shareholders' meeting may be held in or out of the State of
Florida at a place stated in or fixed in accordance with a resolution by the
board of directors or, when not inconsistent with the board of directors'
resolution stated in the notice of the annual meeting. If no place is stated in
or fixed in accordance with these bylaws, or stated in the notice of the annual
meeting, annual meetings shall be held at the corporation's principal office.
(3) The failure to hold the annual meeting at the time stated in or fixed
in accordance with these bylaws or pursuant to the Act does not affect the
validity of any corporate action and shall not work a forfeiture of or
dissolution of the corporation.
<PAGE>
Section 2.02. Special Meeting.
(1) The corporation shall hold a special meeting of shareholders:
(a) On call of its board of directors or the person or persons
authorized to do so by the board of directors; or
(b) If the holders of not less than 10% of all votes entitled to be
cast on any issue proposed to be considered at the proposed special meeting
sign, date and deliver to the corporation's secretary one or more written
demands for the meeting describing the purpose or purposes for which it is
to be held.
(2) Special shareholders' meetings may be held in or out of the State of
Florida at a place stated in or fixed in accordance with a resolution of the
board of directors, or, when not inconsistent with the board of directors'
resolution, in the notice of the special meeting. If no place is stated in or
fixed in accordance with these bylaws or in the notice of the special meeting,
special meetings shall be held at the corporation's principal office.
(3) Only business within the purpose or purposes described in the special
meeting notice may be conducted at a special shareholders' meeting.
Section 2.03. Shareholders' List for Meeting.
(1) After fixing a record date for a meeting, a corporation shall prepare a
list of the names of all its shareholders who are entitled to notice of a
shareholders' meeting, in accordance with the Florida Business Corporation Act
(the "Act"), or arranged by voting group, with the address of, and the number
and class and series, if any, of shares held by, each.
(2) The shareholders' list must be available for inspection by any
shareholder for a period of ten days prior to the meeting or such shorter time
as exists between the record date and the meeting and continuing through the
meeting at the corporation's principal office, at a place identified in the
meeting notice in the city where the meeting will be held, or at the office of
the corporation's transfer agent or registrar. A shareholder or his agent or
attorney is entitled on written demand to inspect the list (subject to the
requirements of Section 607.1602(3) of the Act), during regular business hours
and at his expense, during the period it is available for inspection.
(3) The corporation shall make the shareholders' list available at the
meeting, and any shareholder or his agent or attorney is entitled to inspect the
list at any time during the meeting or any adjournment.
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Section 2.04. Record Date.
(1) The board of directors may set a record date for purposes of
determining the shareholders entitled to notice of and to vote at a
shareholders' meeting; however, in no event may a record date fixed by the board
of directors be a date preceding the date upon which the resolution fixing the
record date is adopted.
(2) Unless otherwise fixed by the board of directors, the record date for
determining shareholders entitled to demand a special meeting is the date the
first shareholder delivers his demand to the corporation. In the event that the
board of directors sets the record date for a special meeting of shareholders,
it shall not be a date preceding the date upon which the corporation receives
the first demand from a shareholder requesting a special meeting.
(3) If no prior action is required by the board of directors pursuant to
the Act, and, unless otherwise fixed by the board of directors, the record date
for determining shareholders entitled to take action without a meeting is the
date the first signed written consent is delivered to the corporation under
Section 607.0704 of the Act. If prior action is required by the board of
directors pursuant to the Act, the record date for determining shareholders
entitled to take action without a meeting is at the close of business on the day
on which the board of directors adopts the resolution taking such prior action.
(4) Unless otherwise fixed by the board of directors, the record date for
determining shareholders entitled to notice of and to vote at an annual or
special shareholders' meeting is the close of business on the day before the
first notice is delivered to shareholders.
(5) A record date may not be more than 70 days before the meeting or
action requiring a determination of shareholders.
(6) A determination of shareholders entitled to notice of or to vote at a
shareholders' meeting is effective for any adjournment of the meeting unless the
board of directors fixes a new record date, which it must do if the meeting is
adjourned to a date more than one 120 days after the date fixed for the original
meeting.
Section 2.05. Notice of Meetings and Adjournment.
(1) The corporation shall notify shareholders of the date, time and place
of each annual and special shareholders' meeting no fewer than 10 or more than
60 days before the meeting date. Unless the Act requires otherwise, the
corporation is required to give notice only to shareholders entitled to vote at
the meeting. Notice shall be given in the manner provided in Section 607.0141 of
the Act, by or at the direction of the president, the secretary, of the officer
or persons calling the meeting. If the notice is mailed at least 30 days before
the date of the meeting, it may be done by a class of
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United States mail other than first class. Notwithstanding Section 607.0141, if
mailed, such notice shall be deemed to be delivered when deposited in the United
Statement mail addressed to the shareholder at his address as it appears on the
stock transfer books of the corporation, with postage thereon prepaid.
(2) Unless the Act or the articles of incorporation requires otherwise,
notice of an annual meeting need not include a description of the purpose or
purposes for which the meeting is called.
(3) Notice of a special meeting must include a description of the purpose
or purposes for which the meeting is called.
(4) If an annual or special shareholders meeting is adjourned to a
different date, time, or place, notice need not be given of the new date, time,
or place if the new date, time or place is announced at the meeting before
adjournment is taken, and any business may be transacted at the adjourned
meeting that might have been transacted on the original date of the meeting. If
a new record date is or must be fixed under Section 607.0707 of the Act,
however, notice of the adjourned meeting must be given under this section to
persons who are shareholders as of the new record date who are entitled to
notice of the meeting.
(5) Notwithstanding the foregoing, no notice of a shareholders' meeting
need be given if: (a) an annual report and proxy statements for two consecutive
annual meetings of shareholders, or (b) all, and at least two checks in payment
of dividends or interest on securities during a 12-month period, have been sent
by first-class United States mail, addressed to the shareholder at his address
as it appears on the share transfer books of the corporation, and returned
undeliverable. The obligation of the corporation to give notice of a
shareholders' meeting to any such shareholder shall be reinstated once the
corporation has received a new address for such shareholder for entry on its
share transfer books.
Section 2.06. Waiver of Notice.
(1) A shareholder may waive any notice required by the Act, the articles of
incorporation, or bylaws before or after the date and time stated in the notice.
The waiver must be in writing, be signed by the shareholder entitled to the
notice, and be delivered to the corporation for inclusion in the minutes or
filing with the corporate records. Neither the business to be transacted at nor
the purpose of any regular or special meeting of the shareholders need be
specified in any written waiver of notice.
(2) A shareholder's attendance at a meeting: (a) Waives objection to lack
of notice or defective notice of the meeting, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting business
at the meeting; or (b) waives objection to consideration of a particular matter
at the meeting that is not within
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the purpose or purposes described in the meeting notice, unless the shareholder
objects to considering the matter when it is presented.
ARTICLE III
Shareholder Voting
Section 3.01. Voting Group Defined.
A "voting group" means all shares of one or more classes or series that
under the articles of incorporation or the Act are entitled to vote and be
counted together collectively on a matter at a meeting of shareholders. All
shares entitled by the articles of incorporation or the Act to vote generally on
the matter are for that purpose a single voting group.
Section 3.02. Quorum and Voting Requirements for Voting Groups.
(1) Shares entitled to vote as a separate voting group may take action on a
matter at a meeting only if a quorum of those shares exists with respect to that
matter. Unless the articles of incorporation or the Act provides otherwise, a
majority of the votes entitled to be cast on the matter by the voting group
constitutes a quorum of that voting group for action on that matter.
(2) Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.
(3) If a quorum exists, action on a matter (other than the election of
directors) by a voting group is approved if the votes cast within the voting
group favoring the action exceed the votes cast opposing the action, unless the
articles of incorporation or the Act requires a greater number of affirmative
votes.
Section 3.03. Action by Single and Multiple Voting Groups.
(1) If the articles of incorporation or the Act provides for voting by a
single voting group on a matter, action on that matter is taken when voted upon
by that voting group as provided in Section 3.02 of these bylaws.
(2) If the articles of incorporation or the Act provides for voting by two
or more voting groups on a matter, action on that matter is taken only when
voted upon by each of those voting groups counted separately as provided in
Section 3.02 of these bylaws. Action may be taken by one voting group on a
matter even though no action is taken by another voting group entitled to vote
on the matter.
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Section 3.04. Shareholder Quorum and Voting; Greater or Lesser Voting
Requirements.
(1) A majority of the shares entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders, but in no event
shall a quorum consist of less than one-third of the shares entitled to vote.
When a specified item of business is required to be voted on by a class or
series of stock, a majority of the shares of such class or series shall
constitute a quorum for the transaction of such item of business by that class
or series.
(2) An amendment to the articles of incorporation that adds, changes or
deletes a greater or lesser quorum or voting requirement must meet the same
quorum requirement and be adopted by the same vote and voting groups required to
take action under the quorum and voting requirements then in effect or proposed
to be adopted, whichever is greater.
(3) If a quorum exists, action on a matter, other than the election of
directors, is approved if the votes cast by the holders of the shares
represented at the meeting and entitled to vote on the subject matter favoring
the action exceed the votes cast opposing the action, unless a greater number of
affirmative votes or voting by classes is required by the Act or the articles of
incorporation.
(4) After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a quorum, shall
not affect the validity of any action taken at the meeting or any adjournment
thereof.
(5) The articles of incorporation may provide for a greater voting
requirement or a greater or lesser quorum requirement for shareholders (or
voting groups of shareholders) than is provided by the Act, but in no event
shall a quorum consist of less than one-third of the shares entitled to vote.
Section 3.05. Voting for Directors; Cumulative Voting.
(1) Directors are elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum is present.
(2) Each shareholder who is entitled to vote at an election of directors
has the right to vote the number of shares owned by him for as many persons as
there are directors to be elected and for whose election he has a right to vote.
Shareholders do not have a right to cumulate their votes for directors unless
the articles of incorporation so provide.
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Section 3.06. Voting Entitlement of Shares.
(1) Unless the articles of incorporation or the Act provides otherwise,
each outstanding share, regardless of class, is entitled to one vote on each
matter submitted to a vote at a meeting of shareholders. Only shares are
entitled to vote.
(2) The shares of the corporation are not entitled to vote if they are
owned, directly or indirectly, by a second corporation, domestic or foreign, and
the first corporation owns, directly or indirectly, a majority of shares
entitled to vote for directors of the second corporation.
(3) This section does not limit the power of the corporation to vote any
shares, including its own shares, held by it in a fiduciary capacity.
(4) Redeemable shares are not entitled to vote on any matter, and shall not
be deemed to be outstanding, after notice of redemption is mailed to the holders
thereof and a sum sufficient to redeem such shares has been deposited with a
bank, trust company, or other financial institution upon an irrevocable
obligation to pay the holders the redemption price upon surrender of the shares.
(5) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent, or proxy as the bylaws of the
corporate shareholder may prescribe or, in the absence of any applicable
provision, by such person as the board of directors of the corporate shareholder
may designate. In the absence of any such designation or in case of conflicting
designation by the corporate shareholder, the chairman of the board, the
president, any vice president, the secretary, and the treasurer of the corporate
shareholder, in that order, shall be presumed to be fully authorized to vote
such shares.
(6) Shares held by an administrator, executor, guardian, personal
representative, or conservator may be voted by him, either in person or by
proxy, without a transfer of such shares into his name. Shares standing in the
name of a trustee may be voted by him, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him without a transfer of such
shares into his name or the name of his nominee.
(7) Shares held by or under the control of a receiver, a trustee in
bankruptcy proceedings, or an assignee for the benefit of creditors may be voted
by him without the transfer thereof into his name.
(8) If a share or shares stand of record in the names of two or more
persons, whether fiduciaries, members of a partnership, joint tenants, tenants
in common, tenants by the entirety, or otherwise, or if two or more persons have
the same fiduciary relationship respecting the same shares, unless the secretary
of the corporation is given
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notice to the contrary and is furnished with a copy of the instrument or order
appointing them or creating the relationship wherein it is so provided, then
acts with respect to voting have the following effect:
(a) If only one votes, in person or in proxy, his act binds all;
(b) If more than one vote, in person or by proxy, the act of the
majority so voting binds all;
(c) If more than one vote, in person or by proxy, but the vote is
evenly split on any particular matter, each faction is entitled to vote the
share or shares in question proportionally;
(d) If the instrument or order so filed shows that any such tenancy is
held in unequal interest, a majority or a vote evenly split for purposes of
this subsection shall be a majority or a vote evenly split in interest;
(e) The principles of this subsection shall apply, insofar as
possible, to execution of proxies, waivers, consents, or objections and for
the purpose of ascertaining the presence of a quorum;
(f) Subject to Section 3.08 of these bylaws, nothing herein contained
shall prevent trustees or other fiduciaries holding shares registered in
the name of a nominee from causing such shares to be voted by such nominee
as the trustee or other fiduciary may direct. Such nominee may vote shares
as directed by a trustee or their fiduciary without the necessity of
transferring the shares to the name of the trustee or other fiduciary.
Section 3.07. Proxies.
(1) A shareholder, other person entitled to vote on behalf of a shareholder
pursuant to Section 3.06 of these bylaws, or attorney in fact may vote the
shareholder's shares in person or by proxy.
(2) A shareholder may appoint a proxy to vote or otherwise act for him by
signing an appointment form, either personally or by his attorney in fact. An
executed telegram or cablegram appearing to have been transmitted by such
person, or a photographic, photostatic, or equivalent reproduction of an
appointment form, is a sufficient appointment form.
(3) An appointment of a proxy is effective when received by the secretary
or other officer or agent authorized to tabulate votes. An appointment is valid
for up to 11 months unless a longer period is expressly provided in the
appointment form.
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(4) The death or incapacity of the shareholder appointing a proxy does not
affect the right of the corporation to accept the proxy's authority unless
notice of the death or incapacity is received by the secretary or other officer
or agent authorized to tabulate votes before the proxy exercises his authority
under the appointment.
(5) An appointment of a proxy is revocable by the shareholder unless the
appointment form conspicuously states that it is irrevocable and the appointment
is coupled with an interest. Appointments coupled with an interest include the
appointment of: (a) a pledgee; (b) a person who purchased or agreed to purchase
the shares; (c) a creditor of the corporation who extended credit to the
corporation under terms requiring the appointment; (d) an employee of the
corporation whose employment contract requires the appointment; or (e) a party
to a voting agreement created in accordance with the Act.
(6) An appointment made irrevocable under this section becomes revocable
when the interest with which it is coupled is extinguished and, in a case
provided for in Subsection 5(c) or 5(d), the proxy becomes revocable three years
after the date of the proxy or at the end of the period, if any, specified
herein, whichever is less, unless the period of irrevocability is renewed from
time to time by the execution of a new irrevocable proxy as provided in this
section. This does not affect the duration of a proxy under subsection (3).
(7) A transferee for value of shares subject to an irrevocable appointment
may revoke the appointment if he did not know of its existence when he acquired
the shares and the existence of the irrevocable appointment was not noted
conspicuously on the certificate representing the shares or on the information
statement for shares without certificates.
(8) Subject to Section 3.09 of these bylaws and to any express limitation
on the proxy's authority appearing on the face of the appointment form, a
corporation is entitled to accept the proxy's vote or other action as that of
the shareholder making the appointment.
(9) If an appointment form expressly provides, any proxy holder may
appoint, in writing, a substitute to act in his place.
Section 3.08. Shares Held by Nominees.
(1) The corporation may establish a procedure by which the beneficial owner
of shares that are registered in the name of a nominee is recognized by the
corporation as the shareholder. The extent of this recognition may be determined
in the procedure.
(2) The procedure may set forth (a) the types of nominees to which it
applies; (b) the rights or privileges that the corporation recognizes in a
beneficial owner; (c) the
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manner in which the procedure is selected by the nominee; (d) the information
that must be provided when the procedure is selected; (e) the period for which
selection of the procedure is effective; and (f) other aspects of the rights and
duties created.
Section 3.09. Corporation's Acceptance of Votes.
(1) If the name signed on a vote, consent, waiver, or proxy appointment
corresponds to the name of a shareholder, the corporation if acting in good
faith is entitled to accept the vote, consent waiver, or proxy appointment and
give it effect as the act of the shareholder.
(2) If the name signed on a vote, consent, waiver, or proxy appointment
does not correspond to the name of its shareholder, the corporation if acting in
good faith is nevertheless entitled to accept the vote, consent, waiver, or
proxy appointment and give it effect as the act of the shareholder if: (a) the
shareholder is an entity and the name signed purports to be that of an officer
or agent of the entity; (b) the name signed purports to be that of an
administrator, executor, guardian, personal representative, or conservator
representing the shareholder and, if the corporation requests, evidence of
fiduciary status acceptable to the corporation has been presented with respect
to the vote, consent, waiver, or proxy appointment; (c) the name signed purports
to be that of a receiver, trustee in bankruptcy, or assignee for the benefit of
creditors of the shareholder and, if the corporation requests, evidence of this
status acceptable to the corporation has been presented with respect to the
vote, consent, waiver, or proxy appointment; (d) the name signed purports to be
that of a pledgee, beneficial owner, or attorney in fact of the shareholder and,
if the corporation requests, evidence acceptable to the corporation of the
signatory's authority to sign for the shareholder has been presented with
respect to the vote, consent, waiver, or proxy appointment; or (e) two or more
persons are the shareholder as covenants or fiduciaries and the name signed
purports to be the name of at least one of the co-owners and the person signing
appears to be acting on behalf of all the co-owners.
(3) The corporation is entitled to reject a vote, consent, waiver, or proxy
appointment if the secretary or other officer or agent authorized to tabulate
votes, acting in good faith, has reasonable basis for doubt about the validity
of the signature on it or about the signatory's authority to sign for the
shareholder.
(4) The corporation and its officer or agent who accepts or rejects a vote,
consent, waiver, or proxy appointment in good faith and in accordance with the
standards of this section are not liable in damages to the shareholder for the
consequences of the acceptance or rejection.
(5) Corporate action based on the acceptance or rejection of a vote,
consent, waiver, or proxy appointment under this section is valid unless a court
of competent jurisdiction determines otherwise.
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Section 3.10. Action by Shareholders Without Meeting.
(1) Any action required or permitted by the Act to be taken at any annual
or special meeting of shareholders of the corporation may be taken without a
meeting, without prior notice and without a vote, if the action is taken by the
holders of outstanding stock of each voting group entitled to vote thereon
having not less than the minimum number of votes with respect to each voting
group that would be necessary to authorize or take such action at a meeting at
which all voting groups and shares entitled to vote thereon were present and
voted. In order to be effective, the action must by evidenced by one or more
written consents describing the action taken, dated and signed by approving
shareholders having the requisite number of votes of each voting group entitled
to vote thereon, and delivered to the corporation by delivery to its principal
office in this state, its principal place of business, the corporate secretary,
or another office or agent of the corporation having custody of the book in
which proceedings of meetings of shareholders are recorded. No written consent
shall be effective to take the corporate action referred to therein unless,
within 60 days of the date of the earliest dated consent is delivered in the
manner required by this section, written consent signed by the number of holders
required to take action is delivered to the corporation by delivery as set forth
in this section.
(2) Within 10 days after obtaining such authorization by written consent,
notice in accordance with Section 607.0704(3) of the Act must be given to those
shareholders who have not consented in writing.
ARTICLE IV
Board of Directors and Officers
Section 4.01. Qualifications of Directors.
Directors must be natural persons who are 18 years of age or older but need
not be residents of the State of Florida or shareholders of the corporation.
Section 4.02. Number of Directors.
(1) The board of directors shall consist of not less than one nor more than
nine individuals.
(2) The number of directors may be increased or decreased from time to time
by amendment to these bylaws.
(3) Directors are elected at the first annual shareholders' meeting and
at each annual meeting thereafter unless their terms are staggered under Section
4.04 of these bylaws.
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Section 4.03. Terms of Directors Generally.
(1) The terms of the initial directors of the corporation expire at the
first shareholders' meeting at which directors are elected.
(2) The terms of all other directors expire at the next annual
shareholders' meeting following their election unless their terms are staggered
under Section 4.04 of these bylaws.
(3) A decrease in the number of directors does not shorten an incumbent
director's term.
(4) The term of a director elected to fill a vacancy expires at the next
shareholders' meeting at which directors are elected.
(5) Despite the expiration of a director's term, he continues to serve
until his successor is elected and qualifies or until there is a decrease in the
number of directors.
Section 4.04. Staggered Terms for Directors.
The directors of any corporation organized under the Act may, by the
articles of incorporation, or by amendment to these bylaws adopted by a vote of
the shareholders, be divided into one, two or three classes with the number of
directors in each class being as nearly equal as possible; the term of office of
those of the first class to expire at the annual meeting next ensuing; of the
second class one year thereafter; at the third class two years thereafter; and
at each annual election held after such classification and election, directors
shall be chosen for a full term, as the case may be, to succeed those whose
terms expire. If the directors have staggered terms, then any increase or
decrease in the number of directors shall be so apportioned among the classes as
to make all classes as nearly equal in number as possible.
Section 4.05. Vacancy on Board.
(1) Whenever a vacancy occurs on a board of directors, including a vacancy
resulting from an increase in the number of directors, it may be filled by the
affirmative vote of a majority of the remaining directors.
(2) A vacancy that will occur at a specific later date (by reason of a
resignation effective at a later date may be filled before the vacancy occurs
but the new director may not take office until the vacancy occurs.
Section 4.06. Compensation of Directors.
The board of directors may fix the compensation of directors.
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Section 4.07. Meetings.
(1) The board of directors may hold regular or special meetings in or out
of the State of Florida.
(2) A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the board of directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
(3) Meetings of the board of directors may be called by the chairman of the
board or by the president.
(4) The board of directors may permit any or all directors to participate
in a regular or special meeting by, or conduct the meeting through the use of,
any means of communication by which all directors participating may
simultaneously hear each other during the meeting. A director participating in a
meeting by this means is deemed to be present in person at the meeting.
Section 4.08. Action by Directors Without a Meeting.
(1) Action required or permitted by the Act to be taken at a board of
directors' meeting or committee meeting may be taken without a meeting if the
action is taken by all members of the board or of the committee. The action must
be evidenced by one or more written consents describing the action taken and
signed by each director or committee member.
(2) Action taken under this section is effective when the last director
signs the consent, unless the consent specifies a different effective date.
(3) A consent signed under this section has the effect of a meeting vote
and may be described as such in any document.
Section 4.09. Notice of Meetings.
Regular and special meetings of the board of directors may be held without
notice of the date, time, place, or purpose of the meeting.
Section 4.10. Waiver of Notice.
Notice of a meeting of the board of directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and a waiver of any and
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all objections to the place of the meeting, the time of the meeting, or the
manner in which it has been called or convened, except when a director states,
at the beginning of the meeting or promptly upon arrival at the meeting, any
objection to the transaction of business because the meeting is not lawfully
called or convened.
Section 4.11. Quorum and Voting.
(1) A quorum of a board of directors consists of a majority of the number
of directors prescribed by the articles of incorporation or these bylaws.
(2) If a quorum is present when a vote is taken, the affirmative vote of a
majority of directors present is the act of the board of directors.
(3) A director of a corporation who is present at a meeting of the board of
directors or a committee of the board of directors when corporate action is
taken is deemed to have assented to the action taken unless:
(a) He objects at the beginning of the meeting (or promptly upon his
arrival) to holding it or transacting specified business at the meeting; or
(b) He votes against or abstains from the action taken.
Section 4.12. Committees.
(1) The board of directors, by resolution adopted by a majority of the full
board of directors, may designate from among its members an executive committee
and one or more other committees each of which, to the extent provided in such
resolution, shall have and may exercise all the authority of the board of
directors, except that no such committee shall have the authority to:
(a) Approve or recommend to shareholders actions or proposals required
by the Act to be approved by shareholders.
(b) Fill vacancies on the board of directors or any committee thereof.
(c) Adopt, amend, or repeal these bylaws.
(d) Authorize or approve the reacquisition of shares unless pursuant
to a general formula or method specified by the board of directors.
(e) Authorize or approve the issuance or sale or contract for the sale
of shares, or determine the designation and relative rights, preferences,
and limitations of a voting group except that the board of directors may
authorize a committee (or a senior
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executive officer of the corporation) to do so within limits specifically
prescribed by the board of directors.
(2) The sections of these bylaws which govern meetings, notice and waiver
of notice, and quorum and voting requirements of the board of directors apply to
committees and their members as well.
(3) Each committee must have two or more members who serve at the pleasure
of the board of directors. The board, by resolution adopted in accordance
herewith, may designate one or more directors as alternate members of any such
committee who may act in the place and stead of any absent member or members at
any meeting of such committee.
(4) Neither the designation of any such committee, the delegation thereto
of authority, nor action by such committee pursuant to such authority shall
alone constitute compliance by any member of the board of directors not a member
of the committee in question with his responsibility to act in good faith, in a
manner he reasonably believes to be in the best interests of the corporation,
and with such care as an ordinarily prudent person in a like position would use
under similar circumstances.
Section 4.13. Loans to Officers, Directors, and Employees; Guaranty of
Obligations.
The corporation may lend money to, guaranty any obligation of, or otherwise
assist any officer, director, or employee of the corporation or of a subsidiary,
whenever, in the judgment of the board of directors, such loan, guaranty, or
assistance may reasonably be expected to benefit the corporation. The loan,
guaranty, or other assistance may be with or without interest and may be
unsecured or secured in such manner as the board of directors shall approve,
including, without limitation, a pledge of shares of stock of the corporation.
Nothing in this section shall be deemed to deny, limit, or restrict the
powers of guaranty or warranty of any corporation at common law or under any
statute. Loans, guaranties, or other types of assistance are subject to section
4.19.
Section 4.14. Required Officers.
(1) The corporation shall have such officers as the board of directors may
appoint from time to time.
(2) A duly appointed officer may appoint one or more assistant officers.
(3) The board of directors shall delegate to one of the officers
responsibility for preparing minutes of the directors' and shareholders'
meetings and for authenticating records of the corporation.
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(4) The same individual may simultaneously hold more than one office in the
corporation.
Section 4.15. Duties of Officers.
Each officer has the authority and shall perform the duties set forth in a
resolution or resolutions of the board of directors or by direction of any
officer authorized by the board of directors to prescribe the duties of other
officers.
Section 4.16. Resignation and Removal of Officers.
(1) An officer may resign at any time by delivering notice to the
corporation. A resignation is effective when the notice is delivered unless the
notice specifies a later effective date. If a resignation is made effective at a
later date and the corporation accepts the future effective date, the board of
directors may fill the pending vacancy before the effective date if the board of
directors provides that the successor does not take office until the effective
date.
(2) The board of directors may remove any officer at any time with or
without cause. Any assistant officer, if appointed by another officer, may
likewise be removed by the board of directors or by the officer which appointed
him in accordance with these bylaws.
Section 4.17. Contract Rights of Officers.
The appointment of an officer does not itself create contract rights.
Section 4.18. General Standards for Directors.
(1) A director shall discharge his duties as a director, including his
duties as a member of a committee:
(a) In good faith;
(b) With the care an ordinarily prudent person in a like position
would exercise under similar circumstances; and
(c) In a manner he reasonably believes to be in the best interests of
the corporation.
(2) In discharging his duties, a director is entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, if prepared or presented by:
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(a) One or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented;
(b) Legal counsel, public accountants, or other persons as to matters
the director reasonably believes are within the persons' professional or
expert competence; or
(c) A committee of the board of directors of which he is not a member
if the director reasonably believes the committee merits confidence.
(3) In discharging his duties, a director may consider such factors as the
director deems relevant, including the long-term prospects and interests of the
corporation and its shareholders, and the social, economic, legal, or other
effects of any action on the employees, suppliers, customers of the corporation
or its subsidiaries, the communities and society in which the corporation or its
subsidiaries operate, and the economy of the state and the nation.
(4) A director is not acting in good faith if he has knowledge concerning
the matter in question that makes reliance otherwise permitted by subsection (2)
unwarranted.
(5) A director is not liable for any action taken as a director, or any
failure to take any action, if he performed the duties of his office in
compliance with this section.
Section 4.19. Director Conflicts of Interest.
No contract or other transaction between a corporation and one or more
interested directors shall be either void or voidable because of such
relationship or interest, because such director or directors are present at the
meeting of the board of directors or a committee thereof which authorizes,
approves or ratifies such contract or transaction, or because his or their votes
are counted for such purpose, if:
(1) The fact of such relationship or interest is disclosed or known to the
board of directors or committee which authorizes, approves or ratifies the
contract or transactions by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors;
(2) The fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(3) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
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Common or interested directors may be counted in determining the presence
of a quorum at the meeting of the board of directors or a committee thereof
which authorizes, approves or ratifies such contract or transaction.
For the purpose of paragraph (2) above, a conflict of interest transaction
is authorized, approved or ratified if it receives the vote of a majority of the
shares entitled to be counted under this subsection. Shares owned by or voted
under the control of a director who has a relationship or interest in the
conflict of interest transaction may not be counted in a vote of shareholders to
determine whether to authorize, approve or ratify a conflict of interest
transaction under paragraph (2). The vote of those shares, however, is counted
in determining whether the transaction is approved under other sections of the
Act. A majority of the shares, whether or not present, that are entitled to be
counted in a vote on the transaction under this subsection constitutes a quorum
for the purpose of taking action under this section.
Section 4.20. Resignation of Directors.
A director may resign at any time by delivering written notice to the board
of directors or its chairman or to the corporation.
A resignation is effective when the notice is delivered unless the notice
specifies a later effective date. If a resignation is made effective at a later
date, the board of directors may fill the pending vacancy before the effective
date if the board of directors provides that the successor does not take office
until the effective date.
ARTICLE V
Indemnification of Directors, Officers,
Employees and Agents
Section 5.01. Directors, Officers, Employees and Agents.
(1) The corporation shall have power to indemnify any person who was or is
a party to any proceeding (other than an action by, or in the right of, the
corporation), by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise against liability
incurred in connection with such proceeding, including any appeal thereof, if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any proceeding by judgment, order, settlement,
or conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he
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reasonably believed to be in, or not opposed to, the best interests of the
corporation or, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(2) The corporation shall have power to indemnify any person, who was or is
a party to any proceeding by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses and amounts paid in settlement not exceeding, in the judgment of the
board of directors, the estimated expense of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense or
settlement of such proceeding, including any appeal thereof. Such
indemnification shall be authorized if such person acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the corporation, except that no indemnification shall be made under this
subsection in respect of any claim, issue, or matter as to which such person
shall have been adjudged to be liable unless, and only to the extent that, the
court in which such proceeding was brought, or any other court of competent
jurisdiction, shall determine upon application that, despite the adjudication of
liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper.
(3) To the extent that a director, officer, employee, or agent of the
corporation has been successful on the merits or otherwise in defense of any
proceeding referred to in subsections (1) or (2), or in defense of any claim,
issue, or matter therein, he shall be indemnified against expenses actually and
reasonably incurred by him in connection therewith.
(4) Any indemnification under subsections (1) or (2), unless pursuant to a
determination by a court, shall be made by the corporation only as authorized in
the specific case upon a determination that indemnification of the director,
officer, employee, or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in subsections (1) or (2). Such
determination shall be made:
(a) By the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such proceeding;
(b) If such a quorum is not obtainable or, even if obtainable, by
majority vote of a committee duly designated by the board of directors (in
which directors who are parties may participate) consisting solely of two
or more directors not at the time parties to the proceeding;
(c) By independent legal counsel:
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(i) Selected by the board of directors prescribed in paragraph
(a) or the committee prescribed in paragraph (b); or
(ii) If a quorum of the directors cannot be obtained for
paragraph (a) and the committee cannot be designed under paragraph
(b), selected by majority vote of the full board of directors (in
which directors who are parties may participate); or
(d) By the shareholders by a majority vote of a quorum consisting of
shareholders who were not parties to such proceeding or, if no such quorum
is obtainable, by a majority vote of shareholders who were not parties to
such proceeding.
(5) Evaluation of the reasonableness of expenses and authorization of
indemnification shall be made in the same manner as the determination that
indemnification is permissible. However, if the determination of permissibility
is made by independent legal counsel, persons specified by paragraph (4)(c)
shall evaluate the reasonableness of expenses and may authorize indemnification.
(6) Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the corporation in advance of the final
disposition of such proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if he is ultimately found not to
be entitled to indemnification by the corporation pursuant to this section.
Expenses incurred by other employees and agents may be paid in advance upon such
terms or conditions that the board of directors deems appropriate.
(7) The indemnification and advancement of expenses provided pursuant to
this section are not exclusive, and the corporation may make any other or
further indemnification or advancement of expenses of any of its directors,
officers, employees, or agents, under any bylaw, agreement, vote of shareholders
or disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
However, indemnification or advancement of expenses shall not be made to or on
behalf of any director, officer, employee, or agent if a judgment or other final
adjudication establishes that his actions, or omissions to act, were material to
the cause of action so adjudicated and constitute:
(a) A violation of the criminal law, unless the director, officer,
employee, or agent had reasonable cause to believe his conduct was lawful
or had no reasonable cause to believe his conduct was unlawful;
(b) A transaction from which the director, officer, employee, or agent
derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the
liability provisions of Section 607.0834 under the Act are applicable; or
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(d) Willful misconduct or a conscious disregard for the best interests
of the corporation in a proceeding by or in the right of the corporation to
procure a judgment in its favor or in a proceeding by or in the right of a
shareholder.
(8) Indemnification and advancement of expenses as provided in this section
shall continue as, unless otherwise provided when authorized or ratified, to a
person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators of such a
person, unless otherwise provided when authorized or ratified.
(9) Notwithstanding the failure of the corporation to provide
indemnification, and despite any contrary determination of the board or of the
shareholders in the specific case, a director, officer, employee, or agent of
the corporation who is or was a party to a proceeding may apply for
indemnification or advancement of expenses, or both, to the court conducting the
proceeding, to the circuit court, or to another court of competent jurisdiction.
On receipt of an application, the court, after giving any notice that it
considers necessary, may order indemnification and advancement of expenses,
including expenses incurred in seeking court-ordered indemnification or
advancement of expenses, if it determines that:
(a) The director, officer, employee, or agent if entitled to mandatory
indemnification under subsection (3), in which case the court shall also
order the corporation to pay the director reasonable expenses incurred in
obtaining court-ordered indemnification or advancement of expenses;
(b) The director, officer, employee, or agent is entitled to
indemnification or advancement of expenses, or both, by virtue of the
exercise by the corporation of its power pursuant to subsection (7); or
(c) The director, officer, employee, or agent is fairly and reasonably
entitled to indemnification or advancement of expenses, or both, in view of
all the relevant circumstances, regardless of whether such person met the
standard of conduct set forth in subsection (1), subsection (2) or
subsection (7).
(10) For purposes of this section, the term "corporation" includes, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger, so that
any person who is or was a director, officer, employee, or agent of a
constituent corporation, or is or was serving at the request of a constituent
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust or other enterprise, is in the same position
under this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
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(11) For purposes of this section:
(a) The term "other enterprises" includes employee benefit plans;
(b) The term "expenses" includes counsel fees, including those for
appeal;
(c) The term "liability" includes obligations to pay a judgment,
settlement, penalty, fine (including an excise tax assessed with respect to
any employee benefit plan), and expenses actually and reasonably incurred
with respect to a proceeding;
(d) The term "proceeding" includes any threatened, pending, or
completed action, suit or other type of proceeding, whether civil,
criminal, administrative, or investigative and whether formal or informal;
(e) The term "agent" includes a volunteer;
(f) The term "serving at the request of the corporation" includes any
service as a director, officer, employee, or agent of the corporation that
imposes duties on such persons, including duties relating to an employee
benefit plan and its participants or beneficiaries; and
(g) The term "not opposed to the best interest of the corporation"
describes the actions of a person who acts in good faith and in a manner he
reasonably believes to be in the best interests of the participants and
beneficiaries of an employee benefit plan.
(12) The corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee, or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise against any liability asserted against him
and incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this section.
ARTICLE VI
Office and Agent
Section 6.01. Registered Office and Registered Agent.
(1) The corporation shall have and continuously maintain in the State of
Florida:
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(a) A registered office which may be the same as its place of
business; and
(b) A registered agent, who, may be either:
(i) An individual who resides in the State of Florida whose
business office is identical with such registered office; or
(ii) Another corporation or not-for-profit corporation as defined
in Chapter 617 of the Act, authorized to transact business or conduct
its affairs in the State of Florida, having a business office
identical with the registered office; or
(iii) A foreign corporation or not-for-profit foreign corporation
authorized pursuant to chapter 607 or chapter 617 of the Act to
transact business or conduct its affairs in the State of Florida,
having a business office identical with the registered office.
Section 6.02. Change of Registered Office or Registered Agent; Resignation
of Registered Agent.
(1) The corporation may change its registered office or its registered
agent upon filing with the Department of State of the State of Florida a
statement of change setting forth:
(a) The name of the corporation;
(b) The street address of its current registered office;
(c) If the current registered office is to be changed, the street
address of the new registered office;
(d) The name of its current registered agent;
(e) If its current registered agent is to be changed, the name of the
new registered agent and the new agent's written consent (either on the
statement or attached to it) to the appointment;
(f) That the street address of its registered office and the street
address of the business office of its registered agent, as changed, will be
identical;
(g) That such change was authorized by resolution duly adopted by its
board of directors or by an officer of the corporation so authorized by the
board of directors.
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ARTICLE VII
Shares, Options, Dividends and Distributions
Section 7.01. Authorized Shares.
(1) The articles of incorporation prescribe the classes of shares and the
number of shares of each class that the corporation is authorized to issue, as
well as a distinguishing designation for each class, and prior to the issuance
of shares of a class the preferences, limitations, and relative rights of that
class must be described in the articles of incorporation.
(2) The articles of incorporation must authorize:
(a) One or more classes of shares that together have unlimited voting
rights, and
(b) One or more classes of shares (which may be the same class or
classes as those with voting rights) that together are entitled to receive
the net assets of the corporation upon dissolution.
(3) The articles of incorporation may authorize one or more classes of
shares that have special, conditional, or limited voting rights, or no rights,
or no right to vote, except to the extent prohibited by the Act;
(a) Are redeemable or convertible as specified in the articles of
incorporation;
(b) Entitle the holders to distributions calculated in any manner,
including dividends that may be cumulative, non-cumulative, or partially
cumulative;
(c) Have preference over any other class of shares with respect to
distributions, including dividends and distributions upon the dissolution
of the corporation.
(4) Shares which are entitled to preference in the distribution of
dividends or assets shall not be designated as common shares. Shares which are
not entitled to preference in the distribution of dividends or assets shall be
common shares and shall not be designated as preferred shares.
Section 7.02. Terms of Class or Series Determined by Board of Directors.
(1) If the articles of incorporation so provide, the board of directors may
determine, in whole or part, the preferences, limitations, and relative rights
(within the limits set forth in Section 7.01) of:
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(a) Any class of shares before the issuance of any shares of that
class, or
(b) One or more series within a class before the issuance of any
shares of that series.
(2) Each series of a class must be given a distinguishing designation.
(3) All shares of a series must have preferences, limitations, and relative
rights identical with those of other shares of the same series and, except to
the extent otherwise provided in the description of the series, of those of
other series of the same class.
(4) Before issuing any shares of a class or series created under this
section, the corporation must deliver to the Department of State of the State of
Florida for filing articles of amendment, which are effective without
shareholder action, in accordance with Section 607.0602 of the Act.
Section 7.03. Issued and Outstanding Shares.
(1) A corporation may issue the number of shares of each class or series
authorized by the articles of incorporation. Shares that are issued are
outstanding shares until they are reacquired, redeemed, converted, or canceled.
(2) The reacquisition, redemption, or conversion of outstanding shares is
subject to the limitations of subsection (3) and to Section 607.06401 of the
Act.
(3) At all times that shares of the corporation are outstanding, one or
more shares that together have unlimited voting rights and one or more shares
that together are entitled to receive the net assets of the corporation upon
dissolution must be outstanding.
Section 7.04. Issuance of Shares.
(1) The board of directors may authorize shares to be issued for
consideration consisting of any tangible or intangible property or benefit to
the corporation, including cash, promissory notes, services performed, promises
to perform services evidenced by a written contract, or other securities of the
corporation.
(2) Before the corporation issues shares, the board of directors must
determine that the consideration received or to be received for shares to be
issued is adequate. That determination by the board of directors is conclusive
insofar as the adequacy of consideration for the issuance of shares relates to
whether the shares are validly issued, fully paid, and non-assessable. When it
cannot be determined that outstanding shares
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are fully paid and non-assessable, there shall be a conclusive presumption that
such shares are fully paid and non-assessable if the board of directors makes a
good faith determination that there is no substantial evidence that the full
consideration for such shares has not been paid.
(3) When the corporation receives the consideration for which the board of
directors authorized the issuance of shares, the shares issued therefor are
fully paid and non-assessable. Consideration in the form of a promise to pay
money or a promise to perform services is received by the corporation at the
time of the making of the promise, unless the agreement specifically provides
otherwise.
(4) The corporation may place in escrow shares issued for a contract for
future services or benefits or a promissory note, or make other arrangements to
restrict the transfer of the shares, and may credit distributions in respect of
the shares against their purchase price, until the services are performed, the
note is paid, or the benefits received. If the services are not performed, the
shares escrowed or restricted and the distributions credited may be canceled in
whole or part.
Section 7.05. Form and Content of Certificates.
(1) Shares may but need not be represented by certificates. Unless the Act
or another statute expressly provides otherwise, the rights and obligations of
shareholders are identical whether or not their shares are represented by
certificates.
(2) At a minimum, each share certificate must state on its face:
(a) The name of the issuing corporation and that the corporation is
organized under the laws of the State of Florida;
(b) The name of the person to whom issued; and
(c) The number and class of shares and the designation of the series,
if any, the certificate represents.
(3) If the shares being issued are of different classes of shares or
different series within a class, the designations, relative rights, preferences,
and limitations applicable to each class and the variations in rights,
preferences, and limitations determined for each series (and the authority of
the board of directors to determine variations for future series) must be
summarized on the front or back of each certificate. Alternatively, each
certificate may state conspicuously on its front or back that the corporation
will furnish the shareholder a full statement of this information on request and
without charge.
(4) Each share certificate:
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(a) Must be signed (either manually or in facsimile) by an officer or
officers designated by the board of directors, and
(b) May bear the corporate seal or its facsimile.
(5) If the person who signed (either manually or in facsimile) a share
certificate no longer holds office when the certificate is issued, the
certificate is nevertheless valid.
(6) Nothing in this section may be construed to invalidate any share
certificate validly issued and outstanding under the Act on July 1, 1990.
Section 7.06. Shares Without Certificates.
(1) The board of directors of the corporation may authorize the issue of
some or all of the shares of any or all of its classes or series without
certificates. The authorization does not affect shares already represented by
certificates until they are surrendered to the corporation.
(2) Within a reasonable time after the issue or transfer of shares without
certificates, the corporation shall send the shareholder a written statement of
the information required on certificates by the Act.
Section 7.07. Restriction on Transfer of Shares and Other Securities.
(1) The articles of incorporation, these bylaws, an agreement among
shareholders, or an agreement between shareholders and the corporation may
impose restrictions on the transfer or registration of transfer of shares of the
corporation. A restriction does not affect shares issued before the restriction
was adopted unless the holders of such shares are parties to the restriction
agreement or voted in favor of the restriction.
(2) A restriction on the transfer or registration of transfer of shares is
valid and enforceable against the holder or a transferee of the holder if the
restriction is authorized by this section, and effected in compliance with the
provisions of the Act, including having a proper purpose as referred to in the
Act.
Section 7.08. Shareholder's Pre-emptive Rights.
The shareholders of the corporation do not have a pre-emptive right to
acquire the corporation's unissued shares.
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Section 7.09. Corporation's Acquisition of its Own Shares.
(1) The corporation may acquire its own shares, and, unless otherwise
provided in the articles of incorporation or except as provided in subsection
(4), shares so acquired constitute authorized but unissued shares of the same
class but undesignated as to series.
(2) If the articles of incorporation prohibit the reissue of acquired
shares, the number of authorized shares is reduced by the number of shares
acquired, effective upon amendment of the articles of incorporation.
(3) Articles of amendment may be adopted by the board of directors without
shareholder action, shall be delivered to the Department of State of the State
of Florida for filing, and shall set forth the information required by Section
607.0631 of the Act.
(4) Shares of the corporation in existence on June 30, 1990, which are
treasury shares under Section 607.004(18), Florida Statutes (1987), shall be
issued, but not outstanding, until canceled or disposed of by the corporation.
Section 7.10. Share Options.
(1) Unless the articles of incorporation provide otherwise, the corporation
may issue rights, options, or warrants for the purchase of shares of the
corporation. The board of directors shall determine the terms upon which the
rights, options, or warrants are issued, their form and content, and the
consideration for which the shares are to be issued.
(2) The terms and conditions of stock rights and options which are created
and issued by the corporation, or its successor, and which entitle the holders
thereof to purchase from the corporation shares of any class or classes, whether
authorized by unissued shares, treasury shares, or shares to be purchased or
acquired by the corporation, may include, without limitation, restrictions, or
conditions that preclude or limit the exercise, transfer, receipt, or holding of
such rights or options by any person or persons, including any person or persons
owning or offering to acquire a specified number or percentage of the
outstanding common shares or other securities of the corporation, or any
transferee or transferees of any such person or persons, or that invalidate or
void such rights or options held by any such person or persons or any such
transferee or transferees.
Section 7.11. Terms and Conditions of Stock Rights and Options.
The terms and conditions of the stock rights and options which are created
and issued by the corporation [or its successor], and which entitle the holders
thereof to purchase from the corporation shares of any class or classes, whether
authorized but
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unissued shares, treasury shares, or shares to be purchased or acquired by the
corporation, may include, without limitation, restrictions or conditions that
preclude or limit the exercise, transfer, receipt or holding of such rights or
options by any person or persons, including any person or persons owning or
offering to acquire a specified number or percentage of the outstanding common
shares or other securities of the corporation, or any transferee or transferees
of any such person or persons, or that invalidate or void such rights or options
held by any such person or persons or any such transferee or transferees.
Section 7.12. Share Dividends.
(1) Shares may be issued pro rata and without consideration to the
corporation's shareholders or to the shareholders of one or more classes or
series. An issuance of shares under this subsection is a share dividend.
(2) Shares of one class or series may not be issued as a share dividend in
respect of shares of another class or series unless:
(a) The articles of incorporation so authorize,
(b) A majority of the votes entitled to be cast by the class or series
to be issued approves the issue, or
(c) There are no outstanding shares of the class or series to be
issued.
(3) If the board of directors does not fix the record date for determining
shareholders entitled to a share dividend, it is the date of the board of
directors authorizes the share dividend.
Section 7.13. Distributions to Shareholders.
(1) The board of directors may authorize and the corporation may make
distributions to its shareholders subject to restriction by the articles of
incorporation and the limitations in subsection (3).
(2) If the board of directors does not fix the record date for determining
shareholders entitled to a distribution (other than one involving a purchase,
redemption, or other acquisition of the corporation's shares), it is the date
the board of directors authorizes the distribution.
(3) No distribution may be made if, after giving it effect:
(a) The corporation would not be able to pay its debts as they become
due in the usual course of business; or
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(b) The corporation's total assets would be less than the sum of its
total liabilities plus (unless the articles of incorporation permit
otherwise) the amount that would be needed, if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential
rights upon dissolution of shareholders whose preferential rights are
superior to those receiving the distribution.
(4) The board of directors may base a determination that a distribution is
not prohibited under subsection (3) either on financial statements prepared on
the basis of accounting practices and principles that are reasonable in the
circumstances or on a fair valuation or other method that is reasonable in the
circumstances. In the case of any distribution based upon such a valuation, each
such distribution shall be identified as a distribution based upon a current
valuation of assets, and the amount per share paid on the basis of such
valuation shall be disclosed to the shareholders concurrent with their receipt
of the distribution.
(5) Except as provided in subsection (7), the effect of a distribution
under subsection (3) is measured;
(a) In the case of distribution by purchase, redemption, or other
acquisition of the corporation's shares, as of the earlier of:
(i) The date money or other property is transferred or debt
incurred by the corporation, or
(ii) The date the shareholder ceases to be a shareholder with
respect to the acquired shares;
(b) In the case of any other distribution of indebtedness, as of the
date the indebtedness is distributed;
(c) In all other cases, as of:
(i) The date the distribution is authorized if the payment occurs
within 120 days after the date of authorization, or
(ii) The date the payment is made if it occurs more than 120 days
after the date of authorization.
(6) A corporation's indebtedness to a shareholder incurred by reason of a
distribution made in accordance with this section is at parity with the
corporation's indebtedness to its general, unsecured creditors except to the
extent subordinated by agreement.
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(7) Indebtedness of the corporation, including indebtedness issued as a
distribution, is not considered a liability for purposes of determinations under
subsection (3) if its terms provide that payment of principal and interest are
made only if and to the extent that payment of a distribution to shareholders
could then be made under this section. If the indebtedness is issued as a
distribution, each payment of principal or interest is treated as a
distribution, the effect of which is measured on the date the payment is
actually made.
ARTICLE VIII
Amendment of Articles and Bylaws
Section 8.01. Authority to Amend the Articles of Incorporation.
(1) The corporation may amend its articles of incorporation at any time to
add or change a provision that is required or permitted in the articles of
incorporation or to delete a provision not required in the articles of
incorporation. Whether a provision is required or permitted in the articles of
incorporation is determined as of the effective date of the amendment.
(2) A shareholder of the corporation does not have a vested property right
resulting from any provision in the articles of incorporation, including
provisions relating to management, control, capital structure, dividend
entitlement, or purpose or duration of the corporation.
Section 8.02. Amendment by Board of Directors.
The corporation's board of directors may adopt one or more amendments to
the corporation's articles of incorporation without shareholder action:
(1) To extend the duration of the corporation if it was incorporated at a
time when limited duration was required by law;
(2) To delete the names and addresses of the initial directors;
(3) To delete the name and address of the initial registered agent or
registered office, if a statement of change is on file with the Department of
State of the State of Florida;
(4) To delete any other information contained in the articles of
incorporation that is solely of historical interest;
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(5) To change each issued and unissued authorized share of an outstanding
class into a greater number of whole shares if the corporation has only shares
of that class outstanding;
(6) To delete the authorization for a class or series of shares authorized
pursuant to Section 607.0602 of the Act, if no shares of such class or series
have been issued;
(7) To change the corporate name by substituting the word "corporation,"
"incorporated," or "company," or the abbreviation "corp.," Inc.," or Co.," for a
similar word or abbreviation in the name, or by adding, deleting, or changing a
geographical attribution for the name; or
(8) To make any other change expressly permitted by the Act to be made
without shareholder action.
Section 8.03. Amendment of Bylaws by Board of Directors.
The corporation's board of directors may amend or repeal the corporation's
bylaws unless the Act reserves the power to amend a particular bylaw provision
exclusively to the shareholders.
Section 8.04. Bylaw Increasing Quorum or Voting Requirements for Directors.
(1) A bylaw that fixes a greater quorum or voting requirement for the board
of directors may be amended or repealed:
(a) If originally adopted by the shareholders, only by the
shareholders;
(b) If originally adopted by the board of directors, either by the
shareholders or by the board of directors.
(2) A bylaw adopted or amended by the shareholders that fixes a greater
quorum or voting requirement for the board of directors may provide that it may
be amended or repealed only by a specified vote of either the shareholders or
the board of directors.
(3) Action by the board of directors under paragraph (1)(b) to adopt or
amend a bylaw that changes the quorum or voting requirement for the board of
directors must meet the same quorum requirement and be adopted by the same vote
required to take action under the quorum and voting requirement then in effect
or proposed to be adopted, whichever is greater.
32
<PAGE>
ARTICLE IX
Records and Reports
Section 9.01. Corporate Records.
(1) The corporation shall keep as permanent records minutes of all meetings
of its shareholders and board of directors, a record of all actions taken by the
shareholders or board of directors without a meeting, and a record of all
actions taken by a committee of the board of directors in place of the board of
directors on behalf of the corporation.
(2) The corporation shall maintain accurate accounting records.
(3) The corporation or its agent shall maintain a record of its
shareholders in a form that permits preparation of a list of the names and
addresses of all shareholders in alphabetical order by class of shares showing
the number and series of shares held by each.
(4) The corporation shall maintain its records in written form or in
another form capable of conversion into written form within a reasonable time.
(5) The corporation shall keep a copy of the following records:
(a) Its articles or restated articles of incorporation and all
amendments to them currently in effect;
(b) Its bylaws or restated bylaws and all amendments to them currently
in effect;
(c) Resolutions adopted by the board of directors creating one or more
classes or series of shares and finding their relative rights, preferences,
and limitations, if shares issued pursuant to those resolutions are
outstanding;
(d) The minutes of all shareholders' meetings and records of all
action taken by shareholders without a meeting for the past three years;
(e) Written communications to all shareholders generally or all
shareholders of a class or series within the past three years, including
the financial statements furnished for the past three years;
(f) A list of the names and business street addresses of its current
directors and officers; and
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(g) Its most recent annual report delivered to the Department of State
of the State of Florida.
Section 9.02. Financial Statements for Shareholders.
(1) Unless modified by resolution of the shareholders within 120 days of
the close of each fiscal year, the corporation shall furnish its shareholders
annual financial statements which may be consolidated or combined statements of
the corporation and one or more of its subsidiaries, as appropriate, that
include a balance sheet as of the end of the fiscal year, an income statement
for that year, and a statement of cash flows for that year. If financial
statements are prepared for the corporation on the basis of generally-accepted
accounting principles, the annual financial statements must also be prepared on
that basis.
(2) If the annual financial statements are reported upon by a public
accountant, his report must accompany them. If not, the statements must be
accompanied by a statement of the president or the person responsible for the
corporation's accounting records:
(a) Stating his reasonable belief whether the statements were prepared
on the basis of generally-accepted accounting principles and, if not,
describing the basis of preparation; and
(b) Describing any respects in which the statements were not prepared
on a basis of accounting consistent with the statements prepared for the
preceding year.
(3) The corporation shall mail the annual financial statements to each
shareholder within 120 days after the close of each fiscal year or within such
additional time thereafter as is reasonably necessary to enable the corporation
to prepare its financial statements, if for reasons beyond the corporation's
control, it is unable to prepare its financial statements within the prescribed
period. Thereafter, on written request from a shareholder who was not mailed the
statements, the corporation shall mail him the latest annual financial
statements.
Section 9.03. Other Reports to Shareholders.
(1) If the corporation indemnifies or advances expenses to any director,
officer, employee or agent otherwise than by court order or action by the
shareholders or by an insurance carrier pursuant to insurance maintained by the
corporation, the corporation shall report the indemnification or advance in
writing to the shareholders with or before the notice of the next shareholders'
meeting, or prior to such meeting if the indemnification or advance occurs after
the giving of such notice but prior to the time such meeting is held, which
report shall include a statement specifying the persons paid,
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<PAGE>
the amounts paid, and the nature and status at the time of such payment of the
litigation or threatened litigation.
(2) If the corporation issues or authorizes the issuance of shares for
promises to render services in the future, the corporation shall report in
writing to the shareholders the number of shares authorized or issued, and the
consideration received by the corporation, with or before the notice of the next
shareholders' meeting.
Section 9.04. Annual Report for Department of State.
(1) The corporation shall deliver to the Department of State of the State
of Florida for filing a sworn annual report on such forms as the Department of
State of the State of Florida prescribes that sets forth the information
prescribed by Section 607.1622 of the Act.
(2) Proof to the satisfaction of the Department of State of the State of
Florida on or before July 1 of each calendar year that such report was deposited
in the United States mail in a sealed envelope, properly addressed with postage
prepaid, shall be deemed in compliance with this requirement.
(3) Each report shall be executed by the corporation by an officer or
director or, if the corporation is in the hands of a receiver or trustee, shall
be executed on behalf of the corporation by such receiver or trustee, and the
signing thereof shall have the same legal effect as if made under oath, without
the necessity of appending such oath thereto.
(4) Information in the annual report must be current as of the date the
annual report is executed on behalf of the corporation.
(5) Any corporation failing to file an annual report which complies with
the requirements of this section shall not be permitted to maintain or defend
any action in any court of this state until such report is filed and all fees
and taxes due under the Act are paid and shall be subject to dissolution or
cancellation of its certificate of authority to do business as provided in the
Act.
ARTICLE X
Miscellaneous
Section 10.01. Definition of the "Act".
All references contained herein to the "Act" or to sections of the "Act"
shall be deemed to be in reference to the Florida Business Corporation Act.
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Section 10.02. Application of Florida Law.
Whenever any provision of these bylaws is inconsistent with any provision
of the Florida Business Corporation Act, Statutes 607, as they may be amended
from time to time, then in such instance Florida law shall prevail.
Section 10.03. Fiscal Year.
The fiscal year of the corporation shall be determined by resolution of
the board of directors.
Section 10.04. Conflicts with Articles of Incorporation.
In the event that any provision contained in these bylaws conflicts with
any provision of the corporation's articles of incorporation, as amended from
time to time, the provisions of the articles of incorporation shall prevail and
be given full force and effect, to the full extent permissible under the Act.
36
3.9
OHIO KEY II BYLAWS
<PAGE>
BY-LAWS
OF
OHIO KEY II, INC.
a Florida corporation
<PAGE>
INDEX
PAGE
ARTICLE I
Offices
Section 1.01 Principal Office....................................... 1
Section 1.02 Registered Office...................................... 1
Section 1.03 Other Offices.......................................... 1
ARTICLE II
Meetings of Shareholders
Section 2.01 Annual Meeting......................................... 1
Section 2.02 Special Meetings....................................... 2
Section 2.03 Shareholders' List for Meeting......................... 2
Section 2.04 Record Date............................................ 3
Section 2.05 Notice of Meetings and Adjournment..................... 3
Section 2.06 Waiver of Notice....................................... 4
ARTICLE III
Shareholder Voting
Section 3.01 Voting Group Defined................................... 5
Section 3.02 Quorum and Voting Requirements for
Voting Groups.................................... 5
Section 3.03 Action by Single and Multiple Voting
Groups........................................... 5
Section 3.04 Shareholder Quorum and Voting; Greater
or Lesser Voting Requirements.................... 6
<PAGE>
Section 3.05 Voting for Directors; Cumulative Voting................ 6
Section 3.06 Voting Entitlement of Shares........................... 7
Section 3.07 Proxies................................................ 8
Section 3.08 Shares Held by Nominees................................ 9
Section 3.09 Corporation's Acceptance of Votes...................... 10
Section 3.10 Action by Shareholders Without Meeting................. 11
ARTICLE IV
Board of Directors and Officers
Section 4.01 Qualifications of Directors............................ 11
Section 4.02 Number of Directors.................................... 11
Section 4.03 Terms of Directors Generally........................... 12
Section 4.04 Staggered Terms for Directors.......................... 12
Section 4.05 Vacancy on Board....................................... 12
Section 4.06 Compensation of Directors.............................. 12
Section 4.07 Meetings............................................... 13
Section 4.08 Action by Directors Without a Meeting.................. 13
Section 4.09 Notice of Meetings..................................... 13
Section 4.10 Waiver of Notice....................................... 13
Section 4.11 Quorum and Voting...................................... 14
Section 4.12 Committees............................................. 14
Section 4.13 Loans to Officers, Directors and
Employees; Guaranty of Obligations.............. 15
Section 4.14 Required Officers...................................... 15
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Section 4.15 Duties of Officers................................... 16
Section 4.16 Resignation and Removal of Officers.................. 16
Section 4.17 Contract Rights of Officers.......................... 16
Section 4.18 General Standards for Directors...................... 16
Section 4.19 Director Conflicts of Interest....................... 17
Section 4.20 Resignation of Directors............................. 18
ARTICLE V
Indemnification of Directors, Officers,
Employees and Agents
Section 5.01 Directors, Officers, Employees
and Agents..................................... 18
ARTICLE VI
Office and Agent
Section 6.01 Registered Office and Registered Agent............... 22
Section 6.02 Change of Registered Office or Registered
Agent; Resignation of Registered Agent........ 23
ARTICLE VII
Shares, Option, Dividends and Distributions
Section 7.01 Authorized Shares.................................... 24
Section 7.02 Terms of Class or Series Determined
by Board of Directors.......................... 24
Section 7.03 Issued and Outstanding Shares........................ 25
Section 7.04 Issuance of Shares................................... 25
Section 7.05 Form and Content of Certificates..................... 26
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<PAGE>
Section 7.06 Shares Without Certificates............................ 27
Section 7.07 Restriction on Transfer of Shares
and Other Securities............................. 27
Section 7.08 Shareholder's Pre-emptive Rights....................... 27
Section 7.09 Corporation's Acquisition of its
Own Shares....................................... 28
Section 7.10 Share Options.......................................... 28
Section 7.11 Terms and Conditions of Stock Rights
and Options...................................... 28
Section 7.12 Share Dividends........................................ 29
Section 7.13 Distributions to Shareholders.......................... 29
ARTICLE VIII
Amendment of Articles and Bylaws
Section 8.01 Authority to Amend the Articles of
Incorporation.................................... 31
Section 8.02 Amendment by Board of Directors........................ 31
Section 8.03 Amendment of Bylaws by Board of
Directors........................................ 32
Section 8.04 Bylaw Increasing Quorum or Voting
Requirements for Directors....................... 32
ARTICLE IX
Records and Report
Section 9.01 Corporate Records...................................... 33
Section 9.02 Financial Statements for Shareholders.................. 34
Section 9.03 Other Reports to Shareholders.......................... 34
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<PAGE>
Section 9.04 Annual Report for Department of State.................. 35
ARTICLE X
Miscellaneous
Section 10.01 Definition of the "Act"................................ 35
Section 10.02 Application of Florida Law............................. 36
Section 10.03 Fiscal Year............................................ 36
Section 10.04 Conflicts with Articles of
Incorporation................................... 36
v
<PAGE>
ARTICLE I
Offices
Section 1.01. Principal Office.
The principal office of the corporation in the State of Florida shall be
established at such places as the board of directors from time to time
determine.
Section 1.02. Registered Office.
The registered office of the corporation in the State of Florida shall be
at the office of its registered agent as stated in the articles of incorporation
or as the board of directors shall from time to time determine.
Section 1.03. Other Offices.
The corporation may have additional offices at such other places, either
within or without the State of Florida, as the board of directors may from time
to time determine or the business of the corporation may require.
ARTICLE II
Meetings of Shareholders
Section 2.01. Annual Meeting.
(1) The corporation shall hold a meeting of shareholders annually, for the
election of directors and for the transaction of any proper business, at a time
stated in or fixed in accordance with a resolution of the board of directors.
(2) Annual shareholders' meeting may be held in or out of the State of
Florida at a place stated in or fixed in accordance with a resolution by the
board of directors or, when not inconsistent with the board of directors'
resolution stated in the notice of the annual meeting. If no place is stated in
or fixed in accordance with these bylaws, or stated in the notice of the annual
meeting, annual meetings shall be held at the corporation's principal office.
(3) The failure to hold the annual meeting at the time stated in or fixed
in accordance with these bylaws or pursuant to the Act does not affect the
validity of any corporate action and shall not work a forfeiture of or
dissolution of the corporation.
<PAGE>
Section 2.02. Special Meeting.
(1) The corporation shall hold a special meeting of shareholders:
(a) On call of its board of directors or the person or persons
authorized to do so by the board of directors; or
(b) If the holders of not less than 10% of all votes entitled to be
cast on any issue proposed to be considered at the proposed special meeting
sign, date and deliver to the corporation's secretary one or more written
demands for the meeting describing the purpose or purposes for which it is
to be held.
(2) Special shareholders' meetings may be held in or out of the State of
Florida at a place stated in or fixed in accordance with a resolution of the
board of directors, or, when not inconsistent with the board of directors'
resolution, in the notice of the special meeting. If no place is stated in or
fixed in accordance with these bylaws or in the notice of the special meeting,
special meetings shall be held at the corporation's principal office.
(3) Only business within the purpose or purposes described in the special
meeting notice may be conducted at a special shareholders' meeting.
Section 2.03. Shareholders' List for Meeting.
(1) After fixing a record date for a meeting, a corporation shall prepare a
list of the names of all its shareholders who are entitled to notice of a
shareholders' meeting, in accordance with the Florida Business Corporation Act
(the "Act"), or arranged by voting group, with the address of, and the number
and class and series, if any, of shares held by, each.
(2) The shareholders' list must be available for inspection by any
shareholder for a period of ten days prior to the meeting or such shorter time
as exists between the record date and the meeting and continuing through the
meeting at the corporation's principal office, at a place identified in the
meeting notice in the city where the meeting will be held, or at the office of
the corporation's transfer agent or registrar. A shareholder or his agent or
attorney is entitled on written demand to inspect the list (subject to the
requirements of Section 607.1602(3) of the Act), during regular business hours
and at his expense, during the period it is available for inspection.
(3) The corporation shall make the shareholders' list available at the
meeting, and any shareholder or his agent or attorney is entitled to inspect the
list at any time during the meeting or any adjournment.
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<PAGE>
Section 2.04. Record Date.
(1) The board of directors may set a record date for purposes of
determining the shareholders entitled to notice of and to vote at a
shareholders' meeting; however, in no event may a record date fixed by the board
of directors be a date preceding the date upon which the resolution fixing the
record date is adopted.
(2) Unless otherwise fixed by the board of directors, the record date for
determining shareholders entitled to demand a special meeting is the date the
first shareholder delivers his demand to the corporation. In the event that the
board of directors sets the record date for a special meeting of shareholders,
it shall not be a date preceding the date upon which the corporation receives
the first demand from a shareholder requesting a special meeting.
(3) If no prior action is required by the board of directors pursuant to
the Act, and, unless otherwise fixed by the board of directors, the record date
for determining shareholders entitled to take action without a meeting is the
date the first signed written consent is delivered to the corporation under
Section 607.0704 of the Act. If prior action is required by the board of
directors pursuant to the Act, the record date for determining shareholders
entitled to take action without a meeting is at the close of business on the day
on which the board of directors adopts the resolution taking such prior action.
(4) Unless otherwise fixed by the board of directors, the record date for
determining shareholders entitled to notice of and to vote at an annual or
special shareholders' meeting is the close of business on the day before the
first notice is delivered to shareholders.
(5) A record date may not be more than 70 days before the meeting or action
requiring a determination of shareholders.
(6) A determination of shareholders entitled to notice of or to vote at a
shareholders' meeting is effective for any adjournment of the meeting unless the
board of directors fixes a new record date, which it must do if the meeting is
adjourned to a date more than one 120 days after the date fixed for the original
meeting.
Section 2.05. Notice of Meetings and Adjournment.
(1) The corporation shall notify shareholders of the date, time and place
of each annual and special shareholders' meeting no fewer than 10 or more than
60 days before the meeting date. Unless the Act requires otherwise, the
corporation is required to give notice only to shareholders entitled to vote at
the meeting. Notice shall be given in the manner provided in Section 607.0141 of
the Act, by or at the direction of the president, the secretary, of the officer
or persons calling the meeting. If the notice is mailed at least 30 days before
the date of the meeting, it may be done by a class of
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<PAGE>
United States mail other than first class. Notwithstanding Section 607.0141, if
mailed, such notice shall be deemed to be delivered when deposited in the United
Statement mail addressed to the shareholder at his address as it appears on the
stock transfer books of the corporation, with postage thereon prepaid.
(2) Unless the Act or the articles of incorporation requires otherwise,
notice of an annual meeting need not include a description of the purpose or
purposes for which the meeting is called.
(3) Notice of a special meeting must include a description of the purpose
or purposes for which the meeting is called.
(4) If an annual or special shareholders meeting is adjourned to a
different date, time, or place, notice need not be given of the new date, time,
or place if the new date, time or place is announced at the meeting before
adjournment is taken, and any business may be transacted at the adjourned
meeting that might have been transacted on the original date of the meeting. If
a new record date is or must be fixed under Section 607.0707 of the Act,
however, notice of the adjourned meeting must be given under this section to
persons who are shareholders as of the new record date who are entitled to
notice of the meeting.
(5) Notwithstanding the foregoing, no notice of a shareholders' meeting
need be given if: (a) an annual report and proxy statements for two consecutive
annual meetings of shareholders, or (b) all, and at least two checks in payment
of dividends or interest on securities during a 12-month period, have been sent
by first-class United States mail, addressed to the shareholder at his address
as it appears on the share transfer books of the corporation, and returned
undeliverable. The obligation of the corporation to give notice of a
shareholders' meeting to any such shareholder shall be reinstated once the
corporation has received a new address for such shareholder for entry on its
share transfer books.
Section 2.06. Waiver of Notice.
(1) A shareholder may waive any notice required by the Act, the articles of
incorporation, or bylaws before or after the date and time stated in the notice.
The waiver must be in writing, be signed by the shareholder entitled to the
notice, and be delivered to the corporation for inclusion in the minutes or
filing with the corporate records. Neither the business to be transacted at nor
the purpose of any regular or special meeting of the shareholders need be
specified in any written waiver of notice.
(2) A shareholder's attendance at a meeting: (a) Waives objection to lack
of notice or defective notice of the meeting, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting business
at the meeting; or (b) waives objection to consideration of a particular matter
at the meeting that is not within
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<PAGE>
the purpose or purposes described in the meeting notice, unless the shareholder
objects to considering the matter when it is presented.
ARTICLE III
Shareholder Voting
Section 3.01. Voting Group Defined.
A "voting group" means all shares of one or more classes or series that
under the articles of incorporation or the Act are entitled to vote and be
counted together collectively on a matter at a meeting of shareholders. All
shares entitled by the articles of incorporation or the Act to vote generally on
the matter are for that purpose a single voting group.
Section 3.02. Quorum and Voting Requirements for Voting Groups.
(1) Shares entitled to vote as a separate voting group may take action on a
matter at a meeting only if a quorum of those shares exists with respect to that
matter. Unless the articles of incorporation or the Act provides otherwise, a
majority of the votes entitled to be cast on the matter by the voting group
constitutes a quorum of that voting group for action on that matter.
(2) Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.
(3) If a quorum exists, action on a matter (other than the election of
directors) by a voting group is approved if the votes cast within the voting
group favoring the action exceed the votes cast opposing the action, unless the
articles of incorporation or the Act requires a greater number of affirmative
votes.
Section 3.03. Action by Single and Multiple Voting Groups.
(1) If the articles of incorporation or the Act provides for voting by a
single voting group on a matter, action on that matter is taken when voted upon
by that voting group as provided in Section 3.02 of these bylaws.
(2) If the articles of incorporation or the Act provides for voting by two
or more voting groups on a matter, action on that matter is taken only when
voted upon by each of those voting groups counted separately as provided in
Section 3.02 of these bylaws. Action may be taken by one voting group on a
matter even though no action is taken by another voting group entitled to vote
on the matter.
5
<PAGE>
Section 3.04. Shareholder Quorum and Voting; Greater or Lesser Voting
Requirements.
(1) A majority of the shares entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders, but in no event
shall a quorum consist of less than one-third of the shares entitled to vote.
When a specified item of business is required to be voted on by a class or
series of stock, a majority of the shares of such class or series shall
constitute a quorum for the transaction of such item of business by that class
or series.
(2) An amendment to the articles of incorporation that adds, changes or
deletes a greater or lesser quorum or voting requirement must meet the same
quorum requirement and be adopted by the same vote and voting groups required to
take action under the quorum and voting requirements then in effect or proposed
to be adopted, whichever is greater.
(3) If a quorum exists, action on a matter, other than the election of
directors, is approved if the votes cast by the holders of the shares
represented at the meeting and entitled to vote on the subject matter favoring
the action exceed the votes cast opposing the action, unless a greater number of
affirmative votes or voting by classes is required by the Act or the articles of
incorporation.
(4) After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a quorum, shall
not affect the validity of any action taken at the meeting or any adjournment
thereof.
(5) The articles of incorporation may provide for a greater voting
requirement or a greater or lesser quorum requirement for shareholders (or
voting groups of shareholders) than is provided by the Act, but in no event
shall a quorum consist of less than one-third of the shares entitled to vote.
Section 3.05. Voting for Directors; Cumulative Voting.
(1) Directors are elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum is present.
(2) Each shareholder who is entitled to vote at an election of directors
has the right to vote the number of shares owned by him for as many persons as
there are directors to be elected and for whose election he has a right to vote.
Shareholders do not have a right to cumulate their votes for directors unless
the articles of incorporation so provide.
6
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Section 3.06. Voting Entitlement of Shares.
(1) Unless the articles of incorporation or the Act provides otherwise,
each outstanding share, regardless of class, is entitled to one vote on each
matter submitted to a vote at a meeting of shareholders. Only shares are
entitled to vote.
(2) The shares of the corporation are not entitled to vote if they are
owned, directly or indirectly, by a second corporation, domestic or foreign, and
the first corporation owns, directly or indirectly, a majority of shares
entitled to vote for directors of the second corporation.
(3) This section does not limit the power of the corporation to vote any
shares, including its own shares, held by it in a fiduciary capacity.
(4) Redeemable shares are not entitled to vote on any matter, and shall not
be deemed to be outstanding, after notice of redemption is mailed to the holders
thereof and a sum sufficient to redeem such shares has been deposited with a
bank, trust company, or other financial institution upon an irrevocable
obligation to pay the holders the redemption price upon surrender of the shares.
(5) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent, or proxy as the bylaws of the
corporate shareholder may prescribe or, in the absence of any applicable
provision, by such person as the board of directors of the corporate shareholder
may designate. In the absence of any such designation or in case of conflicting
designation by the corporate shareholder, the chairman of the board, the
president, any vice president, the secretary, and the treasurer of the corporate
shareholder, in that order, shall be presumed to be fully authorized to vote
such shares.
(6) Shares held by an administrator, executor, guardian, personal
representative, or conservator may be voted by him, either in person or by
proxy, without a transfer of such shares into his name. Shares standing in the
name of a trustee may be voted by him, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him without a transfer of such
shares into his name or the name of his nominee.
(7) Shares held by or under the control of a receiver, a trustee in
bankruptcy proceedings, or an assignee for the benefit of creditors may be voted
by him without the transfer thereof into his name.
(8) If a share or shares stand of record in the names of two or more
persons, whether fiduciaries, members of a partnership, joint tenants, tenants
in common, tenants by the entirety, or otherwise, or if two or more persons have
the same fiduciary relationship respecting the same shares, unless the secretary
of the corporation is given
7
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notice to the contrary and is furnished with a copy of the instrument or order
appointing them or creating the relationship wherein it is so provided, then
acts with respect to voting have the following effect:
(a) If only one votes, in person or in proxy, his act binds all;
(b) If more than one vote, in person or by proxy, the act of the
majority so voting binds all;
(c) If more than one vote, in person or by proxy, but the vote is
evenly split on any particular matter, each faction is entitled to vote the
share or shares in question proportionally;
(d) If the instrument or order so filed shows that any such tenancy is
held in unequal interest, a majority or a vote evenly split for purposes of
this subsection shall be a majority or a vote evenly split in interest;
(e) The principles of this subsection shall apply, insofar as
possible, to execution of proxies, waivers, consents, or objections and for
the purpose of ascertaining the presence of a quorum;
(f) Subject to Section 3.08 of these bylaws, nothing herein contained
shall prevent trustees or other fiduciaries holding shares registered in
the name of a nominee from causing such shares to be voted by such nominee
as the trustee or other fiduciary may direct. Such nominee may vote shares
as directed by a trustee or their fiduciary without the necessity of
transferring the shares to the name of the trustee or other fiduciary.
Section 3.07. Proxies.
(1) A shareholder, other person entitled to vote on behalf of a shareholder
pursuant to Section 3.06 of these bylaws, or attorney in fact may vote the
shareholder's shares in person or by proxy.
(2) A shareholder may appoint a proxy to vote or otherwise act for him by
signing an appointment form, either personally or by his attorney in fact. An
executed telegram or cablegram appearing to have been transmitted by such
person, or a photographic, photostatic, or equivalent reproduction of an
appointment form, is a sufficient appointment form.
(3) An appointment of a proxy is effective when received by the secretary
or other officer or agent authorized to tabulate votes. An appointment is valid
for up to 11 months unless a longer period is expressly provided in the
appointment form.
8
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(4) The death or incapacity of the shareholder appointing a proxy does not
affect the right of the corporation to accept the proxy's authority unless
notice of the death or incapacity is received by the secretary or other officer
or agent authorized to tabulate votes before the proxy exercises his authority
under the appointment.
(5) An appointment of a proxy is revocable by the shareholder unless the
appointment form conspicuously states that it is irrevocable and the appointment
is coupled with an interest. Appointments coupled with an interest include the
appointment of: (a) a pledgee; (b) a person who purchased or agreed to purchase
the shares; (c) a creditor of the corporation who extended credit to the
corporation under terms requiring the appointment; (d) an employee of the
corporation whose employment contract requires the appointment; or (e) a party
to a voting agreement created in accordance with the Act.
(6) An appointment made irrevocable under this section becomes revocable
when the interest with which it is coupled is extinguished and, in a case
provided for in Subsection 5(c) or 5(d), the proxy becomes revocable three years
after the date of the proxy or at the end of the period, if any, specified
herein, whichever is less, unless the period of irrevocability is renewed from
time to time by the execution of a new irrevocable proxy as provided in this
section. This does not affect the duration of a proxy under subsection (3).
(7) A transferee for value of shares subject to an irrevocable appointment
may revoke the appointment if he did not know of its existence when he acquired
the shares and the existence of the irrevocable appointment was not noted
conspicuously on the certificate representing the shares or on the information
statement for shares without certificates.
(8) Subject to Section 3.09 of these bylaws and to any express limitation
on the proxy's authority appearing on the face of the appointment form, a
corporation is entitled to accept the proxy's vote or other action as that of
the shareholder making the appointment.
(9) If an appointment form expressly provides, any proxy holder may
appoint, in writing, a substitute to act in his place.
Section 3.08. Shares Held by Nominees.
(1) The corporation may establish a procedure by which the beneficial owner
of shares that are registered in the name of a nominee is recognized by the
corporation as the shareholder. The extent of this recognition may be determined
in the procedure.
(2) The procedure may set forth (a) the types of nominees to which it
applies; (b) the rights or privileges that the corporation recognizes in a
beneficial owner; (c) the
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manner in which the procedure is selected by the nominee; (d) the information
that must be provided when the procedure is selected; (e) the period for which
selection of the procedure is effective; and (f) other aspects of the rights and
duties created.
Section 3.09. Corporation's Acceptance of Votes.
(1) If the name signed on a vote, consent, waiver, or proxy appointment
corresponds to the name of a shareholder, the corporation if acting in good
faith is entitled to accept the vote, consent waiver, or proxy appointment and
give it effect as the act of the shareholder.
(2) If the name signed on a vote, consent, waiver, or proxy appointment
does not correspond to the name of its shareholder, the corporation if acting in
good faith is nevertheless entitled to accept the vote, consent, waiver, or
proxy appointment and give it effect as the act of the shareholder if: (a) the
shareholder is an entity and the name signed purports to be that of an officer
or agent of the entity; (b) the name signed purports to be that of an
administrator, executor, guardian, personal representative, or conservator
representing the shareholder and, if the corporation requests, evidence of
fiduciary status acceptable to the corporation has been presented with respect
to the vote, consent, waiver, or proxy appointment; (c) the name signed purports
to be that of a receiver, trustee in bankruptcy, or assignee for the benefit of
creditors of the shareholder and, if the corporation requests, evidence of this
status acceptable to the corporation has been presented with respect to the
vote, consent, waiver, or proxy appointment; (d) the name signed purports to be
that of a pledgee, beneficial owner, or attorney in fact of the shareholder and,
if the corporation requests, evidence acceptable to the corporation of the
signatory's authority to sign for the shareholder has been presented with
respect to the vote, consent, waiver, or proxy appointment; or (e) two or more
persons are the shareholder as covenants or fiduciaries and the name signed
purports to be the name of at least one of the co-owners and the person signing
appears to be acting on behalf of all the co-owners.
(3) The corporation is entitled to reject a vote, consent, waiver, or proxy
appointment if the secretary or other officer or agent authorized to tabulate
votes, acting in good faith, has reasonable basis for doubt about the validity
of the signature on it or about the signatory's authority to sign for the
shareholder.
(4) The corporation and its officer or agent who accepts or rejects a vote,
consent, waiver, or proxy appointment in good faith and in accordance with the
standards of this section are not liable in damages to the shareholder for the
consequences of the acceptance or rejection.
(5) Corporate action based on the acceptance or rejection of a vote,
consent, waiver, or proxy appointment under this section is valid unless a court
of competent jurisdiction determines otherwise.
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Section 3.10. Action by Shareholders Without Meeting.
(1) Any action required or permitted by the Act to be taken at any annual
or special meeting of shareholders of the corporation may be taken without a
meeting, without prior notice and without a vote, if the action is taken by the
holders of outstanding stock of each voting group entitled to vote thereon
having not less than the minimum number of votes with respect to each voting
group that would be necessary to authorize or take such action at a meeting at
which all voting groups and shares entitled to vote thereon were present and
voted. In order to be effective, the action must by evidenced by one or more
written consents describing the action taken, dated and signed by approving
shareholders having the requisite number of votes of each voting group entitled
to vote thereon, and delivered to the corporation by delivery to its principal
office in this state, its principal place of business, the corporate secretary,
or another office or agent of the corporation having custody of the book in
which proceedings of meetings of shareholders are recorded. No written consent
shall be effective to take the corporate action referred to therein unless,
within 60 days of the date of the earliest dated consent is delivered in the
manner required by this section, written consent signed by the number of holders
required to take action is delivered to the corporation by delivery as set forth
in this section.
(2) Within 10 days after obtaining such authorization by written consent,
notice in accordance with Section 607.0704(3) of the Act must be given to those
shareholders who have not consented in writing.
ARTICLE IV
Board of Directors and Officers
Section 4.01. Qualifications of Directors.
Directors must be natural persons who are 18 years of age or older but need
not be residents of the State of Florida or shareholders of the corporation.
Section 4.02. Number of Directors.
(1) The board of directors shall consist of not less than one nor more than
nine individuals.
(2) The number of directors may be increased or decreased from time to time
by amendment to these bylaws.
(3) Directors are elected at the first annual shareholders' meeting and at
each annual meeting thereafter unless their terms are staggered under Section
4.04 of these bylaws.
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Section 4.03. Terms of Directors Generally.
(1) The terms of the initial directors of the corporation expire at the
first shareholders' meeting at which directors are elected.
(2) The terms of all other directors expire at the next annual
shareholders' meeting following their election unless their terms are staggered
under Section 4.04 of these bylaws.
(3) A decrease in the number of directors does not shorten an incumbent
director's term.
(4) The term of a director elected to fill a vacancy expires at the next
shareholders' meeting at which directors are elected.
(5) Despite the expiration of a director's term, he continues to serve
until his successor is elected and qualifies or until there is a decrease in the
number of directors.
Section 4.04. Staggered Terms for Directors.
The directors of any corporation organized under the Act may, by the
articles of incorporation, or by amendment to these bylaws adopted by a vote of
the shareholders, be divided into one, two or three classes with the number of
directors in each class being as nearly equal as possible; the term of office of
those of the first class to expire at the annual meeting next ensuing; of the
second class one year thereafter; at the third class two years thereafter; and
at each annual election held after such classification and election, directors
shall be chosen for a full term, as the case may be, to succeed those whose
terms expire. If the directors have staggered terms, then any increase or
decrease in the number of directors shall be so apportioned among the classes as
to make all classes as nearly equal in number as possible.
Section 4.05. Vacancy on Board.
(1) Whenever a vacancy occurs on a board of directors, including a vacancy
resulting from an increase in the number of directors, it may be filled by the
affirmative vote of a majority of the remaining directors.
(2) A vacancy that will occur at a specific later date (by reason of a
resignation effective at a later date may be filled before the vacancy occurs
but the new director may not take office until the vacancy occurs.
Section 4.06. Compensation of Directors.
The board of directors may fix the compensation of directors.
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Section 4.07. Meetings.
(1) The board of directors may hold regular or special meetings in or out
of the State of Florida.
(2) A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the board of directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
(3) Meetings of the board of directors may be called by the chairman of the
board or by the president.
(4) The board of directors may permit any or all directors to participate
in a regular or special meeting by, or conduct the meeting through the use of,
any means of communication by which all directors participating may
simultaneously hear each other during the meeting. A director participating in a
meeting by this means is deemed to be present in person at the meeting.
Section 4.08. Action by Directors Without a Meeting.
(1) Action required or permitted by the Act to be taken at a board of
directors' meeting or committee meeting may be taken without a meeting if the
action is taken by all members of the board or of the committee. The action must
be evidenced by one or more written consents describing the action taken and
signed by each director or committee member.
(2) Action taken under this section is effective when the last director
signs the consent, unless the consent specifies a different effective date.
(3) A consent signed under this section has the effect of a meeting vote
and may be described as such in any document.
Section 4.09. Notice of Meetings.
Regular and special meetings of the board of directors may be held without
notice of the date, time, place, or purpose of the meeting.
Section 4.10. Waiver of Notice.
Notice of a meeting of the board of directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and a waiver of any and
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all objections to the place of the meeting, the time of the meeting, or the
manner in which it has been called or convened, except when a director states,
at the beginning of the meeting or promptly upon arrival at the meeting, any
objection to the transaction of business because the meeting is not lawfully
called or convened.
Section 4.11. Quorum and Voting.
(1) A quorum of a board of directors consists of a majority of the number
of directors prescribed by the articles of incorporation or these bylaws.
(2) If a quorum is present when a vote is taken, the affirmative vote of a
majority of directors present is the act of the board of directors.
(3) A director of a corporation who is present at a meeting of the board of
directors or a committee of the board of directors when corporate action is
taken is deemed to have assented to the action taken unless:
(a) He objects at the beginning of the meeting (or promptly upon his
arrival) to holding it or transacting specified business at the meeting; or
(b) He votes against or abstains from the action taken.
Section 4.12. Committees.
(1) The board of directors, by resolution adopted by a majority of the full
board of directors, may designate from among its members an executive committee
and one or more other committees each of which, to the extent provided in such
resolution, shall have and may exercise all the authority of the board of
directors, except that no such committee shall have the authority to:
(a) Approve or recommend to shareholders actions or proposals required
by the Act to be approved by shareholders.
(b) Fill vacancies on the board of directors or any committee thereof.
(c) Adopt, amend, or repeal these bylaws.
(d) Authorize or approve the reacquisition of shares unless pursuant
to a general formula or method specified by the board of directors.
(e) Authorize or approve the issuance or sale or contract for the sale
of shares, or determine the designation and relative rights, preferences,
and limitations of a voting group except that the board of directors may
authorize a committee (or a senior
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executive officer of the corporation) to do so within limits specifically
prescribed by the board of directors.
(2) The sections of these bylaws which govern meetings, notice and waiver
of notice, and quorum and voting requirements of the board of directors apply to
committees and their members as well.
(3) Each committee must have two or more members who serve at the pleasure
of the board of directors. The board, by resolution adopted in accordance
herewith, may designate one or more directors as alternate members of any such
committee who may act in the place and stead of any absent member or members at
any meeting of such committee.
(4) Neither the designation of any such committee, the delegation thereto
of authority, nor action by such committee pursuant to such authority shall
alone constitute compliance by any member of the board of directors not a member
of the committee in question with his responsibility to act in good faith, in a
manner he reasonably believes to be in the best interests of the corporation,
and with such care as an ordinarily prudent person in a like position would use
under similar circumstances.
Section 4.13. Loans to Officers, Directors, and Employees; Guaranty of
Obligations.
The corporation may lend money to, guaranty any obligation of, or otherwise
assist any officer, director, or employee of the corporation or of a subsidiary,
whenever, in the judgment of the board of directors, such loan, guaranty, or
assistance may reasonably be expected to benefit the corporation. The loan,
guaranty, or other assistance may be with or without interest and may be
unsecured or secured in such manner as the board of directors shall approve,
including, without limitation, a pledge of shares of stock of the corporation.
Nothing in this section shall be deemed to deny, limit, or restrict the powers
of guaranty or warranty of any corporation at common law or under any statute.
Loans, guaranties, or other types of assistance are subject to section 4.19.
Section 4.14. Required Officers.
(1) The corporation shall have such officers as the board of directors may
appoint from time to time.
(2) A duly appointed officer may appoint one or more assistant officers.
(3) The board of directors shall delegate to one of the officers
responsibility for preparing minutes of the directors' and shareholders'
meetings and for authenticating records of the corporation.
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(4) The same individual may simultaneously hold more than one office in the
corporation.
Section 4.15. Duties of Officers.
Each officer has the authority and shall perform the duties set forth in a
resolution or resolutions of the board of directors or by direction of any
officer authorized by the board of directors to prescribe the duties of other
officers.
Section 4.16. Resignation and Removal of Officers.
(1) An officer may resign at any time by delivering notice to the
corporation. A resignation is effective when the notice is delivered unless the
notice specifies a later effective date. If a resignation is made effective at a
later date and the corporation accepts the future effective date, the board of
directors may fill the pending vacancy before the effective date if the board of
directors provides that the successor does not take office until the effective
date.
(2) The board of directors may remove any officer at any time with or
without cause. Any assistant officer, if appointed by another officer, may
likewise be removed by the board of directors or by the officer which appointed
him in accordance with these bylaws.
Section 4.17. Contract Rights of Officers.
The appointment of an officer does not itself create contract rights.
Section 4.18. General Standards for Directors.
(1) A director shall discharge his duties as a director, including his
duties as a member of a committee:
(a) In good faith;
(b) With the care an ordinarily prudent person in a like position
would exercise under similar circumstances; and
(c) In a manner he reasonably believes to be in the best interests of
the corporation.
(2) In discharging his duties, a director is entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, if prepared or presented by:
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(a) One or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented;
(b) Legal counsel, public accountants, or other persons as to matters
the director reasonably believes are within the persons' professional or
expert competence; or
(c) A committee of the board of directors of which he is not a member
if the director reasonably believes the committee merits confidence.
(3) In discharging his duties, a director may consider such factors as the
director deems relevant, including the long-term prospects and interests of the
corporation and its shareholders, and the social, economic, legal, or other
effects of any action on the employees, suppliers, customers of the corporation
or its subsidiaries, the communities and society in which the corporation or its
subsidiaries operate, and the economy of the state and the nation.
(4) A director is not acting in good faith if he has knowledge concerning
the matter in question that makes reliance otherwise permitted by subsection (2)
unwarranted.
(5) A director is not liable for any action taken as a director, or any
failure to take any action, if he performed the duties of his office in
compliance with this section.
Section 4.19. Director Conflicts of Interest.
No contract or other transaction between a corporation and one or more
interested directors shall be either void or voidable because of such
relationship or interest, because such director or directors are present at the
meeting of the board of directors or a committee thereof which authorizes,
approves or ratifies such contract or transaction, or because his or their votes
are counted for such purpose, if:
(1) The fact of such relationship or interest is disclosed or known to the
board of directors or committee which authorizes, approves or ratifies the
contract or transactions by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors;
(2) The fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(3) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
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Common or interested directors may be counted in determining the presence
of a quorum at the meeting of the board of directors or a committee thereof
which authorizes, approves or ratifies such contract or transaction.
For the purpose of paragraph (2) above, a conflict of interest transaction
is authorized, approved or ratified if it receives the vote of a majority of the
shares entitled to be counted under this subsection. Shares owned by or voted
under the control of a director who has a relationship or interest in the
conflict of interest transaction may not be counted in a vote of shareholders to
determine whether to authorize, approve or ratify a conflict of interest
transaction under paragraph (2). The vote of those shares, however, is counted
in determining whether the transaction is approved under other sections of the
Act. A majority of the shares, whether or not present, that are entitled to be
counted in a vote on the transaction under this subsection constitutes a quorum
for the purpose of taking action under this section.
Section 4.20. Resignation of Directors.
A director may resign at any time by delivering written notice to the board
of directors or its chairman or to the corporation.
A resignation is effective when the notice is delivered unless the notice
specifies a later effective date. If a resignation is made effective at a later
date, the board of directors may fill the pending vacancy before the effective
date if the board of directors provides that the successor does not take office
until the effective date.
ARTICLE V
Indemnification of Directors, Officers,
Employees and Agents
Section 5.01. Directors, Officers, Employees and Agents.
(1) The corporation shall have power to indemnify any person who was or is
a party to any proceeding (other than an action by, or in the right of, the
corporation), by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise against liability
incurred in connection with such proceeding, including any appeal thereof, if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any proceeding by judgment, order, settlement,
or conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he
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reasonably believed to be in, or not opposed to, the best interests of the
corporation or, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(2) The corporation shall have power to indemnify any person, who was or is
a party to any proceeding by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses and amounts paid in settlement not exceeding, in the judgment of the
board of directors, the estimated expense of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense or
settlement of such proceeding, including any appeal thereof. Such
indemnification shall be authorized if such person acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the corporation, except that no indemnification shall be made under this
subsection in respect of any claim, issue, or matter as to which such person
shall have been adjudged to be liable unless, and only to the extent that, the
court in which such proceeding was brought, or any other court of competent
jurisdiction, shall determine upon application that, despite the adjudication of
liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper.
(3) To the extent that a director, officer, employee, or agent of the
corporation has been successful on the merits or otherwise in defense of any
proceeding referred to in subsections (1) or (2), or in defense of any claim,
issue, or matter therein, he shall be indemnified against expenses actually and
reasonably incurred by him in connection therewith.
(4) Any indemnification under subsections (1) or (2), unless pursuant to a
determination by a court, shall be made by the corporation only as authorized in
the specific case upon a determination that indemnification of the director,
officer, employee, or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in subsections (1) or (2). Such
determination shall be made:
(a) By the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such proceeding;
(b) If such a quorum is not obtainable or, even if obtainable, by
majority vote of a committee duly designated by the board of directors (in
which directors who are parties may participate) consisting solely of two
or more directors not at the time parties to the proceeding;
(c) By independent legal counsel:
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(i) Selected by the board of directors prescribed in paragraph
(a) or the committee prescribed in paragraph (b); or
(ii) If a quorum of the directors cannot be obtained for
paragraph (a) and the committee cannot be designed under paragraph
(b), selected by majority vote of the full board of directors (in
which directors who are parties may participate); or
(d) By the shareholders by a majority vote of a quorum consisting of
shareholders who were not parties to such proceeding or, if no such quorum
is obtainable, by a majority vote of shareholders who were not parties to
such proceeding.
(5) Evaluation of the reasonableness of expenses and authorization of
indemnification shall be made in the same manner as the determination that
indemnification is permissible. However, if the determination of permissibility
is made by independent legal counsel, persons specified by paragraph (4)(c)
shall evaluate the reasonableness of expenses and may authorize indemnification.
(6) Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the corporation in advance of the final
disposition of such proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if he is ultimately found not to
be entitled to indemnification by the corporation pursuant to this section.
Expenses incurred by other employees and agents may be paid in advance upon such
terms or conditions that the board of directors deems appropriate.
(7) The indemnification and advancement of expenses provided pursuant to
this section are not exclusive, and the corporation may make any other or
further indemnification or advancement of expenses of any of its directors,
officers, employees, or agents, under any bylaw, agreement, vote of shareholders
or disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
However, indemnification or advancement of expenses shall not be made to or on
behalf of any director, officer, employee, or agent if a judgment or other final
adjudication establishes that his actions, or omissions to act, were material to
the cause of action so adjudicated and constitute:
(a) A violation of the criminal law, unless the director, officer,
employee, or agent had reasonable cause to believe his conduct was lawful
or had no reasonable cause to believe his conduct was unlawful;
(b) A transaction from which the director, officer, employee, or agent
derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the
liability provisions of Section 607.0834 under the Act are applicable; or
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(d) Willful misconduct or a conscious disregard for the best interests
of the corporation in a proceeding by or in the right of the corporation to
procure a judgment in its favor or in a proceeding by or in the right of a
shareholder.
(8) Indemnification and advancement of expenses as provided in this section
shall continue as, unless otherwise provided when authorized or ratified, to a
person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators of such a
person, unless otherwise provided when authorized or ratified.
(9) Notwithstanding the failure of the corporation to provide
indemnification, and despite any contrary determination of the board or of the
shareholders in the specific case, a director, officer, employee, or agent of
the corporation who is or was a party to a proceeding may apply for
indemnification or advancement of expenses, or both, to the court conducting the
proceeding, to the circuit court, or to another court of competent jurisdiction.
On receipt of an application, the court, after giving any notice that it
considers necessary, may order indemnification and advancement of expenses,
including expenses incurred in seeking court-ordered indemnification or
advancement of expenses, if it determines that:
(a) The director, officer, employee, or agent if entitled to mandatory
indemnification under subsection (3), in which case the court shall also
order the corporation to pay the director reasonable expenses incurred in
obtaining court-ordered indemnification or advancement of expenses;
(b) The director, officer, employee, or agent is entitled to
indemnification or advancement of expenses, or both, by virtue of the
exercise by the corporation of its power pursuant to subsection (7); or
(c) The director, officer, employee, or agent is fairly and reasonably
entitled to indemnification or advancement of expenses, or both, in view of
all the relevant circumstances, regardless of whether such person met the
standard of conduct set forth in subsection (1), subsection (2) or
subsection (7).
(10) For purposes of this section, the term "corporation" includes, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger, so that
any person who is or was a director, officer, employee, or agent of a
constituent corporation, or is or was serving at the request of a constituent
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust or other enterprise, is in the same position
under this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
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(11) For purposes of this section:
(a) The term "other enterprises" includes employee benefit plans;
(b) The term "expenses" includes counsel fees, including those for
appeal;
(c) The term "liability" includes obligations to pay a judgment,
settlement, penalty, fine (including an excise tax assessed with respect to
any employee benefit plan), and expenses actually and reasonably incurred
with respect to a proceeding;
(d) The term "proceeding" includes any threatened, pending, or
completed action, suit or other type of proceeding, whether civil,
criminal, administrative, or investigative and whether formal or informal;
(e) The term "agent" includes a volunteer;
(f) The term "serving at the request of the corporation" includes any
service as a director, officer, employee, or agent of the corporation that
imposes duties on such persons, including duties relating to an employee
benefit plan and its participants or beneficiaries; and
(g) The term "not opposed to the best interest of the corporation"
describes the actions of a person who acts in good faith and in a manner he
reasonably believes to be in the best interests of the participants and
beneficiaries of an employee benefit plan.
(12) The corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee, or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise against any liability asserted against him
and incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this section.
ARTICLE VI
Office and Agent
Section 6.01. Registered Office and Registered Agent.
(1) The corporation shall have and continuously maintain in the State of
Florida:
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(a) A registered office which may be the same as its place of
business; and
(b) A registered agent, who, may be either:
(i) An individual who resides in the State of Florida whose
business office is identical with such registered office; or
(ii) Another corporation or not-for-profit corporation as defined
in Chapter 617 of the Act, authorized to transact business or conduct
its affairs in the State of Florida, having a business office
identical with the registered office; or
(iii) A foreign corporation or not-for-profit foreign corporation
authorized pursuant to chapter 607 or chapter 617 of the Act to
transact business or conduct its affairs in the State of Florida,
having a business office identical with the registered office.
Section 6.02. Change of Registered Office or Registered Agent; Resignation
of Registered Agent.
(1) The corporation may change its registered office or its registered
agent upon filing with the Department of State of the State of Florida a
statement of change setting forth:
(a) The name of the corporation;
(b) The street address of its current registered office;
(c) If the current registered office is to be changed, the street
address of the new registered office;
(d) The name of its current registered agent;
(e) If its current registered agent is to be changed, the name of the
new registered agent and the new agent's written consent (either on the
statement or attached to it) to the appointment;
(f) That the street address of its registered office and the street
address of the business office of its registered agent, as changed, will be
identical;
(g) That such change was authorized by resolution duly adopted by its
board of directors or by an officer of the corporation so authorized by the
board of directors.
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ARTICLE VII
Shares, Options, Dividends and Distributions
Section 7.01. Authorized Shares.
(1) The articles of incorporation prescribe the classes of shares and the
number of shares of each class that the corporation is authorized to issue, as
well as a distinguishing designation for each class, and prior to the issuance
of shares of a class the preferences, limitations, and relative rights of that
class must be described in the articles of incorporation.
(2) The articles of incorporation must authorize:
(a) One or more classes of shares that together have unlimited voting
rights, and
(b) One or more classes of shares (which may be the same class or
classes as those with voting rights) that together are entitled to receive
the net assets of the corporation upon dissolution.
(3) The articles of incorporation may authorize one or more classes of
shares that have special, conditional, or limited voting rights, or no rights,
or no right to vote, except to the extent prohibited by the Act;
(a) Are redeemable or convertible as specified in the articles of
incorporation;
(b) Entitle the holders to distributions calculated in any manner,
including dividends that may be cumulative, non-cumulative, or partially
cumulative;
(c) Have preference over any other class of shares with respect to
distributions, including dividends and distributions upon the dissolution
of the corporation.
(4) Shares which are entitled to preference in the distribution of
dividends or assets shall not be designated as common shares. Shares which are
not entitled to preference in the distribution of dividends or assets shall be
common shares and shall not be designated as preferred shares.
Section 7.02. Terms of Class or Series Determined by Board of Directors.
(1) If the articles of incorporation so provide, the board of directors may
determine, in whole or part, the preferences, limitations, and relative rights
(within the limits set forth in Section 7.01) of:
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(a) Any class of shares before the issuance of any shares of that
class, or
(b) One or more series within a class before the issuance of any
shares of that series.
(2) Each series of a class must be given a distinguishing designation.
(3) All shares of a series must have preferences, limitations, and relative
rights identical with those of other shares of the same series and, except to
the extent otherwise provided in the description of the series, of those of
other series of the same class.
(4) Before issuing any shares of a class or series created under this
section, the corporation must deliver to the Department of State of the State of
Florida for filing articles of amendment, which are effective without
shareholder action, in accordance with Section 607.0602 of the Act.
Section 7.03. Issued and Outstanding Shares.
(1) A corporation may issue the number of shares of each class or series
authorized by the articles of incorporation. Shares that are issued are
outstanding shares until they are reacquired, redeemed, converted, or canceled.
(2) The reacquisition, redemption, or conversion of outstanding shares is
subject to the limitations of subsection (3) and to Section 607.06401 of the
Act.
(3) At all times that shares of the corporation are outstanding, one or
more shares that together have unlimited voting rights and one or more shares
that together are entitled to receive the net assets of the corporation upon
dissolution must be outstanding.
Section 7.04. Issuance of Shares.
(1) The board of directors may authorize shares to be issued for
consideration consisting of any tangible or intangible property or benefit to
the corporation, including cash, promissory notes, services performed, promises
to perform services evidenced by a written contract, or other securities of the
corporation.
(2) Before the corporation issues shares, the board of directors must
determine that the consideration received or to be received for shares to be
issued is adequate. That determination by the board of directors is conclusive
insofar as the adequacy of consideration for the issuance of shares relates to
whether the shares are validly issued, fully paid, and non-assessable. When it
cannot be determined that outstanding shares
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<PAGE>
are fully paid and non-assessable, there shall be a conclusive presumption that
such shares are fully paid and non-assessable if the board of directors makes a
good faith determination that there is no substantial evidence that the full
consideration for such shares has not been paid.
(3) When the corporation receives the consideration for which the board of
directors authorized the issuance of shares, the shares issued therefor are
fully paid and non-assessable. Consideration in the form of a promise to pay
money or a promise to perform services is received by the corporation at the
time of the making of the promise, unless the agreement specifically provides
otherwise.
(4) The corporation may place in escrow shares issued for a contract for
future services or benefits or a promissory note, or make other arrangements to
restrict the transfer of the shares, and may credit distributions in respect of
the shares against their purchase price, until the services are performed, the
note is paid, or the benefits received. If the services are not performed, the
shares escrowed or restricted and the distributions credited may be canceled in
whole or part.
Section 7.05. Form and Content of Certificates.
(1) Shares may but need not be represented by certificates. Unless the Act
or another statute expressly provides otherwise, the rights and obligations of
shareholders are identical whether or not their shares are represented by
certificates.
(2) At a minimum, each share certificate must state on its face:
(a) The name of the issuing corporation and that the corporation is
organized under the laws of the State of Florida;
(b) The name of the person to whom issued; and
(c) The number and class of shares and the designation of the series,
if any, the certificate represents.
(3) If the shares being issued are of different classes of shares or
different series within a class, the designations, relative rights, preferences,
and limitations applicable to each class and the variations in rights,
preferences, and limitations determined for each series (and the authority of
the board of directors to determine variations for future series) must be
summarized on the front or back of each certificate. Alternatively, each
certificate may state conspicuously on its front or back that the corporation
will furnish the shareholder a full statement of this information on request and
without charge.
(4) Each share certificate:
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(a) Must be signed (either manually or in facsimile) by an officer or
officers designated by the board of directors, and
(b) May bear the corporate seal or its facsimile.
(5) If the person who signed (either manually or in facsimile) a share
certificate no longer holds office when the certificate is issued, the
certificate is nevertheless valid.
(6) Nothing in this section may be construed to invalidate any share
certificate validly issued and outstanding under the Act on July 1, 1990.
Section 7.06. Shares Without Certificates.
(1) The board of directors of the corporation may authorize the issue of
some or all of the shares of any or all of its classes or series without
certificates. The authorization does not affect shares already represented by
certificates until they are surrendered to the corporation.
(2) Within a reasonable time after the issue or transfer of shares without
certificates, the corporation shall send the shareholder a written statement of
the information required on certificates by the Act.
Section 7.07. Restriction on Transfer of Shares and Other Securities.
(1) The articles of incorporation, these bylaws, an agreement among
shareholders, or an agreement between shareholders and the corporation may
impose restrictions on the transfer or registration of transfer of shares of the
corporation. A restriction does not affect shares issued before the restriction
was adopted unless the holders of such shares are parties to the restriction
agreement or voted in favor of the restriction.
(2) A restriction on the transfer or registration of transfer of shares is
valid and enforceable against the holder or a transferee of the holder if the
restriction is authorized by this section, and effected in compliance with the
provisions of the Act, including having a proper purpose as referred to in the
Act.
Section 7.08. Shareholder's Pre-emptive Rights.
The shareholders of the corporation do not have a pre-emptive right to
acquire the corporation's unissued shares.
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Section 7.09. Corporation's Acquisition of its Own Shares.
(1) The corporation may acquire its own shares, and, unless otherwise
provided in the articles of incorporation or except as provided in subsection
(4), shares so acquired constitute authorized but unissued shares of the same
class but undesignated as to series.
(2) If the articles of incorporation prohibit the reissue of acquired
shares, the number of authorized shares is reduced by the number of shares
acquired, effective upon amendment of the articles of incorporation.
(3) Articles of amendment may be adopted by the board of directors without
shareholder action, shall be delivered to the Department of State of the State
of Florida for filing, and shall set forth the information required by Section
607.0631 of the Act.
(4) Shares of the corporation in existence on June 30, 1990, which are
treasury shares under Section 607.004(18), Florida Statutes (1987), shall be
issued, but not outstanding, until canceled or disposed of by the corporation.
Section 7.10. Share Options.
(1) Unless the articles of incorporation provide otherwise, the corporation
may issue rights, options, or warrants for the purchase of shares of the
corporation. The board of directors shall determine the terms upon which the
rights, options, or warrants are issued, their form and content, and the
consideration for which the shares are to be issued.
(2) The terms and conditions of stock rights and options which are created
and issued by the corporation, or its successor, and which entitle the holders
thereof to purchase from the corporation shares of any class or classes, whether
authorized by unissued shares, treasury shares, or shares to be purchased or
acquired by the corporation, may include, without limitation, restrictions, or
conditions that preclude or limit the exercise, transfer, receipt, or holding of
such rights or options by any person or persons, including any person or persons
owning or offering to acquire a specified number or percentage of the
outstanding common shares or other securities of the corporation, or any
transferee or transferees of any such person or persons, or that invalidate or
void such rights or options held by any such person or persons or any such
transferee or transferees.
Section 7.11. Terms and Conditions of Stock Rights and Options.
The terms and conditions of the stock rights and options which are created
and issued by the corporation [or its successor], and which entitle the holders
thereof to purchase from the corporation shares of any class or classes, whether
authorized but
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unissued shares, treasury shares, or shares to be purchased or acquired by the
corporation, may include, without limitation, restrictions or conditions that
preclude or limit the exercise, transfer, receipt or holding of such rights or
options by any person or persons, including any person or persons owning or
offering to acquire a specified number or percentage of the outstanding common
shares or other securities of the corporation, or any transferee or transferees
of any such person or persons, or that invalidate or void such rights or options
held by any such person or persons or any such transferee or transferees.
Section 7.12. Share Dividends.
(1) Shares may be issued pro rata and without consideration to the
corporation's shareholders or to the shareholders of one or more classes or
series. An issuance of shares under this subsection is a share dividend.
(2) Shares of one class or series may not be issued as a share dividend in
respect of shares of another class or series unless:
(a) The articles of incorporation so authorize,
(b) A majority of the votes entitled to be cast by the class or series
to be issued approves the issue, or
(c) There are no outstanding shares of the class or series to be
issued.
(3) If the board of directors does not fix the record date for determining
shareholders entitled to a share dividend, it is the date of the board of
directors authorizes the share dividend.
Section 7.13. Distributions to Shareholders.
(1) The board of directors may authorize and the corporation may make
distributions to its shareholders subject to restriction by the articles of
incorporation and the limitations in subsection (3).
(2) If the board of directors does not fix the record date for determining
shareholders entitled to a distribution (other than one involving a purchase,
redemption, or other acquisition of the corporation's shares), it is the date
the board of directors authorizes the distribution.
(3) No distribution may be made if, after giving it effect:
(a) The corporation would not be able to pay its debts as they become
due in the usual course of business; or
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(b) The corporation's total assets would be less than the sum of its
total liabilities plus (unless the articles of incorporation permit
otherwise) the amount that would be needed, if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential
rights upon dissolution of shareholders whose preferential rights are
superior to those receiving the distribution.
(4) The board of directors may base a determination that a distribution is
not prohibited under subsection (3) either on financial statements prepared on
the basis of accounting practices and principles that are reasonable in the
circumstances or on a fair valuation or other method that is reasonable in the
circumstances. In the case of any distribution based upon such a valuation, each
such distribution shall be identified as a distribution based upon a current
valuation of assets, and the amount per share paid on the basis of such
valuation shall be disclosed to the shareholders concurrent with their receipt
of the distribution.
(5) Except as provided in subsection (7), the effect of a distribution
under subsection (3) is measured;
(a) In the case of distribution by purchase, redemption, or other
acquisition of the corporation's shares, as of the earlier of:
(i) The date money or other property is transferred or debt
incurred by the corporation, or
(ii) The date the shareholder ceases to be a shareholder with
respect to the acquired shares;
(b) In the case of any other distribution of indebtedness, as of the
date the indebtedness is distributed;
(c) In all other cases, as of:
(i) The date the distribution is authorized if the payment occurs
within 120 days after the date of authorization, or
(ii) The date the payment is made if it occurs more than 120 days
after the date of authorization.
(6) A corporation's indebtedness to a shareholder incurred by reason of a
distribution made in accordance with this section is at parity with the
corporation's indebtedness to its general, unsecured creditors except to the
extent subordinated by agreement.
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(7) Indebtedness of the corporation, including indebtedness issued as a
distribution, is not considered a liability for purposes of determinations under
subsection (3) if its terms provide that payment of principal and interest are
made only if and to the extent that payment of a distribution to shareholders
could then be made under this section. If the indebtedness is issued as a
distribution, each payment of principal or interest is treated as a
distribution, the effect of which is measured on the date the payment is
actually made.
ARTICLE VIII
Amendment of Articles and Bylaws
Section 8.01. Authority to Amend the Articles of Incorporation.
(1) The corporation may amend its articles of incorporation at any time to
add or change a provision that is required or permitted in the articles of
incorporation or to delete a provision not required in the articles of
incorporation. Whether a provision is required or permitted in the articles of
incorporation is determined as of the effective date of the amendment.
(2) A shareholder of the corporation does not have a vested property right
resulting from any provision in the articles of incorporation, including
provisions relating to management, control, capital structure, dividend
entitlement, or purpose or duration of the corporation.
Section 8.02. Amendment by Board of Directors.
The corporation's board of directors may adopt one or more amendments to
the corporation's articles of incorporation without shareholder action:
(1) To extend the duration of the corporation if it was incorporated at a
time when limited duration was required by law;
(2) To delete the names and addresses of the initial directors;
(3) To delete the name and address of the initial registered agent or
registered office, if a statement of change is on file with the Department of
State of the State of Florida;
(4) To delete any other information contained in the articles of
incorporation that is solely of historical interest;
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(5) To change each issued and unissued authorized share of an outstanding
class into a greater number of whole shares if the corporation has only shares
of that class outstanding;
(6) To delete the authorization for a class or series of shares authorized
pursuant to Section 607.0602 of the Act, if no shares of such class or series
have been issued;
(7) To change the corporate name by substituting the word "corporation,"
"incorporated," or "company," or the abbreviation "corp.," Inc.," or Co.," for a
similar word or abbreviation in the name, or by adding, deleting, or changing a
geographical attribution for the name; or
(8) To make any other change expressly permitted by the Act to be made
without shareholder action.
Section 8.03. Amendment of Bylaws by Board of Directors.
The corporation's board of directors may amend or repeal the corporation's
bylaws unless the Act reserves the power to amend a particular bylaw provision
exclusively to the shareholders.
Section 8.04. Bylaw Increasing Quorum or Voting Requirements for Directors.
(1) A bylaw that fixes a greater quorum or voting requirement for the board
of directors may be amended or repealed:
(a) If originally adopted by the shareholders, only by the
shareholders;
(b) If originally adopted by the board of directors, either by the
shareholders or by the board of directors.
(2) A bylaw adopted or amended by the shareholders that fixes a greater
quorum or voting requirement for the board of directors may provide that it may
be amended or repealed only by a specified vote of either the shareholders or
the board of directors.
(3) Action by the board of directors under paragraph (1)(b) to adopt or
amend a bylaw that changes the quorum or voting requirement for the board of
directors must meet the same quorum requirement and be adopted by the same vote
required to take action under the quorum and voting requirement then in effect
or proposed to be adopted, whichever is greater.
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ARTICLE IX
Records and Reports
Section 9.01. Corporate Records.
(1) The corporation shall keep as permanent records minutes of all meetings
of its shareholders and board of directors, a record of all actions taken by the
shareholders or board of directors without a meeting, and a record of all
actions taken by a committee of the board of directors in place of the board of
directors on behalf of the corporation.
(2) The corporation shall maintain accurate accounting records.
(3) The corporation or its agent shall maintain a record of its
shareholders in a form that permits preparation of a list of the names and
addresses of all shareholders in alphabetical order by class of shares showing
the number and series of shares held by each.
(4) The corporation shall maintain its records in written form or in
another form capable of conversion into written form within a reasonable time.
(5) The corporation shall keep a copy of the following records:
(a) Its articles or restated articles of incorporation and all
amendments to them currently in effect;
(b) Its bylaws or restated bylaws and all amendments to them currently
in effect;
(c) Resolutions adopted by the board of directors creating one or more
classes or series of shares and finding their relative rights, preferences,
and limitations, if shares issued pursuant to those resolutions are
outstanding;
(d) The minutes of all shareholders' meetings and records of all
action taken by shareholders without a meeting for the past three years;
(e) Written communications to all shareholders generally or all
shareholders of a class or series within the past three years, including
the financial statements furnished for the past three years;
(f) A list of the names and business street addresses of its current
directors and officers; and
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(g) Its most recent annual report delivered to the Department of State of
the State of Florida.
Section 9.02. Financial Statements for Shareholders.
(1) Unless modified by resolution of the shareholders within 120 days of
the close of each fiscal year, the corporation shall furnish its shareholders
annual financial statements which may be consolidated or combined statements of
the corporation and one or more of its subsidiaries, as appropriate, that
include a balance sheet as of the end of the fiscal year, an income statement
for that year, and a statement of cash flows for that year. If financial
statements are prepared for the corporation on the basis of generally-accepted
accounting principles, the annual financial statements must also be prepared on
that basis.
(2) If the annual financial statements are reported upon by a public
accountant, his report must accompany them. If not, the statements must be
accompanied by a statement of the president or the person responsible for the
corporation's accounting records:
(a) Stating his reasonable belief whether the statements were prepared
on the basis of generally-accepted accounting principles and, if not,
describing the basis of preparation; and
(b) Describing any respects in which the statements were not prepared
on a basis of accounting consistent with the statements prepared for the
preceding year.
(3) The corporation shall mail the annual financial statements to each
shareholder within 120 days after the close of each fiscal year or within such
additional time thereafter as is reasonably necessary to enable the corporation
to prepare its financial statements, if for reasons beyond the corporation's
control, it is unable to prepare its financial statements within the prescribed
period. Thereafter, on written request from a shareholder who was not mailed the
statements, the corporation shall mail him the latest annual financial
statements.
Section 9.03. Other Reports to Shareholders.
(1) If the corporation indemnifies or advances expenses to any director,
officer, employee or agent otherwise than by court order or action by the
shareholders or by an insurance carrier pursuant to insurance maintained by the
corporation, the corporation shall report the indemnification or advance in
writing to the shareholders with or before the notice of the next shareholders'
meeting, or prior to such meeting if the indemnification or advance occurs after
the giving of such notice but prior to the time such meeting is held, which
report shall include a statement specifying the persons paid,
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the amounts paid, and the nature and status at the time of such payment of the
litigation or threatened litigation.
(2) If the corporation issues or authorizes the issuance of shares for
promises to render services in the future, the corporation shall report in
writing to the shareholders the number of shares authorized or issued, and the
consideration received by the corporation, with or before the notice of the next
shareholders' meeting.
Section 9.04. Annual Report for Department of State.
(1) The corporation shall deliver to the Department of State of the State
of Florida for filing a sworn annual report on such forms as the Department of
State of the State of Florida prescribes that sets forth the information
prescribed by Section 607.1622 of the Act.
(2) Proof to the satisfaction of the Department of State of the State of
Florida on or before July 1 of each calendar year that such report was deposited
in the United States mail in a sealed envelope, properly addressed with postage
prepaid, shall be deemed in compliance with this requirement.
(3) Each report shall be executed by the corporation by an officer or
director or, if the corporation is in the hands of a receiver or trustee, shall
be executed on behalf of the corporation by such receiver or trustee, and the
signing thereof shall have the same legal effect as if made under oath, without
the necessity of appending such oath thereto.
(4) Information in the annual report must be current as of the date the
annual report is executed on behalf of the corporation.
(5) Any corporation failing to file an annual report which complies with
the requirements of this section shall not be permitted to maintain or defend
any action in any court of this state until such report is filed and all fees
and taxes due under the Act are paid and shall be subject to dissolution or
cancellation of its certificate of authority to do business as provided in the
Act.
ARTICLE X
Miscellaneous
Section 10.01. Definition of the "Act".
All references contained herein to the "Act" or to sections of the "Act"
shall be deemed to be in reference to the Florida Business Corporation Act.
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Section 10.02. Application of Florida Law.
Whenever any provision of these bylaws is inconsistent with any provision
of the Florida Business Corporation Act, Statutes 607, as they may be amended
from time to time, then in such instance Florida law shall prevail.
Section 10.03. Fiscal Year.
The fiscal year of the corporation shall be determined by resolution of the
board of directors.
Section 10.04. Conflicts with Articles of Incorporation.
In the event that any provision contained in these bylaws conflicts with
any provision of the corporation's articles of incorporation, as amended from
time to time, the provisions of the articles of incorporation shall prevail and
be given full force and effect, to the full extent permissible under the Act.
36
4.1
COMMON STOCK CERTIFICATE
PAR VALUE $.001
NUMBER SHARES
PELICAN PROPERTIES, INTERNATIONAL CORP.
INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA
COMMON STOCK CUSIP
THIS CERTIFIES THAT
Is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF PELICAN
PROPERTIES, INTERNATIONAL CORPORATION, (hereinafter called the "Corporation"),
transferable only on the books of the Corporation by the holder hereof in person
or by duly authorized attorney upon surrender of this Certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be held subject to all of the provisions of the Certificate of
Incorporation of the Corporation to all of which the holder by acceptance hereof
assents.
This Certificate is not valid unless countersigned and registered by
the Transfer Agent.
Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Date
- --------------------------- ----------------------------
President Secretary
<PAGE>
Exhibit 4.2
CLASS A COMMON STOCK PURCHASE WARRANT CERTIFICATE
<PAGE>
NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "SECURITIES
ACT"). THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
REGISTRATION UNDER THE SECURITIES ACT OR SUCH OFFER, SALE OR TRANSFER IS EXEMPT
FROM SUCH REGISTRATION.
CLASS A COMMON STOCK PURCHASE WARRANT CERTIFICATE
Dated: ________________________
______________ Warrants
to Purchase ____________ Shares
of Common Stock, $.01 Par Value Per Share
PELICAN PROPERTIES INTERNATIONAL, CORP., a Florida corporation (the
"Company"), hereby certifies that _________________, its permissible
transferees, designees, successors and assigns (collectively, the "Holder"), for
value received, is entitled to purchase from the Company at any time commencing
on the date hereof up through March 19, 2000, ______________ shares (the
"Warrant Shares") of the Company's common stock, par value $.01 per share (the
"Common Stock"), at $5.00 per share (the "Exercise Price"). This Warrant is one
of a series (collectively, the "Warrants") which entitle the Holders thereof to
purchase an aggregate of 200,000 shares of Common Stock.
1. Exercise of Warrants. Upon presentation and surrender of this Class A
Common Stock Purchase Warrant Certificate ("Warrant Certificate" or "this
Certificate"), with the attached Purchase Form duly executed, at the principal
office of the Company at 38801 Overseas Highway, Big Pine Key, Florida 33043,
together with a bank check, certified check or other form of payment acceptable
to the Company in the amount of the Exercise Price multiplied by the number of
Warrant Shares being purchased, the Company, or the Company's Transfer Agent as
the case may be, shall deliver to the holder hereof, certificates of Common
Stock which in the aggregate represent the number of Warrant Shares being
purchased. All or less than all of the Warrants represented by this Certificate,
as provided above, may be exercised and, in case of the exercise of less than
all, the Company, upon surrender hereof, will deliver to the holder a new
Warrant Certificate or Certificates of like tenor and dated the date hereof
entitling said holder to purchase the number of Warrant Shares represented by
this Certificate which have not been exercised.
<PAGE>
2. Exchange and Transfer. This Certificate at any time prior to the
exercise hereof, upon presentation and surrender to the Company, may be
exchanged, alone or with other Certificates of like tenor registered in the name
of the same holder, for another Certificate or Certificates of like tenor in the
name of such holder exercisable for the aggregate number of Warrant Shares as
the Certificate or Certificates surrendered.
3. Rights and Obligations of Holder of this Certificate.
(a) The Holder of this Certificate shall not, by virtue hereof, be entitled
to any rights of a stockholder in the Company, either at law or in equity;
provided, however, that in the event any certificate representing shares of
Common Stock or other securities is issued to the holder hereof upon exercise of
some or all of the Warrants, such holder shall, for all purposes, be deemed to
have become the holder of record of such Common Stock on the date on which this
Certificate, together with a duly executed Purchase Form, was surrendered and
payment of the aggregate Exercise Price was made, irrespective of the date of
delivery of such share certificate.
(b) In case the Company shall (i) pay a dividend in Common Stock or make a
distribution in Common Stock, (ii) subdivide its outstanding Common Stock into a
greater number of shares, or (iii) combine its outstanding Common Stock into a
smaller number of shares (including a recapitalization in connection with a
consolidation or merger in which the Company is the continuing corporation),
then (x) the Exercise Price on the record date of such division on the effective
date of such action shall be adjusted by multiplying such Exercise Price by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately before such event and the denominator of which is the
number of shares of Common Stock outstanding immediately after such event, and
(y) the number of shares of Common Stock for which this Warrant Certificate may
be exercised immediately before such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the Exercise Price immediately
before such event and the denominator of which is the Exercise Price immediately
after such event as provided in subitem (x) hereinabove.
(c) In case of any consolidation or merger of the Company with or into
another corporation (other than any consolidation or merger in which the Company
is the continuing corporation and which does not result in any reclassification
of the outstanding shares of Common Stock or the conversion of such outstanding
shares of Common Stock into shares or other stock or other securities or
property), or the sale or transfer of the property of the Company as an entirety
or substantially as an entirety, there shall be delivered upon exercise of the
Warrant Certificate the number of shares of stock or other securities or
2
<PAGE>
property to which a holder of the number of shares of Common Stock would have
been entitled upon such action if this Warrant Certificate had been exercised
immediately prior to such action.
4. Common Stock.
(a) The Company covenants and agrees that all shares of Common Stock
issuable upon exercise of this Warrant Certificate will, upon delivery, be duly
and validly authorized and issued, fully-paid and non-assessable.
(b) The Company covenants and agrees that it will at all times reserve and
keep available an authorized number of shares of its Common Stock and other
applicable securities sufficient to permit the exercise in full of all
outstanding options, warrants and rights, including the Warrants.
5. Issuance of Certificates. As soon as possible after full or partial
exercise of this Warrant, but in any event not more than three (3) business days
of receipt of payment by the Company for such exercise, the Company, at its
expense, will cause to be issued in the name of and delivered to the holder of
this Warrant, a certificate or certificates for the number of fully paid and
non-assessable shares of Common Stock to which that holder shall be entitled on
such exercise. No fractional shares will be issued on exercise of this Warrant.
If on any exercise of this Warrant a fraction of a share results, the Company
will pay the cash value of that fractional share, calculated on the basis of the
Exercise Price. All such certificates shall bear a restrictive legend to the
effect that the Shares represented by such certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), and the Shares may not
be sold or transferred in the absence of such registration or an exemption
therefrom, such legend to be substantially in the form of the bold face language
appearing on Page 1 of this Warrant Certificate.
6. Disposition of Warrants or Shares. The holder of this Warrant
Certificate, each transferee hereof and any holder and transferee of any Warrant
Shares, by his or its acceptance thereof, agrees that no public distribution of
Warrants or Warrant Shares will be made in violation of the provisions of the
Act. Furthermore, it shall be a condition to the transfer of the Warrants that
any transferee thereof deliver to the Company his, her or its written agreement
to accept and be bound by all of the terms and conditions contained in this
Warrant Certificate.
7. Redemption. The Warrants represented hereby may be redeemed at the
option of the Company, at a redemption price of $.05 per Warrant at any time
commencing on the date hereof, upon thirty (30) days' prior written notice. On
and after the date fixed for redemption, the Registered Holder shall have no
rights with respect to the Warrants represented hereby except to receive
3
<PAGE>
the $.05 per Warrant upon surrender of this Warrant Certificate. Upon thirty
(30) days' prior written notice to all holders of the Warrants, the Company
shall have the right to reduce the exercise price and/or extend the term of the
Warrants in compliance with the requirements of Rule 13e-4 to the extent
applicable.
8. Notices. Except as otherwise specified herein to the contrary, all
notices, requests, demands and other communications required or desired to be
given hereunder shall only be effective if given in writing by certified or
registered mail, return receipt requested, postage prepaid, or by U.S. express
mail service or private overnight mail service (e.g. Federal Express). Any such
notice shall be deemed to have been given (a) on the business day immediately
subsequent to mailing, if sent by U.S. express mail service or private overnight
mail service, or (b) three (3) business days following the mailing thereof, if
mailed by certified or registered mail, postage prepaid, return receipt
requested, and all such notices shall be sent to the following addresses (or to
such other address or addresses as a party may have advised the other in the
manner provided in this Section 8):
If to the Company: PELICAN PROPERTIES INTERNATIONAL,
CORP.
38801 Overseas Highway
Big Pine Key, Florida 33043
If to the Holder: _____________________________
_____________________________
_____________________________
_____________________________
_____________________________
9. Governing Law. This Warrant Certificate and all rights and obligations
hereunder shall be deemed to be made under and governed by the laws of the State
of Florida without giving effect to the conflicts of laws provisions. The Holder
hereby irrevocably consents to the venue and jurisdiction of the State and
Federal Courts located in the State of Florida, County of Dade.
10. Successors and Assigns. This Warrant Certificate shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns.
11. Headings. The headings of various sections of this Warrant Certificate
have been inserted for reference only and shall not be a part of this
Certificate.
4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or by facsimile, by one of its officers thereunto duly
authorized.
PELICAN PROPERTIES INTERNATIONAL, CORP.
Date: _________________ By:____________________________________
_________________, President
5
<PAGE>
ELECTION TO PURCHASE
To Be Executed by the Holder
in Order to Exercise the Common Stock
Purchase Warrant Certificate
The undersigned Holder hereby irrevocably elects to exercise _____ of
the Warrants represented by this Common Stock Warrant Certificate, and to
purchase the shares of Common Stock issuable upon the exercise of such Warrants
and requests that certificates for securities be issued in the name of:
______________________________________
(Please type or print name and address)
______________________________________
______________________________________
______________________________________
(Social Security or tax identification number)
and delivered to _______________________________________________
________________________________________________________________________________
(Please type or print name and address)
and, if such number of Warrants shall not be all the Warrants evidenced by this
Common Stock Warrant Certificate, that a new Common Stock Warrant Certificate
for the balance of such Warrants be registered in the name of, and delivered to,
the Holder at the address stated below.
In full payment of the purchase price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
$_____________ by check or money order payable in United States currency to the
order of [Company].
[HOLDER]
Dated:_________________ By:____________________________
Name:
Title:
__________________________________________
(Address)
__________________________________________
__________________________________________
(Social Security or tax
identification number)
6
Exhibit 4.3
CLASS B COMMON STOCK PURCHASE WARRANT CERTIFICATE
<PAGE>
NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "SECURITIES
ACT"). THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
REGISTRATION UNDER THE SECURITIES ACT OR SUCH OFFER, SALE OR TRANSFER IS EXEMPT
FROM SUCH REGISTRATION.
CLASS B COMMON STOCK PURCHASE WARRANT CERTIFICATE
Dated: ________________________
______________ Warrants
to Purchase ____________ Shares
of Common Stock, $.01 Par Value Per Share
PELICAN PROPERTIES INTERNATIONAL, CORP., a Florida corporation (the
"Company"), hereby certifies that _________________, its permissible
transferees, designees, successors and assigns (collectively, the "Holder"), for
value received, is entitled to purchase from the Company at any time commencing
on the date hereof up through March 19, 2001, ______________ shares (the
"Warrant Shares") of the Company's common stock, par value $.01 per share (the
"Common Stock"), at $5.00 per share (the "Exercise Price"). This Warrant is one
of a series (collectively, the "Warrants") which entitle the Holders thereof to
purchase an aggregate of 200,000 shares of Common Stock.
1. Exercise of Warrants. Upon presentation and surrender of this Class A
Common Stock Purchase Warrant Certificate ("Warrant Certificate" or "this
Certificate"), with the attached Purchase Form duly executed, at the principal
office of the Company at 38801 Overseas Highway, Big Pine Key, Florida 33043,
together with a bank check, certified check or other form of payment acceptable
to the Company in the amount of the Exercise Price multiplied by the number of
Warrant Shares being purchased, the Company, or the Company's Transfer Agent as
the case may be, shall deliver to the holder hereof, certificates of Common
Stock which in the aggregate represent the number of Warrant Shares being
purchased. All or less than all of the Warrants represented by this Certificate,
as provided above, may be exercised and, in case of the exercise of less than
all, the Company, upon surrender hereof, will deliver to the holder a new
Warrant Certificate or Certificates of like tenor and dated the date hereof
entitling said holder to purchase the number of Warrant Shares represented by
this Certificate which have not been exercised.
<PAGE>
2. Exchange and Transfer. This Certificate at any time prior to the
exercise hereof, upon presentation and surrender to the Company, may be
exchanged, alone or with other Certificates of like tenor registered in the name
of the same holder, for another Certificate or Certificates of like tenor in the
name of such holder exercisable for the aggregate number of Warrant Shares as
the Certificate or Certificates surrendered.
3. Rights and Obligations of Holder of this Certificate.
(a) The Holder of this Certificate shall not, by virtue hereof, be entitled
to any rights of a stockholder in the Company, either at law or in equity;
provided, however, that in the event any certificate representing shares of
Common Stock or other securities is issued to the holder hereof upon exercise of
some or all of the Warrants, such holder shall, for all purposes, be deemed to
have become the holder of record of such Common Stock on the date on which this
Certificate, together with a duly executed Purchase Form, was surrendered and
payment of the aggregate Exercise Price was made, irrespective of the date of
delivery of such share certificate.
(b) In case the Company shall (i) pay a dividend in Common Stock or make a
distribution in Common Stock, (ii) subdivide its outstanding Common Stock into a
greater number of shares, or (iii) combine its outstanding Common Stock into a
smaller number of shares (including a recapitalization in connection with a
consolidation or merger in which the Company is the continuing corporation),
then (x) the Exercise Price on the record date of such division on the effective
date of such action shall be adjusted by multiplying such Exercise Price by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately before such event and the denominator of which is the
number of shares of Common Stock outstanding immediately after such event, and
(y) the number of shares of Common Stock for which this Warrant Certificate may
be exercised immediately before such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the Exercise Price immediately
before such event and the denominator of which is the Exercise Price immediately
after such event as provided in subitem (x) hereinabove.
(c) In case of any consolidation or merger of the Company with or into
another corporation (other than any consolidation or merger in which the Company
is the continuing corporation and which does not result in any reclassification
of the outstanding shares of Common Stock or the conversion of such outstanding
shares of Common Stock into shares or other stock or other securities or
property), or the sale or transfer of the property of the Company as an entirety
or substantially as an entirety, there shall be delivered upon exercise of the
Warrant Certificate the number of shares of stock or other securities or
2
<PAGE>
property to which a holder of the number of shares of Common Stock would have
been entitled upon such action if this Warrant Certificate had been exercised
immediately prior to such action.
4. Common Stock.
(a) The Company covenants and agrees that all shares of Common Stock
issuable upon exercise of this Warrant Certificate will, upon delivery, be duly
and validly authorized and issued, fully-paid and non-assessable.
(b) The Company covenants and agrees that it will at all times reserve and
keep available an authorized number of shares of its Common Stock and other
applicable securities sufficient to permit the exercise in full of all
outstanding options, warrants and rights, including the Warrants.
5. Issuance of Certificates. As soon as possible after full or partial
exercise of this Warrant, but in any event not more than three (3) business days
of receipt of payment by the Company for such exercise, the Company, at its
expense, will cause to be issued in the name of and delivered to the holder of
this Warrant, a certificate or certificates for the number of fully paid and
non-assessable shares of Common Stock to which that holder shall be entitled on
such exercise. No fractional shares will be issued on exercise of this Warrant.
If on any exercise of this Warrant a fraction of a share results, the Company
will pay the cash value of that fractional share, calculated on the basis of the
Exercise Price. All such certificates shall bear a restrictive legend to the
effect that the Shares represented by such certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), and the Shares may not
be sold or transferred in the absence of such registration or an exemption
therefrom, such legend to be substantially in the form of the bold face language
appearing on Page 1 of this Warrant Certificate.
6. Disposition of Warrants or Shares. The holder of this Warrant
Certificate, each transferee hereof and any holder and transferee of any Warrant
Shares, by his or its acceptance thereof, agrees that no public distribution of
Warrants or Warrant Shares will be made in violation of the provisions of the
Act. Furthermore, it shall be a condition to the transfer of the Warrants that
any transferee thereof deliver to the Company his, her or its written agreement
to accept and be bound by all of the terms and conditions contained in this
Warrant Certificate.
7. Redemption. The Warrants represented hereby may be redeemed at the
option of the Company, at a redemption price of $1.00 for the Class B Warrants
per Warrant at any time commencing on the date hereof, upon thirty (30) days'
prior written notice. On and after the date fixed for redemption, the Registered
Holder shall have no rights with respect to the Warrants represented
3
<PAGE>
hereby except to receive the $.05 per Warrant upon surrender of this Warrant
Certificate. Upon thirty (30) days' prior written notice to all holders of the
Warrants, the Company shall have the right to reduce the exercise price and/or
extend the term of the Warrants in compliance with the requirements of Rule
13e-4 to the extent applicable.
8. Notices. Except as otherwise specified herein to the contrary, all
notices, requests, demands and other communications required or desired to be
given hereunder shall only be effective if given in writing by certified or
registered mail, return receipt requested, postage prepaid, or by U.S. express
mail service or private overnight mail service (e.g. Federal Express). Any such
notice shall be deemed to have been given (a) on the business day immediately
subsequent to mailing, if sent by U.S. express mail service or private overnight
mail service, or (b) three (3) business days following the mailing thereof, if
mailed by certified or registered mail, postage prepaid, return receipt
requested, and all such notices shall be sent to the following addresses (or to
such other address or addresses as a party may have advised the other in the
manner provided in this Section 8):
If to the Company: PELICAN PROPERTIES INTERNATIONAL,
CORP.
38801 Overseas Highway
Big Pine Key, Florida 33043
If to the Holder: _____________________________
_____________________________
_____________________________
_____________________________
_____________________________
9. Governing Law. This Warrant Certificate and all rights and obligations
hereunder shall be deemed to be made under and governed by the laws of the State
of Florida without giving effect to the conflicts of laws provisions. The Holder
hereby irrevocably consents to the venue and jurisdiction of the State and
Federal Courts located in the State of Florida, County of Dade.
10. Successors and Assigns. This Warrant Certificate shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns.
11. Headings. The headings of various sections of this Warrant Certificate
have been inserted for reference only and shall not be a part of this
Certificate.
4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or by facsimile, by one of its officers thereunto duly
authorized.
PELICAN PROPERTIES INTERNATIONAL, CORP.
Date: _________________ By:____________________________________
_________________, President
5
<PAGE>
ELECTION TO PURCHASE
To Be Executed by the Holder
in Order to Exercise the Common Stock
Purchase Warrant Certificate
The undersigned Holder hereby irrevocably elects to exercise _____ of
the Warrants represented by this Common Stock Warrant Certificate, and to
purchase the shares of Common Stock issuable upon the exercise of such Warrants
and requests that certificates for securities be issued in the name of:
______________________________________
(Please type or print name and address)
______________________________________
______________________________________
______________________________________
(Social Security or tax identification number)
and delivered to _______________________________________________
________________________________________________________________________________
(Please type or print name and address)
and, if such number of Warrants shall not be all the Warrants evidenced by this
Common Stock Warrant Certificate, that a new Common Stock Warrant Certificate
for the balance of such Warrants be registered in the name of, and delivered to,
the Holder at the address stated below.
In full payment of the purchase price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
$_____________ by check or money order payable in United States currency to the
order of [Company].
[HOLDER]
Dated:_________________ By:____________________________
Name:
Title:
___________________________________________
(Address)
___________________________________________
___________________________________________
(Social Security or tax
identification number)
6
Exhibit 10.1
EXCHANGE AGREEMENT
<PAGE>
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT ("Agreement") is dated and effective as of the __th
day of August, 1995 (the "Effective Date"), by and between PELICAN PROPERTIES,
INTERNATIONAL CORP., f/k/a OPTIMUM COMPUTING, INC., a Florida corporation (the
"Company"), SUNSHINE KEY ASSOCIATES LIMITED PARTNERSHIP, a Florida limited
partnership (the "Partnership"), INFINITY INVESTMENT GROUP, INC., a Florida
corporation (the "General Partner"), RENE GOMEZ, a Majority Shareholder of the
Company ("GOMEZ") and all of the Limited Partners of the Partnership listed on
Exhibit "A" of this Agreement (collectively referred to as the "Limited
Partners" and individually the "Limited Partner" and the Limited Partners and
General Partner sometime collectively referred to as the "Partners").
RECITALS:
WHEREAS, the Company has authorized capital stock consisting of 100,000,000
shares of common stock, par value $.001 per share (the "Common Stock") of which
3,611,000 shares are issued and outstanding; and
WHEREAS, the Limited Partners own up to an aggregate of 99% of the
Partnership Interests (the "Partnership Interests") in the Partnership; and
WHEREAS, the General Partner owns an aggregate of 1% of the Partnership
Interest in the Partnership; and
WHEREAS, Gomez owns, beneficially and of record, an aggregate of 3,001,000
shares of Common Stock of the Company; and
WHEREAS, the Limited Partners desire to exchange all of their Partnership
Interests in the Partnership, in exchange for shares of Common Stock of the
Company and the Company desires to exchange up to an aggregate of 3,010,000
shares of its Common Stock, in exchange for an aggregate of up to 99% of the
Partnership Interests held by the Limited Partners; and
WHEREAS, in consideration for the exchange of Partnership Interest for
shares of Common Stock, Gomez will relinquish to the Company all of Gomez's
rights, title and interest in and to the 3,001,000 shares of the Common Stock
now owned by Gomez, whether beneficially or of record, and the Company shall
cancel of record the issuance of the 3,001,000 shares of Common Stock now owned
by Gomez; and
WHEREAS, in consideration for the exchange of Partnership Interest for
shares of Common Stock, each Limited Partner will release the General Partner
from any and all claims or causes of action each may have against the General
Partner; and
<PAGE>
WHEREAS, provided not less than 90% of the Partnership Interests are
offered for exchange, the Company will exchange up to an aggregate of 3,010,000
shares for the Partnership Interests; and
WHEREAS, the parties to this Agreement intend that this Partnership
Interest for shares of Common Stock exchange is a tax free transaction pursuant
to the Internal Revenue Code of 1986, as amended from time to time and all rules
and regulations promulgated thereunder (the "Code").
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
SECTION 1. RECITALS
1.1 Recitals. The above recitals are true, correct and are herein
incorporated by reference.
SECTION 2. EXCHANGE
2.1 Exchange. The Limited Partners hereby agree that they shall, on the
"Closing Date," as defined in Section 3.1 of this Agreement, exchange not less
than 90% of the Partnership Interests for an aggregate amount of up to 3,010,000
shares of Common Stock of the Company, in an amount equal to approximately
30,404 shares of Common Stock for each 1% of Partnership Interest and the
Company shall exchange an aggregate of up to 3,010,000 shares of Common Stock of
the Company for an aggregate of up to 99% of the Partnership Interest.
Simultaneously herewith, Gomez will relinquish all right, title and interest in
the 3,001,000 shares of Common Stock owned, beneficially and of record, by him.
The exchange shall not be consummated in the event that the holders of less than
90% of the Partnership Interests do not accept the exchange. In the event that
the holders of less than 99%, but more than 90%, of the Partnership Interests
accept the exchange, the exchange shall occur at the sole discretion of the
Company.
2.2 Release of General Partner. For and in consideration of the exchange of
Partnership Interests for shares of Common Stock, each Limited Partner hereby
agrees to remise, release and forever discharge, and by this Release does for it
and its administrators, employees, directors, officers, subsidiaries,
affiliates, successors and assigns, completely and totally remise and forever
discharge the General Partner and its personal representatives, administrators,
successors and assigns, of and from any and all manner of action and actions,
cause and causes of actions, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments,
2
<PAGE>
extent, executions, claims and demands whatsoever, in law or in equity, which
against it the Limited Partner has ever had, now or by reason of any matter,
cause or thing whatsoever, from the beginning of the world to the date of this
Agreement and more particularly by reason of all claims that were or could have
been asserted against the General Partner in his capacity as General Partner of
the Partnership.
2.3 Delivery of Shares. On the Closing Date, the Company will issue and
deliver certificates representing the shares of Common Stock to each of the
Limited Partners as provided for herein, which shares of Common Stock, upon such
issuance and delivery, shall be fully paid and non-assessable.
2.4 Investment Intent. The Shares of Common Stock and the Partnership
Interest (collectively the "Securities") have not been registered under the
Securities Act of 1933, as amended, and may not be resold unless the Securities
are registered under the Act or an exemption from such registration is
available. The Limited Partners and the Company represent and warrant that each
is acquiring the Securities for each of their own accounts, for investment and
not with a view to the sale or distribution of the Securities. Each certificate
representing the Securities will have a legend thereupon incorporating language
as follows:
"The Securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act").
The Securities have been acquired for investment and may not be sold or
transferred in the absence of an effective Registration Statement for
the Securities under the Act unless in the opinion of counsel
satisfactory to the Company or the Partnership, as the case may be,
registration is not required by the Act."
2.5 Tax Free Exchange. The parties to this Agreement intend that this
transaction is intended to be a tax free reorganization pursuant to the Code,
and an opinion of tax counsel as to the tax free nature of the exchange has been
received by the Partnership in the form of Exhibit "B" attached hereto and
incorporated herein by reference.
2.6 Limited Partnership Agreement. The Company as the holder of Partnership
Interests agrees that it shall be bound by all of the terms and conditions of
the Limited Partnership Agreement, as if it had been originally named therein in
the place of the Limited Partners. The Company agrees to execute a "Signature
Page for Limited Partners," attached to the Limited Partnership Agreement as
Exhibit "A" and a "Investment Representation Letter," substantially in the form
as attached to the Limited Partnership Agreement as Exhibit "B" and such other
documentation as may be required by the Partnership to evidence such agreement.
The General Partner hereby agrees to waive the delivery by the Company of the
"Special Power of Attorney" attached to the Limited Partnership Agreement as
Exhibit "C."
3
<PAGE>
2.7 Substituted Limited Partner. It is the intention of the partners hereto
for the Company to become a Substituted Limited Partner pursuant to Section 10.6
of the Limited Partnership Agreement in place of each Limited Partner.
2.8 Consent of General Partner. Pursuant to Section 10.6 of the Limited
Partnership Agreement the General Partner hereby consents to the Limited
Partners' exchange and transfer of each of their Partnership Interest and to
rights of the Company as a Substituted Limited Partner.
SECTION 3. CLOSING DATE
3.1 Closing Date. The closing (the "Closing Date") shall be held on or
before August 31, 1995 at 10:00 a.m., or such other date and time as may be
mutually agreed upon by each of the parties, at the law offices of Atlas,
Pearlman, Trop & Borkson, P.A. The sole reason that the Closing Date is on or
before August 31, 1995, is to permit the filing of the requisite blue sky
applications. The effective date, however, shall be deemed the date hereof.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP AND
THE GENERAL PARTNER
The Partnership and the General Partner each represent and warrant to the
Company as follows:
4.1 Organization and Good Standing; Ownership of Partnership Interest. The
Partnership is a limited partnership duly organized, validly existing and in
good standing under the laws of the State of Florida, and is entitled to own or
lease its properties and to carry on its business as and in the places where
such properties are now owned, leased, or operated. There are no outstanding
subscriptions, rights or other agreements obligating the Partnership to issue,
sell or otherwise transfer the Partnership Interest other than is provided for
herein.
4.2 Limited Partnership Agreement and All Amending Certificates Thereto. A
copy of the (a) Limited Partnership Agreement dated December 28, 1988, (b)
Amendment to the Certificate of Limited Partnership dated August 29, 1991, and
(c) the Second Amended and Restated Certificate of Limited Partnership dated
October 21, 1992 (collectively the "Limited Partnership Agreement"), which have
been delivered to the Company are true, correct and complete.
4.3 Financial Statements, Books and Records. Schedule 4.3 sets forth the
audited financial statements of the Partnership for the years ending December
31, 1993 and December 31, 1994, and the related notes thereto (collectively the
"Financial Statements"). The Financial Statements fairly represent the financial
position of the Partnership as at such dates and the results of its operations
for the periods then
4
<PAGE>
ending. The Financial Statements were audited by Garcia, Espinosa, Parapar & Co.
and, to the best knowledge of the Partnership, were prepared in accordance with
general accepted accounting principals applied on a consistent basis with prior
periods except as otherwise stated therein. The books of account and other
financial records of the Partnership, financial or otherwise are in all material
respects complete and correct and are maintained in accordance with good
business and accounting practices. All books and records relating to the
preparation of the Financial Statements are true, correct and complete in all
material respects.
4.4 No Material Adverse Changes. As of the date hereof, except as set forth
in the Financial Statements and Schedule 4.4 attached hereto, there has not been
(i) any material adverse change in the assets, operations, condition (financial
or otherwise), properties or prospective business of the Partnership; (ii) any
incurrence by the Partnership of any indebtedness for borrowed money; (iii) any
loan or advance by the Partnership to any of its Limited Partners, the General
Partner, employees, consultants, agents or other representatives or any other
loan or advance otherwise than in the ordinary course of business; (iv) any
damage, destruction or loss materially effecting the assets, prospective
businesses, operations or condition (financial or otherwise) of the Partnership,
whether or not covered by insurance; and (v) except in the ordinary course of
business, any contract, agreement or transaction consummated.
4.5 Taxes. The Partnership has prepared and filed all appropriate local,
state and federal tax returns of every kind and category for all periods prior
to and through the date hereof for which any such returns has been required to
be filed by it or the failure to make such filings and resulting liabilities
would not be material relative to the results of operations of the Partnership.
To the best of its knowledge, the Partnership has paid all taxes shown to be due
by said returns or on any assessments received by it or has made adequate
provisions for the payment thereof.
4.6 Compliance with Laws. As of the date hereof, except as set forth in the
Financial Statements and Schedule 4.6 attached hereto, the Partnership has
complied with all laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business which, if not
complied with, would materially and adversely effect the business of the
Partnership.
4.7 No Breach. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Limited Partnership Agreement of the
Partnership;
(ii) violate, conflict with or result in the breach of any of the
terms of, result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or
lapse of time or both constitute) a default
5
<PAGE>
under, any contract or other agreement to which the Partnership is a party
or by or to which it or any of its assets or properties may be bound or
subject; or
(iii) violate any order, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body against, or binding
upon the Partnership, or upon the properties or business of the
Partnership.
4.8 Actions and Proceedings. As of the date hereof, except as set forth in
the Financial Statements and Schedule 4.8 attached hereto, (i) there is no
outstanding order, judgment, injunction, award or decree of any court,
governmental or regulatory body or arbitration tribunal against or involving the
Partnership; and (ii) there is no action, suit or claim or legal, administrative
or arbitral proceeding or any investigation (whether or not the defense thereof
or liabilities in respect thereof are covered by insurance) pending or, to the
best knowledge of the General Partner, threatened against or involving the
Partnership, or any of their properties or assets. Except as set forth in the
Financial Statements and Schedule 4.8 attached hereto, none of the actions
suits, claims, proceedings or investigations set forth in the Financial
Statements or Schedule 4.8 attached hereto, individually or together with any
other, will have a material adverse effect on the assets, properties, business
operations, or condition (financial or otherwise) of the Partnership or will
result in any order, judgment, injunction, award or decree of any court,
governmental or regulatory body or arbitration tribunal that is not adequately
reserved against. Except as set forth in the Financial Statements and Schedule
4.8 attached hereto, there is no fact, event or circumstances known to the
General Partner that may give rise to any suit, action, claim, investigation or
proceeding that would be required to be set forth in the Financial Statements or
Schedule 4.8 attached hereto if currently pending or threatened. There is no
action, suit or claim or legal, administrative or arbitral proceeding pending
or, to the best knowledge of the General Partner, threatened that would give
rise to any right of indemnification on the part of any Limited Partner of the
Partnership or the heirs, executors or administrators of such Limited Partner
against the Partnership.
4.9 Brokers or Finders. No broker's or finder's fee will be payable by the
Partnership in connection with the transactions contemplated by this Agreement,
nor will any such fee be incurred as a result of any actions by the General
Partner.
4.10 Authority to Execute and Perform Agreements. The General Partner has
the full legal right and power and all authority and approval required to enter
into, execute and deliver this Agreement and to perform fully its obligations
hereunder. This Agreement has been duly executed and delivered and is the valid
and binding obligation of the Partnership and the General Partner in accordance
with its terms.
4.11 Operation of the Partnership. Until such time as the General Partner
is removed in accordance with the Limited Partnership Agreement, the General
Partner
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agrees to serve in the capacity of a General Partner for the Partnership and to
conduct its business in the best interest of the Limited Partners.
4.12 Full Disclosure. No representation or warranty by the Partnership or
the General Partner in this Agreement or in any document or schedule to be
delivered by it pursuant hereto, and no written statement, certificate or
instrument furnished or to be furnished to the Company pursuant hereto or in
connection with the negotiation, execution or performance of this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state any fact necessary to make any statement herein or therein
not materially misleading or necessary to a complete and correct presentation of
all material aspects of the business of the Partnership. To the best knowledge
of the Partnership and the General Partner, there is no fact, development or
threatened development (except for general economic conditions affecting
business generally) which the Partnership and the General Partner have not
disclosed to the Company in writing and which materially adversely affects the
business of the Partnership.
4.13 Representations and Warranties on Closing Date. The
representations and warranties contained in this Section 4 shall be true and
complete on the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date.
4.14 Title to Property. As of the date hereof, except as set forth in
the Financial Statements, the Partnership has good, marketable, and unencumbered
title to its interest in the real property it owns, as well as good and valid
title to all other personal intangible property used by the Partnership in the
operation of its business.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF EACH LIMITED PARTNER
Each Limited Partner represents and warrants to the Company severally, but
not jointly, as follows:
5.1 As to the Partnership Interest to be transferred by a Limited Partner,
the Partnership Interest is owned by the Limited Partner free and clear of all
agreements, arrangements, encumbrances, liens, claims, equities and liabilities
of every nature and each of the Limited Partners are conveying clear and
unencumbered title thereto to the Company.
5.2 Brokers or Finders. There are no brokers or finders with whom the
Limited Partners have dealt with in connection with this transaction.
Each Limited Partner represents and warrants to the General Partner
severally, but not jointly, as follows:
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5.3 Release of General Partner. For and in consideration of the exchange of
Partnership Interests for shares of Common Stock, each Limited Partner hereby
agrees to remise, release and forever discharge, and by this Release does for it
and its administrators, employees, directors, officers, subsidiaries,
affiliates, successors and assigns, completely and totally remise and forever
discharge the General Partner and its personal representatives, administrators,
successors and assigns, of and from any and all manner of action and actions,
cause and causes of actions, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extent,
executions, claims and demands whatsoever, in law or in equity, which against it
the Limited Partner has ever had, now or by reason of any matter, cause or thing
whatsoever, from the beginning of the world to the date of this Agreement and
more particularly by reason of all claims that were or could have been asserted
against the General Partner in his capacity as General Partner of the
Partnership.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Partners as follows:
6.1 Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida and has full power to own, lease, and operate its properties and assets
and to carry on its business in the State of Florida.
6.2 Outstanding Capitalization. As of the date hereof, the authorized
capitalization of the Company consisted of 100,000,000 shares of Common Stock,
of which 3,611,000 shares have been issued and are outstanding. Giving effect to
the issuance of the Shares pursuant to this Agreement (assuming that 99% of the
Partnership Interests are exchanged) and the cancellation of the 3,001,000
shares owned, beneficially and of record, by Gomez, the Company will have, after
the Effective Date, 3,620,000 shares of Common Stock issued and outstanding.
The Company also has issued and outstanding 200,000 "A" Warrants and
200,000 "B" Warrants issuable upon exercise of such securities into an aggregate
of 400,000 shares of Common Stock of the Company. As of the date hereof, there
are no other issued and outstanding shares of capital stock of the Company nor
are there any other issued and outstanding options, warrants or rights to
purchase shares of Common Stock of the Company.
6.3 Articles of Incorporation and By-Laws. Copies of the Articles of
Incorporation and By-Laws of the Company and any amendments to each, which have
been delivered to the Partnership are true, correct and complete. The minute
book of the Company contains true and complete records of all meetings and
consents in lieu
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of meetings of its Board of Directors and shareholders since its date of
incorporation and accurately reflect all transactions referred to therein.
6.4 The Common Stock. The Common Stock to be issued to the Limited Partners
have been duly authorized by all necessary corporate and any shareholder actions
and, when so issued in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable.
6.5 Financial Statements; Books and Records. Schedule 6.5 sets forth the
audited financial statements of the Company as at June 30, 1995 (the "Financial
Statements"). The Financial Statements fairly represent the financial position
of the Company as at such dates and the results of its operations for the year
and period then ended. To the best of the Company's knowledge, the Financial
Statements were prepared in accordance with generally accepted accounting
principals applied on a consistent basis with prior periods except as otherwise
stated therein. The Financial Statements were audited by Garcia, Espinosa,
Parapar & Co. and, to the best knowledge of the Partnership, were prepared in
accordance with general accepted accounting principals applied on a consistent
basis with prior periods except as otherwise stated therein. The books of
account and other records of the Company, financial or otherwise, are in all
material respects complete and correct and are maintained in accordance with
good business and accounting practices.
6.6 No Material Adverse Changes. As of the date hereof, except as set forth
in the Financial Statements and Schedule 6.6 attached hereto, there has not
been:
(i) any material adverse change in the assets, operations, condition
(financial or otherwise) or prospective business of the Company;
(ii) any incurrence of any indebtedness for borrowed money;
(iii) any declaration, setting aside or payment of any dividend or
distribution with respect to any redemption or repurchase of the Company's
capital stock;
(iv) adoption of any pension, profit sharing, retirement, stock bonus,
stock option or similar plan or arrangement; or
(v) any contract, agreement or transaction consummated.
6.7 Compliance with Laws. The Company has complied with all federal, state,
county and local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business which, if not
complied with, would materially and adversely affect the business of the
Company.
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6.8 No Breach. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Articles of Incorporation, or By-Laws
of the Company;
(ii) violate, conflict with or result in the breach of any of the
terms of, result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or
lapse of time or both constitute) a default under, any contract or other
agreement to which the Company is a party or by or to which it is bound or
subject; or
(iii) violate any order, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body against, or binding
upon, the Company.
6.9 Actions and Proceedings. Except as set forth in the Financial
Statements and Schedule 6.9 attached hereto, there is no outstanding order,
judgment, injunction, award or decree of any court, governmental or regulatory
body or arbitration tribunal against or involving the Company. Except as set
forth in Schedule 6.9, there is no action, suit or claim or legal,
administrative or arbitral proceeding or any investigation (whether or not the
defense thereof or liabilities in respect thereof are covered by insurance)
pending or, to the best knowledge of the Company, threatened against or
involving the Company. Except as set forth in the Financial Statements and
Schedule 6.9 attached hereto, there is no fact, event or circumstances known to
the Company that may give rise to any suit, action, claim, investigation or
proceeding. There is no action, suit or claim or legal, administrative or
arbitral proceeding pending or, to the best knowledge of the Company, threatened
that would give rise to any right of indemnification on the part of any director
or officer of the Company or the heirs, executors or administrators of such
director or officer against the Company.
6.10 Brokers or Finders. No broker's or finder's fee will be payable by the
Company in connection with the transactions contemplated by this Agreement, nor
will any such fee be incurred as a result of any actions by the Company.
6.11 Operations of the Company. Except as set forth in the Financial
Statements, Company has not:
(i) amended its Articles of Incorporation or By-Laws, merged with or
into or consolidated with any other person, subdivided or in any way
reclassified any shares of its capital stock or changed or agreed to change
in any manner the rights of its outstanding capital stock or the character
of its business; or
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(ii) declared or paid any dividend or declared or made any
distribution of any kind to its shareholders, or made any direct or
indirect redemption, retirement, purchase or other acquisition of any
shares of its capital stock.
6.12 Authority to Execute and Perform Agreements. The Company has the full
legal right and power and all authority and approval required to enter into,
execute and deliver this Agreement and to perform fully its obligations
hereunder. This Agreement has been duly executed and delivered and is the valid
and binding obligation of the Company enforceable in accordance with its terms,
except as may be limited by bankruptcy, moratorium, insolvency or other similar
laws generally affecting the enforcement of creditors' rights. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby and the performance by the Company of this Agreement, in accordance with
its respective terms and conditions will not:
(i) require the approval or consent of its shareholders;
(ii) require the approval or consent of any foreign, federal, state,
county, local or other governmental or regulatory body or the approval or
consent of any other person;
(iii) conflict with or result in any breach or violation of any of the
terms and conditions of, or constitute (or with any notice or lapse of time
or both would constitute) a default under, any order, judgment or decree
applicable to the Company, or any instrument, contract or other agreement
to which the Company is a party or by or to which the Company is bound or
subject.
6.13 Full Disclosure. No representation or warranty by the Company in this
Agreement or in any document or schedule to be delivered by it pursuant hereto,
and no written statement, certificate or instrument furnished or to be furnished
to the General Partner and the Limited Partners pursuant hereto or in connection
with the negotiation, execution or performance of this Agreement contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact necessary to make any statement herein or therein not
materially misleading or necessary to a complete and correct presentation of all
material aspects of the business of the Company. To the best knowledge of the
Company, there is no material fact, development or threatened development
(except for general economic conditions affecting business generally) which the
Company has not disclosed in writing and which materially adversely affects the
Company or the transactions contemplated hereby.
6.14 Exercise of Warrants. The "A" and "B" Warrants of the Company have not
been exercised to date and the Company and warrant holders have agreed that same
will not be exercised prior to or simultaneously with the Closing of this
Agreement.
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6.15 Representations and Warranties on Closing Date. The representations
and warranties contained in this Section 6 shall be true and complete on the
Closing Date with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date.
SECTION 7. COVENANTS OF THE PARTNERSHIP AND THE GENERAL PARTNER
The Partnership and the General Partner covenant to the Company as follows:
7.1 Conduct of Business. From the date hereof and through the Closing Date,
the Partnership and the General Partner shall cause the Partnership to conduct
its business in the ordinary course.
7.2 Preservation of Business. From the date hereof and through the Closing
Date, the Partnership and the General Partner shall cause the Partnership to use
its best efforts to preserve its business organization intact, keep available
the services of its present employees and agents, maintain its present suppliers
and customers and preserve its goodwill.
7.3 Litigation. The Partnership and the General Partner shall promptly
notify the Company of any lawsuits, claims, proceedings or investigations which
after the date hereof are threatened or commenced against the Partnership or
against the General Partner, or other representative with respect to the affairs
of the Partnership.
7.4 Continued Effectiveness of Representations and Warranties. From the
date hereof and through the Closing Date, the Partnership and the General
Partner shall cause the Partnership to conduct its business in such a manner so
that the representations and warranties contained in Section 4 shall continue to
be true and correct and shall promptly give notice to the Company of any event,
condition or circumstance occurring from the date hereof which would render any
of the representations or warranties materially untrue, incomplete or
insufficient.
SECTION 8. COVENANTS OF THE COMPANY
The Company covenants to the General Partner, the Partnership and the
Limited Partners as follows:
8.1 Conduct of Business. From the date hereof and through the Closing Date,
the Company shall conduct its business in the ordinary course.
8.2 Preservation of Business. From the date hereof and through the Closing
Date, the Company shall preserve its business organization intact, use its best
efforts to keep available the services of the officers elected as of the date
hereof, its present employees, consultants and agents and preserve the Company's
goodwill.
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SECTION 9. ADDITIONAL COVENANTS
9.1 Corporate Examinations and Investigations. Prior to the Closing Date,
the Company, the Partnership, the General Partner and the Limited Partners shall
each be entitled, through their employees and representatives, to make such
investigation of the assets, properties, business and operations, books, records
and financial condition of the Company or the Partnership as they each may
reasonably require. Any such investigation and examination shall be conducted at
reasonable times and under reasonable circumstances, and each party shall
cooperate fully therein. No investigation by a party hereto shall, however,
diminish or waive in any way any of the representations, warranties, covenants
or agreements of the other party under this Agreement. In order that each party
may have the full opportunity to make such business, accounting and legal
review, examination or investigation as it may wish of the business and affairs
of the Company or the Partnership, each shall furnish the requesting party
during such period with all such information and copies of such documents
concerning the affairs of it as the requesting party may reasonably request and
cause its officers, employees, consultants, agents, accountants and attorneys to
cooperate fully in connection with such review and examination and to make full
disclosure to the other parties of all material facts affecting the financial
condition or business operations of the Company or the Partnership.
9.2 Further Assurances. The parties shall execute such documents and other
papers and take such further actions as may be reasonably required or desirable
to carry out the provisions hereof and the transactions contemplated hereby.
Each such party shall use its best efforts to fulfill or obtain the fulfillment
of the conditions to the Closing, including, without limitation, the execution
and delivery of any documents or other papers, the execution and delivery of
which are conditions precedent to the Closing.
9.3 Confidentiality. In the event the transactions contemplated by this
Agreement are not consummated, the Partnership, the General Partner, the Company
and the Limited Partners agree to keep confidential any information disclosed to
each in connection therewith and to the extent that this exchange is not
consummated for any reason, all documentation will be returned to the respective
parties; provided, however, such obligation shall not apply to information
which:
(i) at the time of disclosure is in the public domain as evidenced by
printed publications;
(ii) after the disclosure, enters the public domain by way of printed
publication through no fault of the receiving party or those in privity
with it;
(iii) it can be shown by written documentation that the information
was in a party's possession at the time of disclosure and which was not
acquired directly or indirectly from the non-disclosing party; or
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(iv) it can be shown by written documentation that the information was
acquired, after disclosure, from a third party who did not receive it from
the non-disclosing party, and who had the right to disclose the information
without any obligation to hold such information confidential.
SECTION 10. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO CLOSE
The obligation of the Company to enter into and complete the Closing is
subject, at the option of the Company, to the fulfillment on or prior to the
Closing Date of the following conditions, any one or more of which may be waived
by the Company in writing.
10.1 Representations and Covenants. The representations and warranties of
the General Partner, the Partnership and the Limited Partners contained in this
Agreement shall be true in all material respects on and as of the Closing Date
with the same force and effect as though made on and as of the Closing Date. The
General Partner, the Partnership and the Limited Partners shall have performed
and complied in all material respects with all covenants and agreements required
by this Agreement to be performed or complied with by the General Partner, the
Partnership and the Limited Partners on or prior to the Closing Date.
10.2 Third Party Consents and Blue Sky Requirements. All consents, permits
and approvals from parties to any contracts, loan agreements or other agreements
with the Partnership, the General Partner or the Limited Partners which may be
required in connection with the performance by the Partnership, the General
Partner and the Limited Partners of its obligations under such contracts or
other agreements after the Closing shall have been obtained; all blue sky
requirements have been complied with to qualify the shares of Common Stock under
state securities laws for issuance to the Limited Partners; and, the approval to
exchange in excess of not less than 90% of the Partnership Interests is
received.
10.3 Satisfactory Business Review. The Company shall have satisfied itself,
after receipt and consideration of the Schedules and after the Company and its
representatives have completed the review of the business of the Partnership
contemplated by this Agreement, that none of the information revealed thereby or
in the Financial Statements has resulted in, or in the reasonable opinion of the
Company may result in, a material adverse change in the assets, properties,
business, operations or condition (financial or otherwise) of the Partnership.
10.4 Litigation. Except as set forth in the Financial Statements, Schedules
4.4 and 4.8 attached hereto, no action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body or instituted or
threatened by any governmental or regulatory body to restrain, modify or prevent
the carrying out of the
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transactions contemplated hereby or to seek damages or a discovery order in
connection with such transactions, or which has or may have, in the reasonable
opinion of the Company a materially adverse effect on the assets, properties,
business, operations or condition (financial or otherwise) of the Partnership.
10.5 Certificate of Good Standing. The Company shall have received
certificates of good standing dated at or about the Closing Date to the effect
that the Partnership and the General Partner are in good standing under the laws
of the State of Florida.
10.6 Subscription Agreement and Investment Representation Letters. The
Limited Partners shall each have delivered to the Company suitable Subscription
Agreements and Investment Representation Letters in the form approved by the
Company, agreeing that the Shares of Common Stock are being acquired for
investment purposes only and not with the view to public resale or distribution.
10.7 Other Documents. The Partnership, the General Partner and the Limited
Partners shall have delivered such other documents, instruments and
certificates, if any, as are required to be delivered pursuant to the provisions
of this Agreement or which may be reasonably requested in furtherance of the
provisions of this Agreement.
SECTION 11. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PARTNERSHIP, THE
GENERAL PARTNER AND THE LIMITED PARTNERS TO CLOSE
The obligation of the Partnership, the General Partner and the Limited
Partners to enter into and complete the Closing is subject, at the option of the
Partnership, the General Partner and the Limited Partners, to the fulfillment on
or prior to the Closing Date of the following conditions, any one or more of
which may be waived in writing by the Partnership, the General Partner and the
Limited Partners.
11.1 Representations and Covenants. The representations and warranties of
the Company contained in this Agreement shall be true in all material respects
on the Closing Date with the same force and effect as though made on and as of
the Closing Date. The Company shall have performed and complied with all
covenants and agreements required by the Agreement to be performed or complied
with by the Company on or prior to the Closing Date.
11.2 Corporate Resolutions. The Board of Directors of the Company shall
have approved the transactions contemplated by this Agreement.
11.3 Satisfactory Business Review. The Partnership, the General Partner and
the Limited Partners shall have satisfied themselves, after review of the
information provided hereby or in connection herewith, or following any
discussions with management or representatives of the Company, that none of the
information revealed
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thereby has resulted in or in the reasonable opinion of the Partnership, the
General Partner and the Limited Partners may result in a material adverse change
in the assets, properties, business, operations or condition (financial or
otherwise) of the Company.
11.4 Litigation. Except as set forth in the Financial Statements, Schedules
6.6 and 6.9 attached hereto, no action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body or instituted or
threatened by any governmental or regulatory body to restrain, modify or prevent
the carrying out of the transactions contemplated hereby or to seek damages or a
discovery order in connection with such transactions, or which has or may in the
reasonable opinion of the Partnership, the General Partner and the Limited
Partners, have a materially adverse effect on the business, operations or
condition (financial or otherwise) of the Company.
11.5 Certificates of Good Standing. The Company shall have delivered to the
Partnership certificate of good standing from the Secretary of State of the
State of Florida dated on or about the Closing Date to the effect that the
Company is in good standing under the laws of the State of Florida.
11.6 Stock Certificates. Within twenty-one (21) days from the Closing date,
the Limited Partners shall receive certificates representing the Shares of
Common Stock to be received pursuant hereto.
11.7 Other Documents and Blue Sky Requirements. The Company shall have
delivered such other instruments, documents and certificates, if any, as are
required to be delivered pursuant to the provisions of this Agreement or which
may be reasonably requested in furtherance of the provisions of this Agreement
and all blue sky requirements have been complied with to qualify the shares of
Common Stock under state securities laws for issuance to the Limited Partners.
SECTION 12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP,
THE GENERAL PARTNER AND THE LIMITED PARTNERS
Notwithstanding any right of the Company fully to investigate the affairs
of the Partnership and notwithstanding any knowledge of facts determined or
determinable by the Company pursuant to such investigation or right or
investigation, the Company shall have the right to rely fully upon the
representations, warranties, covenants and agreements of the Partnership, the
General Partner and the Limited Partners contained in this Agreement or in any
document delivered to the Company by the Partnership, the General Partner and
the Limited Partners or any of their representatives, in connection with the
transactions contemplated by this Agreement. All such representations,
warranties, covenants and agreements shall survive the execution and delivery
hereof and the Closing hereunder for twelve (12) months following the Closing
Date.
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SECTION 13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Notwithstanding any right of the Partnership, the General Partner and the
Limited Partners fully to investigate the affairs of the Company and
notwithstanding any knowledge of facts determined or determinable by the
Partnership, the General Partner and the Limited Partners pursuant to such
investigation or right or investigation, the Partnership, the General Partner
and the Limited Partners have the right to rely fully upon the representations,
warranties, covenants and agreements of the Company contained in this Agreement
or in any document delivered to the Partnership, the General Partner and the
Limited Partners by the Company or any of their representatives, in connection
with the transactions contemplated by this Agreement. All such representations,
warranties, covenants and agreements shall survive the execution and delivery
hereof and the Closing hereunder for twelve (12) months following the Closing
Date.
SECTION 14. OFFICERS AND DIRECTORS OF THE COMPANY
14.1 Directors. The Board of Directors of the Company shall initially
consist of three (3) members, C. John Knorr, Jr., J. Rod Martin and Thomas L.
Callahan, until their respective successors shall be duly elected or appointed
and qualified.
14.2 Officers. The officers of the Company on the Closing Date shall be as
follows:
C. John Knorr, Jr. - President
J. Rod Martin - Secretary/Treasurer
SECTION 15. INDEMNIFICATION
15.1 Obligation of the Partnership, the General Partner and the Limited
Partners to Indemnify. Subject to the limitations on the survival of
representations and warranties contained in Section 12, the Partnership, the
General Partner and the Limited Partners hereby agree to indemnify, defend and
hold harmless the Company from and against any losses, liabilities, damages,
deficiencies, costs or expenses (including interest, penalties and reasonable
attorneys' fees and disbursements) (a "Loss") based upon, arising out of or
otherwise due to any inaccuracy in or any breach of any representation,
warranty, covenant or agreement made by each of them contained in this Agreement
or in any document or other writing delivered pursuant to this Agreement.
15.2 Obligation of the Company to Indemnify. Subject to the limitations on
the survival of representations and warranties contained in Section 13, the
Company agrees to indemnify, defend and hold harmless the Partnership, the
General Partner and the Limited Partners from and against any Loss, based upon,
arising out of or otherwise due
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to any inaccuracy in or any breach of any representation, warranty, covenant or
agreement made by the Company and contained in this Agreement or in any document
or other writing delivered pursuant to this Agreement.
15.3 Claims by Third Parties. Promptly after receipt by either party hereto
(the "Indemnitee") of notice of any demand, claim or circumstances which, with
the lapse of time, would give rise to a claim or the commencement (or threatened
commencement) of any action, proceeding or investigation (an "Asserted
Liability") that may result in a Loss, the Indemnitee shall give notice thereof
(the "Claims Notice") to the other party or parties (the "Indemnitor"). The
Claims Notice shall describe the Asserted Liability in reasonable detail, and
shall indicate the amount (estimated, if necessary) of the Loss that has been or
may be suffered by the Indemnitee.
15.4 Opportunity to Defend. Indemnitor may elect to compromise or defend,
at its own expense and by its own counsel, any Asserted Liability. If the
Indemnitor elects to compromise or defend such Asserted Liability, it shall
within fifteen (15) days (or sooner, if the nature of the Asserted Liability so
requires) notify the Indemnitee of its intent to do so, and the Indemnitee shall
cooperate, at the expense of the Indemnitor in the compromise of, or defense
against, such Asserted Liability. The Indemnitee may participate at its own
expense, in the defense of such Asserted Liability. If Indemnitor elects not to
compromise or defend the Asserted Liability, fails to notify the Indemnitee of
its election as herein provided, contests its obligations to indemnify under
this Agreement, or at any time fails to pursue in good faith the resolution of
any Asserted Liability, in the opinion of Indemnitee, then Indemnitee may, upon
ten days' notice to Indemnitor pay, compromise or defend any such Asserted
Liability. If the Indemnitor choose to defend any claim, the Indemnitee shall
make available to the Indemnitor any books, records or other documents within
its control that are necessary or appropriate for such defense.
SECTION 16. TERMINATION OF AGREEMENT
This Agreement may be terminated prior to the Closing Date as follows:
(i) at the election of the Company, if any one or more of the
conditions to the obligation of the Company to close have not been
fulfilled as of the Closing Date;
(ii) at the election of the Partnership, if any one or more of the
material conditions to the obligation of the Partnership, the General
Partner and the Limited Partners to close have not been fulfilled as of the
Closing Date;
(iii) at the election of the Company if the Partnership, the General
Partner and the Limited Partners have breached any material
representations, warranty, covenant or agreement contained in this
Agreement;
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(iv) at the election of the Partnership, if the Company has breached
any material representation, warranty, covenant or agreement contained in
this Agreement;
(v) at the election of the Company or the Partnership, if any legal
proceeding is commenced or threatened by any governmental or regulatory
agency or other person directed against the consummation of the Closing or
any other transaction contemplated under this Agreement and either the
Company or the Partnership, as the case may be, reasonably and in good
faith deem it impractical or inadvisable to proceed in view of such legal
proceeding or threat thereof; or
(vi) at any time on or prior to the Closing Date, by mutual written
consent of the Company and the Partnership.
If this Agreement is terminated and the transactions contemplated hereby
are not consummated as described herein, this Agreement shall become null and
void and of no further force and effect, except for the provisions of subsection
10 hereof relating to the obligation of the parties to keep information
confidential. None of the parties shall have any liability in respect of a
termination of this Agreement except to the extent that failure to satisfy the
conditions of Section 12 and 13 results from the intentional or willful
violation of the representations, warranties, covenants or agreements of such
party under this Agreement.
SECTION 17. MISCELLANEOUS
17.1 Notices. Any notice or other communication required or which may be
given hereunder shall be in writing by a party or by an attorney to a party and
shall be delivered personally, telegraphed, telexed, sent by facsimile
transmission or sent by certified, registered, or express mail, postage prepaid,
and shall be deemed given when so delivered personally, telegraphed, telexed or
sent by facsimile transmission or if mailed, four (4) days after the date of
mailing, as follows:
(i) If to the Company:
Pelican Properties, International Corp.
3191 Coral Way, Suite 115, Box 165
Coral Gables, Florida 33145
Attention: President
19
<PAGE>
(ii) If to the Partnership, to:
Sunshine Key Associates Limited Partnership
Route 1, Box 790
Big Pine Key, Florida 33043
Attention: C. John Knorr, Jr., President of General Partner
(iii) If to the General Partner, to:
Infinity Investment Group, Inc.
Route 1, Box 790
Big Pine Key, Florida 33043
Attention: C. John Knorr, Jr., President
(iv) If to the Limited Partners:
[To the named Limited Partners]
3191 Coral Way, Suite 115, Box 165
Coral Gables, Florida 33145
(v) If to Gomez, to:
Rene Gomez
3191 Coral Way, Suite 115
Coral Gables, Florida 33145
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notice hereunder.
17.2 Entire Agreement. This Agreement (including the Exhibits and Schedules
hereto) and the collateral agreements executed in connection with the
consummation of the transactions contemplated herein contain the entire
agreement among the parties with respect to the exchange of the Securities and
related transactions, and supersede all prior agreements, written or oral, with
respect thereto.
17.3 Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any
20
<PAGE>
rights or remedies which any party may otherwise have at law or in equity. The
rights and remedies of any party based upon, arising out of or otherwise in
respect of any inaccuracy in or breach of any representation, warranty, covenant
or agreement contained in this Agreement shall in no way be limited by the fact
that the act, omission, occurrence or other state of facts upon which the claim
of any inaccuracy or breach is based may also be the subject matter of any other
representation, warranty, covenant or agreement contained in this Agreement (or
in any other agreement between the parties) as to which there is no inaccuracy
or breach.
17.4 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Florida applicable to agreements made
and to be performed entirely within such State.
17.5 Venue. Each of the parties to this Agreement acknowledge and agree
that the U.S. District for the Southern District of Florida, or if such court
lacks jurisdiction, the 11th Judicial Circuit (or its successor) in and for Dade
County, Florida, shall be the venue and exclusive proper forum in which to
adjudicate any case or controversy arising either, directly or indirectly, under
or in connection with this Agreement and the parties further agree that, in the
event of litigation arising out of or in connection with this Agreement in these
courts, they will not contest or challenge the jurisdiction or venue of these
courts.
17.6 No Assignment. This Agreement is not assignable except by operation of
law.
17.7 Exhibits and Schedules. The Exhibits and Schedules to this Agreement
are a part of this Agreement as if set forth in full herein.
17.8 Headings. The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
17.9 Severability of Provisions. The invalidity or unenforceability of any
term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision of this Agreement shall in no way affect the validity or enforcement
of any other provision or any part thereof.
17.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed, shall constitute an original copy
hereof, but all of which together shall consider but one and the same document.
17.11 Construction. This Agreement shall be construed within the fair
meaning of each of its terms and not against the party drafting the Agreement.
21
<PAGE>
THE PARTIES TO THIS EXCHANGE AGREEMENT, AS EVIDENCED BY THEIR SIGNATURES
BELOW, ACKNOWLEDGE THAT THEY HAVE READ THIS AGREEMENT, HAVE HAD THE OPPORTUNITY
TO CONSULT WITH INDEPENDENT COUNSEL OF THEIR OWN CHOICE, AND UNDERSTAND EACH OF
THE PROVISIONS OF THIS EXCHANGE AGREEMENT.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.
PELICAN PROPERTIES, INTERNATIONAL
CORP.
By: /s/ Rene Gomez, President
-----------------------------------
Rene Gomez, President
SUNSHINE KEY ASSOCIATES LIMITED
PARTNERSHIP
By: INFINITY INVESTMENT GROUP, INC.,
General Partner
By: /s/ C. John Knorr, Jr.
-----------------------------------
C. John Knorr, Jr., President
INFINITY INVESTMENT GROUP, INC.
By: /s/ C. John Knorr, Jr.
-----------------------------------
C. John Knorr, Jr., President
/s/ Rene Gomez
-----------------------------------
Rene Gomez
22
<PAGE>
SIGNATURE PAGE FOR LIMITED PARTNERS
The undersigned hereby executes this Signature Page to the EXCHANGE
AGREEMENT by and between PELICAN PROPERTIES, INTERNATIONAL CORP., SUNSHINE KEY
ASSOCIATES LIMITED PARTNERSHIP, INFINITY INVESTMENT GROUP, INC. AND RENE GOMEZ.
Federal Identification Number
or Social Security Number
-------------------------
________________________________________ ____________________________________
Signature of Limited Partner
________________________________________ ____________________________________
Signature of Joint Owner
Name and Address
- ----------------
________________________________________
Print Name
________________________________________
Print Name of Joint Owner
________________________________________
Street Address (Residence)
________________________________________
City, State, Zip Code
________________________________________
Telephone Number
Shares to be registered as:
[ ] Corporate ownership (an officer must sign)
[ ] Partnership ownership (all general partners must sign)
[ ] Sole ownership
[ ] Joint tenants with right of survivorship
[ ] Tenants in common
23
<PAGE>
EXHIBIT A
LIMITED PARTNERS
<PAGE>
Names of
Limited Partners
- ----------------
Albert Baker Revocable Trust
J.T. Abrams Baker Life Tenant
Bobby Bell
Horace & Constance Bernton
Richard Van Blerkom
Linda Brauer
Estate of Stanley Buckster
Sandra Burwell
Thomas L. Callahan
Linda M. Callahan
Ivan and Lois Caplan
Hubert & Mary Charlton
Robert and MaryAnn Circosta
Fred & Elene Combs
Gerald Fink, M.D.
J. Frog Ltd. Consolidated
Richard Gamble
Gerber-Miller Investments
Elizabeth Hill
Joseph & Evelyn Jennette, Jr.
Joffe Enterprises
Carl J. Knorr, Sr.
Leonard Kraisel
Willie Lanier
Frank J. Lengenfelder
Ralph L. Madison
Ohio Key Limited Partnership
T.A. Pickell
Albert & Betryce Prosterman
Leslie M. Prosterman
Mrs. Sheila M. Prosterman
Bruce and Linda Rahmlow
Fred Schloss
Alfred & Arlene Siller
Howard and Dorcas Smith
SK Partners
William & Kathleen Sutton
William & Patricia Walton, Jr.
Richard V. Waterhouse
Windward Capital Corp.
Charles & Sophie Young
<PAGE>
EXHIBIT "B"
OPINION OF TAX COUNSEL
<PAGE>
SCHEDULE 4.3
PARTNERSHIP'S AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDING DECEMBER 31, 1993 AND DECEMBER 31, 1994
<PAGE>
SCHEDULE 4.4
MATERIAL ADVERSE CHANGES
None.
<PAGE>
SCHEDULE 4.6
COMPLIANCE WITH LAWS
None.
<PAGE>
SCHEDULE 4.8
LITIGATION/PROCEEDINGS SINCE
None.
<PAGE>
SCHEDULE 6.5
COMPANY'S AUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDING JUNE 30, 1995
<PAGE>
SCHEDULE 6.6
MATERIAL ADVERSE CHANGE
None.
<PAGE>
SCHEDULE 6.9
LITIGATION/PROCEEDING
None.
LOAN RESTRUCTURING AGREEMENT
THIS AGREEMENT is made and entered into as of December 31, 1996 by and
among SUNSHINE KEY ASSOCIATES LIMITED PARTNERSHIP, a Florida limited partnership
(the "Borrower"), OHIO KEY I, INC., a Florida corporation, and OHIO KEY II,
INC., a Florida corporation (collectively, the "Obligor") and WAMCO XXII, LTD.,
a Texas limited partnership (the "Lender").
R E C I T A L S:
A. Borrower is indebted to Lender as evidenced by that certain Term Note,
dated February 25, 1988, in the original principal amount of $6,000,000, payable
to NCNB National Bank of Florida, corporate predecessor to NationsBank, N.A.
(South) (the "Original Lender") and is further indebted to Lender as evidenced
by that certain Term Note, dated December 20, 1988, in the original principal
amount of $1,100,000, payable to the Original Lender.
B. The notes described above were consolidated and renewed by that certain
Consolidated Note, dated December 20, 1988, in the original principal amount of
$7,100,000, payable to the Original Lender, which Note was further renewed by
that certain Amended and Restated Note, dated as of November 1, 1991, in the
original principal amount of $6,992,110.40 (the "Amended Note").
C. Borrower is further indebted to Lender as evidenced by that certain
Renewal Promissory Note, dated November 1, 1991, in the original principal
amount of $118,654.57, payable to the Original Lender (the "Additional Note")
(the Amended Note and the Additional Note are collectively referred to herein as
the "Existing Notes").
D. The Existing Notes are secured by, among other things, that certain
Mortgage and Security Agreement, dated February 25, 1988, from the Borrower to
the Original Lender recorded on March 1, 1988, in Official Records Book 1043, at
Page 0500 of the Public Records of Monroe County, Florida (the "Original
Mortgage"), as amended and modified by: (i) that certain Amendment No. 1 to
Mortgage and Security Agreement, dated December 20, 1988, between the Borrower
and the Original Lender, recorded on December 27, 1988 in Official Records Book
1076, at Page 1943 of the Public Records of Monroe County, Florida, (ii) that
certain Modification of Mortgage and Notice of Receipt of Future Advance, dated
November 1, 1991, between the Borrower and the Original Lender recorded on
January 13, 1992 in Official Records Book 1196, at Page 2044 of the Public
Records of Monroe County, Florida, (iii) that certain Modification of Mortgage
and Notice of Receipt of Future Advance, dated December 1, 1992, between the
Borrower and the Original Lender recorded on February 8, 1993 in Official
Records Book 1244, at Page 0915 of the Public Records of Monroe County, Florida,
and (iv) that certain Modification of Mortgage, dated February 1, 1993, between
the Borrower and the Original Lender recorded on May 12, 1993 in Official
Records Book 1256, at Page 1834
1
<PAGE>
of the Public Records of Monroe County, Florida (the Original Mortgage, as
modified by the foregoing agreements is hereinafter referred to as the
"Mortgage").
E. The Existing Notes are further secured by that certain Security
Agreement, dated February 25, 1988 (the "Security Agreement"), executed by
Borrower covering certain personal property more particularly described therein.
F. The Existing Notes are further secured by that certain WCC-1 Financing
Statement filed with the Florida Secretary of State on March 1, 1988, File No.
1880033009, as amended by WCC-3 Statement of Change filed with the Florida
Secretary of State on January 1, 1993, File No. 930000010500 (collectively, the
"UCC").
G. The Existing Notes are governed by that certain Loan Agreement, dated
November 25, 1988, between Borrower and Lender, as amended (as amended, the
"Loan Agreement").
H. The Existing Notes, the Mortgage, the Security Agreement, the UCC, the
Loan Agreement and all other written documents executed in connection therewith,
together with any written renewals, modifications, and/or extensions thereof are
collectively referred to as the "Existing Documents".
I. As a result of Borrower's failure to pay principal and interest on the
Notes when due, the Original Lender instituted legal proceedings to foreclose
the Mortgage and to collect the Notes in the Circuit Court of the Sixteenth
Judicial Circuit in and for Monroe County, Florida (the "State Court") pursuant
to Case No. 95-20205 CA 09 (the "Lawsuit").
J. Borrower subsequently filed for bankruptcy protection in the United
States Bankruptcy Court for the Southern District of Florida pursuant to Case
No. 96-10174-BKC-RAM, styled In Re Sunshine Key Associates Limited Partnership.
K. The Bankruptcy Court granted the Original Lender complete relief from
the automatic stay and the State Court granted a Final Summary Judgment of
Foreclosure in favor of the Lender, as successor by assignment to the Original
Lender, in the amount of $8,587,479.34 as of May 2, 1996, plus interest at the
rate set forth in the Final Judgment, and court costs and attorneys fees (the
"Final Judgment").
L. By operation of law, the Existing Documents have merged into the Final
Judgment.
M. As an accommodation to Borrower, Lender entered into a Stipulation for
Settlement in the bankruptcy action, dated August 6, 1996, between Borrower and
Lender (the "Stipulation") pursuant to which Lender agreed to temporarily
forbear from prosecuting the Lawsuit and to reduce the amount of its secured
claim to $5,700,000,
2
<PAGE>
subject to the Borrower's performance of its obligations under the Stipulation.
N. Under the terms of the Stipulation, Borrower and Lender have agreed to
restructure the indebtedness evidenced by the Final Judgment upon Lender's
receipt of the cash payments required by the Stipulation and Borrower's further
compliance with the other terms and conditions of the Stipulation.
O. The Borrower has filed its Modified Third Amended Plan of Reorganization
with the Bankruptcy Court incorporating the restructuring of the indebtedness
contemplated by the Stipulation and the Plan was confirmed by court order dated
October 29, 1996 (the "Confirmation Order").
P. The parties desire to execute this Loan Restructuring Agreement (the
"Agreement") to redocument the indebtedness evidenced by the Final Judgment to
reflect the terms of the Stipulation, the Plan and the Confirmation Order.
A G R E E M E N T
FOR AND IN CONSIDERATION of the mutual covenants herein, ten dollars
($10.00), and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Borrower, Obligor and Lender agree as follows:
1. Recitals. The foregoing recitals are confirmed by the parties as true
and correct and are incorporated herein by reference. The recitals are a
substantive, contractual part of this Agreement.
2. Reduction of Indebtedness. Borrower, Obligor and Lender agree that upon
the parties execution of this Agreement and the fulfillment by Borrower and
Obligor of the conditions precedent to the effectiveness of this Agreement set
forth in Section 8 hereof, the indebtedness evidenced by the Final Judgment
shall be reduced to $4,700,000 (the "Restructured Loan").
3. Redocumentation of Indebtedness. Restructured Loan shall henceforth be
evidenced by the Restated Promissory Note, dated as of December 31, 1996, in the
principal amount of $4,700,000 in the form attached hereto as Exhibit "A" (the
"Restated Note") and shall henceforth be governed and secured by this Agreement
and the other documents listed in Section 8 below (the Restated Note, this
Agreement and the other documents listed in Section 8 below are collectively
referred to herein as the "Loan Documents"). The Loan Documents shall replace
and supersede the Existing Documents, which have merged into the Final Judgment
by operation of law. The Loan Documents are not given in payment or satisfaction
of the Existing Documents or the Final Judgment, but rather are the substitution
of one evidence of debt for another without any intent to extinguish the old.
3
<PAGE>
4. Obligor's Assumption of Loan Documents. By execution of this Agreement,
Obligor hereby agrees to assume all of Borrower's obligations under the Existing
Documents, as restructured pursuant to the Loan Documents, including, without
limitation, the obligation to pay principal and interest on the Restated Note.
5. Restructured Loan Repayment Terms. The Restructured Loan, as evidenced
by the Restated Note, shall be repayable as follows:
(a) During the period commencing on the effective date of Borrower's
Third Amended Plan of Reorganization (the "Effective Date") and ending on
August 30, 1997, the Restated Note will not bear interest, except in the
case of a default, in which case interest will accrue at the default rate
specified in the Restated Note. In lieu of interest, the Obligor will make
monthly payments of $5,000 each commencing on last day of the month of the
Effective Date through and including August 30, 1997, to compensate Lender
for its agreement to waive interest on the Restated Note during this
period. Such payments will not reduce the principal balance of the Restated
Note.
(b) Commencing on August 30, 1997, the Restated Note will bear
interest at 9% per annum. On September 30, 1997 and on the same day of each
month thereafter, through and including September 30, 1999, the Obligor
will make equal payments of principal and interest on the Restated Note in
the amount of $39,442.43 each. The Restated Note will mature on October 30,
1999 (the "Maturity Date"), at which time the outstanding principal balance
and all accrued interest will be due and payable in full.
(c) If the Restated Note is repaid in full before November 30, 1997,
the Obligor will receive an early payment discount equal to 8% of the
outstanding principal balance of the Restated Note on the date of
repayment. In order to receive the discount, the Obligor must repay all
outstanding accrued interest under the Restated Note and any other sums
owed to Lender on the date of early payment.
(d) If the Restated Note is repaid in full after November 30, 1997,
and before November 30, 1998, the Obligor will receive an early payment
discount equal to 5% of the outstanding principal balance of the Restated
Note on the date of repayment. In order to receive the discount, the
Obligor must repay all outstanding accrued interest and any other sums owed
to Lender on the date of early payment.
(e) No early payment discount will be available after November 30,
1998.
6. Option to Extend Maturity Date. The Obligor shall have a one-time
option, exercisable on or after July 30 1999, to extend the maturity of the
Restated Note until October 30, 2002 (the "Extended Maturity Date"), upon
compliance with the following conditions:
4
<PAGE>
(a) On or before the Maturity Date, the Obligor shall pay Lender an
extension fee equal to 1% of the outstanding principal balance of the
Restated Note and reduce the principal balance of the Restated Note by
$500,000. The $500,000 reduction is in addition to all regularly scheduled
principal payments due on the Restated Note through the Maturity Date.
(b) The Obligor shall provide Lender with written notice of its
election to exercise the extension option no later than sixty (60) days
prior to the Maturity Date.
(c) The Obligor shall not be in default under the terms of the
Restated Note or any of the other Loan Documents.
7. Terms Applicable Extended Loan. If the Obligor elects to exercise the
extension option and meets all conditions set forth in Section 5 hereof, the
following terms shall apply during the extended term of the Restated Note:
(a) The Obligor shall execute a renewal of the Restated Note (the
"Extended Note") which will bear interest commencing on the Maturity Date
at a per annum rate equal to the greater of 9.75% or 1% over the Wall
Street Journal Prime Rate of interest in effect on the date of exercise of
the option, whichever is higher (the "Applicable Rate").
(b) On November 30, 1999, through and including September 30, 2002,
the Debtor will make equal amortizing monthly payments of principal and
interest on the Extended Note determined by reference to standard
amortization tables using an interest rate equal to the Applicable Rate,
the outstanding principal balance of the Restated Note on the Maturity Date
and an amortization period of 20 years. The Renewal Note will mature on the
September 30, 2002, at which time the outstanding principal balance plus
accrued interest will be due and payable in full.
8. Conditions Precedent to Restructured Loan. The Lender's agreement to
restructure the indebtedness evidenced by the Final Judgment as set forth in
this Agreement is subject to the following conditions precedent, each of which
must be fulfilled on or before the Effective Date:
(a) The Lender shall have received the $1,000,000 in cash payments
required to be paid by the Borrower to the Lender during the Forbearance
Period (as defined in the Stipulation) under the terms of the Stipulation.
(b) The Borrower and the Obligor must have settled the litigation with
Monroe County relating to the Borrower's violation of municipal ordinances
governing the size of recreational vehicles renting spaces on the mortgaged
property and all notices of violations and other liens filed by the County
against the mortgaged property must be fully discharged and released, or
the Borrower must be proceeding to resolve the dispute to the satisfaction
of Lender.
(c) The Obligor shall deliver to Lender a commitment to endorse the
existing title insurance policy insuring the Mortgage whereby the title
insurance company will agree to insure the first lien priority of the
Restated Mortgage and Assumption Agreement attached hereto as Exhibit "B"
(the "Restated Mortgage"). The
5
<PAGE>
commitment to endorse shall not contain or add any additional exceptions to
the title policy insuring the existing Mortgage and must update the
effective date of the policy through the date of recording the Restated
Mortgage. The Borrower and the Obligor shall affirmatively state and show
that they are in compliance with the county rules and ordinances and that
they have paid or are relieved of such fines or liens.
(d) All real property taxes on the mortgaged property must be paid in
full.
(e) The Obligor shall provide evidence of extended hazard, including
windstorm, insurance and flood insurance on the mortgaged property in an
amount at least equal to the replacement cost of the mortgaged property.
(f) The Obligor shall submit a quarterly budget for the immediately
succeeding fiscal quarter setting forth in detail capital expenditures to
be made to upgrade all facilities and infrastructure on the mortgaged
property. The budget must be mutually acceptable to Lender and the Obligor.
(g) The Borrower, the Obligor and C. John Knorr, as applicable, shall
have delivered the following documentation to the Lender, which shall be in
form and substance satisfactory to the Lender:
(i) the Restated Note in the form attached hereto as Exhibit "A"
executed by the Obligor.
(ii) the Restated Mortgage in the form attached hereto as Exhibit
"B" executed by the Borrower and the Obligor.
(iii) a Security Agreement in the form attached hereto as Exhibit
"C" executed by the Obligor.
(iv) WCC-1 Financing Statements to be filed with the Clerk of the
Circuit Court of Monroe County and the Secretary of State of Florida
in the form attached hereto as Exhibits "D-1" and "D-2" executed by
the Obligor.
(v) a General Release in the form attached hereto as Exhibit "E"
executed by the Borrower, the Obligor and C. John Knorr.
(vi) a Subordination Agreement in the form attached hereto as
Exhibit "F" executed by the United States Small Business
Administration.
(vii) a copy of the Agreement of Limited Partnership of the
Borrower, as amended to date, certified by the Secretary of State of
Florida.
(viii) a copy of the Articles of Incorporation of infinity
Investment Group, Inc., as amended to date, certified by the Secretary
of State of Florida.
(ix) a copy of the By-laws of Infinity Investment Group, Inc.,
certified to be a true and correct copy thereof by the Secretary of
said corporation.
6
<PAGE>
(x) evidence of Infinity Investment Group, Inc.'s status as the
sole general partner of the Borrower, together with corporate
resolutions of Infinity Investment Group, Inc. authorizing the
execution and delivery of this Agreement, the Restated Mortgage, the
Release and the other documents contemplated hereby.
(xi) a copy of the respective Articles of Incorporation of Ohio
Key I, Inc. and Ohio Key II, Inc., as amended to date, certified by
the Secretary of State of Florida.
(xii) a copy of the respective By-laws of Ohio Key I, Inc. and
Ohio Key II, Inc., certified to be true and correct copies thereof by
the respective Secretaries of said corporations.
(xiii) corporate resolutions of Ohio Key I, Inc. and Ohio Key II,
Inc. authorizing the execution and delivery of this Agreement, the
Restated Note, the Restated Mortgage, the Release and the other
documents contemplated hereby.
9. Representations and Warranties of the Borrower and the Obligor. As a
material inducement to the Lender to enter into this Agreement, the Borrower and
the Obligor represent and warrant to the Lender as follows:
(a) The execution and delivery of this Agreement and the consummation
of the transactions described in this Agreement and the other Loan
Documents have been duly authorized by all necessary action and this
Agreement and the other Loan Documents constitute the legal, valid and
binding obligations of the Borrower and the Obligor, respectively,
enforceable against the Borrower and the Obligor in accordance with their
respective terms;
(b) The execution and delivery of the Loan Documents does not
constitute a breach of any agreement to which the Borrower or the Obligor
are or may be bound, and does not violate any law, order or regulation to
which the Borrower or the Obligor is subject;
(c) The Borrower has not transferred to another party any right or
claim that it may have against the Lender;
(d) The information and documents furnished to the Lender in
connection with this Agreement are true and complete in all material
respects;
(e) The Obligor is financially solvent in that the value of its total
assets exceeds its total liabilities, as determined in accordance with
generally accepted accounting principles;
(f) Neither the Borrower nor the Obligor will be rendered insolvent by
the transactions described in this Agreement; and
(g) The Borrower and the Obligor are entering into this Agreement
voluntarily and without threat of duress, undue influence or fraud by the
Lender or any other party, and have been represented by legal counsel with
respect to this Agreement.
7
<PAGE>
10. Affirmative Covenants of the Borrower and the Obligor. The Borrower and
the Obligor hereby covenant and agree that from the date hereof and until
payment in full of the principal and interest on the Restated Note, and if
applicable, the Extended Note, they shall comply with the following covenants
and agreements:
(a) To use their best efforts to promptly remedy all existing
violations of environmental laws and regulations relating to the mortgaged
property, including, without limitation, the placement of monitoring wells
on the mortgaged property, the removal and/or replacement of gas tanks on
the mortgaged property and the repair of the sewage treatment facility on
the mortgaged property. The Debtor and the Obligor will operate the
mortgaged property in compliance with all applicable environmental laws,
rules and regulations affecting any of their ongoing operations.
(b) The Obligor shall submit quarterly budgets of the type described
in Section 8(f) above on an ongoing basis throughout the term of the
Restated Note and, if applicable, the Extended Note. Such budgets shall be
mutually acceptable to Lender and the Obligor.
(c) The Obligor shall provide internally prepared financial statements
to Lender on a quarterly basis showing the revenues and expenditures for
the mortgaged property during such quarter. The financial statements shall
include an income statement, a balance sheet, a capital expenditures report
and a cash report, all in form and substance acceptable to Lender. The
financial statements must be prepared in accordance with generally accepted
accounting principles consistently applied and will be due 30 days after
the end of the quarter covered by the financial statements.
(d) The financial statements shall report on all expenditures required
under the budget and indicate if there is a greater than $5,000 shortfall
in required capital expenditures. In the event there is a greater than
$5,000 shortfall on any line item in the budget, the Obligor shall fund the
deficiency and provide evidence thereof.
(e) The Obligor may not pay any dividends or other distributions of
any kind until all capital improvements required to be made under the
budget are fully completed and the indebtedness due to Lender is paid in
full.
(f) Any management fee paid for operation of the mortgaged property
shall not exceed $10,500.00 per month.
11. Relief from Automatic Stay. The Borrower and the Obligor hereby
acknowledge and agree that Lender has obtained complete relief from the
automatic stay to complete the Lawsuit. The Borrower and the Obligor further
acknowledge and agree that Lender is giving up valuable rights by agreeing to
restructure the Existing Notes pursuant to this Agreement and the other Loan
Documents and that the Lender has only done so with the express understanding
that it will be entitled to complete relief from the automatic stay in the event
of a subsequent bankruptcy filing by the Borrower and the Obligor. Accordingly,
the Borrower and the Obligor hereby agree as follows:
(a) In the event either Borrower or Obligor shall (i) file bankruptcy
with any bankruptcy court of competent jurisdiction or be the subject of
any petition under Title 11 of the U.S. Code, as amended, (ii) be the
subject of any order for relief issued
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under such Title 11 of the U.S. Code, as amended, (iii) file or be the
subject of any petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any present or future federal or state act or law relating to bankruptcy,
insolvency, or other relief for debtors, (iv) have sought or consented to
or acquiesced in the appointment of any trustee, receiver, conservator, or
liquidator, (v) be the subject of any order, judgment or decree entered by
any court of competent jurisdiction approving a petition filed against the
Borrower for any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future
Federal or State act or law relating to bankruptcy, insolvency or relief
for debtors, Lender shall thereupon be entitled to the immediate entry of
an order from the appropriate bankruptcy court granting to the Lender
complete relief from the automatic stay imposed by Section 362 of Title 11
of the U.S. Code, as amended, or otherwise, on or against the exercise of
the rights and remedies otherwise available to Lender as provided in the
Loan Documents, including, without limitation, the foreclosure of the liens
and security interests granted therein and disposition of the collateral
described therein, and as otherwise provided by law.
(b) The Borrower and the Obligor each specifically agree: (i) that
upon filing a motion for relief from the automatic stay, the Lender shall
be entitled to relief from the stay without the necessity of any
evidentiary hearing and without the necessity or requirement of the Lender
to establish or prove the value of the collateral, the lack of adequate
protection of its interest in the collateral, or the lack of equity in the
collateral; (ii) that the lifting of the automatic stay hereunder by the
appropriate bankruptcy court shall be deemed to be "for cause" pursuant to
ss. 362(d)(1) of Title 11 of the U.S. Code, as amended; and (iii) that
neither the Borrower nor the Obligor will directly or indirectly oppose or
otherwise defend against the Lender's efforts to gain relief from the
automatic stay. This provision is not intended to preclude the Borrower or
the Obligor from filing for relief or protection under any chapter of the
Bankruptcy Code.
(c) Costs and Expenses. The Borrower and the Obligor shall reimburse
Lender for all expenses and fees paid or incurred in connection with the
documentation, negotiation and closing of the transactions contemplated by
this Agreement, including, without limitation, UCC and lien search costs,
documentary stamp taxes, intangible taxes and similar state and local taxes
and fees, filing and recording fees and the fees and expenses of Lender's
counsel, whether such fees and expenses are incurred prior to or after the
date of execution hereof.
12. Miscellaneous.
(a) This Agreement may be executed in a number of identical counterparts
which, taken together, shall constitute collectively one (1) agreement; but in
making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart executed by the party to be charged.
(b) Any future waiver, alteration, amendment or modification of any of the
provisions of the Loan Documents shall not be valid or enforceable unless in
writing and signed by all parties, it being expressly agreed that the Loan
Documents cannot be modified orally, by course of dealing or by implied
agreement. Moreover, any delay by Lender in enforcing its rights after an event
of default shall not be a release or waiver of the event of default and shall
not be relied upon by the Borrower or the Obligor as a
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release or waiver of the default.
(c) This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto, their heirs, executors, administrators, successors, legal
representatives, and assigns.
(d) The headings of paragraphs in this Agreement are for convenience of
reference only and shall not in any way affect the interpretation or
construction of this Agreement.
(e) THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF FLORIDA
AND FEDERAL LAW, AS APPLICABLE.
(f) The warranties and representations of the parties in this Agreement
shall survive the termination of this Agreement.
(g) The terms and conditions set forth in this Agreement are the product of
joint draftsmanship by all parties, each being represented by counsel, and any
ambiguities in this Agreement or any documentation prepared pursuant to or in
connection with this Agreement shall not be construed against any of the parties
because of draftsmanship.
(h) For purposes of this Agreement and the other Loan Documents, the
addresses for notice for the Borrower, the Obligor and Lender are as follows:
BORROWER AND OBLIGOR: LENDER:
Sunshine Key Associates Limited WAMCO XXII, LTD.
Partnership RIVA Financial Services
Route 1, Box 790 577 Southlake Blvd., Southport Office Park
Big Pine Key, Florida 33043 Richmond, Virginia 23236
Attention: C. John Knorr Attention: Robert J. Ketron
Notice shall be in writing, and shall be deemed to have been given (i) 72 hours
after being sent by certified or registered mail, return receipt requested,
postage prepaid and addressed as set forth above; or (ii) when personally
delivered to a party or any other officer, partner, agent or employee of such
party at the address set forth above. Rejection or other refusal to accept or
inability to deliver because of a changed address of which no notice has been
received shall also constitute service of notice. Borrower, Obligor and Lender
may change such address by sending written notice to the other in accordance
with the foregoing; however, no written notice of change of address shall be
effective until the date of receipt thereof. The parties hereto agree that any
notice sent to Borrower or Obligor shall be deemed notice to all general
partners in the event that the Borrower or Obligor is a general partnership.
[Signatures appear on the following page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above indicated.
SUNSHINE KEY ASSOCIATES LIMITED WAMCO XXII, LTD., a Texas limited
PARTNERSHIP, a Florida limited partnership
partnership
By: INFINITY INVESTMENT GROUP, By: WAMCO XXII of Texas, Inc., its
INC. general partner
By: /s/ C. John Knorr By: /s/ Robert S. Hetron
------------------------------ -----------------------------------
Print Name: C. John Knorr Print Name: Robert S. Hetron
Title: President Title: Vice President & Asst. Secretary
OHIO KEY I, INC. a Florida corporation
By: /s/ C. John Knorr
------------------------------
Print Name: C. John Knorr
Title: President
OHIO KEY II, INC., a Florida corporation
By: /s/ C. John Knorr
------------------------------
Print Name: C. John Knorr
Title: President
11
RESTATED PROMISSORY NOTE
$4,700,000.00 December 31, 1996
FOR VALUE RECEIVED, OHIO KEY I, INC., a Florida corporation, and OHIO KEY
II, INC., a Florida corporation (collectively, the "Borrower"), jointly and
severally promise to pay to the order of WAMCO XXII, LTD., a Texas limited
partnership (the "Lender") or order, the following:
the principal amount of FOUR MILLION SEVEN HUNDRED THOUSAND AND 00/100
DOLLARS ($4,700,000.00) together with interest on the whole of the
principal amount outstanding hereunder from time to time from the date
hereof until this Note is paid in full, at the per annum rate of interest
indicated below. Interest shall be computed on the actual number of days
elapsed over a 360-day year, i.e., 1/360 of a full year's interest shall
accrue for each day the Note is outstanding.
1.1 Payment Schedule.
This Note shall bear interest and shall be payable as follows:
a. During the period commencing on the date hereof and
ending on August 30, 1997, this Note will not bear interest,
except in the case of a default, in which case interest will
accrue at the Default Rate specified herein. In lieu of interest,
the Borrower will make monthly payments of $5,000 each commencing
on December 31, 1996 and continuing on the last day of each month
thereafter through and including August 30, 1997, to compensate
the Lender for its agreement to waive interest on this Note
during this period. Such payments shall not reduce the principal
balance of this Note.
b. Commencing on August 30, 1997, this Note will bear
interest at the rate of nine percent (9%) per annum (the
"Applicable Interest Rate"). On September 30, 1997 and on the
same day of each month thereafter, through and including
September 30, 1999, the Debtor shall make equal payments of
principal and interest on this Note in the amount of $39,442.23
each. This Note will mature on October 30, 1999 (the "Maturity
Date), at which time the outstanding principal balance hereof and
all accrued interest hereon will be due and payable in full.
1.2 On the Maturity Date, the entire outstanding Principal Balance,
together with all accrued and unpaid interest and any other charges due
under this Note shall be due and payable.
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1.3 Each payment shall be credited first to amounts owing by Borrower
to Lender other than Principal Balance and interest, second to interest,
and third to the Principal Balance.
1.4 Borrower shall have the right to prepay this Note in whole or in
part, on any payment date hereunder, without premium or penalty. All
prepayments shall be applied as set forth in Section 1.3 above.
1.5 Borrower shall receive a discount for early payment of the Note as
follows:
a. If the outstanding principal balance of this Note is repaid in
full before November 30, 1997, the Borrower will receive an early
payment discount equal to eight percent (8%) of the outstanding
principal balance of this Note on the date of repayment. In order to
receive the discount, the Borrower must repay all outstanding accrued
interest under this Note and any other sums owed to Lender on the date
of early payment.
b. If the outstanding principal balance of this Note is repaid in
full before November 30, 1998, the Borrower will receive an early
payment discount equal to five percent (5%) of the outstanding
principal balance of this Note on the date of repayment. In order to
receive the discount, the Borrower must repay all outstanding accrued
interest under this Note and any other sums owed to Lender on the date
of early payment.
c. No early payment discount will be available after November 30,
1998.
1.6 Borrower shall have a one-time option, exercisable on or after
July 30, 1999, to extend the maturity of this Note until October 30, 2002
upon compliance with the terms and conditions set forth in the
Restructuring Agreement (as defined below).
2. Usury. No provision of this Note shall be construed to mean that
Borrower has paid or agreed to pay, directly or indirectly, under any
circumstance whatsoever, any interest in excess of that which lawfully may be
charged under any applicable laws relating to interest. If for any reason
interest in excess of the highest lawful rate shall at any time be paid
hereunder, any such excess shall constitute and shall be treated as a payment on
the principal amount due.
3. Manner and Place of Payment. Each payment shall be made in lawful money
of the United States of America and payable in immediately available funds at
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Lender's address set forth above or at such other place as the legal holder
hereof shall from time to time designate to Borrower in writing. Payments must
state Lender's loan number. If any payment of principal or interest on this Note
is due on a Saturday, a Sunday, or a legal holiday under the laws of the State
of Florida, such payments shall be made on the next succeeding business day, and
such extension of time shall be included in computing interest in connection
with such payment.
4. Default and Remedies.
4.1 This Note shall be in default upon the occurrence of any one of
the following events (each is an "Event of Default"):
(a) Any payment of principal, interest or other amount due under
this Note is not made within ten (10) days of the date said
payment is due and payable;
(b) There occurs an Event of a Default as defined in that
certain Restated Mortgage and Assumption Agreement, dated as
of December 31, 1996, among the Borrower, Sunshine Key
Associates Limited Partnership, a Florida limited
partnership (the "Debtor") and the Lender (the "Mortgage");
(c) The Borrower breaches or fails to perform any covenant or
agreement contained in the and Loan Restructuring Agreement,
dated as of December 31, 1996, among the Borrower, the
Debtor and the Lender (the "Restructuring Agreement") (the
Mortgage and the Restructuring Agreement being collectively
referred to as the "Loan Documents").
4.2 Upon the occurrence of an Event of Default and at any time
thereafter, Lender shall have the right, exercisable at Lender's sole
discretion, to declare the entire unpaid principal amount of this Note, all
accrued and unpaid interest on this Note, and any other charges due
hereunder, immediately due and payable without notice to Borrower. Borrower
expressly waives notice of the exercise of such right.
4.3 The failure of Lender to exercise this right of acceleration or
any other right to which Lender may be entitled shall not constitute a
waiver of such right or any other right in the event of any subsequent
default.
4.4 If this Note is not paid when due or if it becomes necessary in
the opinion of Lender to employ counsel to collect or enforce this note or
to protect the security for the same, Borrower and all other parties liable
for the payment hereunder shall pay to Lender, to the extent permitted by
applicable law, all costs, charges, disbursements and reasonable attorney's
fees incurred by Lender in collecting or
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enforcing payment hereof or in protecting the same, whether incurred in or
out of court, including without limitation, probate proceedings, bankruptcy
proceedings, and appeals.
4.5 If all or any portion of a payment due hereunder is not made
within ten (10) days after it is due, or if any principal or interest
becomes due and payable by Lender's exercise of its rights to accelerate
upon default, then all such amounts due but unpaid shall thereafter bear
interest from the date of such nonpayment or exercise, until payment in
full, at the lesser of the maximum contract interest rate allowed by law,
from time to time, or the rate of four percent (4%) per annum above the
Applicable Interest Rate (the "Default Rate").
4.6 In addition, Lender may charge and collect a late charge not to
exceed five percent (5%) of each payment accepted by Lender, which is more
than ten (10) days in arrears, to cover, among other things, the expense
involved in Lender's handling of delinquent payments.
4.7 Borrower grants Lender a lien and security interest in all
deposits, credits and property of Borrower now or hereafter in the
possession or control of Lender (or in transit to it), whether such
collateral is security for the repayment of this Note or other indebtedness
of Borrower to Lender, in any of Lender's various capacities. Borrower
grants to Lender an unconditional right of setoff for all of Borrower s
liabilities hereunder. Lender may at any time without notice to Borrower
apply such deposits, credits and property or any part thereof to any
liability of Borrower under this Note, the Mortgage, or any other Loan
Documents, even though such liability is unmatured.
5. Waivers.
5.1 To the full extent permitted by law, the Borrower and all
endorsers, sureties, guarantors and other persons who may become liable for
the payment hereof, severally waive demand, presentment, protest, notice of
dishonor or nonpayment, notice of protest, and any and all lack of
diligence in the enforcement or collection hereof, and consent to the
release of any of them from liability, and any renewals, extensions, or
other indulgences, all without notice to any of them.
5.2 All homestead exemptions, all appraisement and stay laws, and all
rights of redemption are hereby expressly waived to the full extent
permitted by law.
5.3 No delay or omission of Lender to exercise any right or power
hereunder shall impair such right or power or be a waiver of any default or
an acquiescence therein. Any single or partial exercise of any such right
or power shall not preclude other or future exercise of any other right. No
waiver shall be valid unless it is in writing signed by Lender, and then
only to the extent specifically set forth in the writing. All remedies
hereunder or afforded by law shall be cumulative, and all shall be
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<PAGE>
available to Lender until this Note and all other liabilities of Borrower
to Lender have been paid in full.
6. Taxes and Expenses. Borrower agrees to pay all taxes or duties assessed
and incurred against Lender upon or in connection with this Note, the debt
evidenced hereby, or the Mortgage or other security for this Note, excluding'
however, federal, state, and local income taxes. Borrower agrees to pay all
costs, expenses, and attorneys' fees incurred by Lender (through all phases of
litigation, including appellate and bankruptcy proceedings) in any proceeding
for collection of the debt evidenced hereby, in any foreclosure of the Mortgage,
in protecting or sustaining the lien and in any controversy arising from or
connected with this Note, the Mortgage, or other Loan Documents.
7. Security for the Note. This Note is secured by the Mortgage and related
Uniform Commercial Code financing statements, the Loan Documents, and all other
collateral security documents made by Borrower in favor of Lender encumbering
certain real and personal property more particularly described therein. All of
the items described in such documents constitute security for this Note, whether
filed of record or otherwise, and reference is made to the same for a further
description of the rights of Lender thereunder.
8. No Oral Agreements. This Note is the final expression of the agreement
between the parties. This document may not be contradicted by evidence of prior
or contemporaneous oral agreements of the parties. There are no unwritten oral
agreements between the parties.
9. Miscellaneous. This Note shall be binding upon Borrower and its heirs,
successors, and assigns, and shall inure to the benefit of Lender and its
successors, transferees and assigns, and all parties who may become holders of
this Note. This Note is made and executed under and shall in all respects be
governed and enforced by, and construed in accordance with, the laws of the
State of Florida, including, without limitation, matters of construction,
validity and performance. Each party to this Note acknowledges that it has
reviewed this Note and hereby agrees that the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Note. In the event any terms or
provisions of this Note are held invalid or unenforceable, the remaining terms
and conditions of this Note shall continue to be fully enforceable without
change, and this Note shall be interpreted as if the invalid or unenforceable
provision had not been a part hereof.
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IN WITNESS WHEREOF, Borrower has executed or caused this Note to be
executed by its duly authorized agents.
OHIO KEY I, INC., a Florida corporation
By: /s/ C. John Knorr, Jr.
---------------------------------------
Name: C. John Knorr, Jr.
-------------------------------------
Title: President
------------------------------------
[Corporate Seal]
OHIO KEY II, INC., a Florida corporation
By: /s/ C. John Knorr, Jr.
---------------------------------------
Name: C. John Knorr, Jr.
-------------------------------------
Title: President
------------------------------------
[Corporate Seal]
6
This instrument prepared by and return to:
Bernardo A. Portuondo
Haley, Sinagra & Perez, P.A.
100 South Biscayne Blvd., Suite 800
Miami, Florida 33131
RESTATED MORTGAGE AND ASSUMPTION AGREEMENT
This Agreement is made and entered into as of December 31, 1996 by and
among SUNSHINE KEY ASSOCIATES LIMITED PARTNERSHIP, a Florida limited partnership
(the "Borrower"), OHIO KEY I, INC., a Florida corporation, and OHIO KEY II,
INC., a Florida corporation (collectively, "Obligor") and WAMCO XXII, LTD., a
Texas limited partnership (the "Lender").
R E C I T A L S:
A. Borrower is indebted to Lender as evidenced by that certain Term Note,
dated February 25, 1988, in the original principal amount of $6,000,000, payable
to NCNB National Bank of Florida, corporate predecessor to NationsBank, N.A.
(South) (the "Original Lender") and is further indebted to Lender as evidenced
by that certain Term Note, dated December 20, 1988, in the original principal
amount of $1,100,000, payable to the Original Lender.
B. The notes described above were consolidated and renewed by that certain
Consolidated Note, dated December 20, 1988, in the original principal amount of
$7,100,000, payable to the Original Lender, which Note was further renewed by
that certain Amended and Restated Note, dated as of November 1, 1991, in the
original principal amount of $6,992,110.40 (the "Amended Note").
C. Borrower is further indebted to Lender as evidenced by that certain
Renewal Promissory Note, dated November 1, 1991, in the original principal
amount of $118,654.57, payable to the Original Lender (the "Additional Note")
(the Amended Note and the Additional Note are collectively referred to herein as
the "Existing Notes").
D. The Existing Notes are secured by, among other things, that certain
Mortgage and Security Agreement, dated February 25, 1988, from the Borrower to
the Original Lender recorded on March 1, 1988, in Official Records Book 1043, at
Page 0500 of the Public Records of Monroe County, Florida (the "Original
Mortgage"), as amended and modified by: (i) that certain Amendment No. 1 to
Mortgage and Security Agreement, dated December 20, 1988, between the Borrower
and the Original Lender, recorded on December 27, 1988 in Official Records Book
1076, at Page 1943 of the Public Records of Monroe County, Florida, (ii) that
certain Modification of Mortgage and Notice of
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Receipt of Future Advance, dated November 1, 1991, between the Borrower and the
Original Lender recorded on January 13, 1992 in Official Records Book 1196, at
Page 2044 of the Public Records of Monroe County, Florida, (iii) that certain
Modification of Mortgage and Notice of Receipt of Future Advance, dated December
1, 1992, between the Borrower and the Original Lender recorded on February 8,
1993 in Official Records Book 1244, at Page 0915 of the Public Records of Monroe
County, Florida, and (iv) that certain Modification of Mortgage, dated February
1, 1993, between the Borrower and the Original Lender recorded on May 12, 1993
in Official Records Book 1256, at Page 1834 of the Public Records of Monroe
County, Florida (the Original Mortgage, as modified by the foregoing agreements
is hereinafter referred to as the "Mortgage").
E. The Existing Notes are further secured by that certain Security
Agreement, dated February 25, 1988 (the "Security Agreement"), executed by
Borrower covering certain personal property more particularly described herein.
F. The Existing Notes are further secured by that certain UCC-1 Financing
Statement filed with the Florida Secretary of State on March 1, 1988, File No.
1880033009, as amended by UCC-3 Statement of Change filed with the Florida
Secretary of State on January 1, 1993, File No. 930000010500 (collectively, the
"UCC").
G. The Existing Notes are governed by that certain Loan Agreement, dated
November 25, 1988, between Borrower and Lender, as amended (as amended, the
"Loan Agreement").
H. The Existing Notes, the Mortgage, the Security Agreement, the UCC, the
Loan Agreement and all other written documents executed in connection therewith,
together with any written renewals, modifications, and/or extensions thereof are
collectively referred to as the "Existing Documents".
I. As a result of Borrower's failure to pay principal and interest on the
Notes when due, the Original Lender instituted legal proceedings to foreclose
the Mortgage and to collect the Notes in the Circuit Court of the Sixteenth
Judicial Circuit in and for Monroe County, Florida (the "State Court") pursuant
to Case No. 95-20205 CA 09 (the "Lawsuit").
J. Borrower subsequently filed for bankruptcy protection in the United
States Bankruptcy Court for the Southern District of Florida pursuant to Case
No. 96-10174-BKC-RAM, styled In Re: Sunshine Key Associates Limited Partnership.
K. The Bankruptcy Court granted the Original Lender complete relief from
the automatic stay and the State Court granted a Final Summary Judgment of
Foreclosure in favor of the Lender, as successor by assignment to the Original
Lender, in the amount of $8,587,479.34 as of May 2, 1996, plus interest at the
rate set forth in the Final Judgment, and court costs and attorneys fees.
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<PAGE>
L. By operation of law, the Existing Documents have merged into the Final
Judgment.
M. As an accommodation to Borrower, Lender entered into a Stipulation for
Settlement in the bankruptcy action, dated August 6, 1996, between Borrower and
Lender (the "Stipulation") pursuant to which Lender agreed to temporarily
forbear from prosecuting the Lawsuit and to reduce the amount of its secured
claim to $5,700,000, subject to the Borrower's performance of its obligations
under the Stipulation.
N. Under the terms of the Stipulation, Borrower and Lender have agreed to
restructure the indebtedness evidenced by the Final Judgment upon Lender's
receipt of the cash payments required by the Stipulation and Borrower's further
compliance with the other terms and conditions of the Stipulation.
O. The Borrower has filed its Modified Third Amended Plan of Reorganization
with the Bankruptcy Court incorporating the restructuring of the indebtedness
contemplated by the Stipulation and the Plan was confirmed by court order dated
October 29, 1996 (the "Confirmation Order").
P. Simultaneously with the execution hereof, Borrower, Obligor and Lender
are entering into a Loan Restructuring Agreement, of even date herewith (the
"Restructuring Agreement") redocumenting the indebtedness evidenced by the Final
Judgment to reflect the terms of the Stipulation, the Plan and the Confirmation
Order.
Q. The parties desire to execute this Restated Mortgage and Assumption
Agreement (the "Agreement") to redocument the Mortgage to reflect the terms of
the Restructuring Agreement.
A G R E E M E N T
FOR AND IN CONSIDERATION of the mutual covenants herein, ten dollars
($10.00), and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledge, Borrower, Obligor and Lender agree that (i)
Obligor shall, and hereby does, assume all of the Borrower's obligations under
the Mortgage, as merged into the Final Judgment, and restated pursuant hereto;
and (ii) the Mortgage, as merged into the Final Judgment, shall be restated in
its entirety to provide as follows:
"To secure the payment of all Obligations (as hereinafter defined) due or
to become due, and the performance and observance by the Obligor of all terms,
covenants and conditions contained in the instruments and documents evidencing
the Obligations and all other documents relating to or securing the Obligations,
and in order to charge the properties, interests and rights hereinafter
described with such payment, performance and observance, and for and in
consideration of the sum of One Dollar ($1.00) paid by the Lender to Obligor and
other valuable consideration, receipt of which
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is hereby acknowledged, Obligor has granted, bargained, sold and conveyed and
does by these presents grant, bargain, sell, convey, assign, mortgage, deliver,
set over, warrant and confirm unto the Lender and its successors and assigns,
and grant to the Lender and its successors and assigns a security interest in,
all of that certain Land, Improvements, Fixtures and Personalty, the Operating
Rights and Other Rights and Property (all of which are hereinafter sometimes
referred to collectively as the "Premises"), more particularly described as
follows:
(i) all that tract, piece or parcel of land in Monroe County, Florida more
particularly described in Exhibit "A" attached hereto and made a part
hereof consisting of Parcel 1, Parcel 2 and Parcel 3 (the "Land"); and
(ii) all buildings, structures and other improvements of every nature
whatsoever now or hereafter situated on the Land (the "Improvements"); and
(iii) all fixtures and building equipment, of every kind and nature
whatsoever, now or hereafter owned by Obligor and/or located in, on, about
or attached to the Land and Improvements or used or intended to be used
with or in connection with the construction, use, operation, maintenance or
enjoyment of the Land and Improvements or relating or appertaining thereto,
and all extensions, additions, improvements, betterments, renewals,
replacements or proceeds (including, but not limited to, insurance and
condemnation proceeds) of the foregoing, including, but not limited to, all
gas and electric fixtures and apparatus, plumbing fixtures and apparatus,
heating, ventilating and air conditioning fixtures and apparatus, carpeting
and other floor coverings, furniture, furnishings, building machinery,
building materials and supplies, sprinklers, fire extinguishers and other
safety and security equipment and apparatus, elevators, engines, motors,
ranges and other cooking apparatus, washers, dryers, water heaters,
refrigerators, appliances, window screens, awnings, storm sashes, mirrors,
mantels, furniture, pool equipment, and all the right, title and interest
of Obligor in any such property subject to or covered by a security
agreement, conditional sales contract, chattel mortgage or similar lien or
claim together with the benefit of any deposits or payments now or
hereafter made by either Obligor on its behalf, all of which are hereby
declared and shall be deemed to be fixtures and accessions to the freehold
and a part of the Land and Improvements as between the parties hereto and
all persons claiming by, through or under them, and which shall be deemed
to be a portion of the security for the indebtedness herein mentioned and
to be covered by this Restated Mortgage the "Fixtures and Personalty"); and
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(iv) all easements, rights-of-way, gores of land, vaults, streets, ways,
alleys, passages, sewer rights, waters, water courses, water rights and
powers, and all estates, rights, titles, interests, privileges, liberties,
tenements, hereditaments and appurtenances whatsoever, in any way
belonging, relating to or appertaining to the Premises, or any part
thereof, or which hereafter shall in any way belong, relate or be
appurtenant thereto, whether now owned or hereafter acquired by Obligor,
and the reversion and reversions, remainder and remainders, and rents,
issues, profits, revenues thereof (including but not limited to, all
condemnation payments, insurance proceeds, payments under leases and
tenancies, sale proceeds, purchase deposits, tenant security deposits and
escrow funds), and all the estate, right, title, interest, property,
possession, claim and demand whatsoever at law, as well as in equity, of
Obligor of, in and to the same (the "Other Rights and Property);
TO HAVE AND TO HOLD the Premises and all estate therein, together with all
the rights, privileges, and appurtenances hereunto belonging, unto the said
Lender and its successors and assigns forever.
PROVIDED, HOWEVER, that if the Obligor shall promptly pay or cause to be
paid to the Lender all of the Obligations, at the times and in the manner
stipulated therein, herein, and in all other instruments securing the
Obligations, all without any deduction or credit for taxes or other similar
charges paid by the Obligor, and shall keep, perform and observe all the
covenants and promises in the instruments and documents evidencing or related to
the Obligations and secured by the lien of this Restated Mortgage, and any
renewal, extension or modification thereof, and in this Restated Mortgage, to be
kept, performed or observed by Obligor, then this Restated Mortgage, and all the
properties, interest and rights hereby granted, conveyed and assigned shall
cease and be void, but shall otherwise remain in full force and effect.
Obligor does hereby expressly covenant, agree and stipulate with the Lender
as follows:
ARTICLE 1.
Section 1.1 Defined Terms. In addition to terms defined elsewhere in this
Restated Mortgage, the following terms shall have the meanings indicated below,
which meanings shall be equally applicable to both the singular and the plural
forms of such terms:
"Restructuring Agreement" shall have the meaning indicated in the recitals
to this Restated Mortgage.
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"Obligations" shall include:
(a) That certain Restated Promissory Note, of even date herewith, in the
principal amount of $4,700,000, from the Obligor to the Lender, together with
interest thereon as set forth in said Restated Promissory Note, the final
payment of which is due on or before October 30, 1999 (the "Restated Note"),
which Restated Note by reference is made a part hereof to the same extent as if
set out in full herein.
(b) Any and all renewals, modifications, amendments and replacements of the
Restated Note, together with any and all other indebtedness, obligations and
liabilities of the Obligor to the Lender now or hereafter existing, incurred or
created under the Restructuring Agreement or any of the Related Documents;
(c) All costs incurred by the Lender to obtain, preserve and enforce this
Restated Mortgage and the lien created hereunder, collect the Obligations and to
maintain and preserve the Premises, including without limitation, taxes,
assessments, insurance premiums, repairs, reasonable attorneys' fees and legal
expenses, and expenses of sale; and
(d) Any and all other note or notes executed pursuant to Section 2.15
hereof and secured by the lien of this Restated Mortgage, together with any and
all renewals, modifications, amendments and replacements thereof.
"Permitted Encumbrances" shall mean the liens, charges and encumbrances set
forth on Exhibit B attached hereto and made a part hereof.
"Related Documents" shall mean the Restated Note, the Restructuring
Agreement and any other loan documents executed in connection therewith.
ARTICLE 2.
Section 2.1 Payment of Obligations. Obligor expressly agrees to pay the
sums required to be paid by Obligor pursuant to the provisions of this Restated
Mortgage, at the times and in accordance with the provisions of this Restated
Mortgage.
Section 2.2 Warranty of Title. OHIO KEY I, INC., a Florida corporation, as
to Parcel 1, and OHIO KEY II, INC., a Florida corporation, as to Parcel 2,
warrant and represent that they are lawfully seized and possessed of an
indefeasible and marketable estate in fee simple in the respective portions of
the Land and Improvements thereon consisting of Parcel 1 and of Parcel 2, as
well as good title, free and clear of all encumbrances and liens (other than
Permitted Encumbrances), to the respective Fixtures and Personalty and Other
Rights and Property located thereon or related thereto, and have good right,
full power and lawful authority in law and equity to convey, mortgage and
encumber the same in fee simple by way of this Restated Mortgage; that the same
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are free and clear of all liens, charges and encumbrances whatsoever (other than
Permitted Encumbrances) and OHIO KEY I, INC., a Florida corporation, as to
Parcel 1, and OHIO KEY II, INC., a Florida corporation, as to Parcel 2, will
fully warrant and forever defend the title thereto against the claims of all
persons whomsoever. No representations or warranties are given regarding either
Obligor's title to Parcel 3.
Section 2.3 Payment of Taxes, Liens and Utility Charges.
(a) Obligor shall pay or cause to be paid on or before the due date thereof
all taxes, assessments, dues, fines, fees, impositions and public charges of
every character whatsoever, whether general or special, now or hereafter levied,
assessed, confirmed or imposed on or in respect of, or which may be a lien upon,
the Premises, or any part thereof, or any right, interest or estate therein, and
shall promptly submit to the Lender such evidence of the due and punctual
payment thereof as the Lender may require.
(b) Obligor will keep said Premises free from all lien claims of every
kind, whether paramount or subordinate to this Restated Mortgage (except for
Permitted Encumbrances), and Obligor will have any such liens discharged
immediately. Obligor will fully comply with the provisions of the documents
creating or relating to the liens set forth in Exhibit "B", if any, and any
default under any such documents shall constitute an event of default hereunder.
(c) Obligor further agrees to pay all earnings, income, profits and excess
profits taxes and other governmental charges levied, assessed or imposed by the
United States of America or by any state, county, municipality or other taxing
authority upon Obligor or in respect of the Premises, or any part thereof, which
if unpaid, would become a lien or charge upon the Premises or any part thereof.
(d) Obligor will promptly pay or cause to be paid all charges made by
utility companies, whether public or private, for services furnished or used in
connection with the Premises.
(e) In the event of the passage of any state, federal, municipal or other
governmental law, order, rule or regulation, in any manner changing or modifying
the laws now in force governing the taxation of debts secured by mortgages or
the manner of collecting taxes so as to affect adversely the Lender, Obligor
will promptly pay any such tax on or before the due date thereof; and if Obligor
fails to make such prompt payment or if any such state, federal, municipal or
other governmental law, order, rule or regulation prohibits Obligor from making
such payment or would penalize the Lender if Obligor makes such payment, then
the entire principal balance of the Obligations secured by this Restated
Mortgage and all interest accrued thereon shall, without notice, immediately
become due and payable at the option of the Lender.
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Section 2.4 Insurance.
(a) Obligor shall procure for, deliver to and continuously maintain for the
benefit of the lender original paid up insurance policies of such insurance
companies, in such amounts, in such form and substance, and with such expiration
dates, and containing non-contributory standard mortgagee clauses, their
equivalent or a mortgagee loss payable endorsement in favor of the Lender, as
shall be satisfactory to the Lender, providing the following types of insurance
covering the Premises and the interests and liabilities incident to the
ownership, possession and operation thereof;
(i) insurance against loss or damage by fire, lightning, windstorm,
flood, hail, explosion, riot, riot attending a strike, civil commotion,
aircraft, vehicles, smoke, vandalism and malicious mischief and against
such mischief and against such other hazards as, under good insurance
practices, from time to time are insured against for properties of similar
character and location, the amount of which insurance shall be not less
than the full replacement cost of the Premises without deduction for
depreciation, and which policies of insurance shall contain satisfactory
replacement cost endorsements.
(ii) Lender acknowledges that the types of insurance coverage
currently in effect with respect to the Premises are sufficient and no
other types of insurance coverage will be required under this Mortgage.
Notwithstanding the foregoing, Obligor's insurance coverage must otherwise
comply with the terms of this Mortgage.
(b) The Lender is hereby authorized and empowered, at its option, to adjust
or compromise any loss under any insurance policies maintained pursuant to this
Section, and to collect and receive the proceeds from any such policy or
policies. Each insurance company is hereby authorized and directed to make
payment for all such losses directly to the Lender, instead of to Obligor and
the Lender jointly. In the event any insurance company fails to disburse
directly and solely to the Lender but disburses instead either solely to Obligor
or to Obligor and the Lender jointly, Obligor agrees immediately to endorse and
transfer such proceeds to the Lender. Upon the failure of Obligor to endorse and
transfer such proceeds as aforesaid, the Lender may execute such endorsements or
transfers for and in the name of Obligor and Obligor hereby irrevocably appoints
the Lender as Obligor's agent and attorney-in-fact so to do. After deducting
from said insurance proceeds all of its expenses incurred in the collection and
administration of such sums, including attorneys' fees, the Lender shall apply
the net proceeds or any part thereof to the repair or restoration of the
Premises; provided, however, that if an Event of Default has occurred and is
continuing, the Lender, at its option, may apply the net proceeds or any part
thereof (i) to the payment of the Obligations secured hereby, whether or not due
and in whatever order the Lender elects, (ii) to the repair and/or restoration
of the Premises, and/or (iii) for any other purposes or objects for which the
Lender is entitled to advance funds under this Restated Mortgage,
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all without affecting the lien and security interest created by this Restated
Mortgage, and any balance of such monies then remaining shall be paid to Obligor
are the person or entity lawfully entitled thereto. The Lender shall not be held
responsible for any failure to collect any insurance proceeds due under the
terms of any policy regardless of the cause of such failure. The Lender agrees
that any proceeds of insurance resulting from Debtor's lawsuit against its
current insurance carrier for lighting damage at the Premises shall not be
subject to the lien of this Mortgage or the provisions of this Section;
provided, however, that if an Event of Default occurs and is continuing, such
proceeds shall be applied as provided in the immediately preceding sentence.
(c) At least thirty (30) days prior to the expiration date of each policy
maintained pursuant to this Section, a renewal or replacement thereof
satisfactory to the Lender shall be delivered to the Lender. Obligor shall
deliver to the Lender receipts evidencing the payment for all such insurance
policies and renewals or replacements. Obligor hereby assigns to the Lender all
unearned premiums under any insurance policies related in any way to the
Premises as further security hereunder. In the event of the foreclosure of this
Restated Mortgage or any other transfer of title to the Premises in
extinguishment or partial extinguishment of the Obligations, all right, title
and interest of Obligor in and to all insurance policies then in force shall
pass to the purchaser or to the Lender, its nominee or other transferee of the
Premises, as the case may be, and the Lender is hereby irrevocably appointed by
Obligor as attorney-in-fact for Obligor to assign any such policy to said
purchaser or to the Lender, its nominee or other transferee, as the case may be,
without accounting to Obligor for any unearned premiums thereon.
Section 2.5 Condemnation.
(a) Lender and Obligor acknowledge and agree that Parcel 1 consists of real
estate and certain improvements upon which Obligor conducts its business
operations and Parcel 2 and Parcel 3 consist of unimproved real estate. If more
than ten percent (10%) of the total square footage of Parcel 1 shall be damaged
or taken through condemnation (which term when used in this Restated Mortgage
shall include any damage or taking by any governmental authority and any
transfer by private sale in lieu thereof), either temporarily or permanently,
the entire indebtedness secured hereby shall, at the option of the Lender,
become immediately due and payable. Obligor, immediately upon obtaining
knowledge of any proposed taking of the Premises or any part thereof. will
notify the Lender. The Lender shall be entitled to all compensation, awards,
damages, claims, rights of action, proceeds, and other payments, and the right
thereto, and is hereby authorized, at its option, to commence, appear in and
prosecute, in its own or Obligor's name, any action or proceeding relating to
any condemnation, and to settle or compromise any claim in connection
therewith. All such compensation, awards, damages, claims, rights of action,
proceeds and other payments, and the right thereto are hereby assigned by
Obligor to the Lender and the Lender is authorized, at its option, to collect
and receive the same and to give proper receipts and acquittances therefor
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without any obligation to question the amount thereof. After deducting from said
condemnation proceeds all of its expenses incurred in the collection and
administration of such sums, including attorneys' fees, the Lender may apply the
net proceeds or any part thereof, at its option, (i) to the payment of the
indebtedness secured hereby, whether or not due and in whatever order the Lender
elects, (ii) for any other purposes or objects for which the Lender is entitled
to advance funds under this Restated Mortgage, all without affecting the
security interest created by this Restated Mortgage, and any balance of such
monies then remaining shall be paid to Obligor or any other person or entity
lawfully entitled thereto. Obligor agrees to execute such further assignments of
any compensation, awards, damages, claims, rights of action, proceeds, and other
payments, as the Lender may require.
(b) Upon the occurrence and during the continuance of an Event of Default,
the Lender shall be entitled to all compensation, awards, damages, claims,
rights of action, proceeds, and other payments, and the right thereto, relating
to the condemnation of all or any portion of Parcel 1, Parcel 2 or Parcel 3,
notwithstanding the limitations set forth in clause (a) above. In addition, the
other provisions of clause (a) above concerning the Lender's rights and
application of proceeds in the event of a condemnation action shall apply.
Section 2.6 Care of Premises.
(a) Obligor will keep the Premises in good condition and repair, will not
commit or suffer any waste and will not do or suffer to be done anything which
will increase the risk of fire or other hazard to the Premises or any part
thereof or which would or could result in the cancellation of any insurance
policy carried with respect to the Premises.
(b) Obligor will not construct any improvements on the Premises nor remove,
demolish or alter the design or structural character of any building without the
prior written consent of the Lender, and Obligor will not permit the removal,
demolition or alteration thereof.
(c) If the Premises or any part thereof is damaged by fire or other cause,
Obligor will give immediate oral and written notices of the same to the Lender.
(d) The Lender is hereby authorized and empowered to enter and to authorize
others to enter upon any or all of the Premises, at any time and from time to
time, to inspect the same, to perform or observe any covenants, conditions or
terms which Obligor shall fail to perform, meet or comply with, or for any other
purpose in connection with the protection or preservation of the Lender's
security, without thereby becoming liable to Obligor or any person in possession
holding under Obligor. Obligor agrees that it will open and cause its agents,
managers, operators, tenants or lessees to open to the Lender all areas within
the Premises reasonably necessary or convenient with respect to the requirements
hereof.
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(e) Obligor will promptly comply with all present and future laws,
ordinances, rules and regulations of any governmental authority affecting the
Premises or any part thereof.
(f) If all or any part of the Premises shall be damaged by fire or other
casualty, Obligor will promptly restore the Premises to the equivalent of its
original condition and if a part of the Premises shall be damaged through
condemnation, Obligor will promptly restore, repair or alter the remaining
portions of the Premises in a manner satisfactory to the Lender. Notwithstanding
the foregoing, Obligor shall not be obligated so to restore, repair or alter
unless in each instance, the Lender agrees to make available to Obligor
(pursuant to a procedure satisfactory to the Lender) any net insurance or
condemnation proceeds actually received by the Lender hereunder in connection
with such casualty loss, to the extent such proceeds are required to defray the
expense of such restoration, repair or alteration; provided, however, that the
insufficiency of any such insurance or condemnation proceeds to defray the
entire expense of restoration, repair or alteration shall in no way relieve
Obligor of its obligation to restore, repair or alter. In the event all or any
portion of the Premises shall be damaged or destroyed by fire or other casualty
or by condemnation, Obligor shall promptly deposit with the Lender a sum equal
to the amount by which the estimated cost of the restoration of the Premises (as
determined by the Lender in its good faith judgment) exceeds the actual net
insurance or condemnation proceeds with respect to such damage or destruction.
Section 2.7 Further Assurances: After Acquired Property. At any time, and
from time to time, upon request by the Lender, Obligor will make, execute and
deliver or cause to be made, executed and delivered, to the Lender and, where
appropriate, cause to be recorded or rerecorded and/or filed or refiled at such
time and from time to time, and in such offices and places as shall be deemed
desirable by the Lender, any and all such other and further mortgages, security
agreements, financing statements, continuation statements, instruments of
further assurance, certificates and other documents as may, in the opinion of
the Lender, be necessary or desirable in order to effectuate, complete, or
perfect, or to continue and preserve (i) the obligations of Obligor under the
instruments or documents evidencing the Obligations, and (ii) the lien of this
Restated Mortgage as a first and prior lien upon all of the Premises, whether
now owned or hereafter acquired by Obligor. Upon any failure by Obligor so to
do, the Lender may make, execute, record, file, rerecord and/or refile any and
all such mortgages, security agreements, financing statements, continuation
statements, instruments, certificates and documents for and in the name of
Obligor, and Obligor hereby irrevocably appoints the Lender the agent and
attorney-in-fact of Obligor so to do. The lien hereof will automatically attach,
without further act, to all after acquired property attached to and/or used in
the operation of the Premises or any part thereof.
Section 2.8 Subrogation. The Lender shall be subrogated to the claims and
liens of all parties whose claims or liens are discharged or paid with the
proceeds of the Obligations secured hereby.
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Section 2.9 Expenses. Obligor will promptly pay or reimburse the Lender,
upon demand therefor, for all attorneys' fees, costs and expenses incurred by
the Lender in any proceeding involving the estate of a decedent or an insolvent,
or in any action, legal proceeding or dispute of any kind in which the Lender is
made a party, or appears as a party, affecting the Obligations secured hereby,
this Restated Mortgage or the interest created herein, or the Premises,
including but not limited to the foreclosure of this Restated Mortgage, any
proceeding relating to bankruptcy, insolvency or other relief for debtors, any
condemnation action involving the Premises or any action to protect the security
hereof; and all such amounts shall be added to the Obligations secured by the
lien of this Restated Mortgage.
Section 2.10 Assignment of Contracts and Other Agreements. As additional
collateral and further security for the Obligations, Obligor does hereby assign
to the Lender the interest of Obligor in and to any and all contracts, leases,
rental agreements, franchise agreements, management contracts, construction
contracts, and other contracts, licenses and permits now or hereafter affecting
the Premises, or any part thereof, and Obligor agrees to execute and deliver to
the Lender such additional instruments, in form and substance satisfactory to
the Lender, as may hereafter be requested by the Lender to evidence and confirm
said assignment; provided, however, that acceptance of any such assignment shall
not be construed as a consent by the Lender to any contract, lease, rental
agreement, franchise agreement, management contract, construction contract, or
other contract, license or permit, or to impose upon the Lender any obligation
with respect thereto. Upon the occurrence and during the continuance of an Event
of Default, Obligor shall not cancel or permit the cancellation of any such
contract, lease, rental agreement, franchise agreement, management contract,
construction, contract, or other contract, license or permit, or modify any of
said instruments, or accept or permit to be made, any prepayment of any
installment of rent or fees thereunder (except for security deposits and except
for the prepayment of rent for not more than two (2) months in advance) without
first obtaining on each occasion the written approval of the Lender, which
approval will not be unreasonably withheld. Obligor shall faithfully keep and
perform, or cause to be kept and performed, all of the covenants, conditions,
and agreements contained in each of said instruments, now or hereafter existing,
on the part of Obligor to be kept and performed and shall at all times do all
things necessary to compel performance by each other party to said instruments
of all obligations, covenants and agreements by such other party to be performed
thereunder.
Section 2.11 Assignment of Rents, Issues and Profits. Obligor hereby
assigns and transfers to the Lender all the rents, issues and profits of the
Premises, whether now or hereafter accruing, and hereby gives to and confers
upon the Lender the right, power and authority to collect such rents, issues and
profits. Obligor irrevocably appoints the Lender its true and lawful
attorney-in-fact, at the option of the Lender at any time and from time to time,
to demand, receive and enforce payment, to give receipts, releases and
satisfactions, and to sue, in the name of Obligor or the Lender, for all such
rents,
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issues and profits and apply the same to the Obligations secured hereby;
provided, however, that Obligor shall have the right to collect such rents,
issues and profits (but rents shall not be collected for more than two months in
advance) prior to or at any time there is not a default or an event of default
under any of the instruments or documents evidencing or securing any of the
Obligations, the Related Documents or this Restated Mortgage. The assignment of
rents, issues and profits of the Premises in this Section is intended to be an
absolute assignment from Obligor to the Lender and not merely the passing of a
security interest but Obligor shall have the right to collect the same so long
as no default or event of default under any of the instruments or documents
evidencing or securing any of the Obligations, the Related Documents or this
Restated Mortgage shall have occurred and be continuing.
Upon any occurrence of a default or an event of default under any of the
instruments or documents evidencing or securing any of the Obligations, the
Related Documents or this Restated Mortgage, the Lender may, at any time without
notice, either in person, by agent or by a receiver appointed by a court, and
without regard to the adequacy of any security for the Obligations hereby
secured, enter upon and take possession of the Premises, or any part thereof,
and in its own name sue for or otherwise collect such rents, issues and profits,
including those past due and unpaid, and apply the same in accordance with the
provisions of 3.3(b) hereof. The collection of such rents, issues and profits,
or the entering upon and taking possession of the Premises, or the application
thereof as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done in response to such default or pursuant to
such notice of default.
Obligor shall not execute any other assignment of the income, rents, issues
or profits, or any part thereof, from the Premises to any person or entity other
than the Lender, unless the Lender shall first consent to such assignment in
writing and unless such assignment shall expressly provide that it is
subordinate to the assignment contained in this Restated Mortgage and any
assignment executed pursuant hereto or concerning the Obligations secured
hereby.
Section 2.12 Sale or Encumbrance of Premises; Secondary Financing. Obligor
hereby acknowledges to the Lender that (i) the identity and expertise of Obligor
was and continues to be material circumstances upon which the Lender has relied
in connection with, and which constitute valuable consideration to the Lender
for, the extending to the Obligor of the Obligations; and (ii) any change in
such identity or expertise could materially impair or jeopardize the security of
the payment of the Obligations to the Lender that Obligor shall not sell,
transfer, convey, mortgage, encumber or otherwise dispose of the Premises or any
part thereof or any interest therein or engage in secondary financing with
respect thereto without the prior written consent of the Lender; provided,
however, that the subordinate mortgages described in Exhibit "B" shall not be
deemed to violate this provision so long as such mortgages are and remain in all
respects subordinate to this Restated Mortgage. Any change in the legal or
equitable title
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of the Premises or in the beneficial ownership of the Premises, whether or not
of record and whether or not for consideration, or any sale or other disposition
of any interest of Obligor shall be deemed transfer of an interest in the
Premises.
In the event that ownership of the Premises, or any part thereof, becomes
vested in any person or persons other than Obligor, without the prior written
approval of the Lender, the Lender, may without notice to Obligor, waive such
default and deal with such successor or successors in interest with reference to
this Restated Mortgage, in the same manner as with Obligor, without in any way
releasing, discharging or otherwise affecting the liability of Obligor
hereunder, or for the indebtedness hereby secured. No sale of the Premises, no
forbearance on the part of the Lender, no extension of the time for the payment
of any of the Obligations or any change in the terms thereof consented to by the
Lender shall in any way whatsoever operate to release, discharge, modify, change
or affect the original liability of Obligor herein, either in whole or in part,
nor shall the full force and effect of this lien be altered thereby. Any deed
conveying the Premises, or any part thereof, shall provide that the grantee
thereunder assumes all of the grantor's obligations under this Restated
Mortgage, the Related Documents and all other instruments or agreements
evidencing or securing the repayment of the Obligations. ln the event such deed
shall not contain such assumption, the grantee under such deed shall
nevertheless be deemed to have assumed such obligations by acquiring the
Premises or such portion thereof subject to this Restated Mortgage.
Section 2.13 Environmental Condition of Premises. Obligor hereby warrants
and represents to the Lender that, to the best of its knowledge and belief:
(a) the Premises are now and at all times hereafter will continue to be in
full compliance with all Federal, State and local environmental laws and
regulations, including but not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (CERCLA), Public Law No.
96-510, 94 Stat. 2767, and the Superfund Amendments and Reauthorization Act of
1986 (SARA), Public Law No. 99-499, 100 Stat. 1616, and
(b) (i) as of the date hereof there are no hazardous materials, substances,
waste or other environmentally regulated substances (including without
limitation, any materials containing asbestos) located on, in or under the
Premises or used in connection therewith, or (ii) Obligor has fully disclosed to
the Lender in writing the existence, extent and nature of any such hazardous
material, substance, waste or other environmentally regulated substance, which
Obligor is legally authorized and empowered to maintain on, in or under the
Premises or use in connection therewith, Obligor have obtained and will maintain
all licenses, permits and approvals required with respect thereto, and is and
will remain in full compliance with all of the terms, conditions and
requirements of such licenses, permits and approvals. Obligor further warrants
and represents that it will promptly notify the Lender of any change in the
environmental condition of the Premises or in the nature or extent of any
hazardous materials,
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substances or wastes maintained on, in or under the Premises or used in
connection therewith, and will transmit to the Lender copies of any citations,
orders, notices or other material governmental or other communication received
with respect to any other hazardous materials, substances, waste or other
environmentally regulated substance affecting the Premises.
Obligor shall provide the Lender with results of any test wells located on
the property annually.
Obligor hereby indemnifies and holds harmless the Lender from and against
any and all damages, penalties, fines, claims, suits, liabilities, costs
(including cleanup costs), judgments and expenses (including attorneys',
consultant's or expert's fees and expenses) of every kind and nature incurred,
suffered by or asserted against the Lender as a director indirect result of:
(a) any warranty or representation made by Obligor in this paragraph being
or becoming false or untrue in any material respect, or
(b) any requirement under any law, regulation, or ordinance, local, State
or Federal, which requires elimination or removal of any hazardous materials,
substances, waste or other environmentally regulated substances by the Lender,
Obligor or any transferee of Obligor or the Lender.
Obligor's obligations hereunder shall not be limited to any extent by the
terms of the Restated Note secured hereby, and, as to any condition, act or
occurrence prior to payment in full and satisfaction of the Restated Note which
gives rise to liability hereunder, shall continue, survive and remain in full
force and effect notwithstanding payment in full and satisfaction of the
Restated Note and this Restated Mortgage, or foreclosure of this Restated
Mortgage, or delivery of a deed in lieu of foreclosure.
Section 2.14 Security Agreement. Obligor hereby grants to the Lender a
security interest in the Fixtures and Personalty for the purpose of securing all
obligations of the Obligors set forth in the Restated Note and in this Restated
Mortgage. This instrument is a self-operative agreement with respect to the
above described property, but Obligor agrees to execute and deliver on demand
such other security agreements, financing statements and other instruments as
the Lender may request. Obligor hereby warrants, represents and covenants as
follows:
(a) Except for the security interest granted hereby, Obligor is, and as to
portions of the Fixtures and Personalty to be acquired after the date hereof
will be, the sole owner of the Fixtures and Personalty, free from any adverse
lien, security interest, encumbrance or adverse claims thereon of any kind
whatsoever. Obligor will notify the Lender of, and will defend the Fixtures and
Personalty against, all claims and demands of all persons at any time claiming
the same or any interest therein.
15
<PAGE>
(b) Upon the occurrence and during the continuance of an Event of Default,
Obligor will not lease, sell, convey or in any manner transfer the Fixtures and
Personalty without the prior written consent of the Lender.
(c) The Fixtures and Personalty are not and will not be used or bought for
personal, family or household purposes.
(d) The Fixtures and Personalty will be kept on or at the Premises and
Obligor will not remove the Fixtures and Personalty from the Premises without
the prior written consent of the Lender, except such portions or items of
Fixtures and Personalty which are consumed or worn out in ordinary usage, all of
which shall be promptly replaced by Obligor.
(e) Obligor maintains a place of business in the State of Florida and
Obligor will immediately notify the Lender in writing of any changes in its
place of business as set forth in the beginning of this Restated Mortgage.
(f) At the request of the Lender, Obligor will join the Lender in executing
one or more financing statements and renewals and amendments thereof pursuant to
the Uniform Commercial Code of Florida in form satisfactory to the Lender, and
will pay the cost of filing the same in all public offices wherever filing is
deemed by the Lender to be necessary or desirable.
(g) All covenants and obligations of Obligor contained herein relating to
the Land shall be deemed to apply to the Fixtures and Personalty whether or not
expressly referred to herein.
(h) This Restated Mortgage constitutes a Security Agreement as that term is
used in the Uniform Commercial Code of Florida.
Section 2.15 Future Advances. This Restated Mortgage is given to secure not
only existing Obligations, but also such future advances, whether such advances
are obligatory or are to be made at the option of the Lender, or otherwise, as
are made within twenty years from the date hereof, to the same extent as if such
future advances were made on the date of the execution of this Restated
Mortgage. The total amount of Obligations that may be so secured may decrease or
increase from time to time, but the total unpaid balance so secured at any one
time shall not exceed $6,000,000.00, plus interest thereon, and any
disbursements made for the payment of taxes, levies or insurance on the
Premises, with interest on such disbursements.
16
<PAGE>
ARTICLE 3.
Section 3.1 Event of Default. The word "default" and the phrase "event of
default", wherever used in this Restated Mortgage, shall mean and include any
one or more of the following events:
(a) Failure by the Obligor to pay, as and when due and payable, any
installments of principal and/or interest on the Restated Note, the full
outstanding principal amount due at maturity and any accrued and unpaid interest
thereon, or any real estate taxes on the Premises on or before the date
specified for payment thereof in this Restated Mortgage or any required deposits
for insurance premiums, taxes, assessments and other similar charges, or any
other portion of the Obligations secured hereby; or
(b) Failure by Obligor to duly keep, observe and perform any other
covenant, condition or agreement of this Restated Mortgage to be kept or
performed by Obligor, and such failure continues for a period of ten (10) days
after notice thereof has been given to Obligor by the Lender; or
(c) The failure by the Obligor duly to observe or perform any term,
covenant, condition or agreement in any of the Related Documents and such
failure continues beyond any period of grace set forth in the Related Documents
under which such failure has occurred; or
(d) Any representation or warranty of Obligor contained in this Restated
Mortgage or of the Obligor in any of the other Related Documents or any
representation or warranty otherwise made by any party in connection with the
Obligations or any of them proves to be untrue or misleading in any material
respect; or
(e) Obligor shall (1) voluntarily terminate operations or apply for or
consent to the appointment of, or the taking possession by, a receiver,
custodian, trustee or liquidator, or of all or of a substantial part of its
assets, (2) admit in writing its inability, or be generally unable, to pay its
debts as the debts become due, (3) make a general assignment for the benefit of
its creditors, (4) commence a voluntary case under the United States Bankruptcy
Code (as now or hereafter in effect), (5) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, (6) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any petition filed
against it in a voluntary case under the Bankruptcy Code, or (7) take any
corporate action for the purpose of affecting any of the foregoing; or
(f) Without its application, approval or consent, a proceeding shall be
commenced in any court of competent jurisdiction, seeking in respect of Obligor:
the liquidation, reorganization, dissolution, winding-up, or composition or
readjustment of
17
<PAGE>
debt, the appointment of a trustee, receiver, liquidator or the like of Obligor
or of all or any substantial part of the assets of Obligor, or other like relief
in respect of Obligor under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts unless such
proceeding is contested in good faith by Obligor; and, if the proceeding is
being contested in good faith, the same shall continue undismissed, or unstayed
and in effect, for any period of 60 consecutive days, or an order for relief
against Obligor shall be entered in any involuntary case under the Bankruptcy
Code; or
(g) Obligor shall sell, transfer, convey, mortgage, encumber (except, as
permitted pursuant to Section 2.12 hereof) or otherwise dispose of the Premises
or any part thereof or any interest therein, or engage in secondary financing
with respect to the Premises in violation of Section 2.12 above; or
(h) The institution of foreclosure or other proceedings to enforce any
mortgage, security interest, lien or encumbrance of any kind on the Premises or
any portion thereof, whether superior or subordinate to this Restated Mortgage.
Section 3.2 Lender's Rights, Acceleration, Foreclosure and Sale. If an
event of default shall have occurred and shall be continuing, then the whole of
the Obligations secured hereby shall, at the option of the Lender, without
notice or demand, become immediately due and payable for all purposes, time
being of the essence of this Restated Mortgage, anything in the instruments or
documents evidencing or related to the Obligations or this Restated Mortgage to
the contrary notwithstanding, and, thereupon, or at any time during the
existence of any event of default, the Lender may proceed by suit or suits at
law or in equity or by any other appropriate proceeding or remedy to (i) enforce
the payment of the Obligations or the performance by the Obligors of any other
term or provision of the instruments or documents evidencing or related to the
Obligations or any of the Related Documents or enforce any other rights
possessed by the Lender, (ii) foreclose this Restated Mortgage by judicial
proceedings, and/or (iii) pursue any other right or remedy available to the
Lender. Any failure of the Lender to exercise any of said options shall not
constitute a waiver of the right to exercise the same at any other time.
Section 3.3 Right of Lender to Enter and Take Possession; Transfer of
Operating Rights.
(a) If an event of default shall have occurred and be continuing, Obligor,
upon demand of the Lender, shall forthwith surrender to the Lender the actual
possession of the Premises, and the Lender may enter and take possession of the
Premises and may exclude Obligor and Obligor's agents and employees wholly
therefrom, subject to applicable law.
18
<PAGE>
(b) Upon every such entering and taking of possession, the Lender may hold,
store, use, operate, manage, control, and maintain the Premises and conduct the
business thereof, and, from time to time, (i) make or perform all necessary and
proper construction, repairs, renewals, replacements, additions, betterments and
improvements thereto and thereon and purchase or otherwise acquire additional
fixtures, personally and other property; (ii) insure or keep the Premises
insured; (iii) manage and operate the Premises and exercise all the rights and
powers of Obligor in its name and otherwise with respect to the same and (iv)
enter into any and all agreements with respect to the exercise by others of any
of the powers herein granted the Lender, all as the Lender may from. time to
time determine to be to its best interest. The Lender may collect and receive
all of the income, rents, profits, issues and revenues of the Premises,
including any past due as well as those accruing thereafter, and the Lender may
apply any moneys and proceeds received by the Lender, in such order and priority
as the Lender in its sole discretion may determine, to (i) all expenses of
taking, holding, managing and operating the Premises (including compensation for
the services of all persons employed for such purposes); (ii) the cost of all
such maintenance, repairs, renewals, replacements, additions, betterments,
improvements, purchases, and acquisitions; (iii) the cost of such insurance;
(iv) such taxes, assessments and other charges as the Lender may determine to
pay; (v) other proper charges as the Lender may determine to pay; (vi) the
reasonable compensation and expenses of attorneys and agents of the Lender;
(vii) accrued interest; (viii) deposits for taxes, insurance and similar items
required hereunder; or (ix) principle.
(c) Obligor covenants and agrees that, following the occurrence of an event
of default hereunder, it will cooperate with the Lender in making any
applications for any and all approvals by any governmental body, authority or
agency of the transfer or assignment of any or all of the Operating Rights,
whether such transfer or assignment is to the Lender or to any other purchaser
of any of the Premises, and will execute and deliver to Lender any and all
documents as the Lender may reasonably request.
(d) For the purpose of carrying out the provisions of this paragraph,
Obligor hereby constitutes and appoints the Lender its true and lawful
attorney-in-fact of Obligor to do and perform, from time to time, any and all
actions necessary and incidental to such purpose and does, by these presents,
ratify and confirm any and all actions of said attorney-in-fact in the premises.
(e) Whenever all such events of default have been cured and satisfied, the
Lender shall surrender possession of the Premises to Obligor, provided that the
right of the Lender to take possession, from time to time, pursuant to this
Section shall exist if any subsequent event of default shall occur and be
continuing.
19
<PAGE>
Section 3.4 Appointment of a Receiver.
(a) If an event of default shall have occurred and be continuing, the
Lender shall be entitled, without notice and without regard to the adequacy of
any security for the Obligations hereby secured or the solvency of any party
bound for its payment, upon ex-parte application to the appointment of a
receiver to take possession of and to operate the Premises and to collect the
rents, profits, issues, and revenues thereof. Obligor hereby specifically waives
the right to notice and to object to the appointment of a receiver and hereby
expressly agrees that such appointment shall be made as an admitted equity and
as a matter of absolute right to the Lender.
(b) Obligor will pay to the Lender upon demand all expenses and costs,
including receiver's fees, attorney's fees, legal costs and agent's
compensation, incurred pursuant to the provisions contained in this Section, and
all such expenses shall be secured by this Restated Mortgage.
Section 3.5 Discontinuance of Proceedings and Restoration of Status of the
Parties. In case the Lender shall have proceeded to enforce any right or remedy
under this Restated Mortgage by receiver, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Lender, then and in every such case
Obligor and the Lender shall be restored to their former positions and rights
hereunder, and all rights, powers and remedies of the Lender shall continue as
if no such proceeding had been taken.
Section 3.6 Remedies Cumulative. No right, power or remedy conferred upon
or reserved to the Lender by this Restated Mortgage or any of the Related
Documents is intended to be exclusive of any other right, power or remedy, but
each and every such right, power and remedy shall be cumulative and concurrent
and shall be in addition to any other right, power and remedy given hereunder or
now or hereafter existing at law or in equity or by statute.
Section 3.7 Performance by the Lender of Defaults by Obligor. If Obligor
shall default in the payment of any tax, lien, assessment or other charge levied
or assessed against the Premises; in the payment of any insurance premium; in
the procurement of insurance coverage and the delivery of the insurance policies
required hereunder or in the performance or observance of any other covenant,
condition or term of this Restated Mortgage, then the Lender, at its option, may
perform or observe the same, and all payments made for costs or expenses
incurred by the Lender in connection therewith shall be secured hereby and shall
be, without demand, immediately repaid by Obligor to the Lender with interest
thereon at the maximum rate of interest permitted under applicable law. The
Lender shall be the sole judge of the legality, validity and priority of any
such tax, lien, assessment, charge, claim or premium; of the necessity for such
actions; and of the amount necessary to be paid in satisfaction thereof. The
Lender is hereby empowered to enter and to authorize others to enter upon the
Premises or any
20
<PAGE>
part thereof for the purpose of performing or observing any such defaulted
covenant, condition or term, or exercising the lender's rights hereunder,
without thereby becoming liable to Obligor or any person in possession holding
under the Obligors. In order to accelerate the maturity of the Obligations
secured hereby because of the failure of Obligor to pay any taxes, lien,
assessment, charge, premium, liability or obligation as herein provided, it
shall not be necessary or requisite that the Lender shall first pay the same,
nor shall the Lender's payment of the same constitute a waiver of the default
hereunder or otherwise affect the Lender's option to accelerate the Obligations
secured hereby, foreclose this Restated Mortgage and/or exercise any other right
or remedy provided hereunder or under any of the Related Documents.
Section 3.8 Expenses. In any suit to foreclose the lien of this Restated
Mortgage or enforce any other remedy of the Lender under this Restated Mortgage
or any of the instruments and documents evidencing or related to any of the
Obligations, there shall be allowed and included, as additional indebtedness in
the judgment or decree, all reasonable expenditures and expenses which may be
paid or incurred by or on behalf of the Lender for documentary and expert
evidence, stenographers' charges, publication costs, survey costs, appraisal
costs and costs (which may be estimated as to items to be expended after entry
of the decree) of procuring all abstracts of title, title searches and
examinations, title insurance policies, and similar data and assurances with
respect to title as the Lender may deem reasonably necessary either to prosecute
such suit or to evidence to bidders at any sale which may be had pursuant to
such decree the true condition of the title to or value of the Premises. All
expenditures and expenses of the above-described nature and such expenses and
fees as may be incurred in the protection of said Premises and the maintenance
of the lien of this Restated Mortgage, including the reasonable fees of any
attorney employed by the Lender in any litigation or proceeding affecting this
Restated Mortgage, any of the instruments and documents evidencing or related to
any of the Obligations or the Premises or in preparation for the commencement or
defense of any proceeding or threatened suit or proceeding, and whether for
consultation, at trial or any appellate level, shall be immediately due and
payable by Obligor, with interest thereon at the maximum rate of interest
permitted under applicable law.
ARTICLE 4.
Section 4.1 Waivers: Remedies Cumulative: Etc. No waiver of any default in
the performance of any covenant contained herein or in any Obligation secured
hereby shall at any time thereafter be held to be a waiver of any rights of the
holder of any of the Obligations or under any of the Related Documents, nor
shall any waiver of a prior default operate to waive any subsequent default or
defaults. All remedies provided for herein and in the Related Documents are
cumulative and may, at the election of the holder of the Obligations, be
exercised alternatively, successively or in any other manner and are in addition
to any other rights provided by law.
21
<PAGE>
Section 4.2 Headings. The headings of the sections, paragraphs and
subdivisions of this Restated Mortgage are for the convenience of reference
only, are not to be considered a part hereof, and shall not limit or otherwise
affect any of the terms hereof.
Section 4.3 Invalid Provisions to Affect No Others. It is agreed that
nothing herein contained nor any transaction related thereto shall be construed
or so operate as to require Obligor or the Obligor to pay interest at a rate
greater than it is lawful in such case to contract for, or to make any payment
or to do any act contrary to law. If the fulfillment of any provision hereof or
any transaction related hereto, at the time performance of such provisions shall
be due, shall involve transcending the limit of validity prescribed by law, then
ipso facto, the obligation to be fulfilled shall be reduced to the limit of such
validity; and if any clause or provision herein contained operates or would
prospectively operate to invalidate this Restated Mortgage in whole or in part,
then such clause or provision only shall be held for naught, as though not
herein contained, and the remainder of this Restated Mortgage shall remain
operative and in full force and effect.
Section 4.4 Number and Gender. Whenever the singular or plural number,
masculine or feminine or neuter gender is used herein, it shall equally include
the others, as appropriate.
Section 4.5 Changes. Neither this Restated Mortgage nor any term hereof may
be waived, changed, discharged or terminated except by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
Section 4.6 Controlling Law; Successors and Assigns Included in Parties.
All of the covenants, agreements, benefits, powers and provisions of this
Restated Mortgage shall be construed with all the terms and provisions of the
Restructuring Agreement and the Related Documents, according to the laws of the
State of Florida and shall be deemed to include and shall be binding upon the
respective representatives, successors, transferees or assigns of Obligor and
shall include, extend and inure to and be binding upon the successors and
assigns of the Lender.
Section 4.7 Greater Estate. In the event that Obligor is the owner of a
leasehold estate with respect to any portion of the Premises and, prior to the
satisfaction of the indebtedness and the cancellation of this Restated Mortgage
of record, Obligor obtains a fee estate in such portion of the Premises, then,
such fee estate shall automatically, and without further action of any kind on
the part of Obligor, be and become subject to the security lien of this Restated
Mortgage.
22
<PAGE>
Section 4.8 Assignment. This Restated Mortgage is assignable by the Lender,
and any assignment hereof by the Lender shall operate to vest in the assignee
all rights and powers herein conferred upon and granted to the Lender.
Section 4.9 Notice. Except as otherwise contemplated herein or required by
statute, all notices, demands or other communications which are permitted or
required under this Restated Mortgage shall be in writing and signed by the
party giving the same, and shall be delivered personally or sent by certified or
registered United States mail, return receipt requested, postage prepaid, to the
other party at the address set forth below:
To Obligor:
Ohio Key I, Inc.
Ohio Key II, Inc.
Route 1, Box 790
Big Pine Key, Florida 33043
Attention: C. John Knorr
TO LENDER:
WAMCO XXII, LTD.
RIVA Financial Services
577 Southlake Blvd., Southport Office Park
Richmond, Virginia 23236
Attention: Robert J. Ketron
or to such other address within the continental United States of America as may
be from time to time designated by the parties. Each such notice or
communication shall be deemed to have been given on the date of personal
delivery or three (3) days after the date of mailing, as the case may be.
SECTION 4.10 JURY TRIAL WAIVER. OBLIGOR HEREBY, AND THE LENDER BY ITS
ACCEPTANCE OF THIS RESTATED MORTGAGE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WlTH THIS RESTATED
MORTGAGE AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF EITHER PARTY. THIS PROVlSlON IS A MATERIAL INDUCEMENT FOR
THE LENDER ACCEPTING THIS RESTATED MORTGAGE.
23
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Restated Mortgage
and Assumption Agreement to be dated as of the day and year first above written,
but in fact executed by their respective duly authorized officers on January 24,
1997.
Signed, sealed and delivered SUNSHINE KEY ASSOCIATES LIMITED
in the presence of: PARTNERSHIP, a Florida limited partnership
By: INFINITY INVESTMENT GROUP,
INC., its general partner
/s/ Bernardo A. Portuondo By: /s/ C. John Knorr
- ------------------------------ ------------------------------
Print Name: Print Name: C. John Knorr
-------------------- Title: President
/s/ Gina Montanez
- ------------------------------
Print Name:
--------------------
OHIO KEY I, INC., a Florida corporation
/s/ Bernardo A. Portuondo By: /s/ C. John Knorr
- ------------------------------ ------------------------------
Print Name: Print Name: C. John Knorr
-------------------- Title: President
/s/ Gina Montanez
- ------------------------------
Print Name:
--------------------
OHIO KEY II, INC., a Florida corporation
/s/ Bernardo A. Portuondo By: /s/ C. John Knorr
- ------------------------------ ------------------------------
Print Name: Print Name: C. John Knorr
-------------------- Title: President
/s/ Gina Montanez
- ------------------------------
Print Name:
--------------------
24
<PAGE>
WAMCO XXII, LTD., a Texas limited
partnership
By: WAMCO XXII of Texas, Inc., its
general partner
/s/ Jon B. Nelson By: /s/ Robert S. Hetron
- ------------------------------ ---------------------------------
Print Name: Print Name: Robert S. Hetron
-------------------- Title: Vice President & Asst. Secretary
- -----------------------------
Print Name:
-------------------
[Acknowledgements appear on following page]
25
<PAGE>
STATE OF FLORIDA )
)SS:
COUNTY OF DADE )
The foregoing instrument was acknowledged before me this ___ day of
_________, 1997, by ________________________, the _______________ of Infinity
Investment Group, Inc., the general partner of Sunshine Key Associates Limited
Partnership, a Florida limited partnership, on behalf of said corporation and
limited partnership. He/she is personally known to me or has produced
____________ as identification.
-----------------------------------
Notary Public, State of Florida
My Commission Expires: (SEAL)
STATE OF FLORIDA )
)SS:
COUNTY OF DADE )
The foregoing instrument was acknowledged before me this ___ day of
_________, 1997, by ________________________, the _______________ of Ohio Key I,
Inc., a Florida corporation, on behalf of said corporation. He/she is personally
known to me or has produced ____________ as identification.
-----------------------------------
Notary Public, State of Florida
My Commission Expires: (SEAL)
26
<PAGE>
STATE OF FLORIDA )
)SS:
COUNTY OF DADE )
The foregoing instrument was acknowledged before me this ___ day of
_________, 1997, by ________________________, the _______________ of Ohio Key
II, Inc., a Florida corporation, on behalf of said corporation. He/she is
personally known to me or has produced ____________ as identification.
-----------------------------------
Notary Public, State of Florida
My Commission Expires: (SEAL)
STATE OF _______ )
)SS:
COUNTY OF ______ )
The foregoing instrument was acknowledged before me this ___ day of
_________, 1997, by ________________________, the _______________ of WAMCO XXII
of Texas, Inc., the general limited partnership. He/she is personally known to
me or has produced ____________ as identification.
-----------------------------------
Notary Public, State of Florida
My Commission Expires: (SEAL)
VERBAL OR WRITTEN
27
<PAGE>
EXHIBIT A
Legal Description
[TO BE CONTINUED]
<PAGE>
EXHIBIT B
Permitted Encumbrances
1. Restrictions re: Developers of the Florida Keys recorded in Official
Records Book 668, at Page 43.
2. Easement granted to the Utility Board of the City of Key West, recorded
in Official Records Book 955, at Page 1632.
3. The nature and extent of riparian and littoral rights pertaining to the
Land.
4. Any and all rights of the United States Government and of the State of
Florida arising by reasons of the United States Government's control over
navigable waters in the interest of navigation and commerce and the inalienable
rights of the State of Florida in lands and waters of such character.
5. Title to any portion of the Land lying below the mean high water mark of
the body of water surrounding same.
6. Mortgage in favor of the United States Small Business Administration, as
recorded in Official Records Book 1273, at Page 1110.
7. Mortgage in favor of the United States Small Business Administration, as
recorded in Official Records Book 1273, at Page 1114.
All references herein to Official Records are to the Public Records of Monroe
County, Florida.
10.5
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT, entered into this 24th day of January, 1997, by and
between SUNSHINE KEY ASSOCIATES LIMITED PARTNERSHIP, a Florida limited
partnership, hereinafter referred to as the "Assignor", and OHIO KEY I, INC., a
Florida corporation, hereinafter referred to as the "Assignee".
1. Definitions. The following terms shall have the respective meanings
specified below when used in this Assignment:
A. "Property" means the real property located in Monroe County,
Florida, described on Exhibit "1" attached hereto, together with all
buildings and improvements thereon, and all the tenements, hereditaments
and appurtenances thereto belonging or in anywise appertaining;
B. "Leases" mean (i) all leases, tenant registration agreements,
occupancy agreements, rental agreements, storage agreements, registration
cards, reservations for recreational vehicle park space(s), reservations
for boat slip(s), rental arrangements and all other agreements wherein
possessory, use or occupancy rights are granted or conveyed to a third
party with respect to the Property (or any portion thereof), and (ii) all
rental agreements, leases, rental arrangements, tenancies, use agreements
and occupancy agreements affecting the Property (or any portion thereof)
wherein the Assignor is the operator (as defined in Florida Statutes
(section)513.01), proprietor, lessor, landlord or other similarly
denominated party; and
C. "Security Deposits" mean any and all security deposits, advance
rental and reservation deposits held by, or paid to, Assignor on account of
the tenants, lessees, registrants, guests or any other third party under
the Leases.
2. Assignment. For and in consideration of the sum of Ten and NO/100
($10.00) Dollars and other good and valuable consideration, received on behalf
of the Assignee, at or before the ensealing and delivery of these presents, the
receipt whereof is hereby acknowledged, the Assignor hereby grants, bargains,
sells, assigns, conveys, transfers and sets over unto the Assignee all of the
Assignor's right, title and interest in and to the Leases and Security Deposits.
3. Assumption. In reliance upon the covenants and representations on the
part of the Assignor herein contained, the Assignee hereby assumes, and agrees
to be bound by all of the covenants, agreements and obligations of Assignor
under the Leases which shall arise, or which are required to be performed, after
the date of this Assignment, and Assignee further assumes all liability of
Assignor for the proper refund or return of the Security Deposits under said
Leases if, when and as required by said Leases or otherwise by law. Assignee
shall indemnify, defend and hold Assignor harmless from and against all
liabilities, damages, claims, costs, fees and expenses whatsoever (including
reasonable attorneys' fees and court costs) arising out of the obligations
assumed by Assignee pursuant to this Section 3.
<PAGE>
4. Representation. The Assignor hereby represents and covenants as follows:
A. That the Assignor has good and lawful right, power and authority to
convey the Leases to the Assignee;
B. That the Assignor is not in default under any of said Leases;
C. That, except for the Leases, there are no tenancies, leases, rental
agreements or occupancy agreements affecting the Property or any portion
thereof; and
D. That the Assignor has performed all covenants, agreements and
obligations on its part to be performed under the terms of the Leases.
5. Binding Effect. This Assignment shall inure to the benefit of, and be
binding upon, each of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
6. Attorneys' Fees. The Assignee shall be entitled to recover from the
Assignor all costs and expenses, including attorneys' fees, incurred by Assignee
as a consequence of the breach of any covenant, representation, and/or warranty
herein contained.
7. Counterparts. This Assignment may be executed and delivered in
counterparts, each of which shall be deemed to be a duplicate original hereof.
8. Effective Date. This Assignment shall be effective as of January 1,
1997.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the
day and year first above written.
Signed, Sealed and Delivered Ohio Key I, Inc.
in the Presence of:
/s/ Jane Bergman By: /s/ C. John Knorr, Jr.
- ---------------- -----------------------------
C. John Knorr, Jr., President
"ASSIGNEE"
Signed, Sealed and Delivered Sunshine Key Associates Limited Partnership, a
in the Presence of: Florida limited partnership
/s/ Jane Bergman By: Infinity Investment Group, Inc.,
its general partner
By: /s/ C. John Knorr, Jr.
-----------------------------
C. John Knorr, Jr., President
"ASSIGNOR"
2
<PAGE>
STATE OF FLORIDA )
------- )
COUNTY OF )
The foregoing instrument was acknowledged before me this ____ day of
_______________, 1997, by C. John Knorr, Jr., the President of Ohio Key I, Inc.,
a Florida corporation, on behalf of said corporation. He is personally known to
me or has produced as identification.
My Commission Expires:
Notary Public, State of Florida
(SEAL)
Printed Notary Signature
STATE OF FLORIDA )
------- )
COUNTY OF )
The foregoing instrument was acknowledged before me this ____ day of
______________, 1997, by C. John Knorr, Jr., the President of Infinity
Investment Group, Inc., the general partner of Sunshine Key Associates Limited
Partnership, a Florida limited partnership, on behalf of said corporation and
partnership. He is personally known to me or has produced as identification.
My Commission Expires:
Notary Public, State of Florida
(SEAL)
Printed Notary Signature
3
<PAGE>
10.6
AGREEMENT FOR THE ASSUMPTION OF LIABILITIES
THIS AGREEMENT, entered into this 24th day of January, 1997,
by and between OHIO KEY I, INC., a Florida corporation, hereinafter referred to
as the "Transferee", and SUNSHINE KEY ASSOCIATES LIMITED PARTNERSHIP, a Florida
limited partnership, hereinafter referred to as the "Transferor".
1. Liabilities. For purposes of this Agreement, the term
"Liabilities" shall mean all liabilities of the Transferor including, without
limitation, all debts and sums of money owed by Transferor and all obligations
and undertakings to be performed by Transferor in connection with or relating to
the Property, or any portion thereof. The term "Property" shall mean the real
property described on Exhibit "1" attached hereto.
2. Assumption. The Transferee hereby assumes, and agrees to be
bound by and to timely pay and discharge, all of the Liabilities. Transferee
shall indemnify, defend and hold Transferor harmless from and against all
damages, claims, demands, costs, fees and expenses whatsoever (including
reasonable attorneys' fees and court costs) arising out of the Liabilities
assumed by Transferee pursuant to this Section 2.
3. Representation. The Transferor hereby represents and
covenants that no uncured default exists under any of the Liabilities.
4. Binding Effect. This Agreement shall inure to the benefit
of, and be binding upon, each of the parties hereto and their respective heirs,
personal representatives, successors, distributees and assigns.
5. Duplicate Originals. This Agreement may be executed and
delivered in counterparts, each of which shall be deemed to be a duplicate
original hereof.
6. Effective Date. This Agreement shall be effective as of
January 1, 1997.
IN WITNESS WHEREOF, the parties hereto have set their hands
and seals the day and year first above written.
Signed, Sealed and Delivered Ohio Key I, Inc.
in the Presence of:
/s/ Jane Bergman By: /s/ C. John Knorr, Jr.
- --------------------------------- --------------------------------
C. John Knorr, Jr., President
"TRANSFEREE"
Signed, Sealed and Delivered Sunshine Key Associates Limited
in the Presence of: Partnership, a Florida limited
partnership
/s/ Jane Bergman By: Infinity Investment Group, Inc.,
- ---------------------------------- its general partner
By: /s/ C. John Knorr, Jr.
--------------------------------
C. John Knorr, Jr., President
"TRANSFEROR"
2
<PAGE>
STATE OF FLORIDA )
COUNTY OF )
The foregoing instrument was acknowledged before me this
day of , 1997, by C. John Knorr, Jr., the President of
Ohio Key I, Inc., a Florida corporation, on behalf of said corporation. He is
personally known to me or has produced
as identification.
My Commission Expires:
Notary Public, State of Florida
(SEAL)
Printed Notary Signature
STATE OF FLORIDA )
COUNTY OF )
The foregoing instrument was acknowledged before me this
day of , 1997, by C. John Knorr, Jr., the President of
Infinity Investment Group, Inc., the general partner of Sunshine Key Associates
Limited Partnership, a Florida limited partnership, on behalf of said
corporation and partnership. He is personally known to me or has produced
as identification.
My Commission Expires:
Notary Public, State of Florida
(SEAL)
Printed Notary Signature
3
10.7
ASSIGNMENT AND ASSUMPTION OF CONTRACTS
THIS ASSIGNMENT, entered into this 24th day of January, 1997, by and
between SUNSHINE KEY ASSOCIATES LIMITED PARTNERSHIP, a Florida limited
partnership, hereinafter referred to as the "Assignor", and OHIO KEY I, INC., a
Florida corporation, hereinafter referred to as the "Assignee".
1. Assignment. For and in consideration of the sum of Ten and NO/100
($10.00) Dollars and other good and valuable consideration, received on behalf
of the Assignee, at or before the ensealing and delivery of these presents, the
receipt whereof is hereby acknowledged, the Assignor hereby grants, bargains,
sells, assigns, conveys, transfers and sets over unto the Assignee all of the
Assignor's right, title and interest in and to all contracts referred to on
Exhibit "A" attached hereto (collectively, the "Contracts").
2. Assumption. In reliance upon the covenants and representations on the
part of the Assignor herein contained, the Assignee hereby assumes, and agrees
to be bound by all of the covenants, agreements and obligations of Assignor
under the Contracts which shall arise or which are required to be performed,
after the date of this Assignment. Assignee shall indemnify, defend and hold
Assignor harmless from and against all liabilities, damages, claims, costs, fees
and expenses whatsoever (including reasonable attorneys' fees and court costs)
arising out of the obligations assumed by Assignee pursuant to this Section 2.
3. Representation. The Assignor hereby represents and covenants as follows:
A. That the Assignor has good and lawful right, power and authority to
convey the Contracts to the Assignee;
B. That each of said Contracts is valid and existing according to its
respective terms;
C. That any and all payments due or accrued under the Contracts have
been paid through and including the date hereof;
D. That no default exists under any of the Contracts;
E. That none of the Contracts require the consent and/or approval of
any person not a signatory party hereto as a prerequisite or condition to
effectuating this Assignment;
F. That the Assignor will warrant and defend the assignment herein
made unto the said Assignee, its successors, assigns and distributees,
against the claims and demands of all individuals, firms, entities,
businesses, associations, partnerships, corporations and all other persons
whomsoever; and
1
<PAGE>
G. That the Assignor has this date delivered to the Assignee the
original of said Contracts, if available, otherwise photocopies thereof,
together with all addenda, modifications, extensions, renewals or
amendments thereto.
4. Binding Effect. This Assignment shall inure to the benefit of, and be
binding upon, each of the parties hereto and their respective heirs, personal
representatives, successors, distributees and assigns.
5. Attorneys' Fees. The Assignee shall be entitled to recover from the
Assignor all costs and expenses, including attorneys' fees, incurred by Assignee
as a consequence of the breach of any covenant, representation, and/or warranty
herein contained.
6. Duplicate Originals. This Assignment may be executed and delivered in
counterparts, each of which shall be deemed to be a duplicate original hereof.
7. Effective Date. This Assignment shall be effective as of January 1,
1997.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the
day and year first above written.
Signed, Sealed and Delivered Ohio Key I, Inc.
in the Presence of:
/s/ Jane Bergman By: /s/ C. John Knorr, Jr.
- ---------------- -----------------------------
C. John Knorr, Jr., President
"ASSIGNEE"
Signed, Sealed and Delivered Sunshine Key Associates Limited Partnership, a
in the Presence of: Florida limited partnership
/s/ Jane Bergman By: Infinity Investment Group, Inc.,
- ---------------- its general partner
By: /s/ C. John Knorr, Jr.
-----------------------------
C. John Knorr, Jr., President
"ASSIGNOR"
2
<PAGE>
STATE OF FLORIDA )
-------
COUNTY OF )
The foregoing instrument was acknowledged before me this ____ day of
__________, 1997, by C. John Knorr, Jr., the President of Ohio Key I, Inc., a
Florida corporation, on behalf of said corporation. He is personally known to me
or has produced ____________________________________________ as identification.
My Commission Expires:
Notary Public, State of Florida
(SEAL)
Printed Notary Signature
3
<PAGE>
STATE OF FLORIDA )
-------
COUNTY OF )
The foregoing instrument was acknowledged before me this ____ day of
__________, 1997, by C. John Knorr, Jr., the President of Infinity Investment
Group, Inc., the general partner of Sunshine Key Associates Limited Partnership,
a Florida limited partnership, on behalf of said corporation and partnership. He
is personally known to me or has produced ____________________________________
as identification.
My Commission Expires:
Notary Public, State of Florida
(SEAL)
Printed Notary Signature
4
<PAGE>
10.8
A S S I G N M E N T
KNOW ALL MEN BY THESE PRESENTS: That SUNSHINE KEY ASSOCIATES LIMITED
PARTNERSHIP, a Florida limited partnership, hereinafter referred to as the
"Assignor", in consideration of the sum of Ten and NO/100 ($10.00) Dollars and
other good and valuable consideration, received on behalf of OHIO KEY I, INC., a
Florida corporation, hereinafter referred to as the "Assignee", at or before the
ensealing and delivery of these presents, the receipt whereof is hereby
acknowledged, does hereby grant, bargain, sell, assign, convey, transfer and set
over unto the said Assignee all of its right, title and interest in and to the
following:
SEE SCHEDULE "A" ATTACHED HERETO
AND INCORPORATED HEREIN BY REFERENCE.
TO HAVE AND TO HOLD the same unto the said Assignee, its successors and
assigns, absolutely and forever.
THIS ASSIGNMENT shall be effective as of January 1, 1997.
WHENEVER used herein, the use of the singular number shall include the
plural, and the plural the singular, and the use of any gender shall include all
genders. Whenever used herein, the terms "Assignor" and "Assignee" include the
parties to this instrument and their respective heirs, legal representatives,
assigns and successors.
THIS ASSIGNMENT shall inure to the benefit of, and shall be binding upon
the parties, their heirs, distributees, personal representatives, successors and
assigns.
WHENEVER the consent of any party other than Assignor and Assignee is
required with respect to the assignment of any of the properties, items, matters
or things described on Schedule "A", the Assignor shall fully cooperate with the
Assignee in procuring such consent.
THIS ASSIGNMENT may be executed and delivered in counterparts, each of
which shall be deemed to be a duplicate original hereof.
IN WITNESS WHEREOF, the said Assignor has signed and sealed these presents
this 24th day of January, 1997.
Signed, Sealed and Delivered SUNSHINE KEY ASSOCIATES LIMITED
in the presence of: PARTNERSHIP, a Florida limited partnership
/s/ Jane Bergman By: Infinity Investment Group, Inc.,
- ---------------- its general partner
Witness Signature
Printed Name: Jane Bergman By: /s/ C. John Knorr, Jr.
-----------------------------
C. John Knorr, Jr., President
Witness Signature
Printed Name:
1
<PAGE>
STATE OF FLORIDA )
-------
COUNTY OF Monroe )
-------
The foregoing instrument was acknowledged before me this 24th day of
January, 1997, by C. John Knorr, Jr., the President of Infinity Investment
Group, Inc., the general partner of Sunshine Key Associates Limited Partnership,
a Florida limited partnership, on behalf of said corporation and partnership. He
is personally known to me or has produced _____________________________________
as identification.
My Commission Expires: /s/ Lee Schmidt
-------------------------------
Notary Public, State of Florida
(SEAL)
Lee Schmidt
-------------------------------
Printed Notary Signature
This Document Prepared By
Gorham Rutter, Jr., Esquire
P.O. Box 915454
Longwood, FL 32791-5454
2
<PAGE>
SCHEDULE "A"
1. All licenses, permits and governmental commitments held by Assignor or
accruing to the benefit of Assignor in connection with the use, enjoyment,
occupancy, operation or ownership of the "Property", as hereinafter defined. The
term "Property" shall mean the real property located in Monroe County, Florida,
described on Exhibit "1" attached hereto, together with all buildings and
improvements thereon, and all the tenements, hereditaments and appurtenances
thereto belonging or in anywise appertaining.
2. All guarantees and warranties from third parties, if any, held by or
accruing to the benefit of Assignor in connection with the Property, or any
portion thereof.
3. All specifications, plans (construction, landscaping, electrical,
mechanical, architectural, as-built or otherwise), authorizations and drawings
held by or owned by Assignor in connection with the Property, or any portion
thereof.
4. The name "Sunshine Key Camping Resort and Marina", together with all
rights and privileges to use said name.
5. All rent rolls and guest registers used in connection with the operation
or ownership of the Property, or any portion thereof.
6. All rights-of-way, benefits, easements, privileges, rights, tenements,
hereditaments and uses appurtenant to the Property, or any portion thereof.
7. All rules and regulations promulgated by the Assignor which are
currently in effect with respect to the operation or ownership of the Property
(or any portion thereof).
8. All proceeds payable under any and all insurance policies covering the
Property (or any portion thereof), provided the Assignee assumes the policy or
policies under which the proceeds are payable.
9. All mineral rights and reservations relating to the Property, or any
portion thereof.
10. All rights, standings, benefits, protections and privileges in, to,
under and in connection with all filings, registrations, acceptances,
exemptions, approvals and authorizations made with or given by the Federal
Government, State of Florida, County of Monroe, land sales offices, Monroe
County Planning and Zoning Department, Monroe County Commission, United States
Army Corps of Engineers, Florida Department of Environmental Regulation, Florida
Department of Health and Rehabilitative Services and all other governmental and
quasi-governmental offices, departments, bureaus, agencies and authorities as
same pertain to the use, enjoyment, occupancy, ownership or operation of the
Property, or any portion thereof.
11. All claims and demands held by, owned by or accruing to the benefit of
Assignor (excluding, however, all actions, judgments and lawsuits inasmuch as
same are the subject matter of that certain Partial Assignment of Litigation
Proceeds dated August 1, 1995, and the terms of such Partial Assignment shall
prevail over the terms of this Assignment).
12. Any advertising, brochures or promotional materials utilized in the
operation or promotion of the Property, or any portion thereof.
13. The name "Sunshine Key Travel Park", together with all rights and
privileges to use said name.
3
<PAGE>
14. Any accounts, receivables, intangible personal property, chattel paper,
choses in action, records, designs, instruments and documents owned by Assignor,
and any security interests or other security held by or granted to the Assignor
to secure payment by any debtor, guest or other third party.
4
<PAGE>
Exhibit 10.9
EMPLOYMENT AGREEMENT
<PAGE>
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
the 31st day of October, 1996 (the "Effective Date"), between Pelican
Properties, International Corp., a Florida corporation whose address is 3191
Coral Way, Suite 115, Box 165, Coral Gables, FL 33145 (the "Company"), and
Timothy Benjamin (the "Employee").
WHEREAS, the parties hereto entered into an Employment Agreement dated
October 31, 1995 (the "1995 Agreement"), which provided for, and the parties
hereby consummate, the option to renew for two (2) additional one (1) year
periods upon the mutual agreement between the parties;
WHEREAS, the parties hereby agree to renew the 1995 Agreement upon the
terms and conditions provided for herein;
WHEREAS, the Company is presently, through its majority owned subsidiary,
the owner and operator of a recreational vehicle and camping resort in Monroe
County, Florida and intends to acquire additional existing businesses, whether
in the form of asset purchases, stock purchases, mergers, consolidations, joint
ventures, strategic alliances or otherwise (the "Business"); and
WHEREAS, the Company intends to establish a valuable reputation and
goodwill in its business, with expertise in all aspects of the Business; and
WHEREAS, the Employee is desirous of being employed by the Company, and the
Company has agreed to hire the Employee upon certain terms and conditions, one
of which is the execution of this Agreement by Employee; and
WHEREAS, the Employee, by virtue of the Employee's employment with the
Company for the past year has become familiar with and possessed with the
manner, methods, trade secrets and other confidential information pertaining to
the Company's Business, including the Company's client base;
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Company and the Employee do hereby agree as follows:
1. Engagement. The Company hereby employs the Employee as the Chief
Financial Officer and Secretary of the Company, and the Employee hereby accepts
such employment, upon the terms and conditions hereinafter set forth.
2. Authority and Power During Employment Period. The duties of the Employee
shall be subject to the direction of the Board of Directors of the Company, and
<PAGE>
the Employee shall perform all duties as may be mutually agreed upon between the
Employee and the Company. The Employee shall devote full attention and render
exclusive, full time services to the Company, and shall be employed solely by
the Company according to the terms of this Agreement.
3. Term. Unless terminated sooner pursuant to Section 15 of this Agreement,
the Term of employment will commence on the Effective Date and continue for a
period of one year thereafter. This Agreement may be automatically renwed for up
to one (1) year upon mutual agreement between the parties (the "Renewal Term"),
unless terminated pursuant to Section 15 of this Agreement. The term of the
provisions of Sections 5 and 6 shall be as specifically set forth in this
Agreement.
4. Compensation and Benefits.
a. Base Salary. For all services rendered by the Employee pursuant to the
terms of this Agreement and in consideration of the execution of this Agreement
by the Employee, the Company shall initially pay the Employee the sum of Fifty
Thousand Dollars ($50,000) per year, payable bi-weekly. The base salary of the
Employee for any Renewal Term shall be determined by the Board of Directors but
at no time during any Renewal Term of the Employee's employment with the Company
shall the base salary be less than Fifty Thousand Dollars ($50,000) per year.
b. Employee Benefits. The Employee shall be entitled to participate in all
benefit programs of the Company currently existing or hereafter made available
to other salaried executive officers, including, but not limited to, pension,
profit sharing and any other retirement plans, group life insurance,
hospitalization, surgical, dental and major medical coverage, sick leave, salary
continuation, vacation and holidays, long-term disability, and other fringe
benefits. The Company shall use its best efforts to enter into a medical
benefits plan for the Company's employees within six (6) months from the
Effective Date. The Company agrees to assume ninety percent (90%) of the
obligations the Employee may have with regard to his life insurance policy and
the medical benefits plan maintained by his former employer on behalf of the
Employee and his family for a period of one (1) year commencing on the Effective
Date or until such time the Company shall adopt and implement its own medical
benefits plan and group life insurance plan at which time the Employee and his
family shall be covered by such plans.
c. Business Expense Reimbursement. During the Term or any Renewal Term of
employment, the Employee shall be entitled to receive proper reimbursement for
all reasonable, out-of-pocket expenses incurred by the Employee (in accordance
with the policies and procedures established by the Company for its executive
officers) in performing services hereunder, provided the Employee properly
accounts therefor and provided further that any expense in excess of $100 or in
the aggregate of $500 must be approved in advance by the Board of Directors.
2
<PAGE>
d. Stock Options. The Employee shall be entitled to receive Stock Options
as described more fully in the Stock Option Agreement attached hereto as Exhibit
"A" and incorporated herein.
5. Covenant Not to Compete. The Employee acknowledges and recognizes the
highly competitive nature of the Company's business and the goodwill, continued
patronage, and specifically the names and addresses of the Company's Clients (as
hereinafter defined) constitute a substantial asset of the Company having been
acquired through considerable time, money and effort. Accordingly, in
consideration of continued employment and compensation by the Company, the
Employee agrees to the following:
a. That during the Restricted Period (as defined herein) and within the
Restricted Area (as defined herein), the Employee will not, individually or in
conjunction with others, directly or indirectly, engage in any Business
Activities (as hereinafter defined) other than on behalf of the Company and as
agreed by the Company and the Employee, whether as an officer, director,
proprietor, employer, partner, independent contractor, investor, stockholder
(other than as a holder of less than 1% of the outstanding capital stock of a
publicly traded corporation), consultant, advisor, agent or otherwise. Except
that during the term of Employee's employment with the Company, the foregoing
limitations as to Restricted Area shall not be applicable.
b. That during the Restricted Period and within the Restricted Area (as
defined herein), the Employee will not, indirectly or directly, compete with the
Company by soliciting, inducing or influencing any of the Company's Clients
which have a business relationship with the Company at any time during the
Restricted Period to discontinue or reduce the extent of such relationship with
the Company. Except that during the term of Employee's employment with the
Company, the foregoing limitations as to Restricted Area shall not be
applicable.
c. During the term of the Employee's employment with the Company and for
any time thereafter, the Employee will not (a) directly or indirectly recruit,
solicit or otherwise influence any employee or agent of the Company to
discontinue such employment or agency relationship with the Company, or (b)
employ or seek to employ, or cause or permit any business which competes
directly or indirectly with the Business Activities of Company (the "Competitive
Business") to employ or seek to employ for any Competitive Business any person
who is then (or was at any time within six (6) months prior to the date Employee
or the Competitive Business employs or seeks to employ such person) employed by
the Company.
d. During the term of the Employee's employment with the Company and for
any time thereafter, the Employee will not interfere with, disrupt or attempt to
disrupt any past, present or prospective relationship, contractual or otherwise,
between the Company and any Company's client, employee, agent, vendor, supplier
or customer.
3
<PAGE>
6. Non-Disclosure of Confidential Information.
a. The Employee acknowledges that the Company's trade secrets, private or
secret processes, methods and ideas, as they exist from time to time, customer
lists and information concerning the Company's products, services, business
records and plans, inventions, product design information, price structure,
discounts, costs, computer programs and listings, source code and/or subject
code, copyright, trademark, proprietary information, formulae, protocols, forms,
procedures, training methods, development, technical information, marketing
activities and procedures, method for operating of the Company's Business,
credit and financial data concerning the Company and the Company's Clients and
Client Lists, which Client Lists shall not only mean one or more of the names
and addresses of the Clients of the Company but it shall also encompass any and
all information whatsoever regarding them, including their needs, and marketing
and advertising practices and plans and information which is embodied in written
or otherwise recorded form, but it shall also include information which is
mental, not physical (collectively, the "Confidential Information") as valuable,
special and unique assets of the Company, access to and knowledge of which are
essential to the performance of the Employee hereunder. In light of the highly
competitive nature of the industry in which the Company's business is conducted,
the Employee agrees that all Confidential Information, heretofore or in the
future obtained by the Employee as a result of the Employee's association with
the Company, shall be considered confidential.
b. Excluded from the Confidential Information, and therefore not subject to
the provisions of this Agreement, shall be any information which:
(1) At the time of disclosure, is in the public domain as evidenced by
printed publications;
(2) After the disclosure, enters the public domain by way of printed
publication through no fault of the Employee or those in privity with it;
(3) Employee can show by written documentation was in its possession
at the time of disclosure and which was not acquired directly or indirectly
from the Company; or
(4) Employee can show by written documentation was acquired, after
disclosure, from a third party who did not receive it from the Company, and
who had the right to disclose the information without any obligation to
hold such information confidential.
c. The Employee acknowledges that, as between the Company and the Employee,
the Confidential Information and any and all rights and privileges provided
under the trademark, copyright, trade secret and other laws of the United
States, the
4
<PAGE>
individual states thereof, and jurisdictions foreign thereto, and the goodwill
associated therewith, are and at all times will be the property of the Company.
d. Employee agrees that it shall:
(1) Hold in confidence and not disclose or make available to any third
party any such Confidential Information unless so authorized in writing by
the Company;
(2) Exercise all reasonable efforts to prevent third parties from
gaining access to the Confidential Information;
(3) Not use, directly or indirectly, the Confidential Information in
any respect of its business, except as necessary to evaluate the
information;
(4) Restrict the disclosure or availability of the Confidential
Information to those of Employee's employees who have read and understand
this Agreement and who have a need to know the information in order to
achieve the purposes of this Agreement;
(5) Not copy or modify any Confidential Information without prior
written consent of the Company.
(6) Take such other protective measures as may be reasonably necessary
to preserve the confidentiality of the Confidential Information; and
(7) Relinquish and require all of its employees to relinquish all
rights it and its employees may have in any matter, such as drawings,
documents, models, samples, photographs, patterns, templates, molds, tools
or prototypes, which may contain, embody or make use of the Confidential
Information; promptly deliver to the Company any such matter as the Company
may direct at any time; and not retain any copies or other reproductions
thereof.
e. Employee further agrees:
(1) That it shall promptly disclose in writing to the Company all
ideas, inventions, improvements and discoveries which may be conceived,
made or acquired by Employee or its employees as the direct or indirect
result of the disclosure by the Company of the Confidential Information to
Employee;
(2) That all such ideas, inventions, improvements and discoveries
conceived, made or acquired by Employee, alone or with the assistance of
others, relating to the Confidential Information, shall be the property of
the Company and shall be treated as Confidential Information in accordance
with the provisions
5
<PAGE>
hereof and that Employee shall not acquire any intellectual property rights
under this Agreement except the limited right to use set forth in this
Agreement.
(3) That Employee and its employees shall assist in the preparation
and execution of all applications, assignments and other documents which
the Company may deem necessary to obtain patents, copyrights and the like
in the United States and in jurisdictions foreign thereto, and to otherwise
protect the Company.
f. Upon written request of the Company, Employee shall return to the
Company all written materials containing the Confidential Information. Employee
shall also deliver to the Company written statements signed by the Employee
certifying all materials have been returned within five (5) days of receipt of
the request.
7. Company's Clients. The "Company's Clients" shall be deemed to be any
persons, partnerships, corporations, professional associations or other
organizations for whom the Company has performed Business Activities.
8. Restrictive Period. The "Restrictive Period" shall be deemed to be
during the Employee's employment with the Company and for a period of twelve
(12) months following termination of the Employee's employ, regardless of the
reason for termination.
9. Restricted Area. The Restricted Area shall be deemed to mean within
Monroe County, Florida and any other county in any other state which the Company
shall conduct its Business.
10. Business Activities. "Business Activities" shall be deemed to include
any activities which are included in the Company's Business now or during the
effective period of this Agreement.
11. Covenants as Essential Elements of this Agreement; Survival of
Covenants.
a. It is understood by and between the parties hereto that the foregoing
covenants by Employee contained in Sections 5 or 6 of this Agreement shall be
construed to be agreements independent of any other element of the Employee's
employment with the Company. The existence of any other claim or cause of
action, whether predicated on any other provision in this Agreement, or
otherwise, as a result of the relationship between the parties shall not
constitute a defense to the enforcement of the covenants in this Agreement
against the Employee.
b. The covenants by Employee contained in Sections 5 and 6 shall survive
the expiration of this Agreement if the Employee continues to work for the
Company, in any manner, without renewing this Agreement. The Employee further
agrees that the covenants set forth in Section 5 and 6 of this Agreement shall
continue
6
<PAGE>
to be in effect following the expiration or termination of the Employee's
employment with the Company.
12. Remedies.
a. The Employee acknowledges and agrees that the Company's remedy at law
for a breach or threatened breach of any of the provisions of Sections 5 or 6
herein would be inadequate and the breach shall be per se deemed as causing
irreparable harm to the Company. In recognition of this fact, in the event of a
breach by the Employee of any of the provisions of Sections 5 or 6, the Employee
agrees that, in addition to any remedy at law available to the Company,
including, but not limited to monetary damages, the Company, without posting any
bond, shall be entitled to obtain, and the Employee agrees not to oppose the
Company's request for equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available to the Company.
b. The Employee acknowledges that the granting of a temporary injunction,
temporary restraining order or permanent injunction merely prohibiting the use
of Confidential Information would not be an adequate remedy upon breach or
threatened breach of Sections 5 or 6 and consequently agrees, upon proof of any
such breach, to the granting of injunctive relief prohibiting any form of
competition with the Company. Nothing herein contained shall be construed as
prohibiting the Company from pursuing any other remedies available to it for
such breach or threatened breach.
c. In the event that the Employee shall be in violation of the
aforementioned restrictive covenants as set forth in Sections 5 and 6, then the
time limitation during which breach or breaches should occur, and in the event
the Company should be required to seek relief from such breach in any court or
other tribunal, then the covenant shall be extended for a period of time equal
to the pendency of such proceedings, including appeal.
13. Attorneys' Fees. The Employee agrees that in the event that the Company
is required to engage an attorney to enforce the terms of the covenants in
Sections 5 or 6 of this Agreement, the Employee shall pay all costs and expenses
of that attorney or firm, whether or not a complaint or suit is filed with any
court of competent jurisdiction.
14. Effect on Prior Agreements. This Agreement supersedes any and all prior
or written agreement in their entirety between the Company and the Employee,
which shall be void and of no further force and effect after the date of this
Agreement.
15. Termination.
a. Termination Without Cause by Either Party. The Company and the Employee
may terminate this Agreement without cause upon giving thirty (30) days' prior
7
<PAGE>
written notice. During such thirty (30) day period, the Employee shall continue
to perform the Employee's duties pursuant to this Agreement, and the Company
shall continue to compensate the Employee in accordance with this Agreement.
b. Mutual Agreement. The Company and the Employee may terminate this
Agreement by mutual agreement of the parties hereto at any time.
c. Immediate Termination. This Agreement may be terminated immediately by
the Company upon the occurrence of any of the following events:
(1) The death of the Employee;
(2) The Employee has a guardian of the person or estate appointed by a
court of competent jurisdiction;
(3) The Employee is disabled so as to be unable to perform duties
required under this Agreement for a period of ninety (90) consecutive days
or ninety (90) days in any one-hundred eighty (180) day period; or
(4) The willful engagement in misconduct that is materially injurious
to the Company, monetarily or otherwise; or
(5) For "Cause," as defined below.
d. "Cause" means (i) committing or participating in an injurious act of
fraud, gross neglect, misrepresentation, embezzlement or dishonesty against the
Company; (ii) committing or participating in any other injurious act or omission
wantonly, willfully, recklessly or in a manner which was grossly negligent
against the Company, monetarily or otherwise; (iii) engaging in a criminal
enterprise involving moral turpitude; (iv) conviction of a felony under the laws
of the United States or any state thereof; (v) if applicable, loss of any state
or federal license required for the Employee to perform the Employee's material
duties or responsibilities for the Company; or (vi) any assignment of this
Agreement in violation of Section 20 of this Agreement.
Notwithstanding anything else contained in this Agreement, this Agreement
will not be deemed to have been terminated for Cause unless and until there
shall have been delivered to the Employee a notice of termination stating that
the Employee committed one of the types of conduct set forth in the definition
of Cause contained in this Agreement and specifying the particulars thereof.
e. Termination After Failure to Cure Breach. If the Employee commits a
material breach of any provisions of this Agreement, the Company may terminate
the Agreement at any time, if after providing written notice to the Employee of
the alleged
8
<PAGE>
breach or failure, the breach or failure remains uncured for a period of ten
(10) days after receipt of such notice.
16. Notices. Any notice required or permitted to be given under the terms
of this Agreement shall be sufficient if in writing and if sent postage prepaid
by registered or certified mail, return receipt requested; by overnight
delivery; by courier; or by confirmed telecopy, in the case of the Employee to
the Employee's last place of business or residence as shown on the records of
the Company, or in the case of the Company to its principal office as set forth
in the introductory paragraph, or such other place as it may designate.
17. Waiver. Unless agreed in writing, the failure of either party, at any
time, to require performance by the other of any provisions hereunder shall not
affect its right thereafter to enforce the same, nor shall a waiver by either
party of any breach of any provision hereof be taken or held to be a waiver of
any other preceding or succeeding breach of any term or provision of this
Agreement. No extension of time for the performance of any obligation or act
shall be deemed to be an extension of time for the performance of any other
obligation or act hereunder.
18. Complete Agreement. This Agreement contains the entire agreement
between the parties hereto with respect to the contents hereof and supersedes
all prior agreements and understandings between the parties with respect to such
matters, whether written or oral. Neither this Agreement nor any term or
provision hereof may be changed, waived, discharged or amended in any manner
other than by an instrument in writing, signed by the party against which the
enforcement of the change, waiver, discharge or amendment is sought.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one agreement.
20. Binding Effect/Assignment. This Agreement shall be binding upon the
parties hereto, their heirs, legal representatives, successors and assigns. This
Agreement shall not be assignable by the Employee but shall be assignable by the
Company in connection with the sale, transfer or other disposition of its
business or to any of the Company's affiliates controlled by or under common
control with the Company.
21. Governing Law. This Agreement shall become valid when executed and
accepted by Company. The parties agree that it shall be deemed made and entered
into in the State of Florida and shall be governed and construed under and in
accordance with the laws of the State of Florida. Anything in this Agreement to
the contrary notwithstanding, the Employee shall conduct the Employee's business
in a lawful manner
9
<PAGE>
and faithfully comply with applicable laws or regulations of the state, city or
other political subdivision in which the Employee is located.
22. Headings. The headings of the sections are for convenience only and
shall not control or affect the meaning or construction or limit the scope or
intent of any of the provisions of this Agreement.
23. Survival. Any termination of this Agreement shall not, however, affect
the ongoing provisions of this Agreement which shall survive such termination in
accordance with their terms.
24. Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein. If any court
determines that any provision of Section 5 or 6 hereof is unenforceable because
of the duration or scope of such provision, such court shall have the power to
reduce the scope or duration of such provision, as the case may be, and, in its
reduced form, such provision shall then be enforceable.
25. Enforcement. Should it become necessary for any party to institute
legal action to enforce the terms and conditions of this Agreement, the
successful party will be awarded reasonable attorneys' fees at all trial and
appellate levels, expenses and costs.
26. Venue. Company and Employee acknowledge and agree that the U.S.
District for the Southern District of Florida, or if such court lacks
jurisdiction, the 11th Judicial Circuit (or its successor) in and for Dade
County, Florida, shall be the venue and exclusive proper forum in which to
adjudicate any case or controversy arising either, directly or indirectly, under
or in connection with this Agreement and the parties further agree that, in the
event of litigation arising out of or in connection with this Agreement in these
courts, they will not contest or challenge the jurisdiction or venue of these
courts.
27. Construction. This Agreement shall be construed within the fair meaning
of each of its terms and not against the party drafting the document.
THE PARTIES TO THIS AGREEMENT HAVE READ THIS AGREEMENT, UNDERSTAND ITS TERMS AND
CONDITIONS, HAVE HAD THE OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL OF
THEIR OWN CHOICE AND AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS.
10
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IN WITNESS WHEREOF, the Effective Date shall be the date the Agreement has been
accepted by the Company at its principal offices in Dade County, Florida.
WITNESS: THE COMPANY
Pelican Properties, International Corp.
________________________________
By: /s/ C. John Knorr
------------------------------------
Name: C. John Knorr, Jr.
Its: President
THE EMPLOYEE
________________________________
/s/ Timothy Benjamin
---------------------------------------
Timothy Benjamin
11
Exhibit 10.10
EMPLOYMENT AGREEMENT
<PAGE>
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
the 1st day of June 1997 (the "Effective Date"), between Pelican Properties
International, Corp., a Florida corporation whose address is Route 1, Box 790,
Big Pine Key, FL 33043 (the "Company"), and Jane Bergman (the "Employee").
WHEREAS, the Company is presently, through its majority owned subsidiary,
the owner and operator of a recreational vehicle and camping resort in Monroe
County, Florida and intends to acquire additional existing businesses, whether
in the form of asset purchases, stock purchases, mergers, consolidations, joint
ventures, strategic alliances or otherwise (the "Business"); and
WHEREAS, the Company intends to establish a valuable reputation and
goodwill in its business, with expertise in all aspects of the Business; and
WHEREAS, the Employee is desirous of being employed by the Company, and the
Company has agreed to hire the Employee upon certain terms and conditions, one
of which is the execution of this Agreement by Employee; and
WHEREAS, the Employee, by virtue of the Employee's employment by the
Company shall become familiar with and possessed with the manner, methods, trade
secrets and other confidential information pertaining to the Company's Business,
including the Company's client base;
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Company and the Employee do hereby agree as follows:
1. Engagement. The Company hereby employs the Employee as the President of
the Company, and the Employee hereby accepts such employment, upon the terms and
conditions hereinafter set forth.
2. Authority and Power During Employment Period. The duties of the
Employee shall be subject to the direction of the Board of Directors of the
Company, and the Employee shall perform all duties as may be mutually agreed
upon between the Employee and the Company. The Employee shall devote full
attention and render exclusive, full time services to the Company, and shall be
employed solely by the Company according to the terms of this Agreement.
3. Term. Unless terminated sooner pursuant to Section 15 of this Agreement,
the Term of employment will commence on the Effective Date and continue for a
period of one (1) year thereafter. This Agreement may be automatically renewed
for up to one (1) additional one (1) year periods upon mutual agreement between
the parties (the "Renewal Term"), unless terminated pursuant to Section 15 of
this Agreement. The term of the provisions of Sections 5 and 6 shall be as
specifically set forth in this Agreement.
<PAGE>
4. Compensation and Benefits.
a. Salary. The Employee shall be paid a base salary for the first year of
the Term (as defined in Section 3) as set forth in Section 4(b) herein; base
salary for any Renewal Term (as defined in Section 3) shall be mutually agreed
to by the parties hereto.
b. Stock. As additional compensation, for all services rendered by the
Employee pursuant to the terms of this Agreement and in consideration of the
continuing services rendered by the Employee pursuant to the terms of this
Agreement, the Company shall issue an aggregate of Eighty Thousand (80,000)
shares of Common Stock of the Company to the Employee as follows: Twenty
Thousand (20,000) shares to be issued on the last day of the completion of the
first quarter following the signing of this Agreement, Twenty Thousand (20,000)
shares to be issued at the completion of the second quarter following the
signing of this Agreement, Twenty Thousand (20,000) shares to be issued on the
last day of the completion of the third quarter following the signing of this
Agreement, and Twenty Thousand (20,000) to be issued on the last day of the
completion of the final quarter following the signing of this Agreement.
c. Employee Benefits. The Employee shall be entitled to participate in all
benefit programs of the Company currently existing or hereafter made available
to other salaried executive officers, including, but not limited to, pension,
profit sharing and any other retirement plans, group life insurance,
hospitalization, surgical, dental and major medical coverage, sick leave, salary
continuation, vacation and holidays, long-term disability, and other fringe
benefits.
d. Business Expense Reimbursement. During the Term or any Renewal Term of
employment, the Employee shall be entitled to receive proper reimbursement for
all reasonable, out-of-pocket expenses incurred by the Employee (in accordance
with the policies and procedures established by the Company for its executive
officers) in performing services hereunder, provided the Employee properly
accounts therefor and provided further that any expense in excess of $100 or in
the aggregate of $500 must be approved in advance by the Board of Directors.
5. Covenant Not to Compete. The Employee acknowledges and recognizes the
highly competitive nature of the Company's business and the goodwill, continued
patronage, and specifically the names and addresses of the Company's Clients (as
hereinafter defined) constitute a substantial asset of the Company having been
acquired through considerable time, money and effort. Accordingly, in
consideration of continued employment and compensation by the Company, the
Employee agrees to the following:
a. That during the Restricted Period (as defined herein) and within the
Restricted Area (as defined herein), the Employee will not, individually or in
conjunction with others, directly or indirectly, engage in any Business
Activities (as hereinafter
2
<PAGE>
defined) other than on behalf of the Company and as agreed by the Company and
the Employee, whether as an officer, director, proprietor, employer, partner,
independent contractor, investor, stockholder (other than as a holder of less
than 1% of the outstanding capital stock of a publicly traded corporation),
consultant, advisor, agent or otherwise. Except that during the term of
Employee's employment with the Company, the foregoing limitations as to
Restricted Area shall not be applicable.
b. That during the Restricted Period and within the Restricted Area (as
defined herein), the Employee will not, indirectly or directly, compete with the
Company by soliciting, inducing or influencing any of the Company's Clients
which have a business relationship with the Company at any time during the
Restricted Period to discontinue or reduce the extent of such relationship with
the Company. Except that during the term of Employee's employment with the
Company, the foregoing limitations as to Restricted Area shall not be
applicable.
c. During the term of the Employee's employment with the Company and for
any time thereafter, the Employee will not (a) directly or indirectly recruit,
solicit or otherwise influence any employee or agent of the Company to
discontinue such employment or agency relationship with the Company, or (b)
employ or seek to employ, or cause or permit any business which competes
directly or indirectly with the Business Activities of Company (the "Competitive
Business") to employ or seek to employ for any Competitive Business any person
who is then (or was at any time within six (6) months prior to the date Employee
or the Competitive Business employs or seeks to employ such person) employed by
the Company.
d. During the term of the Employee's employment with the Company and for
any time thereafter, the Employee will not interfere with, disrupt or attempt to
disrupt any past, present or prospective relationship, contractual or otherwise,
between the Company and any Company's client, employee, agent, vendor, supplier
or customer.
6. Non-Disclosure of Confidential Information.
a. The Employee acknowledges that the Company's trade secrets, private or
secret processes, methods and ideas, as they exist from time to time, customer
lists and information concerning the Company's products, services, business
records and plans, inventions, product design information, price structure,
discounts, costs, computer programs and listings, source code and/or subject
code, copyright, trademark, proprietary information, formulae, protocols, forms,
procedures, training methods, development, technical information, marketing
activities and procedures, method for operating of the Company's Business,
credit and financial data concerning the Company and the Company's Clients and
Client Lists, which Client Lists shall not only mean one or more of the names
and addresses of the Clients of the Company but it shall also encompass any and
all information whatsoever regarding them, including their needs, and marketing
and advertising practices and plans and information which is embodied in written
or otherwise recorded form, but it shall also include information
3
<PAGE>
which is mental, not physical (collectively, the "Confidential Information") as
valuable, special and unique assets of the Company, access to and knowledge of
which are essential to the performance of the Employee hereunder. In light of
the highly competitive nature of the industry in which the Company's business is
conducted, the Employee agrees that all Confidential Information, heretofore or
in the future obtained by the Employee as a result of the Employee's association
with the Company, shall be considered confidential.
b. Excluded from the Confidential Information, and therefore not subject to
the provisions of this Agreement, shall be any information which:
(1) At the time of disclosure, is in the public domain as evidenced by
printed publications;
(2) After the disclosure, enters the public domain by way of printed
publication through no fault of the Employee or those in privity with it;
(3) Employee can show by written documentation was in its possession
at the time of disclosure and which was not acquired directly or indirectly
from the Company; or
(4) Employee can show by written documentation was acquired, after
disclosure, from a third party who did not receive it from the Company, and
who had the right to disclose the information without any obligation to
hold such information confidential.
c. The Employee acknowledges that, as between the Company and the Employee,
the Confidential Information and any and all rights and privileges provided
under the trademark, copyright, trade secret and other laws of the United
States, the individual states thereof, and jurisdictions foreign thereto, and
the goodwill associated therewith, are and at all times will be the property of
the Company.
d. Employee agrees that it shall:
(1) Hold in confidence and not disclose or make available to any third
party any such Confidential Information unless so authorized in writing by
the Company;
(2) Exercise all reasonable efforts to prevent third parties from
gaining access to the Confidential Information;
(3) Not use, directly or indirectly, the Confidential Information in
any respect of its business, except as necessary to evaluate the
information;
4
<PAGE>
(4) Restrict the disclosure or availability of the Confidential
Information to those of Employee's employees who have read and understand
this Agreement and who have a need to know the information in order to
achieve the purposes of this Agreement;
(5) Not copy or modify any Confidential Information without prior
written consent of the Company.
(6) Take such other protective measures as may be reasonably necessary
to preserve the confidentiality of the Confidential Information; and
(7) Relinquish and require all of its employees to relinquish all
rights it and its employees may have in any matter, such as drawings,
documents, models, samples, photographs, patterns, templates, molds, tools
or prototypes, which may contain, embody or make use of the Confidential
Information; promptly deliver to the Company any such matter as the Company
may direct at any time; and not retain any copies or other reproductions
thereof.
e. Employee further agrees:
(1) That it shall promptly disclose in writing to the Company all
ideas, inventions, improvements and discoveries which may be conceived,
made or acquired by Employee or its employees as the direct or indirect
result of the disclosure by the Company of the Confidential Information to
Employee;
(2) That all such ideas, inventions, improvements and discoveries
conceived, made or acquired by Employee, alone or with the assistance of
others, relating to the Confidential Information, shall be the property of
the Company and shall be treated as Confidential Information in accordance
with the provisions hereof and that Employee shall not acquire any
intellectual property rights under this Agreement except the limited right
to use set forth in this Agreement.
(3) That Employee and its employees shall assist in the preparation
and execution of all applications, assignments and other documents which
the Company may deem necessary to obtain patents, copyrights and the like
in the United States and in jurisdictions foreign thereto, and to otherwise
protect the Company.
f. Upon written request of the Company, Employee shall return to the
Company all written materials containing the Confidential Information. Employee
shall also deliver to the Company written statements signed by the Employee
certifying all materials have been returned within five (5) days of receipt of
the request.
5
<PAGE>
7. Company's Clients. The "Company's Clients" shall be deemed to be any
persons, partnerships, corporations, professional associations or other
organizations for whom the Company has performed Business Activities.
8. Restrictive Period. The "Restrictive Period" shall be deemed to be
during the Employee's employment with the Company and for a period of twelve
(12) months following termination of the Employee's employ, regardless of the
reason for termination.
9. Restricted Area. The Restricted Area shall be deemed to mean within
Monroe County, Florida and any other county in any other state which the Company
shall conduct its Business.
10. Business Activities. "Business Activities" shall be deemed to include
any activities which are included in the Company's Business now or during the
effective period of this Agreement.
11. Covenants as Essential Elements of this Agreement; Survival of
Covenants.
a. It is understood by and between the parties hereto that the foregoing
covenants by Employee contained in Sections 5 or 6 of this Agreement shall be
construed to be agreements independent of any other element of the Employee's
employment with the Company. The existence of any other claim or cause of
action, whether predicated on any other provision in this Agreement, or
otherwise, as a result of the relationship between the parties shall not
constitute a defense to the enforcement of the covenants in this Agreement
against the Employee.
b. The covenants by Employee contained in Sections 5 and 6 shall survive
the expiration of this Agreement if the Employee continues to work for the
Company, in any manner, without renewing this Agreement. The Employee further
agrees that the covenants set forth in Section 5 and 6 of this Agreement shall
continue to be in effect following the expiration or termination of the
Employee's employment with the Company.
12. Remedies.
a. The Employee acknowledges and agrees that the Company's remedy at law
for a breach or threatened breach of any of the provisions of Sections 5 or 6
herein would be inadequate and the breach shall be per se deemed as causing
irreparable harm to the Company. In recognition of this fact, in the event of a
breach by the Employee of any of the provisions of Sections 5 or 6, the Employee
agrees that, in addition to any remedy at law available to the Company,
including, but not limited to monetary damages, the Company, without posting any
bond, shall be entitled to obtain, and the Employee agrees not to oppose the
Company's request for equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available to the Company.
6
<PAGE>
b. The Employee acknowledges that the granting of a temporary injunction,
temporary restraining order or permanent injunction merely prohibiting the use
of Confidential Information would not be an adequate remedy upon breach or
threatened breach of Sections 5 or 6 and consequently agrees, upon proof of any
such breach, to the granting of injunctive relief prohibiting any form of
competition with the Company. Nothing herein contained shall be construed as
prohibiting the Company from pursuing any other remedies available to it for
such breach or threatened breach.
c. In the event that the Employee shall be in violation of the
aforementioned restrictive covenants as set forth in Sections 5 and 6, then the
time limitation during which breach or breaches should occur, and in the event
the Company should be required to seek relief from such breach in any court or
other tribunal, then the covenant shall be extended for a period of time equal
to the pendency of such proceedings, including appeal.
13. Attorneys' Fees. The Employee agrees that in the event that the Company
is required to engage an attorney to enforce the terms of the covenants in
Sections 5 or 6 of this Agreement, the Employee shall pay all costs and expenses
of that attorney or firm, whether or not a complaint or suit is filed with any
court of competent jurisdiction.
14. Effect on Prior Agreements. This Agreement supersedes any and all prior
or written agreement in their entirety between the Company and the Employee,
which shall be void and of no further force and effect after the date of this
Agreement.
15. Termination.
a. Termination Without Cause by Either Party. The Company and the Employee
may terminate this Agreement without cause upon giving thirty (30) days' prior
written notice. During such thirty (30) day period, the Employee shall continue
to perform the Employee's duties pursuant to this Agreement, and the Company
shall continue to compensate the Employee in accordance with this Agreement.
b. Mutual Agreement. The Company and the Employee may terminate this
Agreement by mutual agreement of the parties hereto at any time.
c. Immediate Termination. This Agreement may be terminated immediately by
the Company upon the occurrence of any of the following events:
(1) The death of the Employee;
(2) The Employee has a guardian of the person or estate appointed by a
court of competent jurisdiction;
7
<PAGE>
(3) The Employee is disabled so as to be unable to perform duties
required under this Agreement for a period of ninety (90) consecutive days
or ninety (90) days in any one-hundred eighty (180) day period; or
(4) The willful engagement in misconduct that is materially injurious
to the Company, monetarily or otherwise; or
(5) For "Cause," as defined below.
d. "Cause" means (i) committing or participating in an injurious act of
fraud, gross neglect, misrepresentation, embezzlement or dishonesty against the
Company; (ii) committing or participating in any other injurious act or omission
wantonly, willfully, recklessly or in a manner which was grossly negligent
against the Company, monetarily or otherwise; (iii) engaging in a criminal
enterprise involving moral turpitude; (iv) conviction of a felony under the laws
of the United States or any state thereof; (v) if applicable, loss of any state
or federal license required for the Employee to perform the Employee's material
duties or responsibilities for the Company; or (vi) any assignment of this
Agreement in violation of Section 20 of this Agreement.
Notwithstanding anything else contained in this Agreement, this Agreement
will not be deemed to have been terminated for Cause unless and until there
shall have been delivered to the Employee a notice of termination stating that
the Employee committed one of the types of conduct set forth in the definition
of Cause contained in this Agreement and specifying the particulars thereof.
e. Termination After Failure to Cure Breach. If the Employee commits a
material breach of any provisions of this Agreement, the Company may terminate
the Agreement at any time, if after providing written notice to the Employee of
the alleged breach or failure, the breach or failure remains uncured for a
period of ten (10) days after receipt of such notice.
16. Notices. Any notice required or permitted to be given under the terms
of this Agreement shall be sufficient if in writing and if sent postage prepaid
by registered or certified mail, return receipt requested; by overnight
delivery; by courier; or by confirmed telecopy, in the case of the Employee to
the Employee's last place of business or residence as shown on the records of
the Company, or in the case of the Company to its principal office as set forth
in the introductory paragraph, or such other place as it may designate.
17. Waiver. Unless agreed in writing, the failure of either party, at any
time, to require performance by the other of any provisions hereunder shall not
affect its right thereafter to enforce the same, nor shall a waiver by either
party of any breach of any provision hereof be taken or held to be a waiver of
any other preceding or succeeding breach of any term or provision of this
Agreement. No extension of time for the
8
<PAGE>
performance of any obligation or act shall be deemed to be an extension of time
for the performance of any other obligation or act hereunder.
18. Complete Agreement. This Agreement contains the entire agreement
between the parties hereto with respect to the contents hereof and supersedes
all prior agreements and understandings between the parties with respect to such
matters, whether written or oral. Neither this Agreement nor any term or
provision hereof may be changed, waived, discharged or amended in any manner
other than by an instrument in writing, signed by the party against which the
enforcement of the change, waiver, discharge or amendment is sought.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one agreement.
20. Binding Effect/Assignment. This Agreement shall be binding upon the
parties hereto, their heirs, legal representatives, successors and assigns. This
Agreement shall not be assignable by the Employee but shall be assignable by the
Company in connection with the sale, transfer or other disposition of its
business or to any of the Company's affiliates controlled by or under common
control with the Company.
21. Governing Law. This Agreement shall become valid when executed and
accepted by Company. The parties agree that it shall be deemed made and entered
into in the State of Florida and shall be governed and construed under and in
accordance with the laws of the State of Florida. Anything in this Agreement to
the contrary notwithstanding, the Employee shall conduct the Employee's business
in a lawful manner and faithfully comply with applicable laws or regulations of
the state, city or other political subdivision in which the Employee is located.
22. Headings. The headings of the sections are for convenience only and
shall not control or affect the meaning or construction or limit the scope or
intent of any of the provisions of this Agreement.
23. Survival. Any termination of this Agreement shall not, however, affect
the ongoing provisions of this Agreement which shall survive such termination in
accordance with their terms.
24. Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein. If any court
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<PAGE>
determines that any provision of Section 5 or 6 hereof is unenforceable because
of the duration or scope of such provision, such court shall have the power to
reduce the scope or duration of such provision, as the case may be, and, in its
reduced form, such provision shall then be enforceable.
25. Enforcement. Should it become necessary for any party to institute
legal action to enforce the terms and conditions of this Agreement, the
successful party will be awarded reasonable attorneys' fees at all trial and
appellate levels, expenses and costs.
26. Venue. Company and Employee acknowledge and agree that the U.S.
District for the Southern District of Florida, or if such court lacks
jurisdiction, the 11th Judicial Circuit (or its successor) in and for Dade
County, Florida, shall be the venue and exclusive proper forum in which to
adjudicate any case or controversy arising either, directly or indirectly, under
or in connection with this Agreement and the parties further agree that, in the
event of litigation arising out of or in connection with this Agreement in these
courts, they will not contest or challenge the jurisdiction or venue of these
courts.
27. Construction. This Agreement shall be construed within the fair meaning
of each of its terms and not against the party drafting the document.
THE PARTIES TO THIS AGREEMENT HAVE READ THIS AGREEMENT, UNDERSTAND ITS TERMS AND
CONDITIONS, HAVE HAD THE OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL OF
THEIR OWN CHOICE AND AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS.
IN WITNESS WHEREOF, the Effective Date shall be the date the Agreement has been
accepted by the Company at its principal offices in Dade County, Florida.
WITNESS: THE COMPANY
Pelican Properties International, Corp.
_______________________________
By: /s/ C. John Knorr, Jr.
----------------------------------------
C. John Knorr, Jr., Chairman of the Board
THE EMPLOYEE
_______________________________
/s/ Jane Bergman
--------------------------------------------
Jane Bergman
10
<PAGE>
EXHIBIT A
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is dated as of October 1, 1996, (the "Grant
Date"), between Pelican Properties, International Corp., a Florida corporation
whose principal place of business is 3191 Coral Way, Suite 115, Box 165, Coral
Gables, FL 33145 (the "Company") and Timothy Benjamin (the "Optionee").
In consideration for services rendered to the Company as a Chief Financial
Officer and Secretary, the Company hereby grants to Optionee the option to
acquire common stock, par value $.001 per share, of the Company (the "Common
Stock"), upon the following terms and conditions.
1. Grant of Option. Subject to the provisions of this Agreement and the
Employment Agreement entered into between the Company and the Optionee of even
date, the Company hereby grants to Optionee the right and option (the "Option")
to purchase up to Eighty Thousand (80,000) shares of Common Stock (the "Option
Shares") at the Exercise Price (the "Exercise Price") described in Section 2 of
this Agreement and specifically subject to the "Vesting of the Option" described
in Section 3 of this Agreement.
2. Exercise Price. Subject to the provisions of Section 3 of this
Agreement, the Exercise Price of the Option Shares shall be determined as
follows:
a. For any Option vesting on December 31, 1997 ("Year One"), the
exercise price shall be the greater of (i) $2.50 per Option Share or (ii)
the average bid price per share of Common Stock for Year One, determined by
averaging the bid prices as of March 31, 1997, June 30, 1997, September 30,
1997, and December 31, 1997.
b. For any Option vesting on December 31, 1998 ("Year Two"), the
exercise price shall be the greater of (i) $2.50 per Option Share or (ii)
the average bid price per share of Common Stock for Year Two, determined by
averaging the bid prices as of March 31, 1998, June 30, 1998, September 30,
1998, and December 31, 1998.
The Company shall pay all original issue or transfer taxes on the exercise
of the Option.
<PAGE>
3. Vesting of Option. Subject to the provisions of this Agreement
a. A total of up to 40,000 Option Shares may vest for each of (i) Year
One and (ii) Year Two; subject to the Company meeting two of the three
criteria set forth below during Year One and Year Two commencing January 1,
1997, and continuing through December 31, 1998:
(1) As of December 31, the Company shall have attained no less
than a 20% increase in its Earnings Before Income Tax (EBIT) over the
previous December 31 year end; and/or
(2) As of December 31, the weighted average earnings per share of
the Company's Common Stock shall have increased by no less than 20%
over the previous year's weighted average earning per share, which
shall be determined by the sum of the average outstanding shares
during the relevant year as of March 31, June 30, September 30, and
December 31, divided by 4, and comparing that number to the previously
year's number, calculated in a like manner; and/or
(3) As of December 31, the average bid price of the Common Stock
shall have increased by no less than 20% over the previous year's
average bid price, which shall be determined by averaging the bid
price of the Common Stock for the five (5) consecutive business days
commencing December 1.
b. To the extent that
(1) only one of the criteria described in Section 3(a) is
attained during a given year, 20,000 Option Shares shall vest for that
year; and
(2) an increase of more than 10% but less than 20% of the
criteria is met during a given year, the number of Option Shares shall
vest based upon a pro-rata percentage, which would range between
20,000 to 39,999 Option Shares for that year.
c. Subject to the provisions hereof, the Option Shares shall vest as
of December 31 of Year One or Year Two, as applicable.
4. Exercisability of Option. Subject to the provisions of this Agreement,
the Option shall be exercisable by Optionee in whole or in part, at any time and
from time to time, upon the Vesting Date and ending on December 31, 2000.
5. Non-Assignability of Option. The Option shall not be given, granted,
sold, exchanged, transferred, pledged, encumbered, assignee or otherwise
disposed of by Optionee, other than by will or the laws of descent and
distribution, and, during the
2
<PAGE>
lifetime of Optionee, shall not be exercisable by any other person, but only by
the Optionee.
6. Method of Exercise of Option. Optionee shall notify the Company by
written notice, in the form of the Notice of Exercise attached hereto
(Attachment A), delivered to the Company's principal office, attention: Chief
Executive Officer, accompanied by Optionee's cashier's check payable to the
order of the Company for the full exercise price of the Option Shares purchased.
As soon as practicable after the receipt of such Notice of Exercise, the Company
shall, at its principal office, tender to Optionee a certificate or certificates
issues in Optionee's name evidencing the Option Shares purchased by Optionee
hereunder.
7. Termination of Option. To the extent not exercised, the Option shall
terminate the earlier of:
(a) December 31, 2000; or
(b) In the event Optionee ceases to be the Chief Financial Officer of
the Company at any time prior to expiration of the Option, for any reason
other than for Cause, as that term is defined in the Employment Agreement
between the Company and the Optionee of even date herewith, the unexercised
portion of the Option may be exercised by Optionee (or by a person who
acquired the right to exercise the Option by bequest or inheritance or by
reason of the death of Optionee) for a period of thirty (30) days from the
date of such cessation; or
(c) In the event of Optionee's termination for Cause at any time prior
to the expiration of the Option, the unexercised portion of the Option
shall immediately terminate.
8. Shares of Common Stock as Investment. By accepting the Option, Optionee
agrees that the Option and any and all Option Shares purchased upon the exercise
thereof, unless registered at the time of purchase under the Securities Act of
1933, as amended (the "Securities Act"), shall be acquired for investment and
not for distribution, and upon the issuance of any or all of the Option Shares
subject to the Option, Optionee shall deliver to the Company a representation in
writing that such Option Shares are being acquired in good faith for investment
and not with a view to resale or distribution. The Company may place an
appropriate restrictive legend on the certificate or certificates evidencing
such Option Shares.
9. Adjustment of Shares.
(a) If any time prior to the expiration or exercise in full of the Option,
there shall be any increase or decrease in the number of issued and outstanding
shares of the Common Stock through the declaration of a stock dividend or
through any
3
<PAGE>
recapitalization resulting in a stock split-up, combination or exchange of the
Common Stock, then and in such event, appropriate adjustment shall be made in
the number of Shares, and the exercise price per Option Share thereof, that
remain unexercised under the Option, so that the same percentage of the
Company's issued and outstanding shares of Common Stock shall remain subject to
purchase at the same aggregate exercise price.
(b) Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with a direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or exercise price of the Shares that remain
unexercised under the Option.
(c) Without limiting the generality of the foregoing, the existence of
unexercised Shares under the Option shall not affect in any manner the right or
power of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issue by the Company of debt securities, or preferred to
preference stock that would rank above the Shares issuable upon exercise of the
Option; (iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.
10. Corporate Events. In the event of a proposed liquidation of the
Company, a proposed sale of all or substantially all of its assets or its Common
Stock, a proposed merger or consolidation, or a proposed separation or
reorganization, the Board of Directors may declare that the Option shall
terminate as of a date to be fixed by the Board of Directors; provided that not
less than thirty (30) days written notice of the date so fixed shall be given to
the Optionee, and the Optionee shall have the right, during the thirty (30) days
preceding such termination, to exercise the Option as to all or any part of the
Option Shares covered thereby, including Option Shares as to which such Option
shall not otherwise be exercisable. However, nothing set forth herein shall (i)
extend the term set for purchasing the Option Shares or (ii) give Optionee any
rights or privileges as a shareholder of the Company (respecting the Option
Shares underlying the Option which is the subject of this Agreement) prior to
the Optionee's exercise of any of the Option Shares.
11. Binding Effect. Except as otherwise expressly provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their heirs, legal representatives, successors and permitted assigns.
4
<PAGE>
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without giving effect to the
conflict of laws principles thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
PELICAN PROPERTIES
INTERNATIONAL, CORP.
By: /s/ Jane Bergman
---------------------------------
OPTIONEE
/s/ Timothy Benjamin
-------------------------------------
TIMOTHY BENJAMIN
5
<PAGE>
ATTACHMENT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise the within Option to
the extent of purchasing ____________ shares of Common Stock of Pelican
Properties, International Corp., a Florida corporation, and hereby makes
payments of $_________ in payment therefor.
--------------------------------
Signature
--------------------------------
Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
Name:
---------------------------------------------------------------------------
(Please type or print in block letters.)
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Social Security Number:
---------------------------------------------------------
6
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
IN RE: CASE NO. 96-10174-BKC-RAM
CHAPTER 11
SUNSHINE KEY ASSOCIATES
LIMITED PARTNERSHIP, a Florida
Limited Partnership
Tax ID 56-1573059
Debtor.
- -------------------------------/
ORDER CONFIRMING DEBTOR'S MODIFIED THIRD AMENDED PLAN OF
REORGANIZATION
The Debtor's Modified Third Amended Plan, Dated September 30, 1996, under
Chapter 11 of the Bankruptcy Code filed by the Debtor, SUNSHINE KEY ASSOCIATES,
LTD. PARTNERSHIP, having been transmitted to claimants; and it having been
determined after hearing and notice:
1. That the Debtor's Modified Third Amended Plan has been accepted in
writing by the claimants whose acceptance is required by law; and
2. That the provisions of Chapter 11 of the Code have been complied with;
that the Plan has been proposed in good faith and not by any means forbidden by
law; and
3. That the Plan does not discriminate unfairly, and is fair and equitable,
with respect to each class of claims that is impaired under the Plan, and has
not accepted the Plan; and
4. All payments made or promised by the Debtor or by a person issuing
securities or acquiring property under the Plan, or by any other person for
services or for costs and expenses in, or in connection with, the Plan and
incident to the case, have been
<PAGE>
fully disclosed to the Court and are reasonable or, if to be fixed after
confirmation of the Plan, will be subject to approval of the Court; and
5. The identities, qualifications, and affiliations of persons who are to
be directors or officers, or voting trustees, if any of the debtors after
confirmation of the Plan, have been fully disclosed, and the appointment of such
persons to such offices, or their continuance therein, is equitable and
consistent with the interest of the claimants and interest holders and with
public policy; and
6. That the identity of any insider that will be employed or retained by
the debtor and compensation to such insider has been fully disclosed; and
7. Confirmation of the Plan is not likely to be followed by the
liquidation, or the need for further financial reorganization, of the debtor;
8. The Court shall retain jurisdiction as provided in the Plan until there
is substantial consummation of the Plan. The Plan is modified if it calls for
retention of jurisdiction beyond that point; and
9. ROBERT C. FURR, ESQ., is named disbursing agent without additional
compensation. Bond is waived. The disbursing agent is directed to make all first
installment payments on the effective date of the Plan. The disbursing agent
shall then file a report on or before the seventieth (70th) day after the entry
of this Order upon the docket, which report shall reflect substantial
<PAGE>
cunsummation and the issuance of the Notes by Newco to Class 7 Creditors. The
disbursing agent shall file a final report and Application for Final Decree
within ninety (90) days after the entry of this Order on the docket.
10. The Debtor shall pay the United States Trustee the appropriate sum
required pursuant to 28 U.S.C. ss. 1930(a)(6) within ten (10) days of the entry
of this Order for preconfirmation periods. The reorganized Debtor shall further
pay the United States Trustee the fee required pursuant to 28 U.S.C. ss.
1930(a)(6) for post-confirmation periods within the time period set forth in 28
U.S.C. ss. 1930(a)(6) which the Debtor has agreed shall be based upon all
post-confirmation disbursements made by the reorganized Debtor, until the
earlier of the closing of the case by the issuance of a Final Decree by the
Court, or upon the entry of an Order by this Court dismissing this case or
converting this case to another Chapter under the United States Bankruptcy Code.
Failure to timely file the Final Report of Estate and Motion for Final Decree
Closing Case will result in the imposition of sanctions against the debtor's
counsel, which may include the return of attorney's fees.
11. The above-named Debtor is discharged from any debt that arose before
the date of confirmation of the Plan and any debt of a kind specified in 11
U.S.C. ss. 502(g), (h), or (i) except as provided in the Plan or in this Order.
IT IS ORDERED THAT:
1. The Modified Third Amended Plan Of Reorganization, dated
<PAGE>
September 30, 1996 filed by the Debtor, SUNSHINE KEY ASSOCIATES, LTD.
PARTNERSHIP, and as further modified on the record, and by the terms of this
Order, is confirmed.
2. Class 4 of the Modified, Third Amended Plan of Reorganization consists
of the alleged secured claim of Monroe County, for alleged violations of the
County Code. By separate order, the Court has approved the Compromise of
Controversy between the Debtor and Monroe County, whereby Monroe County is
granted, among other things, a general unsecured claim in the amount of
$20,000.00 to be treated in Class 7 of the Plan. Accordingly, Class 4 of the
Plan, and the treatment accorded thereby, is hereby stricken.
3. Paragraph 3.11, Class 7, of the Plan is hereby modified to provide that
in the event that South Side of the Debtor's real property is sold, the allowed
Class 7 Claims shall be paid, to the extent of net proceeds available to the
Debtor after necessary closing costs and satisfaction of the secured claims.
4. The Effective Date of the Plan shall be December 20, 1996. The Plan
shall not become effective if the Debtor defaults in payment of the full
$800,000.00 due WAMCO XXII Ltd. on the effective date, and in that event, WAMCO
shall be immediately entitled to conduct its foreclosure sale. In the event of a
default, the Debtor shall file an appropriate affidavit and an Order dismissing
the case with prejudice for 180 days.
DONE AND ORDERED in the Southern District of Florida this 29th day of
October, 1996.
<PAGE>
/s/ Robert A. Mark
---------------------------------
ROBERT A. MARK
UNITED STATES BANKRUPTCY JUDGE
COPIES FURNISHED TO:
Jordi Guso, Esq.
Furr and Cohen, P.A.
1499 W. Palmetto Pk. Rd. #412
Boca Raton, Florida 33486
Office of Asst. U.S. Trustee
51 S.W. 1 Avenue
Room 1204
Miami, Florida 33130
99.2
IN THE UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
IN RE: )
SUNSHINE KEY ASSOCIATES, ) CASE NO. 96-10174-BKC-RAM
LTD. PARTNERSHIP, CHAPTER 11
)
Debtor.
- -------------------------)
DEBTOR'S MODIFIED THIRD AMENDED PLAN OF REORGANIZATION
FURR AND COHEN, P.A.
Attorneys for Debtor
By: Jordi Guso, Esq.
1499 West Palmetto Park Road
Suite 412
Boca Raton, Florida 33486
(561) 395-0500
<PAGE>
TABLE OF CONTENTS
Page
----
(a) Definitions - Article I............................................. 1
(b) Classification of Claims and Interests -
Article II.......................................................... 2
(c) Treatment of Claims and Interests under the
Plan - Article III.................................................. 2
(d) Impairment - Article IV............................................. 11
(e) Means of Execution and Security for
Installment Payments - Article V.................................... 11
(f) Executory Contracts - Article VI.................................... 13
(g) Effect of Confirmation - Article VII................................ 14
(h) Cram Down, Modification, Substantive
Consolidation - Article VIII........................................ 15
(i) Retention of Jurisdiction - Article IX.............................. 15
(j) Officers and Directors - Article X.................................. 17
(k) Miscellaneous - Article XI.......................................... 17
ii
<PAGE>
DEBTOR'S AMENDED PLAN OF REORGANIZATION
ARTICLE I
Definitions
For the purposes of this Amended Plan and to the extent not otherwise
provided herein, the terms below shall have the respective meanings hereinafter
set forth and, unless otherwise indicated, the singular shall include the plural
and capitalized terms shall refer to the terms as defined in this Article and,
any term used in the Plan which is not defined below, but which is used in the
Bankruptcy Code, shall have the meaning assigned to it in the Bankruptcy Code.
1.1 "Disputed Claim" means any Claim designated as disputed, contingent or
unliquidated in Debtor's Schedules filed in connection with its Bankruptcy case,
or any claim against which an objection to the allowance thereof has been, or
will be, interposed, and as to which no Final Order has been entered.
1.2 "Effective Date" means the 60th day following the Confirmation Order,
(in the event that such date is not a business day, the next day thereafter).
1.3 "NEWCO" shall mean the yet-to-be formed wholly owned subsidiary of
Pelican Properties, International Corporation. NEWCO shall acquire title to the
Debtor's assets, subject to the liabilities of the Plan, on the Effective Date.
1
<PAGE>
ARTICLE II
Classification of Claims and Interests
2.1 An allowed Claim is part of a particular class only to the extent that
the Allowed Claim qualifies within the definition of that Class and, is in a
different Class to the extent that the remainder of the Claim qualifies within
the description of a different Class.
ARTICLE III
Treatment of Claims and Interests Under the Plan
3.1 General. All payments under this Plan shall commence ten days after
confirmation.
3.2 Administrative Claims. All Allowed Administrative Claims shall be paid:
(a) in full on the Effective Date or, if such Claim is objected to,
the Date of a Final Order allowing any such Administrative Claim;
OR
(b) upon such other terms as may be agreed to between the Debtor and
each such Administrative Claimant.
Administrative costs are estimated to be approximately $20,000.00 above
what has been paid to Furr and Cohen as a retainer. Furr and Cohen received a
retainer of $15,000.00 from Infinity Investments Group, Inc. ("Infinity"), the
corporate general partner of the Debtor. The Debtor did not have the financial
resources at the Petition Date to pay the retainer to Furr and Cohen.
2
<PAGE>
All case related payments for services, costs, and expenses will be subject
to Court approval. All payments shall be from the Debtor's cash on-hand plus the
capital contribution to be provided by equity holders of the Debtor in
connection with the Confirmation of the Plan.
3.3 All fees due under 11 U.S.C.(section)1129(a)(12) shall be paid as
required by 28 U.S.C. (section) 1930.
3.4 Tax Claims. - Allowed Tax Claims, estimated by management to total
$21,170.33(1), specified in 11 U.S.C. Section 507(a)(8) shall receive deferred
cash payments, over a period not exceeding six (6) years after the date of
assessment of such tax, of a value, as of the Effective Date, equal to the
allowed amount of such claim or such other payments that a particular holder may
agree to accept on account of a particular claim with interest rate in effect
per the Internal Revenue Code on date of confirmation.
3.5 Class 1. Class 1 is the Claim of Wamco XXII, Ltd. (hereinafter
"Wamco"), or any successor holder of such claim, secured by a first priority
lien in and upon the real property owned by the Debtor and upon which it
operates the recreational park facility. Class 1 shall receive the treatment
provided under the Stipulation for Settlement approved by the Court on or about
August 5, 1996, and the provisions of the Stipulation for
- --------
(1) The 1995 real property taxes have been paid from the tax escrow established
by the Debtor pre-petition with Haley, Sinagra & Perez, counsel for NationsBank.
Therefore, this figure excludes the 1995 real property taxes.
3
<PAGE>
Settlement are incorporated as though fully set forth herein. By way of summary,
the agreement is as follows:
1. The Lender will request the State Court to immediately enter the Final
Judgment of Foreclosure but the foreclosure sale will not be held prior to
November 31, 1996, conditioned upon the Borrower's performance of all
obligations set forth below.
2. The Borrower's adequate protection payments in the bankruptcy action will
be reduced to $5,000 per month, commencing on June 29, 1996 through and
including November 29, 1996 (the "Forbearance Period").
3. During the Forbearance Period, the Borrower will be required to make the
following cash payments to be applied to the reduction of the principal
balance of the Notes:
a. $200,000 to be paid within 45 days after execution of the Stipulation
for Settlement, or confirmation of the Plan, whichever occurs earlier;
b. $800,000 to be paid on the Effective Date of the Plan, or December 20,
1996, whichever occurs earlier;
4. C. John Knorr, Jr. (the "Guarantor") and NEWCO will personally guaranty the
principal reduction payments specified in paragraph 3 above.
5. The forbearance transaction described in paragraphs 1 through 4 above shall
be evidenced by a written Forbearance Agreement acceptable to the Lender in
its sole and absolute discretion and approved by the Bankruptcy Court. The
Forbearance Agreement, the Guaranties, the Security Agreements
collateralizing the Guaranties and all other documentation will be prepared
by Lender's counsel.
6. If the Borrower or the Guarantors default under the terms of the
forbearance transaction, the Lender will have the right to immediately
proceed with a foreclosure sale of the mortgaged property and the Lender
shall have continuing full relief from the automatic stay to conduct the
sale.
7. The forbearance transaction must be approved by the Bankruptcy Court and
incorporated in the Borrower's Plan of Reorganization.
8. If the Borrower and the Guarantors pay the required $1,000,000 cash
payments and perform all other obligations under the forbearance documents
on a timely basis, the Lender will agree to restructure the Notes and the
Mortgage as provided below:
4
<PAGE>
(a) The Lender will permit the Borrower's limited partner, Pelican
Properties, International Corp., a Florida corporation or its
designated affiliate (the "Obligor"), to assume the obligations of the
Borrower under the Notes and the Mortgage, as such documents are
amended and restated to reflect the restructured loan outlined below.
The documentation under which the Obligor assumes the Borrower's
obligations will be in all respects acceptable to the Lender and its
counsel. The Lender shall have the absolute right to approve the
Obligor.
(b) The Notes will be consolidated and restated under a single note in the
principal amount of $4,700,000 (or the actual loan balance, if less)
with the following payment terms (the "Restated Note"):
i. During the period commencing on December 29, 1996 and ending on
July 29, 1997, the Restated Note will not bear interest. In lieu
of interest, the Obligor will make monthly payments of $5,000
each commencing on May 29, 1996 through and including July 29,
1997 to compensate the Lender for its agreement to waive interest
on the Restated Note during this period. Such payments will not
reduce the principal balance of the Restated Note.
ii. Comencing on July 30, 1997, the Restated Note will bear interest
at 9% per annum. On August 29, 1997 through and including
September 29, 1999, the Borrower will make equal amortizing
monthly payments of principal and interest on the Restated Note
determined by reference to standard amortization tables using an
interest rate of 9% per annum, the principal balance of the
Restated Note on October 30, 1996 and an amortization period of
25 years. Assuming the principal balance of the Restated Note is
$4,700,000, the monthly payment amount will be $39,442.23. The
Restated Note will mature on October 30, 1999, at which time the
outstanding principal balance and all accrued interest will be
due and payable in full.
iii. If the Restated Note is repaid in full before November 30, 1997,
the Obligor will receive an early payment discount equal to 8% of
the outstanding principal balance of the Restated Note on the
date of repayment. In order to receive the discount, the Borrower
must repay all outstanding accrued interest and any other sums
owed to the Lender on the date of early payment.
iv. If the Restated Note is repaid in full after
5
<PAGE>
December 30, 1997 and before November 30, 1998, the Obligor will
receive an early payment discount equal to 5% of the outstanding
principal balance of the Restated Note on the date of repayment.
In order to receive the discount, the Obligor must repay all
outstanding accrued interest and any other sums owed to the
Lender on the date of early payment.
v. No early payment discount will be available after November 30,
1998.
(c) The Obligor will have a one-time option to extend the maturity of the
Restated Note until October 30, 2002 upon compliance with the
following conditions:
i. On or before October 29, 1999, the Obligor must pay the Lender an
extension fee equal to 1% of the outstanding principal balance of
the Restated Note and reduce the principal balance of the
Restated Note by $500,000. The $500,000 reduction is in addition
to all regularly scheduled principal payments due on the Restated
Note through October 29, 1999.
ii. The Obligor must provide the Lender with written notice of its
election to exercise the extension option by September 30, 1999.
iii. The Obligor must not be in default under the terms of the
Restated Note or any other loan documents executed in connection
therewith.
(d) If the Obligor elects to exercise the extension option and meets all
conditions required by the Lender for the exercise thereof, the
following terms will apply during the extended term of the Restated
Note:
i. The Obligor will execute a renewal of the Restated Note (the
"Renewal Note") which will bear interest at the rate of 9.75% per
annum, commencing on October 30, 1999.
ii. On November 29, 1999 through and including September 29, 2002,
the Borrower will make equal amortizing monthly payments of
principal and interest on the Renewal Note determined by
reference to standard amortization tables using an interest rate
of 9.75% per annum, the outstanding principal balance of the
Restated Note on October 30, 1999 and an amortization period of
20 years.
6
<PAGE>
The Restated Note will mature on October 30, 2002 at which time
the outstanding principal balance plus accrued interest will be
due and payable in full.
In the event of any inconsistency between the terms of this Plan and the terms
of the Stipulation for Settlement, the terms of the Stipulation for Settlement
shall govern.
3.6 Class 2. Class 2 is a secured claim of the Small Business
Administration, secured by a second mortgage, junior to the claim of
NationsBank, in and upon the Debtor's real property.
The Class 2 claim shall remain secured by a second mortgage, junior to the
claim of Wamco. The reorganized Debtor shall execute a new note and mortgage in
favor of the Class 2 claim in the face amount of the claim as of the petition
date. The Class 2 claim shall be paid over ten years and shall accrue interest
at the rate of four (4%) percent per annum. For the first 24 months, Class 2
creditors shall receive monthly payments of $2,000.00 per month. Thereafter, the
remaining claims shall be amortized over a period of eight years. The Class 2
claim shall paid in the event of sale or refinancing of the property. The Class
2 claim may be prepaid in whole or in part, at any time without any penalty.
Pursuant to 11 U.S.C. (section)1146, the mortgage, security agreement and
financing statements to be executed by the Debtor in favor of the Class 2
creditor shall be recorded free of any documentary or other surtax imposed by
State or local authorities.
3.7 Class 3. Class 3 is the secured claim of Robertson Marketing. Robertson
Marketing holds a perfected lien on certain office equipment which it leased to
the Debtor. The Debtor will
7
<PAGE>
reject the Class 3 Lease as of the effective date of the Plan. In the event of a
rejection claim by the Class 3 creditor, such claims shall be treated as a Class
5, general unsecured claim.
3.8 Class 4. Class 4 is the alleged secured claim of Monroe County for
alleged Code violations incurred by the Debtor with respect to the construction
and sale of private units:
A. Sunshine Key v. Monroe County, Circuit Court Case No. 93-267-CA-18.
This Circuit Court litigation resulted in a final judgment being issued on the
5th day of June, 1995 at Key West, Florida. The action was for injunctive
relief, and does not in and of itself result in any liability against Sunshine
Key. The court ruled that Sunshine Key may not place recreational park models
within the Sunshine Key property which vehicles are in excess of eight feet in
width. The Court did, however, find that Sunshine Key was not in violation of
the Monroe County Land Development Regulations in relation to the placement of
those recreational park models prior to the filing of this suit.
Sunshine Key has filed an appeal of the judge's decision prohibiting eight
foot wide recreational park model vehicles from the park. The undersigned has
conferred with Patricia Talisman, Esq. for the sole purpose of assisting in
preparing the appeal. The County did not file an appeal of the Final Judgment
within the time constraints set forth in the Florida Rules of Appellate
Procedure.
B. Sunshine Key v. Monroe County Code Enforcement Board. Case No.
94-10132-CA, an appeal of Monroe County Code Enforcement Case No. CL-2-94-56.
During the pendency of the Circuit Court Case referenced above (Case No.
93-267-CA-18) the Monroe County Code Enforcement Board initiated proceedings
against the use of the south side (the undeveloped portion of park) for camping.
The Final Order was issued on the 15th day of March, 1994, finding Sunshine Key
to be in violation and assessing a lien in the amount of $200.00 per day if
compliance was not achieved by April 21, 1994. Sunshine Key immediately ceased
allowing campers in the south side of Sunshine Key to come into compliance, and
appealed the decision. Sunshine Key's brief was filed in the Circuit Court on
the 5th day of May, 1995. The County's brief has not yet been filed, although it
is beyond the applicable period for the filing of a reply brief. Sunshine Key
has asserted that because of its coming into compliance prior to April 21, 1994,
no lien has accrued to the property, but the County has asserted that the lien
may, in whole or in part, have attached to the property. Any lien, if it exists,
is not a liability of the Partnership until all appeals have been rendered
unfavorably to Sunshine Key, which
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in the opinion of the undersigned, is not a probable result.
C. Sunshine Key v. Monroe County Code Enforcement Board, Circuit Court
Case No. 94-100-65-CA, CEB Case No. L7-92-420. During the pendency of the civil
proceedings referenced in "A" above (Case No. 93-267-CA-18), Monroe County
initiated Code Enforcement proceedings against Sunshine Key for the placement of
recreational vehicles in excess of eight feet in width. The appeal was stayed
pending the Final Judgment in the Circuit Court Case No. 93-267-CA-18. As a
result of Judge Taylor's Final Judgment of June 5, 1995, which has not been
appealed by the County, it appears that Sunshine Key is not in violation of the
Monroe County Land Development Regulations despite the finding of the Code
Enforcement Board on the 23rd day of February, 1994, which is the subject matter
of the appeal. Accordingly, Sunshine Key has filed a Motion to Dismiss an action
filed by Monroe County in Case No. 94-202-05, wherein the County seeks to
enforce a lien which is predicated upon said violation of Monroe County Land
Development Regulations. On June 6, 1996, the Circuit Court ruled in the
Debtor's favor and determined that the claims of the County were barred by the
principals of res judicata. As a consequence, the liens had been voided unless
the County timely appeals this decision.
Additionally, the Debtor is the plaintiff in two other cases; (1) against
its insurance carrier, American Southern Home Insurance Company, for damage
relating to the property's electrical system and (2) against Lifeco Mortgage
Services, Inc. for fraudulently absconding with mortgage deposit funds.
The Class 4 claim will receive no distributions on the Effective Date given
the ruling of the Circuit Court.
3.9 Class 5. Class 5 consists of convenience claims. Convenience claims are
the claims of those creditors which do not exceed $250.00 in amount or the
claims of those creditors who elect to reduce their claims $250.00. The Class 5
claims shall be paid in full in cash on the Effective Date of the Plan in full
satisfaction of their claim.
3.10 Class 6. Class 6 are claims of pre-petition professionals of the
Debtor Gorham Rutter, Horan & Horan and Franklin Greeman. Class 6 claims shall
be subordinated to Class 7, general unsecured claims. Class 6 claims shall be
paid in full, or
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upon such terms as the Debtor and each Class 6 claimant shall agree, following
payment of Class 7, general unsecured claims.
3.11 Class 7. Class 7 consists of claims of non-insider, general unsecured
creditors. These claims shall be paid in full in cash in equal quarterly
installments commencing on the Effective Date of the Plan and every quarter
thereafter for a period of forty-eight (48) months. The Class 7 claims can be
prepaid at any time in whole or in part at any time without penalty. On the
Effective Date, NEWCO shall execute promissory note to each of the Class 7
claimants to evidence to the obligation under the Plan.
3.12 Class 8. Class 8 consists of the insider claims of Infinity
Investments Group, Inc. and Pelican Properties, International Corp. and Workout
Associates General Partnership. These claims shall be subordinated to Class 7,
general unsecured claims and shall be paid, if and only if, Class 7 claims are
paid in full. Class 8 creditors may, at their election, convert their debt to
equity in Pelican Properties, International Corp. at the then prevailing market
price.
3.13 Class 9. The equity interests of Infinity Investment Group, Inc., as
general partner. Infinity Investments Group, Inc. as a one (1%) percent general
partner of the Debtor shall be extinguished as of the Effective Date.
3.14 Class 10. The equity interest of Pelican Properties, International
Corp. as limited partner. Under the Plan, the limited partnership interests will
be extinguished. On
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the Effective Date of the Plan, title to the Debtor's real and personal property
shall be transferred to NEWCO. Title shall be subject to the existing liens of
the Class 2 and Class 3 creditors, and subject to the obligations imposed under
the Plan. Pursuant to 11 U.S.C. (section)1146(c) the deed transferring title to
NEWCO shall be recorded free of any documentary or other surtax imposed by state
or local taxing authorities. The shareholders of Pelican Properties,
International Corp. will retain their equity interests. Pelican Properties,
International Corp. will provide a minimum new infusion of $1,000,000.00.
3.12 Blank Ballots. Any Ballot not filed in accordance with the filing
instructions on the Ballot pertaining to this Plan shall not be counted for
voting purposes.
ARTICLE IV
Impairment
4.1 Claims in Classes 1, 2, 3, 4, 5, 6, 7, 8 and 9 are impaired under this
Plan. Impaired classes will be treated as fully set forth in Article III above.
ARTICLE V
Means of Execution and Security for Payments
5.1 The private placement memorandum has been issued and has been
circulated.(2) Pursuant to 11 U.S.C. Section 1146, the
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(2) As of this writing, 478 Memoranda have been prepared to be distributed
within the next five (5) days, although 122 Memoranda have already been
distributed. Initial response from these recipients has been positive.
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Deed, Mortgage, Security Agreement, Financing Statements and any other executed
by the Debtor in favor of Wamco or required to effectuate the Plan shall be
recorded free of any documentary or other surtax imposed by state or local
authorities. The distribution of cash required under the Plan, shall be made
from available funds of the Debtor or as may be available for distribution on or
before the Effective Date or, as otherwise agreed to by Debtor and the holders
of Allowed Priority Claims and Allowed Unsecured Claims. Additional
contributions will come from Capital Infusion to be provided by Pelican
Properties, International Corp. via the private placement and sale of
warrants.(3)
5.2 The distribution of cash required under Article III of the Plan shall,
as set forth in such Article, be made from the Continuing Operation of Debtor
prior to the Effective Date or by Reorganized Debtor following the Effective
Date.
5.3 Upon the Effective Date, NEWCO shall be vested with all of the real and
personal property of the Debtor, subject only to the claims in interest
recognized and granted under this Plan of Reorganization.
5.4 After the entry of an Order of Confirmation, the Reorganized Debtor,
through NEWCO, shall continue its business and
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(3) On September 20, 1996, the Debtor tendered the $200,000. principal reduction
payment to Wamco as required under the Stipulation for Settlement. As such, a
portion of the infusion has already been made.
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manage its affairs without further supervision of the Court.
5.5 Carl John Knorr, Jr. is named as the individual responsible for making
the payments under the Plan. The payments shall be as provided in Article III.
5.6 Any checks mailed by the disbursing agent for the initial payment to a
particular creditor which remains not cleared forty-five (45) days after
mailing, shall constitute "unclaimed funds" which shall become the Debtor's
property.
ARTICLE VI
Executory Contracts
6.1 Any and all Executory Contracts and unexpired leases of the Debtor not
expressly assumed herein, assumed prior to the Confirmation Date, or not at the
Confirmation Date the subject of pending application to assume, shall be deemed
to be rejected.
6.2 Debtor has present intentions to assume the leases with: Infinity
Investment Group, Inc. ("Backhoe"); Financial Alliance Processing Service
("Credit Card Processing Agreement"); TCI Cable ("Community Cable TV"); Big Pine
Industrial Center ("Storage Space"); and Bland Disposal Service ("Garbage
Collection"). The Debtor will reject the Lease with Robertson Marketing
("Equipment Lease"), as of the effective Date of the Plan.
The Debtor has rejected its Lease with Tom Fletcher for an offsite storage
facility.
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6.3 Any claims for rejected contracts shall be paid in Class 5 upon
determination by agreement or by the Court.
ARTICLE VII
Effect of Confirmation
7.1 Discharge - Except as otherwise provided in this Plan, Confirmation of
the Plan and full compliance and performance with the Plan, shall be deemed to
have discharged the Debtor from any Claim that arose on or prior to the
Confirmation Date, and any Claim of a kind specified in Section 502(g), (h) or
(i) of the Bankruptcy Code, whether or not:
(a) a Proof of the Claim is filed or deemed to be filed under Sections
501 and 1111(a) of the Bankruptcy Code;
(b) such Claim is allowed under Section 502 of the Bankruptcy Code; or
(c) the holder of such Claim has accepted the Plan.
The payments to be made by Debtor pursuant to this Plan shall be in full
settlement and satisfaction of all Claims against Debtor.
ARTICLE VIII
Cram Down, Modification, Substantive Consolidation
UTILIZATION OF CRAM DOWN
If all of the applicable provisions of 11 U.S.C. (section)1129(a) other
than paragraph (8), are found to have been met with respect to the Plan, Debtor
may seek confirmation pursuant to 11 U.S.C. (section)1129(b). For the purposes
of seeking confirmation under the cram-down provisions of the Code, should that
alternative means of confirmation prove to be necessary, Debtor reserves the
right to
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modify or vary the treatment of the claims of the rejecting Classes so as to
comply with Section 1129(b) of the Code.
MODIFICATION OF PLAN
DEBTOR may propose amendments to or modifications of this Plan at any time
prior to confirmation with the leave of Court upon notice to parties entitled to
receive the same. After confirmation, DEBTOR may, with the approval of this
Court, and so long as it does not materially adversely affect the interests of
creditors, remedy any defect or omission, or reconcile any inconsistencies in
the Plan, or in the Order of Confirmation, in such a manner as is necessary to
carry out the purposes and effect of this Plan.
ARTICLE IX
Retention of Jurisdiction
9.1 From and after entry of the Confirmation Order, the Bankruptcy Court
shall retain such jurisdiction as is legally permissible over the reorganization
case for the following purposes:
(a) to hear and determine any and all objections to the allowance of
any Claim or any controversy as to the classification of Claims;
(b) to hear and determine any and all applications for compensation
and reimbursement of expenses to professionals as well as to hear and determine
claims entitled to priority under Section 507(a)(1) of Title 11;
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(c) to enable the Debtor to prosecute any and all proceedings which
may be brought to set aside liens or encumbrances and to recover any transfers,
assets, properties or damages to which the Debtor may be entitled under
applicable provision of the Bankruptcy Code or any other Federal, State or local
laws; including causes of action, controversies, disputes, and conflicts between
the Debtor and any other party, including but not limited to any causes of
action for objections to claims, preferences or fraudulent transfers and
obligations or equitable subordination; and to enter any Order assuring that
good, sufficient and marketable legal title is conveyed to NEWCO.
(d) to consider any necessary valuation issues under Section 506 of
the Code, and any proceeding to determine the amount, validity and priority of
liens, in connection with the Debtor's property.
(e) to determine the rights of any party in respect of the assumption
or rejection of any executory contracts or unexpired leases.
(f) to correct any defect, cure any omission, or reconcile any
inconsistency in the Plan or Order of Confirmation, as may be necessary to carry
out the purposes and intent of this Plan.
(g) to modify this Plan after Confirmation, pursuant to the Code.
(h) to enforce and interpret the terms and conditions of this Plan.
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(i) to enter Orders to enforce the title, rights and power of the
Estate as the Court may deem necessary.
(j) to enter Orders concluding and closing this case.
ARTICLE X
Officers and Directors
On a post-confirmation basis, the Debtor's property will be transferred to
NEWCO, a wholly owned subsidiary of Pelican Properties, International Corp. The
officers of Pelican Properties, International Corp. shall continue to serve in
the following capacities:
Carl John Knorr, Jr. Chairman - $65,000 per annum
of the Board
Jane Bergman President - $24,000 per annum
ARTICLE XI
Miscellaneous
11.1 Headings. Headings are utilized in this Plan for the convenience of
reference only, and shall not constitute a part of this Plan for any other
purpose.
11.2 Defects, Omissions and Amendments. This Plan may be altered, amended
or modified by Debtor before or after the Confirmation Date as provided in
Section 1127 of the Bankruptcy Code.
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11.3 Governing Law. Except to the extent that the Bankruptcy Code is
applicable, all rights and obligations arising under this Plan shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Florida.
11.4 Severability. Should any provision in this Plan be determined to be
unenforceable, such determination shall in no way limit or affect the
enforceability and operative effect of any or all other provisions of this Plan.
11.5 Regulatory Approval. No regulatory approval is necessary for the
confirmation of this Plan.
DATED:___________________________
SUNSHINE KEY ASSOCIATES
LTD. PARTNERSHIP
INFINITY INVESTMENT GROUP, INC.,
General Partner
BY /s/ C. John Knorr, Jr.
--------------------------------
C. John Knorr, Jr., Pres.
PELICAN PROPERTIES INTERNATIONAL,
CORP.
BY /s/ C. John Knorr, Jr.
--------------------------------
C. John Knorr, Jr., Chairman
of the Board
I hereby certify that I am admitted to the Bar of the United States
District Court for the Southern District of Florida and I am
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in compliance with the additional qualifications to practice in this Court set
forth in Local Rule 910(A).
FURR AND COHEN, P.A.
Attorney for Debtor
1499 W. Palmetto Park Road
Suite 412
Boca Raton, Florida 33486
(561) 395-0500
By: /s/ Jordi Guso
-------------------------------
JORDI GUSO, ESQUIRE
FL Bar No. 863580
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