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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 4, 1999
Intrepid Capital Corporation
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(Exact name of registrant as specified in its charter)
DELAWARE 333-66859 59-3546446
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
50 North Laura Street, Suite 3550, Jacksonville, Florida 32202
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(Address of principal executive offices) (Zip Code)
(904) 350-9999
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On August 4, 1999, Intrepid Capital Corporation (the "Company"),
Benjamin C. Bishop, Jr., an individual resident of the State of Florida
("Bishop"), Charles E. Harris, as trustee for the Charles E. Harris Revocable
Trust dated September 10, 1997 ("Harris"), Synagen Capital Partners, Inc., a
Florida corporation ("Synagen"), and Arnold A. Heggestad, an individual
resident of the State of Florida ("Heggestad" and together with Bishop, Harris
and Synagen, referred to herein collectively as the "Ewing Shareholders"),
entered into a Share Purchase Agreement (the "Share Purchase Agreement") and
consummated the transactions contemplated thereby (the "Share Purchase").
Pursuant to the terms and conditions of the Share Purchase Agreement, the
Company purchased from the Ewing Shareholders, and the Ewing Shareholders sold
to the Company, all of the outstanding capital stock (the "Ewing Stock") of
Allen C. Ewing Financial Services, Inc. ("Ewing"), a Jacksonville, Florida
based provider of securities brokerage and investment banking services. The
Company acquired the Ewing Stock in exchange for (i) the payment to the Ewing
Shareholders of cash in the aggregate amount of $950,000.00, subject to
adjustment as provided below, plus (ii) the issuance of three subordinated
convertible promissory notes in the principal amounts of $200,000.00, $100,000
and $50,000 to Bishop, Synagen and Heggestad, respectively (the "Purchase
Price"). The cash portion of the Purchase Price is subject to adjustment after
the preparation of the Closing Date Balance Sheet (as defined in the Share
Purchase Agreement) and the determination of the amount, if any, by which the
Actual Equity (as defined in the Share Purchase Agreement) is less than or
greater than the Target Equity (as defined in the Share Purchase Agreement) of
Ewing and the resolution of all disputes with respect thereto as provided in
the Share Purchase Agreement. In addition, $10,000 of the Purchase Price was
retained by the Company pending the resolution of certain matters.
The description contained herein of the Share Purchase Agreement is
qualified in its entirety by reference to the Share Purchase Agreement and the
Press Release dated August 5, 1999, which are attached hereto as Exhibits 2 and
99, respectively, and incorporated herein by this reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired. As of the date of
the filing of this Current Report on Form 8-K, it is impracticable for the
Company to provide the financial statements required by this Item 7(a). In
accordance with Item 7(a)(4) of Form 8-K, such financial statements shall be
filed by amendment to this Form 8-K no later than 75 days after August 4, 1999.
(b) Pro Forma Financial Information. As of the date of the filing
of this Current Report on Form 8-K, it is impracticable for the Company to
provide the pro forma financial information required by this Item 7(b). In
accordance with Item 7(b)(2) of Form 8-K, such financial information shall be
filed by amendment to this Form 8-K no later than 75 days after August 4, 1999.
(c) Exhibits. The following is a list of the Exhibits attached
hereto.
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<TABLE>
<S> <C>
Exhibit No. 2 Share Purchase Agreement
Exhibit No. 10.1 Subordinated Convertible Promissory Note
Exhibit No. 10.2 Subordinated Convertible Promissory Note
Exhibit No. 10.3 Subordinated Convertible Promissory Note
Exhibit No. 10.4 Employment Agreement
Exhibit No. 99 Press Release
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTREPID CAPITAL CORPORATION
By: /s/ Forrest Travis
--------------------------------
Name: Forrest Travis
Title: President and Chief
Executive Officer
Dated: August 16, 1999
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<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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<C> <S>
2 Share Purchase Agreement
10.1 Subordinated Convertible Promissory Note
10.2 Subordinated Convertible Promissory Note
10.3 Subordinated Convertible Promissory Note
10.4 Employment Agreement
99 Press Release
</TABLE>
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EXHIBIT 2
EXECUTION COPY
SHARE PURCHASE AGREEMENT
RELATING TO THE ACQUISITION OF
ALL OF THE OUTSTANDING CAPITAL STOCK OF
ALLEN C. EWING FINANCIAL SERVICES, INC.
BY
INTREPID CAPITAL CORPORATION
DATED AS OF
AUGUST 4, 1999
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 1. DEFINED TERMS..........................................................................................1
ARTICLE 2. SALE AND PURCHASE OF THE SHARES........................................................................2
2.1 SALE AND PURCHASE........................................................................................2
2.2 PURCHASE PRICE...........................................................................................2
2.3 ADJUSTMENT TO THE PURCHASE PRICE.........................................................................3
2.4 PREPARATION OF THE CLOSING DATE BALANCE SHEET............................................................3
2.5 RESOLUTION OF DISPUTES...................................................................................3
2.6 POST-CLOSING PAYMENTS....................................................................................4
2.7 OPTION SECURITIES AND CONVERTIBLE SECURITIES.............................................................4
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE EWING SHAREHOLDERS...............................................4
3.1 ORGANIZATION AND BUSINESS; POWER AND AUTHORITY; EFFECT OF TRANSACTION....................................4
3.2 TITLE TO SHARES..........................................................................................5
3.3 EWING'S FINANCIAL AND OTHER INFORMATION..................................................................6
3.4 MATERIAL STATEMENTS AND OMISSIONS; ABSENCE OF EVENTS.....................................................6
3.5 TITLE TO PROPERTIES......................................................................................6
3.6 RELATED TRANSACTIONS.....................................................................................7
3.7 INSURANCE................................................................................................7
3.8 EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974..........................................................7
3.9 SOLVENCY.................................................................................................8
3.10 BANK ACCOUNTS, ETC.......................................................................................8
3.11 ORDINARY COURSE OF BUSINESS..............................................................................8
3.12 MATERIAL AND ADVERSE RESTRICTIONS........................................................................9
3.13 BROKER OR FINDER.........................................................................................9
3.14 CAPITAL STOCK............................................................................................9
3.15 QUALIFICATION OF THE EWING SHAREHOLDERS.................................................................10
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF HARRIS, SYNAGEN AND HEGGESTAD.......................................10
4.1 COMPLIANCE WITH PRIVATE AUTHORIZATIONS..................................................................11
4.2 COMPLIANCE WITH GOVERNMENTAL AUTHORIZATIONS AND APPLICABLE LAW..........................................11
4.3 INTANGIBLE ASSETS.......................................................................................13
4.4 TAX MATTERS.............................................................................................14
4.5 EMPLOYMENT AND CONSULTING ARRANGEMENTS..................................................................14
4.6 MATERIAL AGREEMENTS.....................................................................................15
4.7 ENVIRONMENTAL MATTERS...................................................................................15
4.8 YEAR 2000 COMPLIANCE....................................................................................16
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BISHOP..............................................................16
5.1 COMPLIANCE WITH PRIVATE AUTHORIZATIONS..................................................................16
5.2 COMPLIANCE WITH GOVERNMENTAL AUTHORIZATIONS AND APPLICABLE LAW..........................................17
5.3 INTANGIBLE ASSETS.......................................................................................19
5.4 TAX MATTERS.............................................................................................19
5.5 EMPLOYMENT AND CONSULTING ARRANGEMENTS..................................................................20
5.6 MATERIAL AGREEMENTS.....................................................................................20
5.7 ENVIRONMENTAL MATTERS...................................................................................21
5.8 YEAR 2000 COMPLIANCE....................................................................................21
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF INTREPID............................................................22
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
6.1 ORGANIZATION AND BUSINESS; POWER AND AUTHORITY; EFFECT OF TRANSACTION...................................22
6.2 INTREPID'S FINANCIAL AND OTHER INFORMATION..............................................................23
6.3 MATERIAL STATEMENTS AND OMISSIONS; ABSENCE OF EVENTS....................................................23
6.4 TITLE TO PROPERTIES.....................................................................................24
6.5 COMPLIANCE WITH PRIVATE AUTHORIZATIONS..................................................................24
6.6 COMPLIANCE WITH GOVERNMENTAL AUTHORIZATIONS AND APPLICABLE LAW..........................................24
6.7 INTANGIBLE ASSETS.......................................................................................27
6.8 RELATED TRANSACTIONS....................................................................................27
6.9 INSURANCE...............................................................................................27
6.10 TAX MATTERS.............................................................................................27
6.11 EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.........................................................28
6.12 SOLVENCY................................................................................................28
6.13 MATERIAL AND ADVERSE RESTRICTIONS.......................................................................28
6.14 BROKER OR FINDER........................................................................................29
6.15 ENVIRONMENTAL MATTERS...................................................................................29
6.16 YEAR 2000 COMPLIANCE....................................................................................29
ARTICLE 7. COVENANTS.............................................................................................30
7.1 ACCESS TO INFORMATION...................................................................................30
7.2 CONDUCT OF THE BUSINESS PRIOR TO THE CLOSING............................................................30
7.3 AGREEMENT TO COOPERATE..................................................................................32
7.4 SATISFACTION OF CONDITIONS..............................................................................32
7.5 NOTICE OF DEVELOPMENTS..................................................................................32
7.6 EMPLOYEE BENEFITS.......................................................................................32
7.7 ELECTIONS TO THE BOARD OF DIRECTORS.....................................................................32
7.8 ADVANCE TO EMPLOYEE.....................................................................................32
7.9 KEY MAN INSURANCE.......................................................................................33
7.10 RULE 144................................................................................................33
ARTICLE 8. CLOSING; CLOSING DATE; DELIVERIES.....................................................................33
8.1 CLOSING; CLOSING DATE...................................................................................33
8.2 DELIVERIES BY THE EWING SHAREHOLDERS....................................................................33
8.3 DELIVERIES BY INTREPID..................................................................................34
ARTICLE 9. CONDITIONS PRECEDENT TO OBLIGATIONS...................................................................34
9.1 CONDITIONS TO OBLIGATIONS OF INTREPID...................................................................34
9.2 CONDITIONS TO OBLIGATIONS OF THE EWING SHAREHOLDERS.....................................................35
ARTICLE 10. INDEMNIFICATION......................................................................................36
10.1 SURVIVAL................................................................................................36
10.2 INDEMNIFICATION.........................................................................................36
10.3 LIMITATION OF LIABILITY.................................................................................37
10.4 NOTICE OF CLAIMS........................................................................................37
10.5 DEFENSE OF THIRD PARTY CLAIMS...........................................................................37
10.6 RIGHT OF SET-OFF........................................................................................38
10.7 EXCLUSIVE REMEDY........................................................................................38
ARTICLE 11. TERMINATION..........................................................................................38
11.1 TERMINATION BY INTREPID.................................................................................38
11.2 TERMINATION BY THE EWING SHAREHOLDERS...................................................................39
11.3 TERMINATION BY ANY PARTY................................................................................39
11.4 TERMINATION BY MUTUAL CONSENT...........................................................................39
11.5 EFFECT OF TERMINATION...................................................................................39
ARTICLE 12. GENERAL PROVISIONS...................................................................................39
12.1 WAIVERS; AMENDMENTS.....................................................................................39
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
12.2 FEES, EXPENSES AND OTHER PAYMENTS.......................................................................40
12.3 NOTICES.................................................................................................40
12.4 SPECIFIC PERFORMANCE; OTHER RIGHTS AND REMEDIES.........................................................41
12.5 SEVERABILITY............................................................................................41
12.6 COUNTERPARTS............................................................................................42
12.7 SECTION HEADINGS........................................................................................42
12.8 GOVERNING LAW...........................................................................................42
12.9 FURTHER ACTS............................................................................................42
12.10 ENTIRE AGREEMENT........................................................................................42
12.11 EXHIBITS................................................................................................43
12.12 ASSIGNMENT..............................................................................................43
12.13 PARTIES IN INTEREST.....................................................................................43
12.14 MUTUAL DRAFTING.........................................................................................43
</TABLE>
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APPENDICES
<TABLE>
<CAPTION>
APPENDIX NO. DESCRIPTION
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<S> <C>
APPENDIX I: Definitions
</TABLE>
LIST OF EXHIBITS
<TABLE>
EXHIBIT NO. DESCRIPTION
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<S> <C>
EXHIBIT A: Non-Negotiable Subordinated Convertible Promissory Note
EXHIBIT B: Non-Negotiable Subordinated Convertible Promissory Note
EXHIBIT C: Non-Negotiable Subordinated Convertible Promissory Note
EXHIBIT D: Benjamin C. Bishop, Jr. Employment Agreement
EXHIBIT E: Brian Beach Employment Agreement
EXHIBIT F: Matters As To Which Foley & Lardner Will Opine
EXHIBIT G: Matters As To Which Rogers & Hardin Will Opine
</TABLE>
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SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of August 4, 1999 by and among INTREPID CAPITAL CORPORATION, a Delaware
corporation ("Intrepid"), BENJAMIN C. BISHOP, JR., an individual resident of
the State of Florida ("Bishop"), CHARLES E. HARRIS, as trustee of the Charles
E. Harris Revocable Trust dated September 10, 1997 ("Harris"), SYNAGEN CAPITAL
PARTNERS, INC., a Florida corporation ("Synagen"), and ARNOLD A. HEGGESTAD, an
individual resident of the State of Florida ("Heggestad" and, together with
Bishop, Harris and Synagen, referred to herein collectively as the "Ewing
Shareholders").
W I T N E S S E T H:
WHEREAS, the Ewing Shareholders own in the aggregate 5,426 shares (the
"Shares") of the common stock, par value $.10 per share (the "Ewing Common
Stock"), of Allen C. Ewing Financial Services, Inc., a Florida corporation
("Ewing"), which Shares represent all of the issued and outstanding capital
stock of Ewing; and
WHEREAS, Intrepid desires to purchase from the Ewing Shareholders, and
the Ewing Shareholders desire to sell to Intrepid, all of the Shares in
exchange for the Purchase Price (as hereinafter defined) in accordance with the
terms and conditions set forth in this Agreement (hereinafter referred to as
the "Share Purchase");
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained and
other valuable consideration, the receipt and adequacy whereof are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby
represent, warrant, covenant and agree as follows:
ARTICLE 1.
DEFINED TERMS
As used herein, unless the context otherwise requires, the terms
defined in Appendix I shall have the respective meanings set forth therein.
Terms defined in the singular shall have a comparable meaning when used in the
plural, and vice versa, and the reference to any gender shall be deemed to
include all genders. Unless otherwise defined or the context otherwise clearly
requires, terms for which meanings are provided in this Agreement shall have
such meanings when used in the Ewing Disclosure Schedule, the Intrepid
Disclosure Schedule and the Collateral Documents executed or required to be
executed pursuant hereto or thereto or otherwise delivered, from time to time,
pursuant hereto or thereto. References to "hereof," "herein" or similar terms
are intended to refer to the Agreement as a whole and not a particular section,
and references to "this Section" or "this Article" are intended to refer to the
entire section or article and not a particular subsection thereof. As used
herein, (a) the term "either party" shall, unless the context otherwise
requires, refer to Intrepid, on the one hand, and the Ewing Shareholders, on
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the other hand, and (b) the terms "include", including" and "includes" are each
deemed to be followed by the words "without limitation".
ARTICLE 2.
SALE AND PURCHASE OF THE SHARES
2.1 SALE AND PURCHASE. Subject to the terms and conditions
hereinafter set forth and on the basis of and in reliance upon the
representations, warranties, obligations and agreements set forth herein, on
the Closing Date, the Ewing Shareholders shall sell, assign, convey and
transfer to Intrepid, and Intrepid shall purchase from the Ewing Shareholders,
all of the Shares in exchange for an amount equal to the Purchase Price, as
defined in Section 2.2. The Ewing Shareholders shall deliver on the Closing
Date, free and clear of all Liens, all certificates representing the Shares,
duly endorsed in blank or accompanied by appropriate stock powers executed in
blank.
2.2 PURCHASE PRICE. The purchase price for the Shares (the
"Purchase Price") shall be $1,300,000, as the same may be adjusted pursuant to
the terms of Section 2.3 hereof, and shall be paid by Intrepid on the Closing
Date as follows:
(a) One Hundred Twelve Thousand Two Hundred Fifty
Seventy Cents ($112,250.70) of the Purchase Price shall be paid to
Harris in cash by wire transfer of immediately available funds to an
account designated by Harris in writing no later than two (2) business
days prior to the Closing Date.
(b) Seven Hundred Fifty-Five Thousand Two Hundred
Forty-Three Dollars and Five Cents ($755,243.05) of the Purchase Price
shall be paid to Synagen by delivery of (i) cash in the amount of Six
Hundred Fifty-Five Thousand Two Hundred Forty-Three Dollars and Five
Cents ($655,243.05) by wire transfer of immediately available funds to
an account designated by Synagen in writing no later than two (2)
business days prior to the Closing Date; and (ii) Intrepid's
promissory note in the principal amount of One Hundred Thousand
Dollars ($100,000) substantially in the form attached hereto as
Exhibit "A" (the "Synagen Promissory Note").
(c) Three Hundred Six Thousand Six Hundred Sixty-Nine
Dollars and Eighty Cents ($306,669.80) of the Purchase Price shall be
paid to Bishop by delivery of (i) cash in the amount of One Hundred
Six Thousand Six Hundred Sixty-Nine Dollars and Eighty Cents
($106,669.80) by wire transfer of immediately available funds to an
account designated by Bishop in writing no later than two (2) business
days prior to the Closing Date; and (ii) Intrepid's promissory note in
the principal amount of Two Hundred Thousand Dollars ($200,000)
substantially in the form attached hereto as Exhibit "B" (the "Bishop
Promissory Note ").
(d) One Hundred Twenty-Five Thousand Eight Hundred Thirty-Six
Dollars and Forty-Five Cents ($125,836.45) of the Purchase Price shall
be paid to Heggestad by delivery of (i) cash in the amount of
Seventy-Five Thousand Eight Hundred Thirty-Six Dollars and Forty-Five
Cents ($75,836.45) by wire transfer of immediately available
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funds to an account designated by Heggestad in writing no later than
two (2) business days prior to the Closing Date; and (ii) Intrepid's
promissory note in the principal amount of Fifty Thousand Dollars
($50,000) substantially in the form attached hereto as Exhibit "C"
(the "Heggestad Promissory Note ").
Notwithstanding the foregoing, Intrepid shall retain $10,000 of the cash
portion of the Purchase Price (the "Holdback Amount"), which shall be
distributed in accordance with the following: (i) a portion of the Holdback
Amount shall be paid by Intrepid to the NASD after the Closing for fines (the
"NASD Fines") levied against Ewing in connection with its recently concluded
examination once the amount of such fines has been liquidated; and (ii) the
Pro-Rata Amount of the balance, if any, of the Holdback Amount shall be paid to
the Ewing Shareholders in accordance with the terms of this Section 2.2 after
Intrepid has paid the NASD Fines. If the NASD Fines are greater than the
Holdback Amount, each Ewing Shareholder shall immediately pay such Ewing
Shareholder's Pro Rata Amount of such excess to Intrepid by wire transfer of
immediately available funds to an account designated by Intrepid.
2.3 ADJUSTMENT TO THE PURCHASE PRICE. As the case may be, on a
dollar-for-dollar basis, the cash portion of each Ewing Shareholder's Pro-Rata
Amount of the Purchase Price shall be reduced or increased by the Pro-Rata
Amount of such reduction or increase to such cash portion of the Purchase Price
to the extent that the shareholders' equity of Ewing as of the Closing Date
(the "Actual Equity"), as set forth on the Closing Date Balance Sheet, is below
or above One Million Three Hundred Thousand Dollars ($1,300,000) (the "Target
Equity").
2.4 PREPARATION OF THE CLOSING DATE BALANCE SHEET. As soon as
practicable (but in no event later than twenty (20) days after the Closing
Date), Intrepid, at its cost and expense, shall cause a balance sheet for Ewing
to be prepared as of the close of business on the Closing Date (the "Closing
Date Balance Sheet"). The Closing Date Balance Sheet shall be prepared in
accordance with GAAP, using the same methods and criteria employed by Ewing in
connection with the preparation of its most recent year-end balance sheet to
the extent such methods are consistent with GAAP, and shall present fairly
Ewing's financial position as of the Closing Date. Upon completion of the
preparation of the Closing Date Balance Sheet, copies thereof shall promptly be
provided to the Ewing Shareholders.
2.5 RESOLUTION OF DISPUTES. If the Ewing Shareholders shall notify
Intrepid within fifteen (15) days after receipt of the Closing Date Balance
Sheet that the Ewing Shareholders dispute any matter with respect thereto, then
all such matters (hereinafter referred to as the "Disputed Matters") shall be
submitted to arbitration in Jacksonville, Florida (the "Arbitration") within
fifteen (15) days after such notice unless the Ewing Shareholders and Intrepid
agree in writing to extend such fifteen (15) day period in an attempt to
negotiate a settlement of such Disputed Matters. The arbitrator (the
"Arbitrator") shall be any one of the nationally recognized independent
accounting firms which is on the Closing Date among the five largest such firms
(the "Big Five accounting firms") mutually agreed to by the Ewing Shareholders
and Intrepid. Any reference herein to the Big Five accounting firms shall be
deemed to include a reference to any member or employee thereof (who is a
certified public accountant) which any such firm may designate as the
Arbitrator on its behalf. If, within ten (10) days following the expiration of
the fifteen (15) day period referred to above or any extension thereof, the
Ewing Shareholders and Intrepid shall have failed to agree upon the selection
of the Arbitrator or any such Arbitrator
3
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selected by them shall not have agreed to perform the services called for
hereunder, the Arbitrator shall thereupon be selected in accordance with the
rules of the American Arbitration Association, with preference being given to
any one of the Big Five accounting firms or any member or employee thereof (who
is a certified public accountant) which or who may be willing to perform such
services, other than any such firm which is then employed by Ewing, any of the
Ewing Shareholders, Intrepid or any of their respective Affiliates. The
Arbitrator shall consider only the Disputed Matters, and the Arbitration shall
be conducted in accordance with the commercial arbitration rules of the
American Arbitration Association then in effect. The Arbitrator shall act
promptly to resolve all Disputed Matters, and the Arbitrator's decision with
respect to all Disputed Matters shall be final and binding upon the parties
hereto and shall not be appealable to any court. The costs and expenses of the
Arbitrator shall be shared 50% by the Ewing Shareholders and 50% by Intrepid.
2.6 POST-CLOSING PAYMENTS. If the Actual Equity (a) is greater
than the Target Equity, then Intrepid shall immediately pay to each Ewing
Shareholder his or its Pro Rata Amount of such excess in cash, (b) is less than
the Target Equity, then each of the Ewing Shareholders shall immediately pay
his or its Pro Rata Amount of such deficiency to Intrepid in cash, or (c) is
equal to the Target Equity, then no adjustment shall be made to the Purchase
Price hereunder; provided, however, that, in each such case, if there are any
Disputed Matters, any payment finally determined to be due either by agreement
or by Arbitration shall be made by the Ewing Shareholders or Intrepid, as the
case may be, within ten (10) days after such determination.
2.7 OPTION SECURITIES AND CONVERTIBLE SECURITIES. Upon the
consummation of the Transactions, each outstanding Option Security and each
Convertible Security of Ewing, if any, whether or not then exercisable for or
convertible into Ewing Common Stock or other Ewing securities, outstanding
immediately prior to the consummation of the Share Purchase shall be canceled
and retired and shall cease to exist, and the holder thereof shall not be
entitled to receive any consideration therefor.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE EWING SHAREHOLDERS
Except as set forth in Section 10.7 hereof, the survival of and
liability for the representations and warranties contained in this Article 3
shall be governed solely by Article 10, and the remedies set forth in Article
10 shall be the sole remedies for any breach of such representations and
warranties. Each of the Ewing Shareholders, severally and not jointly, hereby
represents and warrants to Intrepid as follows:
3.1 ORGANIZATION AND BUSINESS; POWER AND AUTHORITY; EFFECT OF
TRANSACTION.
(a) Ewing and each of its Subsidiaries is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization,
as the case may be, has all requisite power and authority (corporate
and otherwise) to own or hold under lease its properties and to
conduct its business as now conducted and is duly qualified and in
good standing as a foreign corporation in each
4
<PAGE> 10
other jurisdiction (as shown on Section 3.1(a) of the Ewing Disclosure
Schedule) in which the character of the property owned or leased by it
or the nature of its business or operations requires such
qualification, except for such qualifications the failure of which to
obtain, individually or in the aggregate, would not have a material
adverse effect on Ewing.
(b) Such Ewing Shareholder has all requisite power
and authority and has in full force and effect all Governmental
Authorizations and Private Authorizations necessary to enable such
Ewing Shareholder to execute and deliver, and to perform his or its
obligations under, this Agreement and each Collateral Document, if
any, executed or required to be executed by such Ewing Shareholder
pursuant hereto or thereto or to consummate the Transactions. This
Agreement has been duly executed and delivered by such Ewing
Shareholder and constitutes, and each Collateral Document, if any,
executed or required to be executed by such Ewing Shareholder pursuant
hereto or thereto or to consummate the Transactions, when executed and
delivered by such Ewing Shareholder and the other parties thereto,
will constitute legal, valid and binding obligations of such Ewing
Shareholder, enforceable against such Ewing Shareholder in accordance
with their respective terms, except as such enforceability may be
subject to bankruptcy, moratorium, insolvency, reorganization,
arrangement, voidable preference, fraudulent conveyance and other
similar laws relating to or affecting the rights of creditors and
except as the same may be subject to the effect of general principles
of equity.
(c) Except as set forth in Section 3.1(c) of the Ewing
Disclosure Schedule, to such Ewing Shareholder's knowledge, neither
the execution and delivery by such Ewing Shareholder of this Agreement
or any Collateral Document, if any, executed or required to be
executed by such Ewing Shareholder pursuant hereto or thereto, nor the
consummation of the Transactions, nor compliance with the terms,
conditions and provisions hereof or thereof by such Ewing Shareholder:
(i) will conflict with, or result in a breach or
violation of, or constitute a default under, any Organic
Document of Ewing or any of its Subsidiaries or any
Applicable Law, or will conflict with, or result in a breach
or violation of, or constitute a default under, or permit the
acceleration of any obligation or liability in, or but for
any requirement of the giving of notice or passage of time or
both would constitute such a conflict with, breach or
violation of, or default under, or permit any such
acceleration in, any Contractual Obligation of such Ewing
Shareholder, Ewing or any of Ewing's Subsidiaries; or
(ii) will require such Ewing Shareholder, Ewing
or any of its Subsidiaries to make or obtain any Governmental
Authorization, Governmental Filing or Private Authorization.
(d) The Subsidiaries of Ewing are as set forth in Section
3.1(d) of the Ewing Disclosure Schedule.
3.2 TITLE TO SHARES. Such Ewing Shareholder owns the Shares set
forth opposite such Ewing Shareholder's name in Section 3.2 of the Ewing
Disclosure Schedule. Except as set forth
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in Section 3.2 of the Ewing Disclosure Schedule, such Ewing Shareholder owns
and has good and marketable title to the Shares as so set forth, free and clear
of all Liens.
3.3 EWING'S FINANCIAL AND OTHER INFORMATION. Ewing has heretofore
furnished to Intrepid copies of the financial statements of Ewing and its
Subsidiaries listed in Section 3.3 of the Ewing Disclosure Schedule (the "Ewing
Financial Statements"). The Ewing Financial Statements, including in each case
the notes thereto, have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby, except as otherwise
noted therein or as set forth in Section 3.3 of the Ewing Disclosure Schedule,
and fairly present the financial condition and the results of operations and
cash flow of Ewing and its Subsidiaries in accordance with GAAP, on the bases
therein stated, as of the respective dates thereof, and for the respective
periods covered thereby subject, in the case of unaudited financial statements,
to normal nonmaterial year-end audit adjustments and accruals.
3.4 MATERIAL STATEMENTS AND OMISSIONS; ABSENCE OF EVENTS. To such
Ewing Shareholder's knowledge, neither any representation or warranty made by
such Ewing Shareholder contained in this Agreement or in any certificate,
document or other instrument furnished or to be furnished by such Ewing
Shareholder pursuant to the provisions hereof nor the Ewing Disclosure Schedule
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact required to make any statement contained
herein or therein, in light of the circumstances under which they were made,
not misleading. Since the date of the most recent financial statements
constituting a part of the Ewing Financial Statements, except to the extent
specifically described in Section 3.4 of the Ewing Disclosure Schedule, there
has been no change with respect to Ewing and its Subsidiaries which has had, or
(so far as such Ewing Shareholder can now reasonably foresee) is reasonably
likely to have, a material adverse effect on Ewing. Since December 31, 1998,
there is no Event which has had, or (so far as such Ewing Shareholder can now
reasonably foresee) is reasonably likely to have, a material adverse effect on
Ewing, except to the extent specifically described in Section 3.4 of the Ewing
Disclosure Schedule. Such Ewing Shareholder is not aware of any impending or
contemplated Event that would cause any of the representations and warranties
made by such Ewing Shareholder in this Article not to be true, correct and
complete on the date of such Event as if made on that date.
3.5 TITLE TO PROPERTIES. Except for leasehold estates and related
easements and licenses, Ewing and its Subsidiaries do not own, directly or
indirectly, any real property. Ewing and its Subsidiaries have good,
indefeasible, marketable and insurable title to or valid leasehold interests in
their respective properties and assets, real or personal, tangible or
intangible, reflected in the balance sheet that is a part of the Ewing
Financial Statements (collectively, the "Ewing Assets"), which together
constitute all of the property, real and personal, tangible and intangible,
owned or leased by Ewing. All of the Ewing Assets are so owned, in each case,
free and clear of all Liens, except (i) Permitted Liens and (ii) Liens set
forth on Section 3.5 of the Ewing Disclosure Schedule (which Liens shall be
released prior to the consummation of the Share Purchase). Except for financing
statements evidencing Liens referred to in the immediately preceding sentence
(a true, accurate and complete list and description of which is set forth in
Section 3.5 of the Ewing Disclosure Schedule), no financing statements under
the Uniform Commercial Code and no other filing which names Ewing or any of its
Subsidiaries as debtor or which covers or purports to cover any of the Ewing
Assets is on file in any state or
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other jurisdiction, and neither Ewing nor any Subsidiary of Ewing has signed or
agreed to sign any such financing statement or filing or any agreement
authorizing any secured party thereunder to file any such financing statement
or filing. To such Ewing Shareholder's knowledge, there is no pending,
threatened or contemplated action to take by eminent domain or otherwise to
condemn any material part of any real property leased by Ewing or any of its
Subsidiaries.
3.6 RELATED TRANSACTIONS. Neither Ewing nor any Subsidiary of
Ewing is a party or subject to any Contractual Obligation relating to the
ownership or operation of the Ewing Assets or the conduct of the business of
Ewing and its Subsidiaries (the "Ewing Business") between Ewing or any of its
Subsidiaries and any of their respective officers, directors, shareholders,
employees or, to the knowledge of such Ewing Shareholder, any Affiliate of any
thereof, including any Contractual Obligation providing for the furnishing of
services to or by, providing for rental of property, real, personal or mixed,
to or from, or providing for the lending or borrowing of money to or from or
otherwise requiring payments to or from, any such Person, other than (a)
Employment Arrangements listed or described in Section 4.5 of the Ewing
Disclosure Schedule, (b) Contractual Obligations between Ewing or any of its
Subsidiaries and any of their respective directors, shareholders, officers,
employees or Affiliates of Ewing or any of the foregoing, which will be
terminated, at no cost or expense to Ewing or its Subsidiaries, prior to the
Closing Date, or (c) as specifically set forth in Section 3.6 of the Ewing
Disclosure Schedule.
3.7 INSURANCE. Ewing and its Subsidiaries maintain, with respect
to the Ewing Assets and the Ewing Business, policies of fire and extended
coverage and casualty, liability and other forms of insurance in such amounts
and against such risks and losses as are set forth in Section 3.7 of the Ewing
Disclosure Schedule.
3.8 EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. Except as
described in Section 3.8 of the Ewing Disclosure Schedule:
(a) Ewing (which for purposes of this Section shall
include any ERISA Affiliate) has never contributed or sponsored, and
has not at any time since its organization made any contribution to or
sponsored, any Plan or Benefit Arrangement which is subject to ERISA.
(b) Ewing is not and never has been a party to any
Multiemployer Plan or made contributions to any such Plan.
(c) Ewing does not maintain any Plan that provides
benefits described in Section 3(1) of ERISA, except as the provisions
of COBRA may apply, to any former employees or retirees of Ewing.
(d) The execution, delivery and performance by each
Ewing Shareholder of this Agreement and the Collateral Documents
executed or required to be executed pursuant hereto and thereto will
not involve any prohibited transaction within the meaning of ERISA or
Section 4975 of the Code.
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3.9 SOLVENCY. As of the execution and delivery of this Agreement,
Ewing and each of its Subsidiaries (other than Subsidiaries which are inactive
and have only intercompany liabilities) are, and immediately prior to and
immediately after giving effect to the consummation of the Share Purchase will
be, Solvent.
3.10 BANK ACCOUNTS, ETC. Section 3.10 of the Ewing Disclosure
Schedule contains a true, accurate and complete list as of the date hereof of
all banks, trust companies, savings and loan associations and brokerage firms
in which Ewing or any of its Subsidiaries has an account or a safe deposit box
and the names of all Persons authorized to draw thereon, to have access
thereto, or to authorize transactions therein, the names of all Persons, if
any, holding valid and subsisting powers of attorney from Ewing or any of its
Subsidiaries and a summary statement as to the terms thereof.
3.11 ORDINARY COURSE OF BUSINESS. Except (i) as may be described
in Section 3.11 of the Ewing Disclosure Schedule, (ii) as may be required or
expressly contemplated by the terms of this Agreement, or (iii) as may be
described in the Ewing Financial Statements, including the notes thereto, from
December 31, 1998 through the date hereof, Ewing and each of its Subsidiaries:
(a) have operated their respective businesses in all
material respects in the normal, usual and customary manner in the
ordinary and regular course of business, consistent with prior
practice;
(b) except in each case in the ordinary course of
business, consistent with prior practice, (i) have not incurred any
obligation or liability (fixed, contingent or otherwise), (ii) have
not sold or otherwise disposed of or contracted to sell or otherwise
dispose of any of its properties or assets, (iii) have not entered
into any individual commitment having a value in excess of $25,000,
and (iv)have not canceled any debts or claims;
(c) have not created or permitted to be created any Lien
on any of the Ewing Assets, except for Permitted Liens;
(d) have not made or committed to make any additions to
its property or any purchases of equipment;
(e) have not increased the schedule of compensation
payable or to become payable to any of the employees and consultants
of Ewing and its Subsidiaries (collectively, the "Ewing Employees")
other than nonmaterial increases in the ordinary course of business,
or otherwise materially altered, modified or changed the terms of
their employment;
(f) have not suffered any damage, destruction or loss
(whether or not covered by insurance) or any acquisition or taking of
property by any Authority that has had or is reasonably likely to have
a material adverse effect on Ewing;
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(g) have not waived any rights of material value without
fair and adequate consideration;
(h) have not experienced any work stoppage;
(i) except in the ordinary course of business, have not
entered into, amended or terminated any Lease, Governmental
Authorization, Private Authorization, Material Agreement or Employment
Arrangement, or any transaction, agreement or arrangement with any
Affiliate of Ewing; and
(j) have not made, paid or declared any Distribution
(except for any Distribution to Ewing by any of its Subsidiaries).
3.12 MATERIAL AND ADVERSE RESTRICTIONS. Neither Ewing nor any
Subsidiary of Ewing is a party to or subject to, nor is any of the Ewing Assets
subject to, any Applicable Law or Governmental Authorization (other than
Applicable Laws or Governmental Authorizations which affect similarly situated
businesses in Ewing's industry generally), Contractual Obligation, Employment
Arrangement, Lease, Material Agreement, Private Authorization or any other
obligation or restriction of any kind or character, which now has or, as far as
such Ewing Shareholder can now reasonably foresee, individually or in the
aggregate, is reasonably likely to have, any material adverse effect on Ewing,
except as set forth in Section 3.12 of the Ewing Disclosure Schedule. Except as
set forth in Section 3.12 of the Ewing Disclosure Schedule, neither Ewing nor
any of its Subsidiaries is subject to regulation under the Investment Advisers
Act of 1940, as amended, or the Investment Company Act of 1940, as amended.
Ewing, each of its Subsidiaries and each of their respective employees which
are or who are required to be registered as a broker/dealer, an investment
adviser, a registered representative, an insurance agent or a sales Person (or
in a similar capacity) with any Authority or any Self-Regulatory Organization,
are duly registered as such. All federal, state and foreign registration
requirements have been complied with in all material respects and such
registrations as currently filed, and all periodic reports required to be filed
with respect thereto, are accurate and complete in all material respects.
3.13 BROKER OR FINDER. No Person assisted in or brought about the
negotiation of this Agreement or the Share Purchase in the capacity of broker,
agent or finder or in any similar capacity on behalf of Ewing or the Ewing
Shareholders.
3.14 CAPITAL STOCK. The authorized and outstanding capital stock
of Ewing is as set forth in Section 3.14 of the Ewing Disclosure Schedule. The
Shares constitute all of the outstanding capital stock of Ewing, and all of the
Shares have been duly authorized and validly issued, are fully paid and
nonassessable, are not subject to any preemptive or similar rights and are
owned of record and, to such Ewing Shareholder's knowledge, beneficially as
shown in Section 3.14 of the Ewing Disclosure Schedule. Except as set forth in
Section 3.14 of the Ewing Disclosure Schedule, Ewing has not granted or issued,
nor has Ewing agreed to grant or issue, any shares of its capital stock or any
Option Security or Convertible Security, and Ewing is not a party to or bound
by any agreement, put or commitment pursuant to which it is obligated to
purchase, redeem or otherwise acquire any shares of capital stock or any Option
Security or Convertible Security.
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<PAGE> 15
3.15 QUALIFICATION OF THE EWING SHAREHOLDERS. Each of the Ewing
Shareholders: (a) is an "accredited investor" within the meaning of Regulation
D of the Securities Act and, upon the conversion of the Synagen Promissory
Note, the Bishop Promissory Note and the Heggestad Promissory Note, as the case
may be, will be acquiring shares of the common stock of Intrepid for such Ewing
Shareholder's own account and not with a view to, or for resale in connection
with, any distribution thereof; (b) understands and acknowledges that the
common stock of Intrepid to be issued upon the conversion of each of the
Synagen Promissory Note, the Bishop Promissory Note and the Heggestad
Promissory Note has not been registered under the Securities Act or any state
securities laws by reason of certain exemptions from the registration
provisions thereof which depend upon, among other things, the bona fide nature
of such Ewing Shareholder's investment intent as expressed herein; (c) is able
to bear the economic risk of an investment in the common stock of Intrepid and
has such knowledge and experience in financial and business matters that such
Ewing Shareholder is capable of evaluating the risks and merits of the common
stock of Intrepid; (d) has personally been provided with all information or
been given access to all information with respect to Intrepid which such Ewing
Shareholder believes might affect such Ewing Shareholder's decision whether to
effect the Transactions; and (e) understands and acknowledges that the common
stock of Intrepid will be "restricted securities" as that term is defined in
Rule 144 under the Securities Act and that the certificate or certificates
representing the common stock of Intrepid to issued upon the conversion of the
Synagen Promissory Note, the Bishop Promissory Note or the Heggestad Promissory
Note will bear a legend restricting transfer unless (i) the transfer is exempt
from the registration requirements under the Securities Act any applicable
state securities law and an opinion of counsel reasonably satisfactory to
Intrepid that such transfer is exempt therefrom is delivered to Intrepid or
(ii) the transfer is made pursuant to an effective registration statement under
the Securities Act and any applicable state securities law. In determining to
proceed with the transaction contemplated hereby, each of the Ewing
Shareholders has relied solely on the results of such Ewing Shareholder's own
independent investigation with respect to Intrepid and the common stock of
Intrepid, upon the representations, warranties, covenants and statements of
Intrepid set forth herein and in such Ewing Shareholder's own independent
investigation of the Intrepid Business. Each of the Ewing Shareholders
acknowledges that the representations, warranties, covenants and statements to
the Ewing Shareholders by Intrepid set forth herein constitute the sole and
exclusive representations, warranties, covenants and statements of Intrepid or
any of its officers, directors, stockholders or other Affiliates in connection
with the Transactions, and each of the Ewing Shareholders understands,
acknowledges and agrees that all other representations, warranties, covenants
and statements of any kind or nature, whether oral or contained in any writing
other than this Agreement and each of the Collateral Documents are specifically
disclaimed by Intrepid.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF
HARRIS, SYNAGEN AND HEGGESTAD
Except as set forth in Section 10.7 hereof, the survival of and
liability for the representations and warranties contained in this Article 4
shall be governed solely by Article 10, and the remedies set forth in Article
10 shall be the sole remedies for any breach of such
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representations and warranties. Each of Harris, Synagen and Heggestad,
severally and not jointly, hereby represents and warrants to Intrepid as
follows:
4.1 COMPLIANCE WITH PRIVATE AUTHORIZATIONS. Section 4.1 of the
Ewing Disclosure Schedule sets forth a true, accurate and complete list and
description of each Private Authorization which individually is material to the
Ewing Assets or the Ewing Business. Ewing and its Subsidiaries have obtained
all Private Authorizations that are necessary for the ownership or operation of
the Ewing Assets or the conduct of the Ewing Business which, if not obtained
and maintained, would, individually or in the aggregate, be reasonably likely
to have a material adverse effect on Ewing. To such Ewing Shareholder's
knowledge, all of such Private Authorizations are valid and in good standing
and are in full force and effect, except for such exceptions as, individually
or in the aggregate, have not had and are not reasonably likely to have a
material adverse effect on Ewing. To such Ewing Shareholder's knowledge,
neither Ewing nor any of its Subsidiaries is in breach or violation of, or in
default in the performance, observance or fulfillment of, any such Private
Authorization, and no Event exists or has occurred which constitutes, or but
for any requirement of giving of notice or passage of time or both would
constitute, such a breach, violation or default, under any such Private
Authorization, except for such defaults, breaches or violations as,
individually or in the aggregate, have not had and will not have any material
adverse effect on Ewing. No such Private Authorization is the subject of any
pending or, to such Ewing Shareholder's knowledge, threatened, attack,
revocation or termination, except for such exceptions as, individually or in
the aggregate, have not had and are not reasonably likely to have a material
adverse effect on Ewing.
4.2 COMPLIANCE WITH GOVERNMENTAL AUTHORIZATIONS AND APPLICABLE
LAW.
(a) To such Ewing Shareholder's knowledge, Section
4.2(a) of the Ewing Disclosure Schedule contains a true, complete and
accurate description of each Governmental Authorization that is
material to the ownership or operation of the Ewing Assets or the
conduct of the Ewing Business and that is required under Applicable
Law (i) to own and operate the Ewing Assets and conduct the Ewing
Business as currently conducted, all of which are in full force and
effect or (ii) that is necessary to permit Ewing to execute and
deliver this Agreement and to perform its obligations hereunder. Ewing
and its Subsidiaries have obtained all Governmental Authorizations
that are necessary for the ownership or operation of the Ewing Assets
or the conduct of the Ewing Business as now conducted and which, if
not obtained and maintained, would, individually or in the aggregate,
have a material adverse effect on Ewing. None of the Governmental
Authorizations listed in Section 4.2(a) of the Ewing Disclosure
Schedule is subject to any restriction or condition that would limit
in any material respect the ownership or operations of the Ewing
Assets or the conduct of the Ewing Business as currently conducted,
except for restrictions and conditions generally applicable to
Governmental Authorizations of such type. The Governmental
Authorizations listed in Section 4.2(a) of the Ewing Disclosure
Schedule are valid and in good standing, are in full force and effect
and, to such Ewing Shareholder's knowledge, are not impaired in any
material respect by any act or omission of Ewing, its Subsidiaries or
any of their respective officers, directors, employees or agents, and
the ownership and operation of the Ewing Assets and the conduct of the
Ewing Business are in accordance in all material respects with the
Governmental Authorizations. All material reports, forms and
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<PAGE> 17
statements required to be filed by Ewing and its Subsidiaries with all
Authorities and Self-Regulatory Organizations with respect to the
Ewing Business have been filed and are true, complete and accurate in
all material respects. To such Ewing Shareholder's knowledge, no such
Governmental Authorization currently held by Ewing or any of its
Subsidiaries is the subject of any pending or, to such Ewing
Shareholder's knowledge, threatened challenge or proceeding to revoke
or terminate any such Governmental Authorization that, individually or
in the aggregate, if revoked or terminated, would have a material
adverse effect on Ewing. Such Ewing Shareholder has no reason to
believe that any such Governmental Authorization will not be renewed
in the name of Ewing or its Subsidiaries, as the case may be, by the
granting Authority in the ordinary course.
(b) To such Ewing Shareholder's knowledge, Ewing and its
Subsidiaries are in compliance with all Applicable Laws, except where
such non-compliance, individually or in the aggregate, has not had and
is not reasonably likely to have a material adverse effect on Ewing.
Except as set forth in Section 4.2(b) of the Ewing Disclosure
Schedule, there are no Legal Actions of any kind pending or, to the
knowledge of such Ewing Shareholder, threatened, at law, in equity or
before any Authority or Self-Regulatory Organization against Ewing or
its Subsidiaries. Such disclosed Legal Actions, if determined
adversely to Ewing or its Subsidiaries, individually or in the
aggregate, are not reasonably likely to have a material adverse effect
on Ewing.
(c) Except as set forth in Section 4.2(c) of the Ewing
Disclosure Schedule, to such Ewing Shareholder's knowledge, Ewing and
its Subsidiaries have not received any notification or communication
from any Authorities or Self-Regulatory Organizations (i) asserting
non-compliance with any of the Laws that such Authorities or
Self-Regulatory Organizations enforce, (ii) threatening to revoke or
condition the continuation of any Private Authorization or
Governmental Authorization (nor do any grounds for any of the
foregoing exist), (iii) requiring them (or any of their respective
directors or controlling Persons) to enter into a cease and desist
order, agreement, memorandum of understanding, censure or disciplinary
agreement (or requiring the board of directors thereof to adopt any
resolution or policy), or (iv) restricting or disqualifying their
respective activities (except for restrictions generally imposed by
disqualifying their respective activities) other than for restrictions
generally imposed by rule, regulation or administrative policy on
brokers or dealers generally.
(d) Other than periodic examinations by Self-Regulatory
Organizations in the ordinary course, such Ewing Shareholder is not
aware of any pending or threatened investigation, review or
disciplinary proceedings by any Authorities or Self-Regulatory
Organizations against Ewing or any Subsidiary of Ewing or any of their
respective officers, directors or employees.
(e) To such Ewing Shareholder's knowledge, neither
Ewing, nor its Subsidiaries, nor any of their respective employees is,
and, to such Ewing Shareholder's knowledge, none of Ewing's Affiliates
or their respective employees are, subject to a "statutory
disqualification" (as defined in Section 3(a)(39) of the Exchange Act)
or subject to a disqualification that would be a basis for censure,
limitations on the activities, functions or operations of, or
suspension or revocation of the registration of any broker-
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<PAGE> 18
dealer Affiliate as a broker-dealer, municipal securities dealer,
government securities broker or government securities dealer under
Section 15, Section 15B or Section 15C of the Exchange Act, and, to
such Ewing Shareholder's knowledge, there is no reasonable basis for,
or proceeding or investigation, whether formal or informal, or whether
preliminary or otherwise, that is reasonably likely to result in, any
such censure, limitations, suspension or revocation.
(f) To such Ewing Shareholder's knowledge, neither Ewing
nor any of its Subsidiaries is required to be registered as an
investment company, commodity trading advisor, commodity pool
operator, futures commission merchant, insurance agent or transfer
agent under any federal, state, local or foreign Law. To such Ewing
Shareholder's knowledge, neither Ewing nor any its Subsidiaries acts
as the "sponsor" of a "broker-dealer trading program", as such terms
are defined in rule 17a-23 under the Exchange Act.
(g) To such Ewing Shareholder's knowledge, in the conduct
of their respective businesses with respect to employee benefit plans
subject to Title I of ERISA, neither Ewing nor any of its Subsidiaries
has (i) breached any applicable fiduciary duty under Part 4 of Title I
of ERISA which would subject it to liability under Sections 405 or 409
of ERISA or (ii) engaged in a "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975(c) of the Code which
would subject it to liability or Taxes under Sections 409 or 502(I) of
ERISA or Section 4975(a) of the Code.
(h) Except as set forth in Section 4.2(c) of the Ewing
Disclosure Schedule, neither Ewing nor any of its Subsidiaries is
subject to any cease and desist, censure or other order issued by, or
a party to any written agreement, consent agreement, memorandum of
understanding or disciplinary agreement with, or a party to any
commitment letter or similar undertaking to, or subject to any order
or directive by, or a recipient of any supervisory letter from or
adopted any board resolutions at the request of any Authority or
Self-Regulatory Organization, or been advised by any Authority or
Self-Regulatory Organization that is considering issuing or requesting
any such agreement or other action, and such Ewing Shareholder has no
knowledge of any pending or threatened regulatory investigation.
(i) To such Ewing Shareholder's knowledge, except as set
forth in Section 4.2(i) of the Ewing Disclosure Schedule, Ewing and
its Subsidiaries have timely filed all reports, registrations and
statements, together with any amendments required to be made with
respect thereto, that were required to be filed under any applicable
law, regulation or rule, with (A) all applicable Authorities and (B)
any Self-Regulatory Organization (collectively, the "Ewing Reports").
To such Ewing Shareholder's knowledge, as of their respective dates,
the Ewing Reports complied with the applicable statutes, rules,
regulations and orders enforced or promulgated by the regulatory
authority with which they were filed.
4.3 INTANGIBLE ASSETS. Except as set forth in Section 4.3 of the Ewing
Disclosure Schedule, to such Ewing Shareholder's knowledge, no Intangible
Assets (except Governmental Authorizations, Private Authorizations and the
Intangible Assets so set forth) are required for the
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<PAGE> 19
ownership or operation of the Ewing Assets or the conduct of the Ewing Business
as currently owned, operated and conducted, except for such exceptions to the
foregoing as, individually or in the aggregate, have not had and will not have
any material adverse effect on Ewing. Ewing and its Subsidiaries do not, to
such Ewing Shareholder's knowledge, wrongfully infringe upon or unlawfully use
any Intangible Assets owned or claimed by another, and, to such Ewing
Shareholder's knowledge, Ewing and its Subsidiaries have not received any
notice of any claim or infringement relating to any such Intangible Asset,
except for such exceptions to the foregoing which, individually or in the
aggregate, have not had and are not reasonably likely to have any material
adverse effect on Ewing.
4.4 TAX MATTERS.
(a) Ewing and each of its Subsidiaries have in
accordance with all Applicable Laws filed all Tax Returns which are
required to be filed, and have paid, or made adequate provision for
the payment of, all Taxes which have or may become due and payable
pursuant to said Tax Returns and all other governmental charges and
assessments received to date and which are now due and payable other
than those Taxes being contested in good faith for which adequate
provision has been made on the most recent balance sheet forming a
part of the Ewing Financial Statements. The Tax Returns of Ewing and
its Subsidiaries have been prepared in all material respects in
accordance with all Applicable Laws. All Taxes which Ewing and its
Subsidiaries are required by law to withhold and collect have been
duly withheld and collected, and have been paid over, in a timely
manner, to the proper Authorities to the extent due and payable.
Neither Ewing nor any of its Subsidiaries has executed any waiver to
extend, or otherwise taken or failed to take any action that would
have the effect of extending, the applicable statute of limitations
respect of any Tax liabilities of Ewing or its Subsidiaries for the
fiscal years prior to and including the most recent fiscal year.
Adequate provision has been made on the most recent balance sheet
forming a part of the Ewing Financial Statements for all Taxes accrued
through the date of such balance sheet of any kind, including interest
and penalties in respect thereof, whether disputed or not, and whether
past, current or deferred, accrued or unaccrued, fixed, contingent,
absolute or otherwise, and there are, to such Ewing Shareholder's
knowledge, no past transactions or matters which are reasonably likely
to result in additional Taxes of a material nature to Ewing for which
an adequate reserve has not been provided on such balance sheet.
Niether Ewing nor any of its Subsidiaries is a "consenting
corporation" within the meaning of Section 341(f) of the Code. To such
Ewing Shareholder's knowledge, Ewing and its Subsidiaries have at all
times been taxable as Subchapter C corporations under the Code, and
have never been members of any consolidated group for Tax purposes,
except as otherwise set forth in Section 4.4(a) of the Ewing
Disclosure Schedule. Neither Ewing nor any of its Subsidiaries is a
party to any tax sharing agreement or arrangement.
(b) All record and beneficial holders of Ewing Common
Stock are "United States persons" within the meaning of Section
7701(a)(30) of the Code.
4.5 EMPLOYMENT AND CONSULTING ARRANGEMENTS. Section 4.5 of the
Ewing Disclosure Schedule contains a true, accurate and complete list of all
Ewing Employees, together with each such Person's title or the capacity in
which such Person is employed or retained and
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<PAGE> 20
each such Person's compensation. Except as described in Section 4.5 of the
Ewing Disclosure Schedule, all Ewing Employees are employed "at will", and
neither Ewing nor any Subsidiary of Ewing has any obligation or liability,
contingent or otherwise, under any Employment Arrangement with any Ewing
Employee. Except as described in Section 4.5 of the Ewing Disclosure Schedule,
to such Ewing Shareholder's knowledge, (a) none of the Ewing Employees is now,
or since its organization has been, represented by any labor union or other
employee collective bargaining organization, and neither Ewing nor any
Subsidiary of Ewing is or ever has been a party to any labor or other
collective bargaining agreement with respect to any of the Ewing Employees, (b)
there are no pending grievances, disputes or controversies with any union or
any other employee or collective bargaining organization of such employees, or
threats of strikes, work stoppages or slowdowns or any pending demands for
collective bargaining by any such union or other organization, (c) neither
Ewing nor any of it Subsidiaries is now, or has since its organization been,
subject to or involved in or threatened with, any union elections, petitions
therefor or other organizational or recruiting activities, in each case with
respect to the Ewing Employees, and (d) none of the Ewing Employees has
notified Ewing or any Subsidiary of Ewing that such Person does not intend to
continue employment with Ewing or such Subsidiary or with Intrepid following
the consummation of the Share Purchase. To such Ewing Shareholder's knowledge,
Ewing and its Subsidiaries have performed in all material respects all
obligations required to be performed under all Employment Arrangements and are
not in material breach or violation of, or in material default or arrears
under, any of the terms, provisions or conditions thereof.
4.6 MATERIAL AGREEMENTS. Listed on Section 4.6 of the Ewing
Disclosure Schedule are all Material Agreements relating to the ownership or
operation of the Ewing Assets or the conduct of the Ewing Business or to which
Ewing or any of its Subsidiaries is a party or to which it is bound or which
any of the Ewing Assets is subject. True, accurate and complete copies of each
of such Material Agreements have been made available by Ewing to Intrepid, and
Ewing has provided Intrepid with photocopies of all such Material Agreements
requested by Intrepid. To such Ewing Shareholder's knowledge, all of such
Material Agreements are valid, binding and legally enforceable obligations of
Ewing or its Subsidiaries, as the case may be, and all other parties thereto,
except as such enforceability may be limited by bankruptcy, moratorium,
insolvency and similar laws affecting the rights and remedies of creditors and
obligations of debtors generally and by general principles of equity. To such
Ewing Shareholder's knowledge, neither Ewing nor its Subsidiaries, as the case
may be, nor any other party thereto, has failed to comply with all of the
material terms and conditions of each such Material Agreement or has done or
performed, or failed to do or perform (and no Claim is pending or threatened in
writing to the effect that Ewing or its Subsidiaries, as the case may be, has
not so complied, done and performed or failed to do and perform) any act which
would invalidate or provide grounds for the other party thereto to terminate
(with or without notice, passage of time or both) such Material Agreement or
impair the rights or benefits, or increase the costs, of Ewing or its
Subsidiaries under any such Material Agreements, except for such
non-compliance, acts or omissions that, individually or in the aggregate, have
not had and will not have a material adverse effect on Ewing. Except as set
forth in Section 4.6 of the Ewing Disclosure Schedule, neither Ewing nor any of
its Subsidiaries extends credit to any of its clients or customers.
4.7 ENVIRONMENTAL MATTERS. Except as set forth in Section 4.7 of
the Ewing Disclosure Schedule and except for such non-compliance, failures and
liabilities which have not
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had and are not reasonably likely to have a material adverse effect on Ewing,
to such Ewing Shareholder's knowledge:
(a) Ewing and each of its Subsidiaries (i) have complied
with the Environmental, Health and Safety Laws in all material
respects, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand or notice has been filed or commenced
against any of them alleging any such failure to comply, (ii) have
obtained and has at all times been and is in substantial compliance
with all of the terms and conditions of all Governmental
Authorizations and training which are required under any of the
Environmental, Health and Safety Laws, and (iii) have complied in all
material respects with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables which are contained in the Environmental,
Health and Safety Laws; and
(b) Ewing and each of its Subsidiaries have no material
liability, and Ewing and each of its Subsidiaries and their respective
predecessors have not handled or disposed of any substance, arranged
for the disposal of any substance, exposed any employee or other
individual to any substance or condition, or owned or operated any
property or facility in any manner that could give rise to any
material liability, for contamination or damage to any site, location
or body of water (surface or subsurface), for any illness of or
personal injury to any employee or other individual, or for any reason
under any Environmental, Health and Safety Law.
4.8 YEAR 2000 COMPLIANCE. To such Ewing Shareholder's knowledge
(without inquiry or independent investigation), the software and hardware
operated by Ewing are capable of providing uninterrupted millennium
functionality to record, store, process and present calendar dates falling on
or after January 1, 2000 and date-dependent data in substantially the same
manner and with the same functionality as such software records, stores,
processes and presents such calendar dates and date-dependent data as of the
date hereof.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF BISHOP
Except as set forth in Section 10.7 hereof, the survival of and
liability for the representations and warranties contained in this Article 5
shall be governed solely by Article 10, and the remedies set forth in Article
10 shall be the sole remedies for any breach of such representations and
warranties. Bishop hereby represents and warrants to Intrepid as follows:
5.1 COMPLIANCE WITH PRIVATE AUTHORIZATIONS. Section 4.1 of the
Ewing Disclosure Schedule sets forth a true, accurate and complete list and
description of each Private Authorization which individually is material to the
Ewing Assets or the Ewing Business. Ewing and its Subsidiaries have obtained
all Private Authorizations that are necessary for the ownership or operation of
the Ewing Assets or the conduct of the Ewing Business which, if not obtained
and maintained, would, individually or in the aggregate, be reasonably likely
to have a material adverse effect on Ewing. All of such Private Authorizations
are valid and in good standing and are in full force and effect, except for
such exceptions as, individually or in the aggregate, have
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not had and are not reasonably likely to have a material adverse effect on
Ewing. Neither Ewing nor any of its Subsidiaries is in breach or violation of,
or in default in the performance, observance or fulfillment of, any such
Private Authorization, and no Event exists or has occurred which constitutes,
or but for any requirement of giving of notice or passage of time or both would
constitute, such a breach, violation or default, under any such Private
Authorization, except for such defaults, breaches or violations as,
individually or in the aggregate, have not had and will not have any material
adverse effect on Ewing. No such Private Authorization is the subject of any
pending or, to Bishop's knowledge, threatened, attack, revocation or
termination, except for such exceptions as, individually or in the aggregate,
have not had and are not reasonably likely to have a material adverse effect on
Ewing.
5.2 COMPLIANCE WITH GOVERNMENTAL AUTHORIZATIONS AND APPLICABLE
LAW.
(a) Section 4.2(a) of the Ewing Disclosure Schedule
contains a true, complete and accurate description of each
Governmental Authorization that is material to the ownership or
operation of the Ewing Assets or the conduct of the Ewing Business and
that is required under Applicable Law (i) to own and operate the Ewing
Assets and conduct the Ewing Business as currently conducted, all of
which are in full force and effect or (ii) that is necessary to permit
Ewing to execute and deliver this Agreement and to perform its
obligations hereunder. Ewing and its Subsidiaries have obtained all
Governmental Authorizations that are necessary for the ownership or
operation of the Ewing Assets or the conduct of the Ewing Business as
now conducted and which, if not obtained and maintained, would,
individually or in the aggregate, have a material adverse effect on
Ewing. None of the Governmental Authorizations listed in Section
4.2(a) of the Ewing Disclosure Schedule is subject to any restriction
or condition that would limit in any material respect the ownership or
operations of the Ewing Assets or the conduct of the Ewing Business as
currently conducted, except for restrictions and conditions generally
applicable to Governmental Authorizations of such type. The
Governmental Authorizations listed in Section 4.2(a) of the Ewing
Disclosure Schedule are valid and in good standing, are in full force
and effect and are not impaired in any material respect by any act or
omission of Ewing, its Subsidiaries or any of their respective
officers, directors, employees or agents, and the ownership and
operation of the Ewing Assets and the conduct of the Ewing Business
are in accordance in all material respects with the Governmental
Authorizations. All material reports, forms and statements required to
be filed by Ewing and its Subsidiaries with all Authorities and
Self-Regulatory Organizations with respect to the Ewing Business have
been filed and are true, complete and accurate in all material
respects. No such Governmental Authorization currently held by Ewing
or any of its Subsidiaries is the subject of any pending or, to
Bishop's knowledge, threatened challenge or proceeding to revoke or
terminate any such Governmental Authorization that, individually or in
the aggregate, if revoked or terminated, would have a material adverse
effect on Ewing. Bishop has no reason to believe that any such
Governmental Authorization will not be renewed in the name of Ewing or
its Subsidiaries, as the case may be, by the granting Authority in the
ordinary course.
(b) Ewing and its Subsidiaries are in compliance with
all Applicable Laws, except where such non-compliance, individually or
in the aggregate, has not had and is
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not reasonably likely to have a material adverse effect on Ewing.
Except as set forth in Section 4.2(b) of the Ewing Disclosure
Schedule, there are no Legal Actions of any kind pending or, to
Bishop's knowledge, threatened, at law, in equity or before any
Authority or Self-Regulatory Organization against Ewing or its
Subsidiaries. Such disclosed Legal Actions, if determined adversely to
Ewing or its Subsidiaries, individually or in the aggregate, are not
reasonably likely to have a material adverse effect on Ewing.
(c) Except as set forth in Section 4.2(c) of the Ewing
Disclosure Schedule, Ewing and its Subsidiaries have not received any
notification or communication from any Authorities or Self-Regulatory
Organizations (i) asserting non-compliance with any of the Laws that
such Authorities or Self-Regulatory Organizations enforce, (ii)
threatening to revoke or condition the continuation of any Private
Authorization or Governmental Authorization (nor do any grounds for
any of the foregoing exist), (iii) requiring them (or any of their
respective directors or controlling Persons) to enter into a cease and
desist order, agreement, memorandum of understanding, censure or
disciplinary agreement (or requiring the board of directors thereof to
adopt any resolution or policy), or (iv) restricting or disqualifying
their respective activities (except for restrictions generally imposed
by disqualifying their respective activities) other than for
restrictions generally imposed by rule, regulation or administrative
policy on brokers or dealers generally.
(d) Other than periodic examinations by Self-Regulatory
Organizations in the ordinary course, Bishop is not aware of any
pending or threatened investigation, review or disciplinary
proceedings by any Authorities or Self-Regulatory Organizations
against Ewing or any Subsidiary of Ewing or any of their respective
officers, directors or employees.
(e) Neither Ewing, nor its Subsidiaries, nor any of
their respective employees is, and, to Bishop's knowledge, none of
Ewing's Affiliates or their respective employees are, subject to a
"statutory disqualification" (as defined in Section 3(a)(39) of the
Exchange Act) or subject to a disqualification that would be a basis
for censure, limitations on the activities, functions or operations
of, or suspension or revocation of the registration of any
broker-dealer Affiliate as a broker-dealer, municipal securities
dealer, government securities broker or government securities dealer
under Section 15, Section 15B or Section 15C of the Exchange Act, and
there is no reasonable basis for, or proceeding or investigation,
whether formal or informal, or whether preliminary or otherwise, that
is reasonably likely to result in, any such censure, limitations,
suspension or revocation.
(f) Neither Ewing nor any of its Subsidiaries is
required to be registered as an investment company, commodity trading
advisor, commodity pool operator, futures commission merchant,
insurance agent or transfer agent under any federal, state, local or
foreign Law. Neither Ewing nor any its Subsidiaries acts as the
"sponsor" of a "broker-dealer trading program", as such terms are
defined in rule 17a-23 under the Exchange Act.
(g) To Bishop's knowledge, in the conduct of their
respective businesses with respect to employee benefit plans subject
to Title I of ERISA, neither Ewing nor any of
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<PAGE> 24
its Subsidiaries has (i) breached any applicable fiduciary duty under
Part 4 of Title I of ERISA which would subject it to liability under
Sections 405 or 409 of ERISA or (ii) engaged in a "prohibited
transaction" within the meaning of Section 406 of ERISA or Section
4975(c) of the Code which would subject it to liability or Taxes under
Sections 409 or 502(I) of ERISA or Section 4975(a) of the Code.
(h) Except as set forth in Section 4.2(c) of the Ewing
Disclosure Schedule, neither Ewing nor any of its Subsidiaries is
subject to any cease and desist, censure or other order issued by, or a
party to any written agreement, consent agreement, memorandum of
understanding or disciplinary agreement with, or a party to any
commitment letter or similar undertaking to, or subject to any order or
directive by, or a recipient of any supervisory letter from or adopted
any board resolutions at the request of any Authority or
Self-Regulatory Organization, or been advised by any Authority or
Self-Regulatory Organization that is considering issuing or requesting
any such agreement or other action, and Bishop has no knowledge of any
pending or threatened regulatory investigation.
(i) Except as set forth in Section 4.2(i) of the Ewing
Disclosure Schedule, Ewing and its Subsidiaries have timely filed all
Ewing Reports. To Bishop's knowledge, as of their respective dates, the
Ewing Reports complied with the applicable statutes, rules, regulations
and orders enforced or promulgated by the regulatory authority with
which they were filed.
5.3 INTANGIBLE ASSETS. Except as set forth in Section 4.3 of the
Ewing Disclosure Schedule, no Intangible Assets (except Governmental
Authorizations, Private Authorizations and the Intangible Assets so set forth)
are required for the ownership or operation of the Ewing Assets or the conduct
of the Ewing Business as currently owned, operated and conducted, except for
such exceptions to the foregoing as, individually or in the aggregate, have not
had and will not have any material adverse effect on Ewing. Ewing and its
Subsidiaries do not, to Bishop's knowledge, wrongfully infringe upon or
unlawfully use any Intangible Assets owned or claimed by another, and Ewing and
its Subsidiaries have not received any notice of any claim or infringement
relating to any such Intangible Asset, except for such exceptions to the
foregoing which, individually or in the aggregate, have not had and are not
reasonably likely to have any material adverse effect on Ewing.
5.4 TAX MATTERS.
(a) Ewing and each of its Subsidiaries have in
accordance with all Applicable Laws filed all Tax Returns which are
required to be filed, and have paid, or made adequate provision for
the payment of, all Taxes which have or may become due and payable
pursuant to said Tax Returns and all other governmental charges and
assessments received to date and which are now due and payable other
than those Taxes being contested in good faith for which adequate
provision has been made on the most recent balance sheet forming a
part of the Ewing Financial Statements. The Tax Returns of Ewing and
its Subsidiaries have been prepared in all material respects in
accordance with all Applicable Laws. All Taxes which Ewing and its
Subsidiaries are required by law to withhold and collect have been
duly withheld and collected, and have been paid over, in a
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<PAGE> 25
timely manner, to the proper Authorities to the extent due and
payable. Neither Ewing nor any of its Subsidiaries has executed any
waiver to extend, or otherwise taken or failed to take any action that
would have the effect of extending, the applicable statute of
limitations respect of any Tax liabilities of Ewing or its
Subsidiaries for the fiscal years prior to and including the most
recent fiscal year. Adequate provision has been made on the most
recent balance sheet forming a part of the Ewing Financial Statements
for all Taxes accrued through the date of such balance sheet of any
kind, including interest and penalties in respect thereof, whether
disputed or not, and whether past, current or deferred, accrued or
unaccrued, fixed, contingent, absolute or otherwise, and there are, to
Bishop's knowledge, no past transactions or matters which are
reasonably likely to result in additional Taxes of a material nature
to Ewing for which an adequate reserve has not been provided on such
balance sheet. Niether Ewing nor any of its Subsidiaries is a
"consenting corporation" within the meaning of Section 341(f) of the
Code. Ewing and its Subsidiaries have at all times been taxable as
Subchapter C corporations under the Code, and have never been members
of any consolidated group for Tax purposes, except as otherwise set
forth in Section 4.4(a) of the Ewing Disclosure Schedule. Neither
Ewing nor any of its Subsidiaries is a party to any tax sharing
agreement or arrangement.
(b) All record and beneficial holders of Ewing Common
Stock are "United States persons" within the meaning of Section
7701(a)(30) of the Code.
5.5 EMPLOYMENT AND CONSULTING ARRANGEMENTS. Section 4.5 of the
Ewing Disclosure Schedule contains a true, accurate and complete list of all
Ewing Employees, together with each such Person's title or the capacity in
which such Person is employed or retained and each such Person's compensation.
Except as described in Section 4.5 of the Ewing Disclosure Schedule, all Ewing
Employees are employed "at will", and neither Ewing nor any Subsidiary of Ewing
has any obligation or liability, contingent or otherwise, under any Employment
Arrangement with any Ewing Employee. Except as described in Section 4.5 of the
Ewing Disclosure Schedule, (a) none of the Ewing Employees is now, or since its
organization has been, represented by any labor union or other employee
collective bargaining organization, and neither Ewing nor any Subsidiary of
Ewing is or ever has been a party to any labor or other collective bargaining
agreement with respect to any of the Ewing Employees, (b) there are no pending
grievances, disputes or controversies with any union or any other employee or
collective bargaining organization of such employees, or threats of strikes,
work stoppages or slowdowns or any pending demands for collective bargaining by
any such union or other organization, (c) neither Ewing nor any of it
Subsidiaries is now, or has since its organization been, subject to or involved
in or threatened with, any union elections, petitions therefor or other
organizational or recruiting activities, in each case with respect to the Ewing
Employees, and (d) none of the Ewing Employees has notified Ewing or any
Subsidiary of Ewing that such Person does not intend to continue employment
with Ewing or such Subsidiary or with Intrepid following the consummation of
the Share Purchase. Ewing and its Subsidiaries have performed in all material
respects all obligations required to be performed under all Employment
Arrangements and are not in material breach or violation of, or in material
default or arrears under, any of the terms, provisions or conditions thereof.
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<PAGE> 26
5.6 MATERIAL AGREEMENTS. Listed on Section 4.6 of the Ewing
Disclosure Schedule are all Material Agreements relating to the ownership or
operation of the Ewing Assets or the conduct of the Ewing Business or to which
Ewing or any of its Subsidiaries is a party or to which it is bound or which
any of the Ewing Assets is subject. True, accurate and complete copies of each
of such Material Agreements have been made available by Ewing to Intrepid, and
Ewing has provided Intrepid with photocopies of all such Material Agreements
requested by Intrepid. All of such Material Agreements are valid, binding and
legally enforceable obligations of Ewing or its Subsidiaries, as the case may
be, and all other parties thereto, except as such enforceability may be limited
by bankruptcy, moratorium, insolvency and similar laws affecting the rights and
remedies of creditors and obligations of debtors generally and by general
principles of equity. Neither Ewing nor its Subsidiaries, as the case may be,
nor, to Bishop's knowledge, any other party thereto, has failed to comply with
the material terms and conditions of each such Material Agreement or has done
or performed, or failed to do or perform (and no Claim is pending or threatened
in writing to the effect that Ewing or its Subsidiaries, as the case may be,
has not so complied, done and performed or failed to do and perform) any act
which would invalidate or provide grounds for the other party thereto to
terminate (with or without notice, passage of time or both) such Material
Agreement or impair the rights or benefits, or increase the costs, of Ewing or
its Subsidiaries under any such Material Agreements, except for such
non-compliance, acts or omissions that, individually or in the aggregate, have
not had and will not have a material adverse effect on Ewing. Neither Ewing nor
any of its Subsidiaries extends credit to any of its clients or customers.
5.7 ENVIRONMENTAL MATTERS. Except as set forth in Section 4.7 of
the Ewing Disclosure Schedule and except for such non-compliance, failures and
liabilities which have not had and are not reasonably likely to have a material
adverse effect on Ewing, to Bishop's knowledge:
(a) Ewing and each of its Subsidiaries (i) have complied
with the Environmental, Health and Safety Laws in all material
respects, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand or notice has been filed or commenced
against any of them alleging any such failure to comply, (ii) have
obtained and has at all times been and is in substantial compliance
with all of the terms and conditions of all Governmental
Authorizations and training which are required under any of the
Environmental, Health and Safety Laws, and (iii) have complied in all
material respects with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables which are contained in the Environmental,
Health and Safety Laws; and
(b) Ewing and each of its Subsidiaries have no material
liability, and Ewing and each of its Subsidiaries and their respective
predecessors have not handled or disposed of any substance, arranged
for the disposal of any substance, exposed any employee or other
individual to any substance or condition, or owned or operated any
property or facility in any manner that could give rise to any
material liability, for contamination or damage to any site, location
or body of water (surface or subsurface), for any illness of or
personal injury to any employee or other individual, or for any reason
under any Environmental, Health and Safety Law.
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5.8 YEAR 2000 COMPLIANCE. To Bishop's knowledge, the software and
hardware operated by Ewing are capable of providing uninterrupted millennium
functionality to record, store, process and present calendar dates falling on
or after January 1, 2000 and date-dependent data in substantially the same
manner and with the same functionality as such software records, stores,
processes and presents such calendar dates and date-dependent data as of the
date hereof.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF INTREPID
Except as set forth in Section 10.7 hereof, the survival of and
liability for the representations and warranties contained in this Article 6
shall be governed solely by Article 10, and the remedies set forth in Article
10 shall be the sole remedies for any breach of such representations and
warranties. Intrepid hereby represents and warrants to the Ewing Shareholders
as follows:
6.1 ORGANIZATION AND BUSINESS; POWER AND AUTHORITY; EFFECT OF
TRANSACTION.
(a) Intrepid and each of its Subsidiaries is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization,
as the case may be, has all requisite power and authority (corporate
and otherwise) to own or hold under lease its properties and to
conduct its business as now conducted and is duly qualified and in
good standing as a foreign corporation in each other jurisdiction in
which the character of the property owned or leased by it or the
nature of its business or operations requires such qualification,
except for such qualifications the failure of which to obtain,
individually or in the aggregate, would not have a material adverse
effect on Intrepid.
(b) Intrepid has all requisite power and authority
(corporate and otherwise) and has in full force and effect all
Governmental Authorizations and Private Authorizations necessary to
enable it to execute and deliver, and to perform its obligations
under, this Agreement and each Collateral Document executed or
required to be executed by it pursuant hereto or thereto or to
consummate the Transactions; and the execution, delivery and
performance of this Agreement and each Collateral Document executed or
required to be executed by it pursuant hereto or thereto have been
duly authorized by all requisite corporate or other action on the part
of Intrepid. This Agreement has been duly executed and delivered by
Intrepid and constitutes, and each Collateral Document executed or
required to be executed by it pursuant hereto or thereto or to
consummate the Transactions, when executed and delivered by Intrepid
and the other parties thereto, will constitute legal, valid and
binding obligations of Intrepid, enforceable against Intrepid in
accordance with their respective terms, except as such enforceability
may be subject to bankruptcy, moratorium, insolvency, reorganization,
arrangement, voidable preference, fraudulent conveyance and other
similar laws relating to or affecting the rights of creditors and
except as the same may be subject to the effect of general principles
of equity.
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<PAGE> 28
(c) Except as set forth in Section 6.1(c) of the
Intrepid Disclosure Schedule, neither the execution and delivery by
Intrepid of this Agreement or any Collateral Document executed or
required to be executed by it pursuant hereto or thereto, nor the
consummation of the Transactions, nor compliance with the terms,
conditions and provisions hereof or thereof by Intrepid:
(i) will conflict with, or result in a breach
or violation of, or constitute a default under, any Organic
Document of Intrepid or any of its Subsidiaries or any
Applicable Law, or will conflict with, or result in a breach
or violation of, or constitute a default under, or permit the
acceleration of any obligation or liability in, or but for
any requirement of giving of notice or passage of time or
both would constitute such a conflict with, breach or
violation of, or default under, or permit any such
acceleration in, any Contractual Obligation of Intrepid or
any of its Subsidiaries; or
(ii) will require Intrepid or any of its
Subsidiaries to make or obtain any Governmental
Authorization, Governmental Filing or Private Authorization.
(d) The Subsidiaries of Intrepid are (i) Intrepid Asset
Management, Inc., a Florida corporation, (ii) Capital Research
Corporation, a Florida corporation, and (iii) Enviroq Corporation, a
Delaware corporation. Enviroq owns 50% of the outstanding capital
stock and has voting control of Sprayroq Corporation, a Delaware
corporation ("Sprayroq"). Each of Intrepid's Subsidiaries other than
Sprayroq is wholly owned.
6.2 INTREPID'S FINANCIAL AND OTHER INFORMATION. Intrepid has
heretofore furnished to the Ewing Shareholders copies of the financial
statements of Intrepid (collectively, the "Intrepid Financial Statements")
included in Intrepid's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998 and in Intrepid's Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1999 (the "Intrepid SEC Reports"). The Intrepid
Financial Statements, including in each case the notes thereto, have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, except as otherwise noted therein or as set forth in
Section 6.2 of the Intrepid Disclosure Schedule or in the Intrepid SEC Reports,
and fairly present the financial condition and the results of operations and
cash flow of Intrepid and its Subsidiaries in accordance with GAAP, on the
bases therein stated, as of the respective dates thereof, and for the
respective periods covered thereby subject, in the case of unaudited financial
statements, to normal nonmaterial year-end audit adjustments and accruals.
6.3 MATERIAL STATEMENTS AND OMISSIONS; ABSENCE OF EVENTS. Neither
any representation or warranty made by Intrepid contained in this Agreement or
in any certificate, document or other instrument furnished or to be furnished
by Intrepid pursuant to the provisions hereof, nor the Intrepid Disclosure
Schedule, contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact required to make any statement
contained herein or therein, in light of the circumstances under which they
were made, not misleading. Since the date of the most recent financial
statements constituting a part of the Intrepid Financial Statements, there has
been no change with respect to Intrepid and its Subsidiaries which has had, or
(so far as Intrepid can now reasonably foresee) is reasonably likely to have, a
material adverse effect on Intrepid. Since December 31, 1998, there is no Event
known to Intrepid which has had, or (so far as Intrepid can now reasonably
foresee) is reasonably likely to have, a material adverse effect on Intrepid.
Intrepid is not aware of any impending or contemplated Event that would cause
any of the representations and warranties made by Intrepid in this Article 6
not to be true, correct and complete on the date of such Event as if made on
that date.
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6.4 TITLE TO PROPERTIES. Intrepid and its Subsidiaries have good,
indefeasible, marketable and insurable title to or valid leasehold interests in
their respective properties and assets, real or personal, tangible or
intangible, reflected in the balance sheet that is a part of the Intrepid
Financial Statements (collectively, the "Intrepid Assets"), which together
constitute all of the property, real and personal, tangible and intangible,
owned or leased by Intrepid. To Intrepid's knowledge, there is no pending,
threatened or contemplated action to take by eminent domain or otherwise to
condemn any material part of any Real Property of Intrepid or its Subsidiaries.
6.5 COMPLIANCE WITH PRIVATE AUTHORIZATIONS. Section 6.5 of the
Intrepid Disclosure Schedule sets forth a true, accurate and complete list and
description of each Private Authorization which individually is material to the
Intrepid Assets or the business of Intrepid and its Subsidiaries (the "Intrepid
Business"). Intrepid and its Subsidiaries have obtained all Private
Authorizations that are necessary for the ownership or operation of the
Intrepid Assets or the conduct of the Intrepid Business which, if not obtained
and maintained, would, individually or in the aggregate, be reasonably likely
to have a material adverse effect on Intrepid. To Intrepid's knowledge, all of
such Private Authorizations are valid and in good standing and are in full
force and effect, except for such exceptions as, individually or in the
aggregate, have not had and are not reasonably likely to have a material
adverse effect on Intrepid. To Intrepid's knowledge, neither it nor any of its
Subsidiaries is in breach or violation of, or in default in the performance,
observance or fulfillment of, any such Private Authorization, and no Event
exists or has occurred which constitutes, or but for any requirement of giving
of notice or passage of time or both would constitute, such a breach, violation
or default, under any such Private Authorization, except for such defaults,
breaches or violations as, individually or in the aggregate, have not had and
will not have any material adverse effect on Intrepid. No such Private
Authorization is the subject of any pending or, to Intrepid's knowledge,
threatened, attack, revocation or termination, except for such exceptions as,
individually or in the aggregate, have not had and are not reasonably likely to
have a material adverse effect on Intrepid.
6.6 COMPLIANCE WITH GOVERNMENTAL AUTHORIZATIONS AND APPLICABLE
LAW.
(a) To Intrepid's knowledge, Section 6.6(a) of the
Intrepid Disclosure Schedule contains a true, complete and accurate
description of each Governmental Authorization that is material to the
ownership or operation of the Intrepid Assets or the conduct of the
Intrepid Business and that is required under Applicable Law (i) to own
and operate the Intrepid Assets and conduct the Intrepid Business as
currently conducted, all of which are in full force and effect or (ii)
that is necessary to permit Intrepid to execute and deliver this
Agreement and to perform its obligations hereunder. Intrepid and its
Subsidiaries have obtained all Governmental Authorizations that are
necessary for the ownership or operation of the Intrepid Assets or the
conduct of the Intrepid Business as now conducted and which, if not
obtained and maintained, would, individually or in the aggregate, have
a material adverse effect on Intrepid. None of the Governmental
Authorizations listed in Section 6.6(a) of the Intrepid Disclosure
Schedule is subject to any restriction or condition that would limit
in any material respect the ownership or
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operations of the Intrepid Assets or the conduct of the Intrepid
Business as currently conducted, except for restrictions and
conditions generally applicable to Governmental Authorizations of such
type. The Governmental Authorizations listed in Section 6.6(a) of the
Intrepid Disclosure Schedule are valid and in good standing, are in
full force and effect and, to Intrepid's knowledge, are not impaired
in any material respect by any act or omission of Intrepid, its
Subsidiaries or any of their respective officers, directors, employees
or agents, and the ownership and operation of the Intrepid Assets and
the conduct of the Intrepid Business are in accordance in all material
respects with the Governmental Authorizations. All material reports,
forms and statements required to be filed by Intrepid and its
Subsidiaries with all Authorities and Self-Regulatory Organizations
with respect to the Intrepid Business have been filed and are true,
complete and accurate in all material respects. To Intrepid's
knowledge, no such Governmental Authorization currently held by
Intrepid or any of its Subsidiaries is the subject of any pending or,
to Intrepid's knowledge, threatened challenge or proceeding to revoke
or terminate any such Governmental Authorization that, individually or
in the aggregate, if revoked or terminated, would have a material
adverse effect on Intrepid. Intrepid has no reason to believe that any
such Governmental Authorization will not be renewed in the name of
Intrepid or its Subsidiaries, as the case may be, by the granting
Authority in the ordinary course.
(b) To Intrepid's knowledge, Intrepid and its
Subsidiaries are in compliance with all Applicable Laws, except where
such non-compliance, individually or in the aggregate, has not had and
is not reasonably likely to have a material adverse effect on
Intrepid. Except as set forth in Section 6.6(b) of the Intrepid
Disclosure Schedule or in the Intrepid SEC Reports, there are no Legal
Actions of any kind pending or, to the knowledge of Intrepid,
threatened, at law, in equity or before any Authority or
Self-Regulatory Organization against Intrepid or its Subsidiaries.
Such disclosed Legal Actions, if determined adversely to Intrepid or
its Subsidiaries, individually or in the aggregate, are not reasonably
likely to have a material adverse effect on Intrepid.
(c) Except as set forth in Section 6.6(c) of the
Intrepid Disclosure Schedule or in the Intrepid SEC Reports, to
Intrepid's knowledge, Intrepid and its Subsidiaries have not received
any notification or communication from any Authorities or
Self-Regulatory Organizations (i) asserting non-compliance with any of
the Laws that such Authorities or Self-Regulatory Organizations
enforce, (ii) threatening to revoke or condition the continuation of
any Private Authorization or Governmental Authorization (nor do any
grounds for any of the foregoing exist), (iii) requiring them (or any
of their respective directors or controlling Persons) to enter into a
cease and desist order, agreement, memorandum of understanding,
censure or disciplinary agreement (or requiring the board of directors
thereof to adopt any resolution or policy), or (iv) restricting or
disqualifying their respective activities (except for restrictions
generally imposed by disqualifying their respective activities) other
than for restrictions generally imposed by rule, regulation or
administrative policy on brokers or dealers generally.
(d) Other than periodic examinations by Self-Regulatory
Organizations in the ordinary course, Intrepid is not aware of any
pending or threatened investigation, review or disciplinary
proceedings by any Authorities or Self-Regulatory Organizations
against Intrepid or any Subsidiary of Intrepid or any of their
respective officers, directors or employees.
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(e) To Intrepid's knowledge, neither Intrepid, nor its
Subsidiaries, nor any of their respective employees is, and, to
Intrepid's knowledge, none of Intrepid's Affiliates or their
respective employees are, subject to a "statutory disqualification"
(as defined in Section 3(a)(39) of the Exchange Act) or subject to a
disqualification that would be a basis for censure, limitations on the
activities, functions or operations of, or suspension or revocation of
the registration of any broker-dealer Affiliate as a broker-dealer,
municipal securities dealer, government securities broker or
government securities dealer under Section 15, Section 15B or Section
15C of the Exchange Act, and, to Intrepid's knowledge, there is no
reasonable basis for, or proceeding or investigation, whether formal
or informal, or whether preliminary or otherwise, that is reasonably
likely to result in, any such censure, limitations, suspension or
revocation.
(f) Neither Intrepid nor any of its Subsidiaries is
required to be registered as an investment company, commodity trading
advisor, commodity pool operator, futures commission merchant,
introducing broker, insurance agent or transfer agent under any
federal, state, local or foreign Law. Neither Intrepid nor any its
Subsidiaries acts as the "sponsor" of a "broker-dealer trading
program", as such terms are defined in rule 17a-23 under the Exchange
Act.
(g) To Intrepid's knowledge, in the conduct of their
respective businesses, neither Intrepid nor any of its Subsidiaries
has (i) breached any applicable fiduciary duty under Part 4 of Title I
of ERISA which would subject it to liability under Sections 405 or 409
of ERISA or (ii) engaged in a "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975(c) of the Code which
would subject it to liability or Taxes under Sections 409 or 502(I) of
ERISA or Section 4975(a) of the Code.
(h) Neither Intrepid nor any of its Subsidiaries is
subject to any cease and desist, censure or other order issued by, or
a party to any written agreement, consent agreement, memorandum of
understanding or disciplinary agreement with, or a party to any
commitment letter or similar undertaking to, or subject to any order
or directive by, or a recipient of any supervisory letter from or
adopted any board resolutions at the request of any Authority or
Self-Regulatory Organization, or been advised by any Authority or
Self-Regulatory Organization that is considering issuing or requesting
any such agreement or other action, and Intrepid has no knowledge of
any pending or threatened regulatory investigation.
(i) To Intrepid's knowledge, except as set forth in
Section 6.6(i) of the Intrepid Disclosure Schedule or in the Intrepid
SEC Reports, Intrepid and its Subsidiaries have timely filed all
reports, registrations and statements, together with any amendments
required to be made with respect thereto, that were required to be
filed under any applicable law, regulation or rule, with (A) all
applicable Authorities and (B) any Self-Regulatory Organization
(collectively, the "Intrepid Reports"). To Intrepid's knowledge, as of
their respective dates, the Intrepid Reports complied with the
applicable statutes, rules, regulations and orders enforced or
promulgated by the regulatory authority with which they were filed.
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6.7 INTANGIBLE ASSETS. Except as set forth in Section 6.7 of the
Intrepid Disclosure Schedule or in the Intrepid SEC Reports, to Intrepid's
knowledge, no Intangible Assets (except Governmental Authorizations, Private
Authorizations and the Intangible Assets so set forth) are required for the
ownership or operation of the Intrepid Assets or the conduct of the Intrepid
Business as currently owned, operated and conducted, except for such exceptions
to the foregoing as, individually or in the aggregate, have not had and will
not have any material adverse effect on Intrepid. Intrepid and its Subsidiaries
do not, to Intrepid's knowledge, wrongfully infringe upon or unlawfully use any
Intangible Assets owned or claimed by another, and, to Intrepid's knowledge,
Intrepid and its Subsidiaries have not received any notice of any claim or
infringement relating to any such Intangible Asset, except for such exceptions
to the foregoing which, individually or in the aggregate, have not had and are
not reasonably likely to have any material adverse effect on Intrepid.
6.8 RELATED TRANSACTIONS. Neither Intrepid nor any Subsidiary of
Intrepid is a party or subject to any Contractual Obligation relating to the
ownership or operation of the Intrepid Assets or the conduct of the Intrepid
Business between Intrepid or any of its Subsidiaries and any of their
respective officers, directors, shareholders, employees or, to Intrepid's
knowledge, any Affiliate of any thereof, including any Contractual Obligation
providing for the furnishing of services to or by, providing for rental of
property, real, personal or mixed, to or from, or providing for the lending or
borrowing of money to or from or otherwise requiring payments to or from, any
such Person, other than (a) Employment Arrangements of Intrepid listed or
described in Section 6.8 of the Intrepid Disclosure Schedule, (b) Contractual
Obligations between Intrepid or any of its Subsidiaries and any of their
respective directors, shareholders, officers, employees or Affiliates of
Intrepid or any of the foregoing, which will be terminated, at no cost or
expense to Intrepid or its Subsidiaries, prior to the date hereof, or (c) as
otherwise specifically set forth in Section 6.8 of the Intrepid Disclosure
Schedule or in the Intrepid SEC Reports.
6.9 INSURANCE. Intrepid and its Subsidiaries maintain, with
respect to the Intrepid Assets and the Intrepid Business, policies of fire and
extended coverage and casualty, liability and other forms of insurance in such
amounts and against such risks and losses as are set forth in Section 6.9 of
the Intrepid Disclosure Schedule.
6.10 TAX MATTERS. Intrepid and each of its Subsidiaries have in
accordance with all Applicable Laws filed all Tax Returns which are required to
be filed, and have paid, or made adequate provision for the payment of, all
Taxes which have or may become due and payable pursuant to said Tax Returns and
all other governmental charges and assessments received to date and which are
now due and payable other than those Taxes being contested in good faith for
which adequate provision has been made on the most recent balance sheet forming
a part of the Intrepid Financial Statements. The Tax Returns of Intrepid and
its Subsidiaries have been prepared in all material respects in accordance with
all Applicable Laws. All Taxes which Intrepid and its Subsidiaries are required
by law to withhold and collect have been duly withheld and collected, and have
been paid over, in a timely manner, to the proper Authorities to the extent due
and payable. Neither Intrepid nor any of its Subsidiaries has executed any
waiver to
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extend, or otherwise taken or failed to take any action that would have the
effect of extending, the applicable statute of limitations in respect of any
Tax liabilities of Intrepid or its Subsidiaries for the fiscal years prior to
and including the most recent fiscal year. Adequate provision has been made on
the most recent balance sheet forming a part of the Intrepid Financial
Statements for all Taxes accrued through the date of such balance sheet of any
kind, including interest and penalties in respect thereof, whether disputed or
not, and whether past, current or deferred, accrued or unaccrued, fixed,
contingent, absolute or otherwise, and there are, to Intrepid's knowledge, no
past transactions or matters which are reasonably likely to result in
additional Taxes of a material nature to Intrepid for which an adequate reserve
has not been provided on such balance sheet. Niether Intrepid nor any of its
Subsidiaries is a "consenting corporation" within the meaning of Section 341(f)
of the Code. Intrepid and its Subsidiaries have at all times been taxable as
Subchapter C corporations under the Code, and have never been members of any
consolidated group for Tax purposes, except as otherwise set forth in Section
6.10 of the Intrepid Disclosure Schedule or in the Intrepid SEC Reports.
Neither Intrepid nor any of its Subsidiaries is a party to any tax sharing
agreement or arrangement.
6.11 EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. Except as
described in Section 6.11 of the Intrepid Disclosure Schedule or in the
Intrepid SEC Reports:
(a) Intrepid (which for purposes of this Section shall
include any ERISA Affiliate) has never contributed or sponsored, and
has not at any time since its organization made any contribution to or
sponsored, any Plan or Benefit Arrangement which is subject to ERISA.
(b) Intrepid is not and never has been a party to any
Multiemployer Plan or made contributions to any such Plan.
(c) Intrepid does not maintain any Plan that provides
benefits described in Section 3(1) of ERISA, except as the provisions
of COBRA may apply, to any former employees or retirees of Intrepid.
(d) The execution, delivery and performance by each
Intrepid Shareholder of this Agreement and the Collateral Documents
executed or required to be executed pursuant hereto and thereto will
not involve any prohibited transaction within the meaning of ERISA or
Section 4975 of the Code.
6.12 SOLVENCY. As of the execution and delivery of this Agreement,
Intrepid and each of its Subsidiaries (other than Subsidiaries which are
inactive and have only intercompany liabilities) are, and immediately prior to
and immediately after giving effect to the consummation of the Share Purchase
will be, Solvent.
6.13 MATERIAL AND ADVERSE RESTRICTIONS. Neither Intrepid nor any
Subsidiary of Intrepid is a party to or subject to, nor is any of the Intrepid
Assets subject to, any Applicable Law or Governmental Authorization (other than
Applicable Laws or Governmental Authorizations which affect similarly situated
businesses in Intrepid's industry generally), Contractual Obligation,
Employment Arrangement, Lease, Material Agreement, Private Authorization or any
other obligation or restriction of any kind or character, which now has or,
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as far as Intrepid can now reasonably foresee, individually or in the
aggregate, is reasonably likely to have, any material adverse effect on
Intrepid, except as set forth in Section 6.13 of the Intrepid Disclosure
Schedule or in the Intrepid SEC Reports. Except as set forth in Section 6.13 of
the Intrepid Disclosure Schedule or in the Intrepid SEC Reports, neither
Intrepid nor any of its Subsidiaries is subject to regulation under the
Investment Advisers Act of 1940, as amended, or the Investment Company Act of
1940, as amended. Intrepid, each of its Subsidiaries and each of their
respective employees which are or who are required to be registered as a
broker/dealer, an investment adviser, a registered representative, an insurance
agent or a sales Person (or in a similar capacity) with any Authority or any
Self-Regulatory Organization, are duly registered as such. All federal, state
and foreign registration requirements have been complied with in all material
respects and such registrations as currently filed, and all periodic reports
required to be filed with respect thereto, are accurate and complete in all
material respects.
6.14 BROKER OR FINDER. No Person assisted in or brought about the
negotiation of this Agreement or the Share Purchase in the capacity of broker,
agent or finder or in any similar capacity on behalf of Intrepid.
6.15 ENVIRONMENTAL MATTERS. Except as set forth in Section 6.15 of
the Intrepid Disclosure Schedule or in the Intrepid SEC Reports and except for
such non-compliance, failures and liabilities which have not had and are not
reasonably likely to have a material adverse effect on Intrepid, to Intrepid's
knowledge:
(a) Intrepid and each of its Subsidiaries (i) have
complied with the Environmental, Health and Safety Laws in all
material respects, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand or notice has been
filed or commenced against any of them alleging any such failure to
comply, (ii) have obtained and has at all times been and is in
substantial compliance with all of the terms and conditions of all
Governmental Authorizations and training which are required under any
of the Environmental, Health and Safety Laws, and (iii) have complied
in all material respects with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables which are contained in the Environmental,
Health and Safety Laws; and
(b) Intrepid and each of its Subsidiaries have no
material liability, and Intrepid and each of its Subsidiaries and
their respective predecessors have not handled or disposed of any
substance, arranged for the disposal of any substance, exposed any
employee or other individual to any substance or condition, or owned
or operated any property or facility in any manner that could give
rise to any material liability, for contamination or damage to any
site, location or body of water (surface or subsurface), for any
illness of or personal injury to any employee or other individual, or
for any reason under any Environmental, Health and Safety Law.
6.16 YEAR 2000 COMPLIANCE. To Intrepid's knowledge (without
inquiry or independent investigation), the software and hardware operated by
Intrepid are capable of providing uninterrupted millennium functionality to
record, store, process and present calendar dates falling on or after January
1, 2000 and date-dependent data in substantially the same
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manner and with the same functionality as such software records, stores,
processes and presents such calendar dates and date-dependent data as of the
date hereof.
ARTICLE 7.
COVENANTS
7.1 ACCESS TO INFORMATION.
(a) The Ewing Shareholders shall afford, and shall cause
Ewing to afford, to Intrepid and, on a need to know basis, its
accountants, counsel, financial advisors and other representatives
(the "Intrepid Representatives") full access during normal business
hours throughout the period prior to the Closing Date to all of
Ewing's properties, books, contracts, commitments and records
(including its tax returns) and, during such period, shall furnish
promptly to Intrepid or the Intrepid Representatives (i) a copy of
each report, schedule, memorandum, letter, agreement or other document
that may have a material adverse effect on Ewing; and (ii) such other
information concerning the Ewing Business and the Ewing Assets as
Intrepid shall reasonably request; provided, however, that no
investigation pursuant to this Section 7.1 shall
amend or modify any representations or warranties made herein or the
conditions to the obligations of the respective parties to consummate
the Transactions.
(b) Intrepid shall, and shall use its best efforts to
cause the Intrepid Representatives to, hold in strict confidence, and
not disclose to any Person without the prior written consent of the
other party hereto, or use in any manner except in connection with the
Transactions, all information obtained from Ewing and the Ewing
Shareholders in connection with the Transactions (collectively,
"Confidential Information"), except that such Confidential Information
may be disclosed (i) where necessary to any Authorities or
Self-Regulatory Organizations; (ii) if required by court order or
decree; (iii) if it is ascertainable or obtained from public or
published information; (iv) if it is or becomes known to the public
other than through disclosure by Intrepid or the Intrepid
Representatives; (vi) if Intrepid can demonstrate it was in its
possession prior to disclosure thereof in connection with this
Agreement; (vii) if Intrepid can demonstrate it was independently
developed by it; or (viii) if Intrepid is advised in writing by
counsel that it is legally required to make such disclosure. If such
information is to be disclosed pursuant to (i) or (ii) hereinabove,
Intrepid shall (x) give as much notice to the Ewing Shareholders as is
practicable prior to making such disclosure, (y) cooperate with the
Ewing Shareholders to obtain an appropriate protective order or other
reliable assurance to prevent or limit the disclosure of the
information and (z) disclose only that portion of the information as
is necessary to comply with Applicable Law.
7.2 CONDUCT OF THE BUSINESS PRIOR TO THE CLOSING. During the
period from the date of this Agreement to the Closing Date, except as otherwise
contemplated by this Agreement or consented to or approved by Intrepid in
writing, the Ewing Shareholders shall cause Ewing (i) to conduct the Ewing
Business in the usual, regular and ordinary course consistent with past practice
and prudent business principles and (ii) to use its reasonable best efforts to
maintain and preserve intact its business organization, employees, goodwill with
customers and advantageous
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business relationships and to retain the services of its officers and key
employees. The Ewing Shareholders further agree that on and or after the date
hereof and prior to the Closing Date, without the written consent of Intrepid,
the Ewing Shareholders shall not cause or otherwise suffer or permit Ewing or
any of its Subsidiaries to:
(a) alter, amend or modify any provision of its Articles
of Incorporation and Bylaws;
(b) incur or become subject to, or agree to incur or
become subject to, any obligation or liability (absolute or
contingent) except current liabilities incurred, and obligations under
contracts entered into, in the ordinary course of the Ewing Business;
(c) discharge or satisfy any Lien or pay any obligation
or liability (absolute or contingent) other than liabilities payable
in the ordinary course of the Ewing Business;
(d) mortgage, pledge or subject to any Lien any of
Ewing's properties, or agree so to do;
(e) sell or transfer or agree to sell or transfer any of
the Ewing Assets or cancel or agree to cancel any debt or claim,
except in each case in the ordinary course of the Ewing Business;
(f) consent or agree to a waiver of any right of
substantial value;
(g) enter into any transaction other than in the
ordinary course of the Ewing Business;
(h) except as provided in Section 7.2(h) of the Ewing
Disclosure Schedule, increase the rate of compensation payable or to
become payable by it to any Ewing Employees or any agents of Ewing by
more than 5% of the rate being paid to them at the date hereof;
(i) terminate any Material Agreement of Ewing;
(j) through negotiation or otherwise, make any
commitment or incur any liability or obligation to any labor
organization except in the ordinary course of the Ewing Business
consistent with past practice;
(k) except as provided in Section 7.2(k) of the Ewing
Disclosure Schedule, make or agree to make any accrual or arrangement
for or payment of bonuses or special compensation of any kind to any
Ewing Employee;
(l) except for the termination of Ms. Janice Jones, the
details of which have been previously provided by Ewing to Intrepid,
terminate any Ewing Employee earning in excess of $25,000 per annum or
directly or indirectly pay or make a commitment to pay any severance
or termination pay to any Ewing Employee or agent of Ewing except in
the ordinary course of the Ewing Business consistent with past
practice;
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(m) introduce any new method of management, operation or
accounting with respect to the Ewing Business or any of the Ewing
Assets or any rights applicable thereto;
(n) offer or extend more favorable prices, discounts or
allowances than were offered or extended regularly on and prior to the
date hereof;
(o) make capital expenditures or commitments therefor in
excess of $10,000 except for repairs and maintenance in the ordinary
course of the Ewing Business consistent with past practice; or
(p) authorize or enter into any agreement to do any of
the foregoing.
7.3 AGREEMENT TO COOPERATE. Subject to the terms and conditions
herein provided, each of the parties hereto shall use all reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under Applicable Law to consummate and
make effective the Transactions, including using its reasonable efforts to
obtain all Private Authorizations and Governmental Authorizations and to effect
all necessary filings and submissions with all Authorities and Self-Regulatory
Organizations.
7.4 SATISFACTION OF CONDITIONS. Each of the parties hereto shall
use its best efforts to fulfill or obtain the fulfillment of all of the
conditions to Closing set forth herein.
7.5 NOTICE OF DEVELOPMENTS. Intrepid and the Ewing Shareholders
agree to give each other prompt written notice in the event that any of the
representations and warranties made by Intrepid or any of the Ewing
Shareholders are discovered to be untrue as of the time made or in the event
any party hereto determines that his or its own representations and warranties
shall be untrue as if made at and as of the Closing Date.
7.6 EMPLOYEE BENEFITS. Following the Closing Date, Intrepid shall
provide generally to the officers and employees of Ewing and its Subsidiaries
employee benefits under employee benefit plans on terms and conditions which,
when taken as a whole, are substantially similar to those currently provided by
Ewing and its Subsidiaries to their similarly situated officers and employees
and set forth in Section 7.6 of the Ewing Disclosure Schedule. For purposes of
participation and vesting under such employee benefit plans, the service of the
employees of Ewing and its Subsidiaries prior to the Closing Date shall be
treated as service with Intrepid.
7.7 ELECTIONS TO THE BOARD OF DIRECTORS. Immediately following
the Closing, Intrepid shall use its best efforts to cause Messrs. Benjamin C.
Bishop, Jr. and Arnold A. Heggestad to be elected to the Board of Directors of
Intrepid.
7.8 ADVANCE TO EMPLOYEE. If, following the Closing Date, Ewing
shall receive reimbursement of the advance made by Ewing to Don Erwin in the
amount of $31,136.14 or any portion thereof, such amount shall be paid in cash
in immediately available funds to each of the Ewing Shareholders in proportion
to their Pro Rata Amount without adjustment by Intrepid.
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7.9 KEY MAN INSURANCE. After the Closing, Intrepid or Ewing may,
in its discretion and at its sole cost and expense, purchase and maintain one
or more policies of key man insurance on Bishop, which policies of insurance
shall designate Intrepid or Ewing, as the case may be, as the beneficiary
thereunder. Bishop covenants and agrees to cooperate fully with Intrepid and
Ewing after the date hereof in obtaining such policies of insurance and to make
available all records and information that are required to obtain such policies
of insurance in a prompt and timely manner.
7.10 RULE 144. From the Closing Date until December 31, 2004,
Intrepid shall (i) make available adequate current public information and (ii)
file with the SEC in a timely manner all reports and other documents required
of Intrepid under the Exchange Act so as to facilitate the disposition by the
Ewing Shareholders of the shares of common stock of Intrepid, if any, issued to
the Ewing Shareholders upon conversion of the Synagen Promissory Note, the
Bishop Promissory Note or the Heggestad Promissory Note, as the case may be, in
accordance with the terms of Rule 144 under the Securities Act as in effect on
the date hereof. In connection with any sale, transfer or other disposition by
any Ewing Shareholder or its assigns of shares of the capital stock of Intrepid
pursuant to Rule 144 under the Securities Act, Intrepid shall reasonably
cooperate with such Ewing Shareholder or its assigns to facilitate the timely
preparation and delivery of certificates representing such shares to be sold
and not bearing any Securities Act legend other than as may be required by
Applicable Law.
ARTICLE 8.
CLOSING; CLOSING DATE; DELIVERIES
8.1 CLOSING; CLOSING DATE. The Transactions shall close and all
deliveries to be made at the time of closing of the Transactions (the
"Closing") shall take place at 10:00 a.m., local time, on August 4, 1999, or on
such other date as may be agreed upon from time to time in writing by the Ewing
Shareholders and Intrepid (the "Closing Date"). The Closing shall take place at
the offices of Foley & Lardner, Jacksonville, Florida, or such other place as
the parties hereto shall agree.
8.2 DELIVERIES BY THE EWING SHAREHOLDERS. On or prior to the
Closing Date, the Ewing Shareholders shall deliver or cause to be delivered to
Intrepid each of the following:
(a) Certificates representing the Shares in accordance
with the terms of Section 2.2 hereof.
(b) An Employment Agreement substantially in the form of
Exhibit D attached hereto and incorporated herein by this reference
(the "Bishop Employment Agreement"), duly executed by Bishop;
(c) An Employment Agreement substantially in the form of
Exhibit E attached hereto and incorporated herein by this reference
(the "Beach Employment Agreement"), duly executed by Beach;
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(d) An opinion of Foley & Lardner, counsel to Ewing,
dated as of the Closing Date, substantially in the form of Exhibit F
hereto;
(e) Written resignations of all of the directors and
officers of Ewing, except for such directors and officers as Intrepid
shall designate in writing; and
(f) Such other separate instruments or documents as
Intrepid may reasonably deem necessary or appropriate in order to
consummate the Transactions.
8.3 DELIVERIES BY INTREPID. On or prior to the Closing Date,
Intrepid shall deliver or cause to be delivered to the Ewing Shareholders each
of the following:
(a) The cash portion of the Purchase Price in accordance
with the terms of Section 2.1 hereof;
(b) The Synagen Promissory Note, duly executed by
Intrepid;
(c) The Bishop Promissory Note, duly executed by
Intrepid;
(d) The Heggestad Promissory Note, duly executed by
Intrepid;
(e) The Bishop Employment Agreement, duly executed by
Intrepid;
(f) The Beach Employment Agreement, duly executed by
Intrepid;
(g) An opinion of Rogers & Hardin LLP, counsel to
Intrepid, dated as of the Closing Date, substantially in the form of
Exhibit G hereto; and
(h) Such other separate instruments or documents as the
Ewing Shareholders may reasonably deem necessary or appropriate in
order to consummate the Transactions.
ARTICLE 9.
CONDITIONS PRECEDENT TO OBLIGATIONS
9.1 CONDITIONS TO OBLIGATIONS OF INTREPID. Each and every
obligation of Intrepid to be performed on the Closing Date shall be subject to
the satisfaction on or prior to the Closing Date of the following conditions
(unless waived in writing by Intrepid):
(a) The representations and warranties set forth in
Articles 3, 4 and 5 hereof shall have been true and correct in all
material respects when made and shall be true and correct in all
material respects at and as of the Closing Date as if such
representations and warranties were made as of the Closing Date,
except for changes permitted or contemplated by this Agreement and
except to the extent that any representation or a warranty is made as
of a specified date, in which case such representation or warranty
shall be true and correct as of such date;
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(b) All covenants, conditions and other obligations
under this Agreement which are to be performed or complied with by the
Ewing Shareholders shall have been fully performed and complied with
on or prior to the Closing Date, including the delivery of fully
executed instruments and documents in accordance with Section 8.2
hereof;
(c) There shall be no pending or threatened Claims,
Legal Actions or investigations by any Authorities against Intrepid,
the Ewing Shareholders or Ewing, for the purpose of enjoining or
preventing the consummation of this Agreement or the Transactions, or
otherwise claiming that this Agreement or the consummation of the
Transactions is illegal;
(d) All Private Authorizations, Governmental
Authorizations and filings or registrations with any Authority or
Self-Regulatory Organization required in connection with the
execution, delivery and performance of this Agreement (including all
consents, approvals, authorizations, certificates, licenses and
permits of the NASD) shall have been obtained or made, except where
the failure to have obtained or made any such consent, authorization,
order, approval, filing or registration would not have a material
adverse effect on Ewing; and
(e) There shall not have occurred any event or
circumstance resulting or reasonably likely to have a material adverse
effect on Ewing.
9.2 CONDITIONS TO OBLIGATIONS OF THE EWING SHAREHOLDERS. Each and
every obligation of the Ewing Shareholders to be performed on the Closing Date
shall be subject to the satisfaction on or prior to the Closing Date of the
following conditions (unless waived in writing by the Ewing Shareholders):
(a) The representations and warranties set forth in
Article 6 hereof shall have been true and correct in all material
respects when made and shall be true and correct in all material
respects at and as of the Closing Date as if such representations and
warranties were made as of the Closing Date, except for changes
permitted or contemplated by this Agreement and except to the extent
that any representation or a warranty is made as of a specified date,
in which case such representation or warranty shall be true and
correct as of such date;
(b) All covenants, conditions and other obligations
under this Agreement which are to be performed or complied with by
Intrepid shall have been fully performed and complied with on or prior
to the Closing Date, including the delivery of fully executed
instruments and documents in accordance with Section 8.3 hereof;
(c) There shall be no pending or threatened Claims,
Legal Actions or investigations by any Authorities against Intrepid,
the Ewing Shareholders or Ewing, for the purpose of enjoining or
preventing the consummation of this Agreement or the Transactions, or
otherwise claiming that this Agreement or the consummation of the
Transactions is illegal;
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(d) All Private Authorizations, Governmental
Authorizations and filings or registrations with any Authority or
Self-Regulatory Organization required in connection with the
execution, delivery and performance of this Agreement (including all
consents, approvals, authorizations, certificates, licenses and
permits of the NASD shall have been obtained or made, except where the
failure to have obtained or made any such consent, authorization,
order, approval, filing or registration would not have a material
adverse effect on Intrepid; and
(e) There shall not have occurred any event or
circumstance resulting or reasonably likely to have a material adverse
effect on Intrepid.
ARTICLE 10.
INDEMNIFICATION
10.1 SURVIVAL. Regardless of any investigation or statement as to
the results thereof made by or on behalf of any party hereto, the
representations and warranties of the parties contained in or made pursuant to
this Agreement or any Collateral Document shall survive the Closing Date and
shall remain operative and in full force and effect for a period of twelve (12)
months after the Closing Date, except for representations and warranties
contained in Sections 3.1, 3.2, 3.5, 3.8, 3.14, 4.2, 4.3, 4.4, 4.7, 5.2, 5.3,
5.4, 5.7, 6.1, 6.4, 6.6, 6.7, 6.10, 6.11 and 6.16 hereof, all of which shall
survive and remain operative and in full force and effect for the applicable
statute of limitations. The covenants and agreements of the parties contained
in or made pursuant to this Agreement or any Collateral Document shall survive
the Closing Date (unless any such covenant or agreement by its express terms in
this Agreement does not so survive) and shall remain operative and in full
force and effect for the statute of limitations applicable to contractual
obligations. The term "Indemnity Period" shall mean the applicable period with
respect to which a representation, warranty, covenant or agreement survives the
Closing Date as provided in this Section 10.1. No claim for indemnification,
other than with respect to fraud or intentional and willful breach or
misrepresentation, may be asserted after the expiration of the Indemnity
Period. Notwithstanding anything herein to the contrary, any representation,
warranty, covenant and agreement which arises and is the subject of a Claim
which is asserted in writing prior to the expiration of the applicable
Indemnity Period shall survive with respect to such Claim or any dispute with
respect thereto until the final resolution thereof.
10.2 INDEMNIFICATION.
(a) Each Ewing Shareholder agrees, severally and not
jointly, that on and after the Closing Date, such Ewing Shareholder
shall indemnify and hold harmless Intrepid and its stockholders,
directors, officers, employees and representatives (collectively, the
"Intrepid Indemnified Parties") from and against such Ewing
Shareholder's Pro Rata Amount of any and all damages, claims, losses,
expenses, costs, obligations, and liabilities, including liabilities
for all reasonable attorneys', accountants' and experts' fees and
expenses incurred, including those incurred to enforce the terms of
this Agreement or any Collateral Document (collectively, "Loss and
Expense"), suffered by the Intrepid Indemnified Parties by reason of
or arising out of (i) any breach of representation or warranty made by
such Ewing Shareholder pursuant to this Agreement or any Collateral
Document, or (ii) any failure by such Ewing Shareholder to perform or
fulfill any of its covenants or agreements set forth in this Agreement
or any Collateral Document.
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(b) Intrepid agrees that on and after the Closing Date
it shall indemnify each Ewing Shareholder and hold such Ewing
Shareholder harmless from and against all Loss and Expense suffered by
such Ewing Shareholder by reason of or arising out of (i) any breach
of representation or warranty made by Intrepid pursuant to this
Agreement or any Collateral Document, or (ii) any failure by Intrepid
to perform or fulfill any of its covenants or agreements set forth in
this Agreement or any Collateral Document.
10.3 LIMITATION OF LIABILITY. Notwithstanding the provisions of
Section 10.2 hereof, after the Closing Date, except as otherwise provided in
Section 10.6 hereof, the Intrepid Indemnified Parties, on the one hand, and the
Ewing Shareholders, on the other hand, shall be entitled to recover their Loss
and Expense in respect of any Claim only (i) in the event that the aggregate
Loss and Expense for all Claims exceeds, in the aggregate, Twenty-Five Thousand
Dollars ($25,000), in which event the indemnified party shall be entitled to
recover all such Loss and Expense; and (ii) to the extent that the aggregate
Loss and Expense for all Claims does not exceed Five Hundred Thousand Dollars
($500,000). In no event shall (i) the liability of any Ewing Shareholder exceed
his or its Pro Rata Amount of the aggregate Loss and Expense which may be
recovered hereunder, or (ii) any Ewing Shareholder be entitled to recover more
than his or its Pro Rata Amount of the aggregate Loss and Expense which may be
recovered hereunder.
10.4 NOTICE OF CLAIMS. If an indemnified party believes that it
has suffered or incurred any Loss and Expense, it shall notify the indemnifying
party promptly in writing, and in any event within the applicable Indemnity
Period specified in Section 10.1 hereof, describing such Loss and Expense, all
with reasonable particularity and containing a reference to the provisions of
this Agreement in respect of which such Loss and Expense shall have occurred.
If any Legal Action is instituted by a third party with respect to which an
indemnified party intends to claim any liability or expense as Loss and Expense
under this Article, such indemnified party shall promptly notify the
indemnifying party of such Legal Action, but the failure to so notify the
indemnifying party shall not relieve such indemnifying party of its obligations
under this Article, except to the extent such failure to notify prejudices such
indemnifying party's ability to defend against such Claim.
10.5 DEFENSE OF THIRD PARTY CLAIMS. The indemnifying party shall
have the right to conduct and control, through legal counsel of its own
choosing, reasonably acceptable to the indemnified party, any third party Legal
Action or other Claim, but the indemnified party may, at its election,
participate in the defense thereof at its sole cost and expense; provided,
however, that if the indemnifying party shall fail to defend any such Legal
Action or other Claim, then the indemnified party may defend, through legal
counsel of its own choosing, such Legal Action or other Claim, and (so long as
it gives the indemnifying party at least fifteen (15) days' notice of the terms
of the proposed settlement thereof and permits the indemnifying party to then
undertake the defense thereof) settle such Legal Action or other Claim and to
recover the amount of such settlement or of any judgment and the reasonable
costs and expenses of such defense. The indemnifying party shall not compromise
or settle any such Legal Action or other Claim without the prior written
consent of the indemnified party, which consent shall not unreasonably
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be withheld, delayed or conditioned if the terms and conditions of such
compromise or settlement proposed by the indemnifying party and agreed to in
writing by the claimant in such Legal Action or other Claim (a) include a full
release of the indemnified party from the Legal Action or other Claim which is
the subject of the Settlement Proposal, and (b) if the indemnified party is an
Intrepid Indemnified Party, and such compromise or settlement does not include
any term or condition which would restrict in any material manner the continued
ownership or operations of the Ewing Assets or the conduct of the Ewing
Business in substantially the manner then being owned, operated and conducted.
No matter whether an indemnifying party defends or prosecutes any third party
Legal Action or Claim, the indemnified and indemnifying parties shall cooperate
in the defense or prosecution thereof. Such cooperation shall include access
during normal business hours afforded to the indemnifying party to, and
reasonable retention by the indemnified party of, records and information which
are reasonably relevant to such third party Legal Action or Claim, and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder, and the
indemnifying party shall reimburse the indemnified party for all its reasonable
out-of-pocket expenses in connection therewith.
10.6 RIGHT OF SET-OFF. If from time to time and at any time after
the Closing Date Intrepid or Ewing shall have been finally determined to be
entitled to be paid any amount by the Ewing Shareholders based upon a final and
binding arbitration or the final judgment of a court of competent jurisdiction
under the provisions of this Article 10 or any other provision of this
Agreement or pursuant to any Exhibit hereto or any other agreement executed and
delivered in connection herewith, Intrepid and Ewing shall be entitled, if they
so elect, to set-off such amount against, or to deduct such amount from, any
payments to be made by Intrepid or Ewing to the Ewing Shareholders pursuant to
this Agreement, the Synagen Promissory Note, the Bishop Promissory Note or the
Heggestad Promissory Note. The right of set-off described in this Section 10.6
shall be in addition to, and not in substitution of, any other rights Intrepid
and Ewing shall be entitled to under the provisions of this Article 10 or
otherwise.
10.7 EXCLUSIVE REMEDY. Except for fraud, purposeful or intentional
misrepresentation or willful or intentional breach of any warranty, covenant or
agreement or as otherwise provided in Section 12.4 hereof, the indemnification
(and any available right of offset) provided in this Article 10 shall be the
sole and exclusive remedy after the Closing Date available to any party against
any other party for any Claim under this Agreement.
ARTICLE 11.
TERMINATION
11.1 TERMINATION BY INTREPID. This Agreement may be terminated and
cancelled at any time prior to the Closing Date by Intrepid upon written notice
to the Ewing Shareholders if: (i) any of the representations or warranties of
the Ewing Shareholders contained herein shall prove to be inaccurate or untrue;
or (ii) any obligation, term or condition to be performed, kept or observed by
the Ewing Shareholders or Ewing hereunder has not been performed, kept or
observed in any material respect at or prior to the time specified in this
Agreement; provided, however, that the Ewing Shareholders shall have a 10-day
period in which to cure any defect described in clause (i) or (ii) of this
Section 11.1, and Intrepid may not terminate this Agreement if the Ewing
Shareholders cure such defect within such 10-day period.
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11.2 TERMINATION BY THE EWING SHAREHOLDERS. This Agreement may be
terminated and cancelled at any time prior to the Closing Date by the Ewing
Shareholders upon joint written notice to Intrepid if: (i) any of the
representations or warranties of Intrepid contained herein shall prove to be
inaccurate or untrue; or (ii) any obligation, term or condition to be
performed, kept or observed by Intrepid hereunder has not been performed, kept
or observed in any material respect at or prior to the time specified in this
Agreement; provided, however, that Intrepid shall have a 10-day period in which
to cure any defect described in clause (i) or (ii) of this Section 11.2, and
the Ewing Shareholders may not terminate this Agreement if Intrepid cures such
defect within such 10-day period.
11.3 TERMINATION BY ANY PARTY. Any party hereto shall have the
right to terminate and cancel this Agreement if (i) the Closing Date shall not
have occurred on or before September 1, 1999, provided that such failure of
occurrence shall not have resulted from the delay, default or breach of such
party; or (ii) a court of competent jurisdiction shall have issued an order,
decree or ruling permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement, and such order, decree, ruling
or other action shall have become final and nonappealable.
11.4 TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated and cancelled at any time prior to the Closing Date by mutual
written consent of Intrepid and the Ewing Shareholders.
11.5 EFFECT OF TERMINATION. In the event of termination of this
Agreement by any party hereto as provided in this Article 11, this Agreement
shall forthwith become void and there shall be no further obligation on the
part of either party or their officers or directors (except as set forth in
this Section 11.5 and in Section 7.1(b), which shall survive such termination;
provided, however, that nothing in this Section 11.5 shall relieve any party
from liability for any breach or failure of observance of any provision of this
Agreement. ARTICLE 12. GENERAL PROVISIONS
12.1 WAIVERS; AMENDMENTS. Changes in or additions to this
Agreement may be made, or compliance with any term, covenant, agreement,
condition or provision set forth herein may be omitted or waived (either
generally or in a particular instance and either retroactively or
prospectively) with, but only with, the consent in writing of the parties
hereto. No delay on the part of either party at any time or times in the
exercise of any right or remedy shall operate as a waiver thereof. Any consent
may be given subject to satisfaction of conditions stated therein. The failure
to insist upon the strict provisions of any covenant, term, condition or other
provision of this Agreement or to exercise any right or remedy thereunder shall
not constitute a waiver of any such covenant, term, condition or other
provision thereof or default in connection therewith. The waiver of any
covenant, term, condition or other provision thereof or default thereunder
shall not affect or alter this Agreement in any other respect, and each and
every covenant, term,
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condition or other provision of this Agreement shall, in such event, continue
in full force and effect, except as so waived, and shall be operative with
respect to any other then existing or subsequent default in connection
therewith.
12.2 FEES, EXPENSES AND OTHER PAYMENTS. All costs and expenses
incurred in connection with any transfer taxes, sales taxes, recording or
documentary taxes, stamps or other charges levied by any Authority in
connection with this Agreement and the consummation of the Share Purchase shall
be paid by Intrepid. Except for the costs and expenses referred to in the first
sentence of this Section 12.2, (a) Intrepid shall pay its own fees, costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, including the fees, costs and expenses of its financial
advisors, accountants and legal counsel, and (b) the Ewing Shareholders shall
pay all of the fees, costs and expenses incurred by them and by Ewing and its
Subsidiaries in connection with this Agreement and the transactions
contemplated hereby, including the fees, costs and expenses of their respective
financial advisors, accountants and legal counsel; provided, however, that all
fees, costs and expenses of Ewing and its Subsidiaries and the Ewing
Shareholders incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by Ewing and shall be accounted for as a
reduction in Actual Equity on the Closing Date Balance Sheet. Any of such fees,
costs and expenses not accounted for as a reduction in Actual Equity on the
Closing Date Balance Sheet shall be paid by the Ewing Shareholders and shall
not be paid by Ewing or its Subsidiaries or out of any of the Ewing Assets.
12.3 NOTICES. All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be
given in writing and shall be deemed to have been delivered (a) three (3)
business days after being mailed by first-class or express mail, postage
prepaid, (b) the next day when sent overnight by recognized courier service,
(c) upon confirmation when sent by telex, telegram, telecopy or other form of
rapid transmission, confirmed by mailing (by first class or express mail,
postage prepaid, or by recognized courier service) written confirmation at
substantially the same time as such rapid transmission, or (d) upon delivery
when personally delivered to the receiving party (which if other than an
individual shall be an officer or other responsible party of the receiving
party). All such notices and communications shall be mailed, sent or delivered
as follows:
(a) If to Intrepid:
Intrepid Capital Corporation
50 North Laura Street, Suite 3550
Jacksonville, Florida 32202
Attention: Mr. Forrest Travis
Telecopier No.: (904) 355-1745
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with a copy to (which shall not constitute notice to
Intrepid):
Rogers & Hardin LLP
2700 International Tower, Peachtree Center
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Steven E. Fox, Esq.
Telecopier No.: (404) 525-2224
(b) If to the Ewing Shareholders:
Charles E. Harris and Synagen Capital Partners, Inc.
1430 Elizabeth Drive
Winter Park, Florida 32789
Telecopier No.: (407) 648-4230
with a copy to (which shall not constitute notice to any
Ewing Shareholder):
Foley & Lardner
200 Laura Street
Jacksonville, Florida 32202
Attention: John T. Sefton, Esq.
Telecopier No.: (904) 359-8700
or to such other person(s), telex or facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by
written notice to the other party.
12.4 SPECIFIC PERFORMANCE; OTHER RIGHTS AND REMEDIES. Each party
recognizes and agrees that in the event the other party should refuse to
perform any of its obligations under this Agreement or any Collateral Document,
the remedy at law would be inadequate and further agrees that for breach of
such provisions, each party shall, in addition to the remedies set forth in
Article 10 hereof and such other remedies as may be available to it at law or
in equity, be entitled to injunctive relief and to enforce its rights by an
action for specific performance to the extent permitted by Applicable Law. Each
party hereby waives any requirement for security or the posting of any bond or
other surety in connection with any temporary or permanent award of injunctive,
mandatory or other equitable relief. Nothing herein contained shall be
construed as prohibiting any party from pursuing any other remedies available
to it pursuant to the provisions of this Agreement or Applicable Law for such
breach or threatened breach, including the recovery of damages.
12.5 SEVERABILITY. If any term or provision of this Agreement
shall be held to be, or shall in fact be, invalid, illegal or unenforceable,
the validity, legality or enforceability of the other provisions and terms
hereof, or the application of such term or provision to Persons or
circumstances other than those to which it is held invalid, illegal or
unenforceable, shall not be affected thereby, and there shall be deemed
substituted for the provision or term at issue a valid, legal and enforceable
provision as similar as possible to the provision or term at issue. If any term
or provision of this Agreement shall be held or deemed to be, or shall in fact
be, invalid, inoperative, illegal or unenforceable as applied to any particular
case in any jurisdiction or
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jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any
such jurisdiction or case as if such invalid, inoperative, illegal or
unenforceable provision had never been contained herein and such provision
reformed so that it would be valid, operative and enforceable to the maximum
extent permitted in such jurisdiction or in such case. Notwithstanding the
foregoing, in the event of any such determination the effect of which is to
affect materially and adversely any party, the parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by Applicable
Law in an acceptable manner to the end that the Transactions are fulfilled and
consummated to the maximum extent possible.
12.6 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, binding upon all of the
parties. In pleading or proving any provision of this Agreement, it shall not
be necessary to produce more than one set of such counterparts.
12.7 SECTION HEADINGS. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
12.8 GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by, and construed in accordance
with the laws of the State of Florida, without giving effect to any choice or
conflict of laws provision or rule that would cause the application of domestic
substantive laws of any other jurisdiction.
12.9 FURTHER ACTS. Each party hereto agrees that at any time, and
from time to time, before and after the consummation of the transactions
contemplated by this Agreement, it will do all such things and execute and
deliver all such Collateral Documents and other assurances, as any other party
hereto or its legal counsel reasonably deems necessary or desirable in order to
carry out the terms and conditions of this Agreement and the transactions
contemplated hereby or to facilitate the enjoyment of any of the rights created
hereby or to be created hereunder.
12.10 ENTIRE AGREEMENT. This Agreement (together with the Ewing
Disclosure Schedule, the Exhibits and the other Collateral Documents delivered
or to be delivered in connection herewith) constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes all prior
agreements, arrangements, covenants, promises, conditions, undertakings,
inducements, representations, warranties and negotiations, expressed or
implied, oral or written, between the parties, with respect to the subject
matter hereof. Each of the parties hereto is a sophisticated Person that was
advised by experienced legal counsel and, to the extent it deemed necessary,
other advisors in connection with this Agreement. Each of the parties hereto
hereby acknowledges that (a) none of the parties hereto has relied or will rely
in respect of this Agreement or the transactions contemplated hereby upon any
document or written or oral information previously furnished to or discovered
by it or its representatives, other than
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this Agreement (or such of the foregoing as are delivered at the consummation
of the Share Purchase), (b) there are no covenants or agreements by or on
behalf of any party hereto or any of its respective Affiliates or
representatives other than those expressly set forth in this Agreement and the
Collateral Documents, and (c) the parties' respective rights and obligations
with respect to this Agreement and the events giving rise thereto will be
solely as set forth in this Agreement and the Collateral Documents.
12.11 EXHIBITS. The Ewing Disclosure Schedule and all Exhibits
hereto are hereby incorporated into this Agreement and made a part hereof as if
set out in full herein.
12.12 ASSIGNMENT. This Agreement shall not be assignable by any
party hereto and any such assignment shall be null and void, except that it
shall inure to the benefit of and be binding upon any successor to any party
hereto by operation of law, including by way of merger, consolidation or sale
of all or substantially all of its assets.
12.13 PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any Person
any right, benefit or remedy of any nature whatsoever under or by reason of
this Agreement, except as otherwise provided in Section 12.12 hereof. There are
no third party beneficiaries of this Agreement.
12.14 MUTUAL DRAFTING. This Agreement is the result of the joint
efforts of the Ewing Shareholders and Intrepid, and each provision hereof has
been subject to the mutual consultation, negotiation and agreement of the
parties hereto and there shall be no construction against any party hereto
based on any presumption of that party's involvement in the drafting thereof.
[SIGNATURES NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement or caused this Agreement to be executed and delivered by their
respective officers thereunto duly authorized, all as of the date first written
above.
INTREPID CAPITAL CORPORATION
By /s/ Forrest Travis
------------------------------------------
Name: Forrest Travis
------------------------------------
Title: President
-----------------------------------
EWING SHAREHOLDERS:
/s/ Charles E. Harris
----------------------------------------------
CHARLES E. HARRIS, AS TRUSTEE OF THE
CHARLES E. HARRIS REVOCABLE TRUST DATED
SEPTEMBER 10, 1997
SYNAGEN CAPITAL PARTNERS, INC.
By: /s/ Charles E. Harris
------------------------------------------
Name: Charles E. Harris
------------------------------------
Title: President
-----------------------------------
/s/ Benjamin C. Bishop, Jr.
----------------------------------------------
BENJAMIN C. BISHOP, JR.
/s/ Arnold A. Heggestad
----------------------------------------------
ARNOLD A. HEGGESTAD
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APPENDIX I
DEFINITIONS
ACTUAL EQUITY shall have the meaning given to it in Section 2.3.
ADVERSE, ADVERSELY, when used alone or in conjunction with other terms
(including "affect," "change" and "effect") shall mean any Event which is
reasonably likely, in the reasonable business judgment of the relevant party,
to be expected to (a) adversely affect the validity or enforceability of this
Agreement or the likelihood of consummation of the Share Purchase, or (b)
adversely affect the business, operations, management, properties or prospects,
or the condition, financial or other, or results of operation of the Ewing
Business or the business of Intrepid, as applicable, or (c) impair such party's
ability to fulfill its obligations under the terms of this Agreement, or (d)
adversely affect the aggregate rights and remedies of such party under this
Agreement.
AFFILIATE, AFFILIATED shall mean, with respect to any Person, (a) any
other Person at the time directly or indirectly controlling, controlled by or
under direct or indirect common control with such Person, (b) any other Person
of which such Person at the time owns, or has the right to acquire, directly or
indirectly, five percent (5%) or more of any class of the capital stock or
beneficial interest, (c) any other Person which at the time owns, or has the
right to acquire, directly or indirectly, five percent (5%) or more of any
class of the capital stock or beneficial interest of such Person, (d) any
executive officer or director of such Person, (e) with respect to any
partnership, joint venture or similar Entity, any general partner thereof, and
(f) when used with respect to an individual, shall include any member of such
individual's immediate family or a family trust.
AGREEMENT shall mean this Agreement as originally in effect,
including, unless the context otherwise specifically requires, this Appendix A,
the Ewing Disclosure Schedule and all exhibits hereto, and as any of the same
may from time to time be supplemented, amended, modified or restated in the
manner herein or therein provided.
APPLICABLE LAW shall mean any Law of any Authority, whether domestic
or foreign, including all federal and state securities Laws, to which a Person
is subject or by which it or any of its business or operations is subject or
any of its property or assets is bound.
ARBITRATION shall have the meaning given to it in Section 2.5.
ARBITRATOR shall have the meaning given to it in Section 2.5.
AUTHORITY shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including any federal, state, territorial, county,
municipal or other government or governmental or quasi-governmental agency,
arbitrator, authority, board, body, branch, bureau, or comparable agency or
Entity, commission, corporation, court, department, instrumentality, mediator,
panel, system or other political unit or subdivision or other Entity of any of
the foregoing, whether domestic or
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foreign, including the SEC, the Commodity Futures Trading Commission, the Board
of Governors of the Federal Reserve, the Federal Deposit Insurance Corporation
or the Office of the Comptroller of the Currency.
BEACH EMPLOYMENT AGREEMENT shall have the meaning given to it in
Section 8.2.
BENEFIT ARRANGEMENT shall mean any material benefit arrangement that
is not a Plan, including (a) any employment or consulting agreement, (b) any
arrangement providing for insurance coverage or workers' compensation benefits,
(c) any incentive bonus or deferred bonus arrangement, (d) any arrangement
providing termination allowance, severance or similar benefits, (e) any equity
compensation plan, (f) any deferred compensation plan, and (g) any compensation
policy and practice, but only to the extent that it covers or relates to any
officer, employee or other Person involved in the ownership and operation of
the assets of Ewing or the conduct of the business of Ewing.
BIG FIVE ACCOUNTING FIRMS shall have the meaning given to it in
Section 2.5.
BISHOP EMPLOYMENT AGREEMENT shall have the meaning given to it in
Section 8.2.
BISHOP PROMISSORY NOTE shall have the meaning given to it in Section
2.2.
BISHOP'S KNOWLEDGE (or words of similar import) shall mean the actual
knowledge of Bishop, as such knowledge exists on the date of this Agreement and
from such date through the Closing Date, after a reasonable review of
appropriate Ewing records and after a reasonable inquiry of appropriate Ewing
officers, directors, employees and agents.
CLAIMS shall mean any and all debts, liabilities, obligations, losses,
damages, deficiencies, assessments and penalties, together with all Legal
Actions, pending or threatened, claims and judgments of whatever kind and
nature relating thereto, and all fees, costs, expenses and disbursements
(including reasonable attorneys' and other legal fees, costs and expenses)
relating to any of the foregoing.
CLOSING shall have the meaning given to it in Section 8.1.
CLOSING DATE shall have the meaning given to it in Section 8.1.
CLOSING DATE BALANCE SHEET shall have the meaning given to it in
Section 2.4.
COBRA shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA.
CODE shall mean the Internal Revenue Code of 1986, as the same has
been amended, and the rules and regulations thereunder, all as from time to
time in effect, or any successor law, rules or regulations, and any reference
to any statutory or regulatory provision shall be deemed to be a reference to
any successor statutory or regulatory provision.
COLLATERAL DOCUMENTS shall mean the Synagen Promissory Note, the
Bishop Promissory Note, the Heggestad Promissory Note, the Bishop Employment
Agreement, the Beach
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Employment Agreement and any other agreement, certificate, contract,
instrument, notice or other document delivered pursuant to the provisions of
this Agreement or any Collateral Document.
CONFIDENTIAL INFORMATION shall have the meaning given to it in Section
7.1.
CONTRACT, CONTRACTUAL OBLIGATION shall mean any executory agreement,
arrangement, commitment, contract, covenant, indemnity, undertaking or other
obligation or liability to which Ewing or Intrepid, as the case may be, is a
party or to which any of the Ewing Assets or the Intrepid Assets, as the case
may be, is subject.
CONTROL (including the terms "controlled," "controlled by" and "under
common control with") shall mean the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management or policies of a Person, or the disposition of such Person's assets
or properties, whether through the ownership of stock, equity or other
ownership, by contract, arrangement or understanding, or as trustee or
executor, by contract or credit arrangement or otherwise.
CONVERTIBLE SECURITIES shall mean any evidences of indebtedness,
shares of capital stock (other than common stock) or other securities directly
or indirectly convertible into or exchangeable for shares of common stock,
whether or not the right to convert or exchange thereunder is immediately
exercisable or is conditioned upon the passage of time, the occurrence or
non-occurrence or existence or non-existence of some other Event, or both.
DISPUTED MATTERS shall have the meaning given to it in Section 2.5.
DISTRIBUTION shall mean, with respect to any Person, (a) the
declaration or payment of any dividend (except dividends payable in common
stock of such Person) on or in respect of any shares of any class of capital
stock of such Person or any shares of capital stock of any Subsidiary owned by
a Person other than such Person or a Subsidiary of such Person, (b) the
purchase, redemption or other retirement of any shares of any class of capital
stock of such Person or any shares of capital stock of any Subsidiary of such
Person owned by a Person other than such Person or a Subsidiary of such Person,
and (c) any other distribution on or in respect of any shares of any class of
capital stock of such Person or any shares of capital stock of any Subsidiary
of such Person owned by a Person other than such Person or a Subsidiary of such
Person.
EMPLOYMENT ARRANGEMENT shall mean any employment, consulting,
retainer, severance or similar contract, agreement, plan, arrangement or policy
(exclusive of any which is terminable within thirty (30) days without
liability, penalty or payment of any kind by Ewing or Intrepid, as the case may
be, or any Affiliate thereof), or providing for severance, termination
payments, insurance coverage (including any self-insured arrangements), workers
compensation, disability benefits, life, health, medical, dental or
hospitalization benefits, supplemental unemployment benefits, vacation or sick
leave benefits, pension or retirement benefits or for deferred compensation,
profit-sharing, bonuses, stock options, stock purchase or appreciation rights
or other forms of incentive compensation or post-retirement insurance,
compensation or post-retirement insurance, compensation or benefits, or any
collective bargaining or other labor
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agreement, whether or not any of the foregoing is subject to the provisions of
ERISA, but only to the extent that it covers or relates to any officer,
employee or other Person involved in the ownership or operation of the Ewing
Assets or the Intrepid Assets, as the case may be, or the conduct of the Ewing
Business or the Intrepid Business, as the case may be.
ENCUMBER shall mean to suffer, accept, agree to or permit the
imposition of a Lien.
ENTITY shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
ENVIRONMENTAL, HEALTH AND SAFETY LAWS means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings and
charges thereunder) of federal, state, local and foreign governments (and all
agencies thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants or chemical, industrial, hazardous or toxic materials or waste
into ambient air, surface water, ground water or lands or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants or chemical, industrial,
hazardous or toxic materials or waste.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
as the same has been amended, and the rules and regulations thereunder, all as
from time to time in effect, or any successor law, rules or regulations, and
any reference to any statutory or regulatory provision shall be deemed to be a
reference to any successor statutory or regulatory provision.
ERISA AFFILIATE shall mean any Person that is treated as a single
employer with Ewing under Sections 414(b), (c), (m) or (o) of the Code or
Section 4001(b)(1) of ERISA.
EVENT shall mean the existence or occurrence of any act, action,
activity, circumstance, condition, event, fact, failure to act, omission,
incident or practice, or any set or combination of any of the foregoing.
EWING shall have the meaning given to it in the first Whereas
paragraph.
EWING ASSETS shall have the meaning given to it in Section 3.5.
EWING BUSINESS shall have the meaning given to it in Section 3.6.
EWING COMMON STOCK shall have the meaning given to it in the first
Whereas paragraph.
EWING DISCLOSURE SCHEDULE shall mean the Ewing Disclosure Schedule
dated as of the date hereof and heretofore delivered by Ewing to Intrepid.
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EWING EMPLOYEES shall have the meaning given it in Section 3.11.
EWING FINANCIAL STATEMENTS shall have the meaning given to it in
Section 3.3.
EWING REPORTS shall have the meaning given to it in Section 4.2.
EWING SHAREHOLDER(S) shall have the meaning given to such terms in the
Preamble.
EWING SHAREHOLDER'S KNOWLEDGE (or words of similar import) shall mean
the actual knowledge of any Ewing Shareholder, as such knowledge exists on the
date of this Agreement and from such date through the Closing Date, and, in the
case of Bishop, only after a reasonable review of appropriate Ewing records and
after a reasonable inquiry of appropriate Ewing officers, directors, employees
or agents.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as the
same has been amended, and the rules and regulations thereunder, all as from
time to time in effect, or any successor law, rules or regulations, and any
reference to any statutory or regulatory provision shall be deemed to be a
reference to any successor statutory or regulatory provision.
FINAL ORDER shall mean, with respect to any Authority, one with
respect to which no appeal, no stay, no petition or application for rehearing,
reconsideration, review or stay, whether on motion of the applicable Authority
or other Person or otherwise, and no other Legal Action contesting such consent
or approval, is in effect or pending and as to which the time or deadline for
filing any such appeal, petition or application or other Legal Action has
expired or, if filed, has been denied, dismissed or withdrawn, and the time or
deadline for instituting any further Legal Action has expired.
GAAP shall mean generally accepted accounting principles applied on a
consistent basis, (i) as set forth in Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants ("AICPA")
and/or in statements of the Financial Accounting Standards Board that are
applicable in the circumstances as of the date in question, (ii) when not
inconsistent with such opinions and statements, as set forth in other AICPA
publications and guidelines and/or (iii) that otherwise arise by custom for the
particular industry, all as the same shall exist on the date of this Agreement.
GOVERNMENTAL AUTHORIZATIONS shall mean all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of all Authorities, including the Securities and Exchange
Commission, the Commodity Futures Trading Commission, the Board of Governors of
the Federal Reserve, the Federal Deposit Insurance Corporation and the Office
of the Comptroller of the Currency, in connection with the ownership or
operation of the Ewing Assets or the Intrepid Assets, as the case may be, or
the conduct of the Ewing Business or the Intrepid Business, as the case may be.
GOVERNMENTAL FILINGS shall mean all filings, including franchise and
similar Tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with all Authorities.
HEGGESTAD PROMISSORY NOTE shall have the meaning given to it in
Section 2.2.
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HOLDBACK AMOUNT shall have the meaning given to it in Section 2.2.
INDEBTEDNESS shall mean, with respect to any Person, (a) all items,
except items of capital stock or of surplus or of general contingency or
deferred tax reserves or any minority interest in any Subsidiary of such Person
to the extent such interest is treated as a liability with indeterminate term
on the consolidated balance sheet of such Person, which in accordance with GAAP
would be included in determining total liabilities as shown on the liability
side of a balance sheet of such Person, (b) all obligations secured by any Lien
to which any property or asset owned or held by such Person is subject, whether
or not the obligation secured thereby shall have been assumed, and (c) to the
extent not otherwise included, all Contractual Obligations of such Person
constituting capitalized leases and all obligations of such Person with respect
to Leases constituting part of a sale and leaseback arrangement.
INDEBTEDNESS FOR MONEY BORROWED shall mean money borrowed and
Indebtedness represented by notes payable and drafts accepted representing
extensions of credit, all obligations evidenced by bonds, debentures, notes or
other similar instruments, the maximum amount currently or at any time
thereafter available to be drawn under all outstanding letters of credit issued
for the account of such Person, all Indebtedness upon which interest charges
are customarily paid by such Person, and all Indebtedness issued or assumed as
full or partial payment for property or services, whether or not any such
notes, drafts, obligations or Indebtedness represent Indebtedness for money
borrowed, but shall not include (a) trade payables, (b) expenses accrued in the
ordinary course of business, (c) customer advance payments and customer
deposits received in the ordinary course of business, or (d) conditional sales
agreements not prohibited by the terms of this Agreement.
INDEMNIFIED PARTIES shall have the meaning given to it in Section
10.9.
INTANGIBLE ASSETS shall mean all assets and property lacking physical
properties the evidence of ownership of which must customarily be maintained by
independent registration, documentation, certification, recordation or other
means, and shall include concessions, copyrights, franchises, license, patents,
permits, service marks, trademarks, trade names, and applications with respect
to any of the foregoing, technology and know-how.
INTELLECTUAL PROPERTY shall mean any and all research, information,
inventions, designs, procedures, developments, discoveries, improvements,
patents and applications therefor, trademarks and applications therefor,
service marks, trade names, copyrights and applications therefor, logos, trade
secrets, drawings, plans, systems, methods, specifications, computer software
programs, tapes, discs and related data processing software (including object
and source codes) owned by such Person or in which it has an ownership interest
and all other manufacturing, engineering, technical, research and development
data and know-how made, conceived, developed and/or acquired by such Person,
which relate to the manufacture, production or processing of any products
developed or sold by such Person or which are within the scope of or usable in
connection with such Person's business as it may, from time to time, hereafter
be conducted or proposed to be conducted.
INTREPID shall have the meaning given to it in the Preamble.
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INTREPID ASSETS shall have the meaning given to it in Section 6.4.
INTREPID BUSINESS shall have the meaning given to it in Section 6.5.
INTREPID DISCLOSURE SCHEDULE shall mean the Intrepid Disclosure
Schedule dated as of the date hereof and heretofore delivered by Intrepid to
the Ewing Shareholders.
INTREPID FINANCIAL STATEMENTS shall have the meaning given to it in
Section 6.2.
INTREPID INDEMNIFIED PARTIES shall have the meaning given to it in
Section 10.2(a).
INTREPID'S KNOWLEDGE (or words of similar import) shall mean the
actual knowledge of any director or executive officer of Intrepid, as such
knowledge exists on the date of this Agreement and from such date through the
Closing Date.
INTREPID REPORTS shall have the meaning given to it in Section 6.6.
INTREPID REPRESENTATIVES shall have the meaning given to it in Section
7.1.
INTREPID SEC REPORTS shall have the meaning given to it in Section
6.2.
LAW shall mean (a) any administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, law, injunction, interpretation, judgment, order, ordinance, policy
statement, proclamation, promulgation, regulation, requirement, rule, rule of
law, rule of public policy, settlement agreement, statute or writ of any
Authority, domestic or foreign, (b) the common law, or other legal precedent,
or (c) any arbitrator's, mediator's or referee's award, decision, finding or
recommendation.
LEASE shall mean any lease of property, whether real, personal or
mixed, and all amendments thereto, and shall include all use or occupancy
agreements.
LEGAL ACTION shall mean, with respect to any Person, any and all
litigation or legal or other actions, arbitrations, counterclaims,
investigations, proceedings, requests for material information by or pursuant
to the order of any Authority or suits, at law or in arbitration, equity or
admiralty, whether or not purported to be brought on behalf of such Person,
affecting such Person or any of such Person's business, property or assets.
LIEN shall mean any of the following: mortgage; lien (statutory or
other); or other security agreement, arrangement or interest; hypothecation,
pledge or other deposit arrangement; assignment; charge; levy; executory
seizure; attachment; garnishment; encumbrance (including any easement,
exception, reservation or limitation, right of way, and the like); conditional
sale, title retention or other similar agreement, arrangement, device or
restriction; preemptive or similar right; any financing lease involving
substantially the same economic effect as any of the foregoing; the filing of
any financing statement under the Uniform Commercial Code or comparable law of
any jurisdiction; restriction on sale, transfer, assignment, disposition or
other alienation; or any option, equity, claim or right of or obligation to,
any other Person, of whatever kind and character.
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LOSS AND EXPENSE shall have the meaning given to it in Section
10.2(a).
MATERIAL, MATERIALLY OR MATERIALITY for the purposes of this
Agreement, shall, unless specifically stated to the contrary, be determined
without regard to the fact that various provisions of this Agreement set forth
specific dollar amounts.
MATERIAL AGREEMENT shall mean any Contractual Obligation which (a) was
not entered into in the ordinary course of business, (b) was entered into in
the ordinary course of business which (i) involved the purchase, sale or lease
of goods or materials, or purchase of services, aggregating more than $25,000
during any of the last three fiscal years, (ii) extends for more than three (3)
months, or (iii) is not terminable on sixty (60) days or less notice without
penalty or other payment, (c) involves a capitalized lease obligation or
Indebtedness for Money Borrowed in excess of $25,000 in any single instance,
(d) is or otherwise constitutes a written agency, broker, dealer, license,
distributorship, sales representative or similar written agreement, (e)
accounted for more than five percent (5%) of the revenues of the Ewing Business
or the Intrepid Business, as the context requires, in any of the last three
fiscal years or is likely to account for more than five percent (5%) of
revenues of the Ewing Business or the Intrepid Business, as the case may be,
during the current fiscal year, or (f) is with any Authority.
MULTIEMPLOYER PLAN shall mean a Plan which is a "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA.
NASD shall mean The National Association of Securities Dealers, Inc.
NASD FINES shall have the meaning given to it in Section 2.2.
OPTION SECURITIES shall mean all stock appreciation rights, rights,
options and warrants, and calls or commitments evidencing the right, to
subscribe for, purchase or otherwise acquire shares of capital stock or
Convertible Securities, whether or not the right to subscribe for, purchase or
otherwise acquire is immediately exercisable or is conditioned upon the passage
of time, the occurrence or non-occurrence or the existence or non-existence of
some other Event.
ORGANIC DOCUMENT shall mean, with respect to a Person which is a
corporation, its Articles of Incorporation or other charter documents, its
by-laws and all shareholder agreements, voting trusts and similar arrangements
applicable to any of its capital stock and, with respect to a Person which is a
partnership, its agreement and certificate of partnership, any agreements among
partners, and any management and similar agreements between the partnership and
any general partners (or any Affiliate thereof).
PBGC shall mean the Pension Benefit Guaranty Corporation and any
Entity succeeding to any or all of its functions under ERISA.
PERMITTED INDEBTEDNESS shall mean any Indebtedness for Money Borrowed
of Ewing or other Excluded Liability outstanding as of the date hereof and
consented to in writing by Intrepid in its sole and absolute discretion.
PERMITTED LIENS shall mean (a) Liens for current taxes which are not
yet due and payable or are being contested in good faith and by appropriate
proceedings, and appropriate reserves
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therefor have been established, (b) such imperfections of title, easements,
encumbrances and mortgages or other Liens, if any, as are not, individually or
in the aggregate, substantial in character, amount or extent and do not
materially detract from the value, or materially interfere with the present
use, of the property subject thereto or affected thereby, or otherwise
materially impair the conduct of the Ewing Business or the Intrepid Business,
as applicable, and (c) such other Liens as are permitted by the provisions of
this Agreement to be in place on the Closing Date.
PERSON shall mean any natural individual or any Entity.
PLAN shall mean, with respect to any Person and at a particular time,
any employee benefit plan which is covered by ERISA and in respect of which
such Person or an ERISA Affiliate is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA, but only to the extent that it covers or
relates to any officer, employee or other Person involved in the ownership and
operation of the Ewing Assets or the conduct of the business of the Ewing
Business.
PRIVATE AUTHORIZATIONS shall mean all approvals, concessions,
consents, franchises, licenses, permits, and other authorizations of all
Persons (other than Authorities) including those with respect to Intellectual
Property or to any Self-Regulatory Organization.
PRO RATA AMOUNT shall mean, with respect to any Ewing Shareholder,
such Ewing Shareholder's proportionate interest in the aggregate outstanding
capital stock of Ewing immediately as of the Closing, expressed as a
percentage.
REAL PROPERTY shall mean all of the fee estates and buildings and
other fixtures and improvements thereon, leasehold interest, easements,
licenses, rights to access, right-of-way, and other real property interests
which are owned or used by Ewing or Intrepid, as the case may be, as of the
date hereof in the operations of the Ewing Business or the Intrepid Business,
as the case may be.
REGULATIONS shall mean the federal income tax regulations promulgated
under the Code, as such Regulations may be amended from time to time. All
references herein to specific sections of the Regulations shall be deemed also
to refer to any corresponding provisions of succeeding Regulations, and all
references to temporary Regulations shall be deemed also to refer to any
corresponding provisions of final Regulations.
SEC shall mean the United States Securities and Exchange Commission.
SECURITIES ACT shall mean the Securities Act of 1933, as the same has
been amended, and the rules and regulations thereunder, all as from time to
time in effect, or any successor law, rules or regulations, and any reference
to any statutory or regulatory provision shall be deemed to be a reference to
any successor statutory or regulatory provision.
SELF-REGULATORY ORGANIZATION shall mean the NASD, The New York Stock
Exchange, the American Stock Exchange, the Chicago Stock Exchange, the
Philadelphia Stock Exchange, the Chicago Board of Trade, any other inter-dealer
quotation system or exchange, or any commission, board, agency or body that is
not an Authority but is charged with the supervision
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or regulation of brokers, dealers, securities underwriting or trading, stock
exchanges, commodities exchanges, insurance companies or agents, investment
companies or investment advisers.
SHARE PURCHASE shall have the meaning given to it in the second
Whereas paragraph.
SHARES shall have the meaning given to it in the first Whereas
paragraph.
SOLVENT shall mean, with respect to any Person on a particular date,
that such Person is "solvent" within the meaning of the federal Bankruptcy Code
and applicable state insolvency and fraudulent conveyance statutes.
SPRAYROQ shall have the meaning given to it in Section 6.1(d).
SUBSIDIARY shall mean, with respect to a Person, any Entity a majority
of the capital stock ordinarily entitled to vote for the election of directors
of which, or if no such voting stock is outstanding, a majority of the equity
interests of which, is owned directly or indirectly, legally or beneficially,
by such Person or any other Person controlled by such Person.
SYNAGEN PROMISSORY NOTE shall have the meaning given to it in Section
2.2.
TARGET EQUITY shall have the meaning given to it in Section 2.3.
TAX (and "Taxable", which shall mean subject to Tax), shall mean, with
respect to any Person, (a) all taxes (domestic or foreign), including any
income (net, gross or other including recapture of any tax items such as
investment tax credits), alternative or add-on minimum tax, gross income, gross
receipts, gains, sales, use, leasing, lease, user, ad valorem, transfer,
recording, franchise, profits, property (real or personal, tangible or
intangible), fuel, license, withholding on amounts paid to or by such Person,
payroll, employment, unemployment, social security, excise, severance, stamp,
occupation, premium, environmental or windfall profit tax, custom, duty or
other tax, or other like assessment or charge of any kind whatsoever, together
with any interest, levies, assessments, charges, penalties, addition to tax or
additional amount imposed by any Taxing Authority, (b) any joint or several
liability of such Person with any other Person for the payment of any amounts
of the type described in (a), and (c) any liability of such Person for the
payment of any amounts of the type described in (a) as a result of any express
or implied obligation to indemnify any other Person.
TAX RETURN OR RETURNS shall mean all returns, consolidated or
otherwise (including information returns), required to be filed with any
Authority with respect to Taxes.
TAXING AUTHORITY shall mean any Authority responsible for the
imposition of any Tax.
TRANSACTIONS shall mean the transactions contemplated to be
consummated on or prior to the Closing Date, including the Share Purchase and
the execution, delivery and performance of the Collateral Documents.
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Exhibit 10.1
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS INTREPID
CAPITAL CORPORATION HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE,
SATISFACTORY TO IT AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
NON-NEGOTIABLE SUBORDINATED CONVERTIBLE PROMISSORY NOTE
$100,000.00 August 4, 1999
Jacksonville, Florida
FOR VALUE RECEIVED, the undersigned, INTREPID CAPITAL CORPORATION, a
Delaware corporation ("Maker"), promises to pay to the order of SYNAGEN CAPITAL
PARTNERS, INC. (the "Holder"), at the address for Holder set forth on the
signature page hereto, or at such other address as Holder may from time to time
designate, the principal sum of ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($100,000.00), together with interest thereon as provided herein, in such coin
or currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, in accordance with the
terms and conditions hereof.
All amounts of principal outstanding hereunder shall bear interest at a
rate equal to eight percent (8%) per annum, payable quarterly in arrears
beginning with the first payment, prorated from the date hereof, on September
30, 1999 and thereafter on or before the fifth day after the end of each
subsequent calendar quarter (each, an "Interest Payment Date") until such time
as all amounts of principal and interest hereunder shall have been paid in full.
Following the occurrence of an Event of Default (as hereinafter defined), this
Note shall bear interest at a rate of 12% per annum until such Event of Default
is cured. If this Note is paid or otherwise satisfied prior to any Interest
Payment Date, Maker shall be obligated to pay a pro-rata amount of interest
hereon based on the number of days that have elapsed between the most recent
Interest Payment Date and the date of such payment or satisfaction. All amounts
paid hereunder shall be first applied to current interest, then to previously
accrued but unpaid interest, if any, and then to principal. Interest shall be
charged on the basis of the actual number of days elapsed, computed on the basis
of a three hundred sixty-five (365) day year. Unpaid interest hereunder shall
not bear interest. Unless earlier paid as provided herein, the principal
outstanding hereunder shall be payable in two (2) equal installments of Fifty
Thousand Dollars ($50,000) each, payable on December 29, 2000 and December 31,
2001, respectively.
This Note is issued pursuant to that certain Share Purchase Agreement
dated of even date herewith to which Maker and the shareholders of Allen C.
Ewing Financial Services, Inc. are each a party (the "Share Purchase
Agreement").
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1. PREPAYMENT.
1.1 RIGHT TO PREPAY. Maker shall have no right to prepay this
Note except as expressly provided in this Section 1 or with the written consent
of Holder. If at any time on or after December 31, 2000, (a) the closing bid
price for the common stock, par value $.01 par share, of Maker (the "Intrepid
Common Stock"), as reported on the NASDAQ System OTC Bulletin Board or, if the
Intrepid Common Stock is then trading on a different automated quotation system
or securities exchange, as reported on such automated quotation system or
exchange, exceeds $5.00 per share for sixty (60) consecutive trading days, and
(b) Maker has timely filed all reports and other documents required to be filed
by it under the Securities Exchange Act of 1934, as amended, then Maker shall
have the right to prepay this Note in whole or in part. Payment hereunder shall
be made at Maker's offices in Jacksonville, Florida or at such other place or
places as Maker and Holder shall mutually agree in writing.
1.2 NOTICE OF PREPAYMENT. In order to exercise its prepayment
right hereunder, Maker must give thirty (30) days' prior written notice to
Holder of Maker's determination to prepay this Note, setting forth the date (the
"Prepayment Date") on which such prepayment shall occur (which shall be not more
than sixty (60) calendar days after the date of such notice)and the amount of
principal and accrued and unpaid interest due Holder as of the Prepayment Date.
If before such Prepayment Date the Holder gives notice to Maker of its election
to convert the outstanding principal balance of this Note into shares of
Intrepid Common Stock in accordance with the terms of Section 2 hereof, then
this Note shall be converted into shares of Intrepid Common Stock in the manner
provided in Section 2 hereof, and Maker's notice of prepayment hereunder shall
have no effect.
2. CONVERSION. Holder shall have the right, at Holder's option at any
time after the first anniversary of the date hereof, to convert the outstanding
principal balance of this Note in whole (but not in part) into fully paid and
non-assessable shares of Intrepid Common Stock as provided herein. The number of
shares of Intrepid Common Stock into which this Note may be converted shall be
determined (i) by dividing the aggregate principal amount outstanding hereunder,
together with all accrued and unpaid interest outstanding as of the date of such
conversion, (ii) by $4.00.
2.1 CONVERSION PROCEDURE.
2.1.1 NOTICE OF CONVERSION. To effect the conversion
of this Note into shares of Intrepid Common Stock, Holder shall
surrender this Note at the principal office of Maker and shall give
written notice by hand or by overnight mail, or by mail, postage
prepaid, to Maker at its principal corporate office, of the election to
convert this Note pursuant to this Section 2.1, and shall state therein
the name or names in which the certificate or certificates for shares
of Intrepid Common Stock are to be issued. Such conversion shall be
deemed to have been made immediately prior to the close of business on
the date of such surrender of this Note, and the person or persons
entitled to receive the shares of Intrepid Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder
or holders of such shares of Intrepid Common Stock as of such date.
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<PAGE> 3
2.1.2 DELIVERY OF STOCK CERTIFICATE. As promptly as
practicable after the conversion of this Note, but in no event later
than five (5) business days after receipt thereof, Maker, at its
expense, will issue and deliver to Holder a certificate or certificates
for the number of full shares of Intrepid Common Stock issuable upon
such conversion.
2.1.3 FRACTIONAL SHARES. No fractional shares of
Intrepid Common Stock shall be issued upon conversion of this Note. In
lieu of Maker issuing any fractional shares to Holder upon the
conversion of this Note, Maker shall issue a check payable to Holder
for the amount not so converted.
2.1.4 TRANSFER TAXES. Maker shall pay all taxes which
may be payable in respect of the issuance of any shares of Intrepid
Common Stock deliverable upon conversion of this Note, except that
Maker shall not be required to pay any tax imposed in connection with
any transfer involving the issuance of a certificate for shares of
Intrepid Common Stock in any name other than that of the original
Holder of this Note; and in such case, Maker shall not be required to
deliver any certificate representing the shares of Intrepid Common
Stock purchased upon conversion until such tax shall have been paid, or
it has been established to Maker's satisfaction that no tax is due.
3. ADJUSTMENTS.
3.1 MERGER, SALE OF ASSETS, ETC. If at any time prior to
payment in full or conversion of this Note, there shall be (i) a reorganization
(other than a combination, reclassification, exchange or subdivision of shares
otherwise provided for herein), (ii) a merger or consolidation of Maker with or
into another corporation in which Maker is not the surviving entity, or a
reverse triangular merger in which Maker is the surviving entity but the shares
of Maker's capital stock outstanding immediately prior to such merger are
converted by virtue of such merger into other property, whether in the form of
securities, cash or otherwise, or (iii) a sale or transfer of Maker's properties
and assets as, or substantially as, an entirety to any other person, then, as a
part of such reorganization, merger, consolidation, sale or transfer, lawful
provision shall be made so that the Holder shall thereafter be entitled to
receive upon conversion of this Note, during the period specified herein, the
number of shares of stock or other securities, cash or property of the successor
corporation resulting from such reorganization, merger, consolidation, sale or
transfer that a holder of the shares deliverable upon conversion of this Note
would have been entitled to receive in such reorganization, consolidation,
merger, sale or transfer if this Note had been exercised immediately before such
reorganization, merger, consolidation, sale or transfer, all subject to further
adjustment as provided in this Section 3.1. The foregoing provisions of this
Section 3.1 shall similarly apply to successive reorganizations, consolidations,
mergers, sales and transfers and to the stock or securities of any other
corporation that are at the time receivable upon the exercise of this Note. If
the per-share consideration payable to Holder for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by Maker's Board
of Directors. In all events, appropriate adjustment (as determined in good faith
by Maker's Board of Directors) shall be made in the application of the
provisions of this Note with respect to the rights and interests of Holder after
the transaction, to the end that all provisions of this Note shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event upon conversion of this Note.
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<PAGE> 4
3.2 RECLASSIFICATION, ETC. If Maker, at any time while this
Note, or any portion thereof, remains outstanding, by reclassification of
securities or otherwise, shall change any of the securities as to which
conversion rights under this Note exist into the same or a different number of
securities of any other class or classes, this Note shall thereafter represent
the right to acquire such number and kind of securities as would have been
issuable as the result of such change with respect to the securities that were
subject to the conversion rights under this Note immediately prior to such
reclassification or other change.
4. NOTICES OF RECORD DATE, ETC. In the event of (i) any taking by Maker
of a record of the holders of any class of securities of Maker for the purpose
of determining the holders thereof who are entitled to receive any dividend
(other than a cash dividend payable out of earned surplus at the same rate as
that of the last such cash dividend theretofore paid) or other distribution, or
any right to subscribe for, purchase or otherwise acquire any shares of stock of
any class or any other securities or property, or to receive any other right; or
(ii) any capital reorganization of Maker, any reclassification or
recapitalization of the capital stock of Maker or any transfer of all or
substantially all of the assets of Maker to any other person or any
consolidation or merger involving Maker; or (iii) any voluntary or involuntary
dissolution, liquidation or winding-up of Maker, Maker will mail to Holder at
least ten (10) days prior to the earliest date specified therein, a notice
specifying: (a) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and the amount and character of such
dividend, distribution or right; and (b) the date on which any such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding-up is expected to become effective and the record date
for determining stockholders entitled to vote thereon.
4.1 RESERVATION OF SHARES. Maker shall at all times reserve
and keep available out of its authorized but unissued shares of Intrepid Common
Stock solely for the purpose of effecting the conversion of this Note such
number of shares of Intrepid Common Stock as shall from time to time be
sufficient to effect the conversion of this Note; and if at any time the number
of authorized but unissued shares of Intrepid Common Stock shall not be
sufficient to effect the conversion of the entire outstanding principal amount
of this Note, in addition to such other remedies as shall be available to the
Holder of this Note, Maker will use its best efforts to take such corporate
actions as may be necessary to increase its authorized but unissued shares of
Intrepid Common Stock to such number of shares as shall be sufficient for such
purposes.
5. EVENTS OF DEFAULT. The occurrence and continuation of any one of the
following events (each an "Event of Default") shall constitute a default
hereunder: (i) Maker shall fail to pay any principal of or interest on this Note
within ten (10) calendar days after its scheduled due date; (ii) Maker shall
violate any representation, warranty, covenant or agreement set forth in this
Note or the Share Purchase Agreement (other than payment when due of principal
or interest on this Note), and Maker shall fail to cure such violation within
ten (10) calendar days after written notice thereof from Holder; (iii) at any
time the tangible net worth of Maker is less than $1,000,000, or the total net
worth of Maker is less than $1,000,000, each as determined in accordance with
generally accepted accounting principles; or (iv) Maker shall make a general
assignment for the benefit of creditors, file a petition in bankruptcy, be
adjudicated insolvent or bankrupt, petition a court for the appointment of any
receiver or trustee for Maker or any
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<PAGE> 5
substantial part of its property, commence any proceeding relating to Maker
under any arrangement or debt readjustment law or statute of any jurisdiction
whether now or hereafter in effect or there shall be commenced against Maker any
such proceeding which remains undismissed for sixty (60) calendar days, or Maker
by any act shall indicate consent to, approval of or acquiescence in any such
proceeding or the appointment of any receiver or trustee for it or any
substantial part of its property, or shall suffer any such receivership or
trusteeship to continue undischarged for sixty (60) calendar days. If an Event
of Default occurs and is continuing, then, at Holder's option, Holder may
declare the entire principal amount outstanding hereunder, together with
interest thereon, immediately due and payable. The rights, remedies, powers and
privileges provided for herein are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
6. SUBORDINATION. Maker, for itself, its successors and assigns,
covenants and agrees, and Holder by Holder's acceptance of this Note likewise
covenants and agrees, that this Note represents unsecured indebtedness of Maker,
and the payment of the principal and interest (including, without limitation,
post-petition interest, whether or not a claim for such post-petition interest
is allowed in the related bankruptcy proceeding) hereunder and any and all other
obligations and liabilities now or at any time or times hereafter owing by Maker
or any subsidiary of Maker to Holder or any other person under or in respect of
this Note and any amendments, modifications, extensions, renewals, refinancings
and replacements hereof, including, without limitation, obligations and
liabilities in respect of expenses, costs, indemnities, conversions, redemptions
and special contingent payments and all guarantees, collateral and other
security, if any, from time to time securing the payment of the Subordinated
Indebtedness (all of the foregoing indebtedness, obligations and liabilities,
collectively, the "Subordinated Indebtedness"), is hereby expressly subordinated
in all respects to the prior payment in full in cash of all Senior Indebtedness
(as defined below), whether such Senior Indebtedness is repaid in accordance
with its terms, or upon dissolution, winding up, liquidation or reorganization
of Maker (whether in bankruptcy, insolvency or receivership proceedings or upon
an assignment for the benefit of creditors or otherwise), or otherwise. The
provisions of this Section 6 shall constitute a continuing offer to all persons
who become holders of, or continue to hold, Senior Indebtedness, and such
provisions are made for the benefit of the holders of Senior Indebtedness, and
such holders are hereby made beneficiaries hereunder, the same as if their names
were written herein as such, and they and each of them may proceed to enforce
such provisions. Such provisions will not be amended without the prior written
consent of all holders of Senior Indebtedness. For purposes of this Note,
"Senior Indebtedness" shall mean all loans, advances, liabilities, covenants,
duties and other indebtedness and obligations of Maker or any subsidiary of
Maker existing on the date hereof or arising from time to time hereafter through
the date upon which any principal outstanding hereunder shall be due but shall
remain unpaid by Maker (regardless of whether any such indebtedness and other
obligations are themselves subordinated to any other indebtedness other
obligations constituting Senior Indebtedness) and any and all renewals,
extensions and refundings of any such indebtedness and other obligations and as
any of the foregoing may be amended, supplemented or otherwise modified from
time to time (including, without limitation, amendments, supplements or
modifications giving effect to increases or additions to, or restructuring or
replacements of, any Senior Indebtedness), whether for principal, premium or
interest (including, without limitation, post-petition interest accruing at the
rate then applicable in respect of such indebtedness or other obligations,
whether or not a claim for such post-petition interest is allowed in the related
bankruptcy proceeding), or
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<PAGE> 6
otherwise (including, without limitation, indebtedness and other obligations for
fees, indemnities, costs and expenses), whether direct or indirect, absolute or
contingent, secured or unsecured, due or to become due, unless in any instrument
or instruments creating, evidencing or securing any such indebtedness or other
obligations it is expressly provided that such indebtedness or other obligations
is not superior in right of payment to this Note. Nothing herein shall preclude
Holder from initiating legal action and obtaining and enforcing a judgment
against Maker. Prior to a default under the Senior Indebtedness, Maker may make
payments hereunder.
7. WAIVER AND AMENDMENT. Any provision of this Note may be amended,
waived or modified only upon the written consent of Maker and Holder.
8. TRANSFERS PROHIBITED WITHOUT CONSENT. This Note shall not be
transferable, negotiable or assignable otherwise than by the operation of law
without the prior written consent of Maker, and any purported transfer,
negotiation or assignment of this Note without the prior written consent of
Maker shall be void and of no force or effect.
9. NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if telegraphed or mailed by registered or
certified mail, postage prepaid, at the respective addresses of the parties as
set forth herein. Any party hereto may by notice so given change its address for
future notice hereunder. Notice shall conclusively be deemed to have been given
when personally delivered or when deposited in the mail or telegraphed in the
manner set forth above and shall be deemed to have been received when delivered.
10. NO STOCKHOLDER RIGHTS. Nothing contained in this Note shall be
construed as conferring upon Holder or any other person the right to vote or to
consent or, except as set forth in Section 4 hereof, to receive notice as a
stockholder in respect of meetings of stockholders for the election of directors
of Maker or any other matters or any rights whatsoever as a stockholder of
Maker; and no dividends or interest shall be payable or accrued in respect of
this Note or the interest represented hereby or the shares of Intrepid Common
Stock obtainable hereunder until, and only to the extent that, this Note shall
have been converted as provided herein.
11. HEADING; REFERENCES. All headings used herein are used for
convenience only and shall not be used to construe or interpret this Note.
12. WAIVER. No waiver by Holder of any default shall be effective
unless in writing, nor shall it operate as a waiver of any other default or of
the same default on a future occasion. No delay or omission by Holder in
exercising any of its rights, remedies, powers and privileges hereunder or at
law and no course of dealing between Holder and Maker or any other person shall
be deemed a waiver by Holder of any of such rights, remedies, powers and
privileges even if such delay or omission is continuous or repeated, nor shall
any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise thereof by Holder or the exercise of any other
right, remedy, power or privilege by Holder. Maker waives demand, presentment,
protest, notice of protest and notice of dishonor.
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<PAGE> 7
13. ATTORNEYS' FEES. If this Note is placed in the hands of any
attorney for collection, or if collected by suit or through any bankruptcy or
other legal proceedings, Maker hereby agrees to pay all expenses incurred
reasonably by the Holder of this Note, including, without limitation, attorneys'
fees, all of which shall become a part of the principal hereof.
14. SEVERABILITY. Each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note.
15. SUCCESSORS AND ASSIGNS. This Note shall be binding upon and inure
to the benefit of Maker and Holder and their respective successors and assigns.
16. GOVERNING LAW. This Note in all respects shall be governed by and
construed and enforced in accordance with the laws of the State of Florida,
without giving effect to principles of conflicts of laws.
[SIGNATURES NEXT PAGE]
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IN WITNESS WHEREOF, Holder and Maker have each caused this Note to be
executed and delivered by its duly authorized officer, all as of the day and
year first above written.
INTREPID CAPITAL CORPORATION
By: /s/ Forrest Travis
---------------------------------
Its: President
-----------------------------
Address: 50 North Laura Street
Suite 3550
Jacksonville, Florida 32202
HOLDER:
SYNAGEN CAPITAL PARTNERS, INC.
By: /s/ Charles E. Harris
---------------------------------
Its: President
-----------------------------
Address: P. O. Box 568589
-----------------------------------------
Orlando, FL 32856-8589
-----------------------------------------
-----------------------------------------
8
<PAGE> 1
Exhibit 10.2
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS INTREPID
CAPITAL CORPORATION HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE,
SATISFACTORY TO IT AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
NON-NEGOTIABLE SUBORDINATED CONVERTIBLE PROMISSORY NOTE
$200,000.00 August 4, 1999
Jacksonville, Florida
FOR VALUE RECEIVED, the undersigned, INTREPID CAPITAL CORPORATION, a
Delaware corporation ("Maker"), promises to pay to the order of BENJAMIN C.
BISHOP, JR., an individual resident of the State of Florida (the "Holder"), at
the address for Holder set forth on the signature page hereto, or at such other
address as Holder may from time to time designate, the principal sum of TWO
HUNDRED THOUSAND AND NO/100 DOLLARS ($200,000.00), together with interest
thereon as provided herein, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, in accordance with the terms and conditions hereof.
All amounts of principal outstanding hereunder shall bear interest at a
rate equal to eight percent (8%) per annum, payable quarterly in arrears
beginning with the first payment, prorated from the date hereof, on September
30, 1999 and thereafter on or before the fifth day after the end of each
subsequent calendar quarter (each, an "Interest Payment Date") until such time
as all amounts of principal and interest hereunder shall have been paid in full.
Following the occurrence of an Event of Default (as hereinafter defined), this
Note shall bear interest at a rate of 12% per annum until such Event of Default
is cured. If this Note is paid or otherwise satisfied prior to any Interest
Payment Date, Maker shall be obligated to pay a pro-rata amount of interest
hereon based on the number of days that have elapsed between the most recent
Interest Payment Date and the date of such payment or satisfaction. All amounts
paid hereunder shall be first applied to current interest, then to previously
accrued but unpaid interest, if any, and then to principal. Interest shall be
charged on the basis of the actual number of days elapsed, computed on the basis
of a three hundred sixty-five (365) day year. Unpaid interest hereunder shall
not bear interest. Unless earlier paid as provided herein, the principal
outstanding hereunder shall be payable in two (2) equal installments of One
Hundred Thousand Dollars ($100,000) each, payable on December 31, 2002 and
December 31, 2003, respectively.
This Note is issued pursuant to that certain Share Purchase Agreement
dated of even date herewith, to which Maker and the shareholders of Allen C.
Ewing Financial Services, Inc. are each a party (the "Share Purchase
Agreement").
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<PAGE> 2
Notwithstanding anything to the contrary set forth herein, Holder shall
not be entitled to any payments under this Note (principal or interest) if, at
the time such payment becomes due, Holder has breached his Non-Competition and
Non-Disclosure Agreement with Maker dated of even date herewith.
1. PREPAYMENT.
1.1 RIGHT TO PREPAY. Maker shall have no right to prepay this
Note except as expressly provided in this Section 1 or with the written consent
of Holder. If at any time on or after December 31, 2000, (a) the closing bid
price for the common stock, par value $.01 par share, of Maker (the "Intrepid
Common Stock"), as reported on the NASDAQ System OTC Bulletin Board or, if the
Intrepid Common Stock is then trading on a different automated quotation system
or securities exchange, as reported on such automated quotation system or
exchange, exceeds $5.00 per share for sixty (60) consecutive trading days, and
(b) Maker has timely filed all reports and other documents required to be filed
by it under the Securities Exchange Act of 1934, as amended, then Maker shall
have the right to prepay this Note in whole or in part. Payment hereunder shall
be made at Maker's offices in Jacksonville, Florida or at such other place or
places as Maker and Holder shall mutually agree in writing.
1.2 NOTICE OF PREPAYMENT. In order to exercise its prepayment
right hereunder, Maker must give thirty (30) days' prior written notice to
Holder of Maker's determination to prepay this Note, setting forth the date (the
"Prepayment Date") on which such prepayment shall occur (which shall be not more
than sixty (60) calendar days after the date of such notice)and the amount of
principal and accrued and unpaid interest due Holder as of the Prepayment Date.
If before such Prepayment Date the Holder gives notice to Maker of his election
to convert the outstanding principal balance of this Note into shares of
Intrepid Common Stock in accordance with the terms of Section 2 hereof, then
this Note shall be converted into shares of Intrepid Common Stock in the manner
provided in Section 2 hereof, and Maker's notice of prepayment hereunder shall
have no effect.
2. CONVERSION. Holder shall have the right, at Holder's option at any
time at any time after the first anniversary of the date hereof, to convert the
outstanding principal balance of this Note in whole (but not in part) into fully
paid and non-assessable shares of Intrepid Common Stock as provided herein. The
number of shares of Intrepid Common Stock into which this Note may be converted
shall be determined (i) by dividing the aggregate principal amount outstanding
hereunder, together with all accrued and unpaid interest outstanding as of the
date of such conversion, (ii) by $4.00.
2.1 CONVERSION PROCEDURE.
2.1.1 NOTICE OF CONVERSION. To effect the conversion
of this Note into shares of Intrepid Common Stock, Holder shall surrender this
Note at the principal office of Maker and shall give written notice by hand or
by overnight mail, or by mail, postage prepaid, to Maker at its principal
corporate office, of the election to convert this Note pursuant to this Section
2.1, and shall state therein the name or names in which the certificate or
certificates for shares of Intrepid Common Stock are to be issued. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of this Note, and the person or persons
entitled to receive the shares of Intrepid Common Stock issuable upon
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<PAGE> 3
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Intrepid Common Stock as of such date.
2.1.2 DELIVERY OF STOCK CERTIFICATE. As promptly as
practicable after the conversion of this Note, but in no event later
than five (5) business days after receipt thereof, Maker, at its
expense, will issue and deliver to Holder a certificate or certificates
for the number of full shares of Intrepid Common Stock issuable upon
such conversion.
2.1.3 FRACTIONAL SHARES. No fractional shares of
Intrepid Common Stock shall be issued upon conversion of this Note. In
lieu of Maker issuing any fractional shares to Holder upon the
conversion of this Note, Maker shall issue a check payable to Holder
for the amount not so converted.
2.1.4 TRANSFER TAXES. Maker shall pay all taxes which
may be payable in respect of the issuance of any shares of Intrepid
Common Stock deliverable upon conversion of this Note, except that
Maker shall not be required to pay any tax imposed in connection with
any transfer involving the issuance of a certificate for shares of
Intrepid Common Stock in any name other than that of the original
Holder of this Note; and in such case, Maker shall not be required to
deliver any certificate representing the shares of Intrepid Common
Stock purchased upon conversion until such tax shall have been paid, or
it has been established to Maker's satisfaction that no tax is due.
3. ADJUSTMENTS.
3.1 MERGER, SALE OF ASSETS, ETC. If at any time prior to
payment in full or conversion of this Note, there shall be (i) a reorganization
(other than a combination, reclassification, exchange or subdivision of shares
otherwise provided for herein), (ii) a merger or consolidation of Maker with or
into another corporation in which Maker is not the surviving entity, or a
reverse triangular merger in which Maker is the surviving entity but the shares
of Maker's capital stock outstanding immediately prior to such merger are
converted by virtue of such merger into other property, whether in the form of
securities, cash or otherwise, or (iii) a sale or transfer of Maker's properties
and assets as, or substantially as, an entirety to any other person, then, as a
part of such reorganization, merger, consolidation, sale or transfer, lawful
provision shall be made so that the Holder shall thereafter be entitled to
receive upon conversion of this Note, during the period specified herein, the
number of shares of stock or other securities, cash or property of the successor
corporation resulting from such reorganization, merger, consolidation, sale or
transfer that a holder of the shares deliverable upon conversion of this Note
would have been entitled to receive in such reorganization, consolidation,
merger, sale or transfer if this Note had been exercised immediately before such
reorganization, merger, consolidation, sale or transfer, all subject to further
adjustment as provided in this Section 3.1. The foregoing provisions of this
Section 3.1 shall similarly apply to successive reorganizations, consolidations,
mergers, sales and transfers and to the stock or securities of any other
corporation that are at the time receivable upon the exercise of this Note. If
the per-share consideration payable to Holder for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by Maker's Board
of Directors. In all events, appropriate adjustment (as determined in good faith
by Maker's Board of Directors) shall be made in the application of the
provisions of this Note with respect to the rights and interests of Holder after
the transaction, to the end that all provisions of
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<PAGE> 4
this Note shall be applicable after that event, as near as reasonably may be, in
relation to any shares or other property deliverable after that event upon
conversion of this Note.
3.2 RECLASSIFICATION, ETC. If Maker, at any time while this
Note, or any portion thereof, remains outstanding, by reclassification of
securities or otherwise, shall change any of the securities as to which
conversion rights under this Note exist into the same or a different number of
securities of any other class or classes, this Note shall thereafter represent
the right to acquire such number and kind of securities as would have been
issuable as the result of such change with respect to the securities that were
subject to the conversion rights under this Note immediately prior to such
reclassification or other change.
4. NOTICES OF RECORD DATE, ETC. In the event of (i) any taking by Maker
of a record of the holders of any class of securities of Maker for the purpose
of determining the holders thereof who are entitled to receive any dividend
(other than a cash dividend payable out of earned surplus at the same rate as
that of the last such cash dividend theretofore paid) or other distribution, or
any right to subscribe for, purchase or otherwise acquire any shares of stock of
any class or any other securities or property, or to receive any other right; or
(ii) any capital reorganization of Maker, any reclassification or
recapitalization of the capital stock of Maker or any transfer of all or
substantially all of the assets of Maker to any other person or any
consolidation or merger involving Maker; or (iii) any voluntary or involuntary
dissolution, liquidation or winding-up of Maker, Maker will mail to Holder at
least ten (10) days prior to the earliest date specified therein, a notice
specifying: (a) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and the amount and character of such
dividend, distribution or right; and (b) the date on which any such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding-up is expected to become effective and the record date
for determining stockholders entitled to vote thereon.
4.1 RESERVATION OF SHARES. Maker shall at all times reserve
and keep available out of its authorized but unissued shares of Intrepid Common
Stock solely for the purpose of effecting the conversion of this Note such
number of shares of Intrepid Common Stock as shall from time to time be
sufficient to effect the conversion of this Note; and if at any time the number
of authorized but unissued shares of Intrepid Common Stock shall not be
sufficient to effect the conversion of the entire outstanding principal amount
of this Note, in addition to such other remedies as shall be available to the
Holder of this Note, Maker will use its best efforts to take such corporate
actions as may be necessary to increase its authorized but unissued shares of
Intrepid Common Stock to such number of shares as shall be sufficient for such
purposes.
5. EVENTS OF DEFAULT. The occurrence and continuation of any one of the
following events (each an "Event of Default") shall constitute a default
hereunder: (i) Maker shall fail to pay any principal of or interest on this Note
within ten (10) calendar days after its scheduled due date; (ii) Maker shall
violate any representation, warranty, covenant or agreement set forth in this
Note or the Share Purchase Agreement (other than payment when due of principal
or interest on this Note), and Maker shall fail to cure such violation within
ten (10) calendar days after written notice thereof from Holder; (iii) at any
time the tangible net worth of Maker is less than $1,000,000, or the total net
worth of Maker is less than $1,000,000, each as determined in
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<PAGE> 5
accordance with generally accepted accounting principles; or (iv) Maker shall
make a general assignment for the benefit of creditors, file a petition in
bankruptcy, be adjudicated insolvent or bankrupt, petition a court for the
appointment of any receiver or trustee for Maker or any substantial part of its
property, commence any proceeding relating to Maker under any arrangement or
debt readjustment law or statute of any jurisdiction whether now or hereafter in
effect or there shall be commenced against Maker any such proceeding which
remains undismissed for sixty (60) calendar days, or Maker by any act shall
indicate consent to, approval of or acquiescence in any such proceeding or the
appointment of any receiver or trustee for it or any substantial part of its
property, or shall suffer any such receivership or trusteeship to continue
undischarged for sixty (60) calendar days. If an Event of Default occurs and is
continuing, then, at Holder's option, Holder may declare the entire principal
amount outstanding hereunder, together with interest thereon, immediately due
and payable. The rights, remedies, powers and privileges provided for herein are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
6. SUBORDINATION. Maker, for itself, its successors and assigns,
covenants and agrees, and Holder by Holder's acceptance of this Note likewise
covenants and agrees, that this Note represents unsecured indebtedness of Maker,
and the payment of the principal and interest (including, without limitation,
post-petition interest, whether or not a claim for such post-petition interest
is allowed in the related bankruptcy proceeding) hereunder and any and all other
obligations and liabilities now or at any time or times hereafter owing by Maker
or any subsidiary of Maker to Holder or any other person under or in respect of
this Note and any amendments, modifications, extensions, renewals, refinancings
and replacements hereof, including, without limitation, obligations and
liabilities in respect of expenses, costs, indemnities, conversions, redemptions
and special contingent payments, and all guarantees, collateral and other
security, if any, from time to time securing the payment of the Subordinated
Indebtedness (all of the foregoing indebtedness, obligations and liabilities,
collectively, the "Subordinated Indebtedness"), is hereby expressly subordinated
in all respects to the prior payment in full in cash of all Senior Indebtedness
(as defined below), whether such Senior Indebtedness is repaid in accordance
with its terms, or upon dissolution, winding up, liquidation or reorganization
of Maker (whether in bankruptcy, insolvency or receivership proceedings or upon
an assignment for the benefit of creditors or otherwise), or otherwise. The
provisions of this Section 6 shall constitute a continuing offer to all persons
who become holders of, or continue to hold, Senior Indebtedness, and such
provisions are made for the benefit of the holders of Senior Indebtedness, and
such holders are hereby made beneficiaries hereunder, the same as if their names
were written herein as such, and they and each of them may proceed to enforce
such provisions. Such provisions will not be amended without the prior written
consent of all holders of Senior Indebtedness. For purposes of this Note,
"Senior Indebtedness" shall mean all loans, advances, liabilities, covenants,
duties and other indebtedness and obligations of Maker or any subsidiary of
Maker existing on the date hereof or arising from time to time hereafter through
the date upon which any principal outstanding hereunder shall be due but shall
remain unpaid by Maker (regardless of whether any such indebtedness and other
obligations are themselves subordinated to any other indebtedness other
obligations constituting Senior Indebtedness) and any and all renewals,
extensions and refundings of any such indebtedness and other obligations and as
any of the foregoing may be amended, supplemented or otherwise modified from
time to time (including, without limitation, amendments, supplements or
modifications giving effect to increases or additions to, or restructuring or
replacements of, any Senior Indebtedness), whether
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<PAGE> 6
for principal, premium or interest (including, without limitation, post-petition
interest accruing at the rate then applicable in respect of such indebtedness or
other obligations, whether or not a claim for such post-petition interest is
allowed in the related bankruptcy proceeding), or otherwise (including, without
limitation, indebtedness and other obligations for fees, indemnities, costs and
expenses), whether direct or indirect, absolute or contingent, secured or
unsecured, due or to become due, unless in any instrument or instruments
creating, evidencing or securing any such indebtedness or other obligations it
is expressly provided that such indebtedness or other obligations is not
superior in right of payment to this Note. Nothing herein shall preclude Holder
from initiating legal action and obtaining and enforcing a judgment against
Maker. Prior to a default under the Senior Indebtedness, Maker may make payments
hereunder.
7. WAIVER AND AMENDMENT. Any provision of this Note may be amended,
waived or modified only upon the written consent of Maker and Holder.
8. TRANSFERS PROHIBITED WITHOUT CONSENT. Except for Permitted Transfers
(as defined below), this Note shall not be transferable, negotiable or
assignable otherwise than by the operation of law without the prior written
consent of Maker, and any purported transfer, negotiation or assignment of this
Note without the prior written consent of Maker shall be void and of no force or
effect. The term "Permitted Transfers" shall mean transfers between or among
Holder and his spouse or trusts for the benefit of Holder, his spouse or
children.
9. NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if telegraphed or mailed by registered or
certified mail, postage prepaid, at the respective addresses of the parties as
set forth herein. Any party hereto may by notice so given change his or its
address for future notice hereunder. Notice shall conclusively be deemed to have
been given when personally delivered or when deposited in the mail or
telegraphed in the manner set forth above and shall be deemed to have been
received when delivered.
10. NO STOCKHOLDER RIGHTS. Nothing contained in this Note shall be
construed as conferring upon Holder or any other person the right to vote or to
consent or, except as set forth in Section 4 hereof, to receive notice as a
stockholder in respect of meetings of stockholders for the election of directors
of Maker or any other matters or any rights whatsoever as a stockholder of
Maker; and no dividends or interest shall be payable or accrued in respect of
this Note or the interest represented hereby or the shares of Intrepid Common
Stock obtainable hereunder until, and only to the extent that, this Note shall
have been converted as provided herein.
11. HEADING; REFERENCES. All headings used herein are used for
convenience only and shall not be used to construe or interpret this Note.
12. WAIVER. No waiver by Holder of any default shall be effective
unless in writing, nor shall it operate as a waiver of any other default or of
the same default on a future occasion. No delay or omission by Holder in
exercising any of its rights, remedies, powers and privileges hereunder or at
law and no course of dealing between Holder and Maker or any other person shall
be deemed a waiver by Holder of any of such rights, remedies, powers and
privileges even if such delay or omission is continuous or repeated, nor shall
any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise thereof by Holder or the
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<PAGE> 7
exercise of any other right, remedy, power or privilege by Holder. Maker waives
demand, presentment, protest, notice of protest and notice of dishonor.
13. ATTORNEYS' FEES. If this Note is placed in the hands of any
attorney for collection, or if collected by suit or through any bankruptcy or
other legal proceedings, Maker hereby agrees to pay all expenses incurred
reasonably by the Holder of this Note, including, without limitation, attorneys'
fees, all of which shall become a part of the principal hereof.
14. SEVERABILITY. Each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note.
15. SUCCESSORS AND ASSIGNS. This Note shall be binding upon Maker and
its successors and assigns and shall inure to the benefit of Holder and his
heirs, representatives, successors and assigns.
16. GOVERNING LAW. This Note in all respects shall be governed by and
construed and enforced in accordance with the laws of the State of Florida,
without giving effect to principles of conflicts of laws.
[SIGNATURES NEXT PAGE]
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IN WITNESS WHEREOF, Holder has executed and delivered this Note, and
Maker has caused this Note to be executed and delivered by its duly authorized
officer, all as of the day and year first above written.
INTREPID CAPITAL CORPORATION
By: /s/ Forrest Travis
---------------------------------
Its: President
--------------------------------
Address: 50 North Laura Street
Suite 3550
Jacksonville, Florida 32202
HOLDER:
/s/ Benjamin C. Bishop, Jr.
------------------------------------
BENJAMIN C. BISHOP, JR.
Address:
-----------------------------------------
-----------------------------------------
-----------------------------------------
8
<PAGE> 1
Exhibit 10.3
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS INTREPID
CAPITAL CORPORATION HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE,
SATISFACTORY TO IT AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
NON-NEGOTIABLE SUBORDINATED CONVERTIBLE PROMISSORY NOTE
$50,000.00 August 4, 1999
Jacksonville, Florida
FOR VALUE RECEIVED, the undersigned, INTREPID CAPITAL CORPORATION, a
Delaware corporation ("Maker"), promises to pay to the order of ARNOLD A.
HEGGESTAD, an individual resident of the State of Florida (the "Holder"), at the
address for Holder set forth on the signature page hereto, or at such other
address as Holder may from time to time designate, the principal sum of FIFTY
THOUSAND AND NO/100 DOLLARS ($50,000.00), together with interest thereon as
provided herein, in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts, in accordance with the terms and conditions hereof.
All amounts of principal outstanding hereunder shall bear interest at a
rate equal to eight percent (8%) per annum, payable quarterly in arrears
beginning with the first payment, prorated from the date hereof, on September
30, 1999 and thereafter on or before the fifth day after the end of each
subsequent calendar quarter (each, an "Interest Payment Date") until such time
as all amounts of principal and interest hereunder shall have been paid in full.
Following the occurrence of an Event of Default (as hereinafter defined), this
Note shall bear interest at a rate of 12% per annum until such Event of Default
is cured. If this Note is paid or otherwise satisfied prior to any Interest
Payment Date, Maker shall be obligated to pay a pro-rata amount of interest
hereon based on the number of days that have elapsed between the most recent
Interest Payment Date and the date of such payment or satisfaction. All amounts
paid hereunder shall be first applied to current interest, then to previously
accrued but unpaid interest, if any, and then to principal. Interest shall be
charged on the basis of the actual number of days elapsed, computed on the basis
of a three hundred sixty-five (365) day year. Unpaid interest hereunder shall
not bear interest. Unless earlier paid as provided herein, the principal
outstanding hereunder shall be payable in two (2) equal installments of
Twenty-Five Thousand Dollars ($25,000) each, payable on December 29, 2000 and
December 31, 2001, respectively.
This Note is issued pursuant to that certain Share Purchase Agreement
dated of even date herewith, to which Maker and the shareholders of Allen C.
Ewing Financial Services, Inc. are each a party (the "Share Purchase
Agreement").
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<PAGE> 2
1. PREPAYMENT.
1.1 RIGHT TO PREPAY. Maker shall have no right to prepay this
Note except as expressly provided in this Section 1 or with the written consent
of Holder. If at any time on or after December 31, 2000, (a) the closing bid
price for the common stock, par value $.01 par share, of Maker (the "Intrepid
Common Stock"), as reported on the NASDAQ System OTC Bulletin Board or, if the
Intrepid Common Stock is then trading on a different automated quotation system
or securities exchange, as reported on such automated quotation system or
exchange, exceeds $5.00 per share for sixty (60) consecutive trading days, and
(b) Maker has timely filed all reports and other documents required to be filed
by it under the Securities Exchange Act of 1934, as amended, then Maker shall
have the right to prepay this Note in whole or in part. Payment hereunder shall
be made at Maker's offices in Jacksonville, Florida or at such other place or
places as Maker and Holder shall mutually agree in writing.
1.2 NOTICE OF PREPAYMENT. In order to exercise its prepayment
right hereunder, Maker must give thirty (30) days' prior written notice to
Holder of Maker's determination to prepay this Note, setting forth the date (the
"Prepayment Date") on which such prepayment shall occur (which shall be not more
than sixty (60) calendar days after the date of such notice)and the amount of
principal and accrued and unpaid interest due Holder as of the Prepayment Date.
If before such Prepayment Date the Holder gives notice to Maker of his election
to convert the outstanding principal balance of this Note into shares of the
Intrepid Common Stock in accordance with the terms of Section 2 hereof, then
this Note shall be converted into shares of Intrepid Common Stock in the manner
provided in Section 2 hereof, and Maker's notice of prepayment hereunder shall
have no effect.
2. CONVERSION. Holder shall have the right, at Holder's option at any
time at any time after the first anniversary of the date hereof, to convert the
outstanding principal balance of this Note in whole (but not in part) into fully
paid and non-assessable shares of Intrepid Common Stock as provided herein. The
number of shares of Intrepid Common Stock into which this Note may be converted
shall be determined (i) by dividing the aggregate principal amount outstanding
hereunder, together with all accrued and unpaid interest outstanding as of the
date of such conversion, (ii) by $4.00.
2.1 CONVERSION PROCEDURE.
2.1.1 NOTICE OF CONVERSION. To effect the conversion
of this Note into shares of Intrepid Common Stock, Holder shall
surrender this Note at the principal office of Maker and shall give
written notice by hand or by overnight mail, or by mail, postage
prepaid, to Maker at its principal corporate office, of the election to
convert this Note pursuant to this Section 2.1, and shall state therein
the name or names in which the certificate or certificates for shares
of Intrepid Common Stock are to be issued. Such conversion shall be
deemed to have been made immediately prior to the close of business on
the date of such surrender of this Note, and the person or persons
entitled to receive the shares of Intrepid Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder
or holders of such shares of Intrepid Common Stock as of such date.
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<PAGE> 3
2.1.2 DELIVERY OF STOCK CERTIFICATE. As promptly as
practicable after the conversion of this Note, but in no event later
than five (5) business days after receipt thereof, Maker, at its
expense, will issue and deliver to Holder a certificate or certificates
for the number of full shares of Intrepid Common Stock issuable upon
such conversion.
2.1.3 FRACTIONAL SHARES. No fractional shares of
Intrepid Common Stock shall be issued upon conversion of this Note. In
lieu of Maker issuing any fractional shares to Holder upon the
conversion of this Note, Maker shall issue a check payable to Holder
for the amount not so converted.
2.1.4 TRANSFER TAXES. Maker shall pay all taxes which
may be payable in respect of the issuance of any shares of Intrepid
Common Stock deliverable upon conversion of this Note, except that
Maker shall not be required to pay any tax imposed in connection with
any transfer involving the issuance of a certificate for shares of
Intrepid Common Stock in any name other than that of the original
Holder of this Note; and in such case, Maker shall not be required to
deliver any certificate representing the shares of Intrepid Common
Stock purchased upon conversion until such tax shall have been paid, or
it has been established to Maker's satisfaction that no tax is due.
3. ADJUSTMENTS.
3.1 MERGER, SALE OF ASSETS, ETC. If at any time prior to
payment in full or conversion of this Note, there shall be (i) a reorganization
(other than a combination, reclassification, exchange or subdivision of shares
otherwise provided for herein), (ii) a merger or consolidation of Maker with or
into another corporation in which Maker is not the surviving entity, or a
reverse triangular merger in which Maker is the surviving entity but the shares
of Maker's capital stock outstanding immediately prior to such merger are
converted by virtue of such merger into other property, whether in the form of
securities, cash or otherwise, or (iii) a sale or transfer of Maker's properties
and assets as, or substantially as, an entirety to any other person, then, as a
part of such reorganization, merger, consolidation, sale or transfer, lawful
provision shall be made so that the Holder shall thereafter be entitled to
receive upon conversion of this Note, during the period specified herein, the
number of shares of stock or other securities, cash or property of the successor
corporation resulting from such reorganization, merger, consolidation, sale or
transfer that a holder of the shares deliverable upon conversion of this Note
would have been entitled to receive in such reorganization, consolidation,
merger, sale or transfer if this Note had been exercised immediately before such
reorganization, merger, consolidation, sale or transfer, all subject to further
adjustment as provided in this Section 3.1. The foregoing provisions of this
Section 3.1 shall similarly apply to successive reorganizations, consolidations,
mergers, sales and transfers and to the stock or securities of any other
corporation that are at the time receivable upon the exercise of this Note. If
the per-share consideration payable to Holder for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by Maker's Board
of Directors. In all events, appropriate adjustment (as determined in good faith
by Maker's Board of Directors) shall be made in the application of the
provisions of this Note with respect to the rights and interests of Holder after
the transaction, to the end that all provisions of this Note shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event upon conversion of this Note.
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<PAGE> 4
3.2 RECLASSIFICATION, ETC. If Maker, at any time while this
Note, or any portion thereof, remains outstanding, by reclassification of
securities or otherwise, shall change any of the securities as to which
conversion rights under this Note exist into the same or a different number of
securities of any other class or classes, this Note shall thereafter represent
the right to acquire such number and kind of securities as would have been
issuable as the result of such change with respect to the securities that were
subject to the conversion rights under this Note immediately prior to such
reclassification or other change.
4. NOTICES OF RECORD DATE, ETC. In the event of (i) any taking by Maker
of a record of the holders of any class of securities of Maker for the purpose
of determining the holders thereof who are entitled to receive any dividend
(other than a cash dividend payable out of earned surplus at the same rate as
that of the last such cash dividend theretofore paid) or other distribution, or
any right to subscribe for, purchase or otherwise acquire any shares of stock of
any class or any other securities or property, or to receive any other right; or
(ii) any capital reorganization of Maker, any reclassification or
recapitalization of the capital stock of Maker or any transfer of all or
substantially all of the assets of Maker to any other person or any
consolidation or merger involving Maker; or (iii) any voluntary or involuntary
dissolution, liquidation or winding-up of Maker, Maker will mail to Holder at
least ten (10) days prior to the earliest date specified therein, a notice
specifying: (a) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and the amount and character of such
dividend, distribution or right; and (b) the date on which any such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding-up is expected to become effective and the record date
for determining stockholders entitled to vote thereon.
4.1 RESERVATION OF SHARES. Maker shall at all times reserve
and keep available out of its authorized but unissued shares of Intrepid Common
Stock solely for the purpose of effecting the conversion of this Note such
number of shares of Intrepid Common Stock as shall from time to time be
sufficient to effect the conversion of this Note; and if at any time the number
of authorized but unissued shares of Intrepid Common Stock shall not be
sufficient to effect the conversion of the entire outstanding principal amount
of this Note, in addition to such other remedies as shall be available to the
Holder of this Note, Maker will use its best efforts to take such corporate
actions as may be necessary to increase its authorized but unissued shares of
Intrepid Common Stock to such number of shares as shall be sufficient for such
purposes.
5. EVENTS OF DEFAULT. The occurrence and continuation of any one of the
following events (each an "Event of Default") shall constitute a default
hereunder: (i) Maker shall fail to pay any principal of or interest on this Note
within ten (10) calendar days after its scheduled due date; (ii) Maker shall
violate any representation, warranty, covenant or agreement set forth in this
Note or the Share Purchase Agreement (other than payment when due of principal
or interest on this Note), and Maker shall fail to cure such violation within
ten (10) calendar days after written notice thereof from Holder; (iii) at any
time the tangible net worth of Maker is less than $1,000,000, or the total net
worth of Maker is less than $1,000,000, each as determined in accordance with
generally accepted accounting principles; or (iv) Maker shall make a general
assignment for the benefit of creditors, file a petition in bankruptcy, be
adjudicated insolvent or bankrupt, petition a court for the appointment of any
receiver or trustee for Maker or any
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<PAGE> 5
substantial part of its property, commence any proceeding relating to Maker
under any arrangement or debt readjustment law or statute of any jurisdiction
whether now or hereafter in effect or there shall be commenced against Maker any
such proceeding which remains undismissed for sixty (60) calendar days, or Maker
by any act shall indicate consent to, approval of or acquiescence in any such
proceeding or the appointment of any receiver or trustee for it or any
substantial part of its property, or shall suffer any such receivership or
trusteeship to continue undischarged for sixty (60) calendar days. If an Event
of Default occurs and is continuing, then, at Holder's option, Holder may
declare the entire principal amount outstanding hereunder, together with
interest thereon, immediately due and payable. The rights, remedies, powers and
privileges provided for herein are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
6. SUBORDINATION. Maker, for itself, its successors and assigns,
covenants and agrees, and Holder by Holder's acceptance of this Note likewise
covenants and agrees, that this Note represents unsecured indebtedness of Maker,
and the payment of the principal and interest (including, without limitation,
post-petition interest, whether or not a claim for such post-petition interest
is allowed in the related bankruptcy proceeding) hereunder and any and all other
obligations and liabilities now or at any time or times hereafter owing by Maker
or any subsidiary of Maker to Holder or any other person under or in respect of
this Note and any amendments, modifications, extensions, renewals, refinancings
and replacements hereof, including, without limitation, obligations and
liabilities in respect of expenses, costs, indemnities, conversions, redemptions
and special contingent payments and all guarantees, collateral and other
security, if any, from time to time securing the payment of the Subordinated
Indebtedness (all of the foregoing indebtedness, obligations and liabilities,
collectively, the "Subordinated Indebtedness"), is hereby expressly subordinated
in all respects to the prior payment in full in cash of all Senior Indebtedness
(as defined below), whether such Senior Indebtedness is repaid in accordance
with its terms, or upon dissolution, winding up, liquidation or reorganization
of Maker (whether in bankruptcy, insolvency or receivership proceedings or upon
an assignment for the benefit of creditors or otherwise), or otherwise. The
provisions of this Section 6 shall constitute a continuing offer to all persons
who become holders of, or continue to hold, Senior Indebtedness, and such
provisions are made for the benefit of the holders of Senior Indebtedness, and
such holders are hereby made beneficiaries hereunder, the same as if their names
were written herein as such, and they and each of them may proceed to enforce
such provisions. Such provisions will not be amended without the prior written
consent of all holders of Senior Indebtedness. For purposes of this Note,
"Senior Indebtedness" shall mean all loans, advances, liabilities, covenants,
duties and other indebtedness and obligations of Maker or any subsidiary of
Maker existing on the date hereof or arising from time to time hereafter through
the date upon which any principal outstanding hereunder shall be due but shall
remain unpaid by Maker (regardless of whether any such indebtedness and other
obligations are themselves subordinated to any other indebtedness other
obligations constituting Senior Indebtedness) and any and all renewals,
extensions and refundings of any such indebtedness and other obligations and as
any of the foregoing may be amended, supplemented or otherwise modified from
time to time (including, without limitation, amendments, supplements or
modifications giving effect to increases or additions to, or restructuring or
replacements of, any Senior Indebtedness), whether for principal, premium or
interest (including, without limitation, post-petition interest accruing at the
rate then applicable in respect of such indebtedness or other obligations,
whether or not a claim for such post-petition interest is allowed in the related
bankruptcy proceeding), or
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<PAGE> 6
otherwise (including, without limitation, indebtedness and other obligations for
fees, indemnities, costs and expenses), whether direct or indirect, absolute or
contingent, secured or unsecured, due or to become due, unless in any instrument
or instruments creating, evidencing or securing any such indebtedness or other
obligations it is expressly provided that such indebtedness or other obligations
is not superior in right of payment to this Note. Nothing herein shall preclude
Holder from initiating legal action and obtaining and enforcing a judgment
against Maker. Prior to a default under the Senior Indebtedness, Maker may make
payments hereunder.
7. WAIVER AND AMENDMENT. Any provision of this Note may be amended,
waived or modified only upon the written consent of Maker and Holder.
8. TRANSFERS PROHIBITED WITHOUT CONSENT. Except for Permitted Transfers
(as defined below), this Note shall not be transferable, negotiable or
assignable otherwise than by the operation of law without the prior written
consent of Maker, and any purported transfer, negotiation or assignment of this
Note without the prior written consent of Maker shall be void and of no force or
effect. The term "Permitted Transfers" shall mean transfers between or among
Holder and his spouse or trusts for the benefit of Holder, his spouse or
children.
9. NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if telegraphed or mailed by registered or
certified mail, postage prepaid, at the respective addresses of the parties as
set forth herein. Any party hereto may by notice so given change his or its
address for future notice hereunder. Notice shall conclusively be deemed to have
been given when personally delivered or when deposited in the mail or
telegraphed in the manner set forth above and shall be deemed to have been
received when delivered.
10. NO STOCKHOLDER RIGHTS. Nothing contained in this Note shall be
construed as conferring upon Holder or any other person the right to vote or to
consent or, except as set forth in Section 4 hereof, to receive notice as a
stockholder in respect of meetings of stockholders for the election of directors
of Maker or any other matters or any rights whatsoever as a stockholder of
Maker; and no dividends or interest shall be payable or accrued in respect of
this Note or the interest represented hereby or the shares of Intrepid Common
Stock obtainable hereunder until, and only to the extent that, this Note shall
have been converted as provided herein.
11. HEADING; REFERENCES. All headings used herein are used for
convenience only and shall not be used to construe or interpret this Note.
12. WAIVER. No waiver by Holder of any default shall be effective
unless in writing, nor shall it operate as a waiver of any other default or of
the same default on a future occasion. No delay or omission by Holder in
exercising any of its rights, remedies, powers and privileges hereunder or at
law and no course of dealing between Holder and Maker or any other person shall
be deemed a waiver by Holder of any of such rights, remedies, powers and
privileges even if such delay or omission is continuous or repeated, nor shall
any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise thereof by Holder or the exercise of any other
right, remedy, power or privilege by Holder. Maker waives demand, presentment,
protest, notice of protest and notice of dishonor.
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13. ATTORNEYS' FEES. If this Note is placed in the hands of any
attorney for collection, or if collected by suit or through any bankruptcy or
other legal proceedings, Maker hereby agrees to pay all expenses incurred
reasonably by the Holder of this Note, including, without limitation, attorneys'
fees, all of which shall become a part of the principal hereof.
14. SEVERABILITY. Each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note.
15. SUCCESSORS AND ASSIGNS. This Note shall be binding upon Maker and
its successors and assigns and shall inure to the benefit of Holder and his
heirs, representatives, successors and assigns.
16. GOVERNING LAW. This Note in all respects shall be governed by and
construed and enforced in accordance with the laws of the State of Florida,
without giving effect to principles of conflicts of laws.
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IN WITNESS WHEREOF, Holder has executed and delivered this Note, and
Maker has caused this Note to be executed and delivered by its duly authorized
officer, all as of the day and year first above written.
INTREPID CAPITAL CORPORATION
By: /s/ Forrest Travis
---------------------------------
Its: President
-----------------------------
Address: 50 North Laura Street
Suite 3550
Jacksonville, Florida 32202
HOLDER:
/s/ Arnold E. Heggestad
------------------------------------
ARNOLD E. HEGGESTAD
Address:
-----------------------------------------
-----------------------------------------
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Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of August 4,
1999, is made and entered into by and between INTREPID CAPITAL CORPORATION, a
Delaware corporation ("the Company"), and BENJAMIN C. BISHOP, JR., an individual
resident of the State of Florida ("Executive").
W I T N E S S E T H:
WHEREAS, execution of this Agreement is contemplated by that
certain Share Purchase Agreement of even date herewith to which Executive, the
Company and the shareholders of Allen C. Ewing Financial Services, Inc.
("ACEFS"), are parties (the "Purchase Agreement"), whereby the Company is
acquiring all of the outstanding capital stock of ACEFS from Executive and the
other shareholders of ACEFS (the "Transaction");
WHEREAS, Executive is the chief executive officer of Allen C.
Ewing & Co. ("Ewing") and desires to continue his employment with Ewing in such
capacity;
WHEREAS, the Company desires that Executive continue to serve
in the capacity of the chief executive officer of Ewing;
WHEREAS, the Company and Executive, in conjunction with and
pursuant to the terms of the Purchase Agreement, each desire to enter into this
Agreement and set forth in writing the terms and conditions of Executive's
employment with the Company; and
WHEREAS, the Company desires reasonable protection of its
confidential business and customer information which it has developed at
substantial expense for a reasonable period of time after termination of his
employment with the Company, except as otherwise provided herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements contained herein and for other good and valuable consideration,
the Company and Executive hereby agree as follows:
1. AGREEMENT TO EMPLOY. Upon the terms and subject to the
conditions of this Agreement, the Company hereby employs Executive and Executive
hereby accepts employment by the Company.
2. TERM; POSITION AND RESPONSIBILITIES.
(A) TERM OF EMPLOYMENT. The employment of Executive
pursuant hereto shall commence on the date of this Agreement and shall remain in
effect through December 31, 2002 (the "Term"), unless sooner terminated pursuant
to the provisions of Section 6 hereof. The Company and Executive shall discuss
in good faith the extension of the Term and, if the Company and Executive
mutually agree to extend the Term, seek to finalize the terms of such extension
at least ninety (90) days prior to the end of the Term.
<PAGE> 2
(B) POSITION AND RESPONSIBILITIES. During the Term,
Executive will be employed as President and Chief Executive Officer of Ewing or
its successor and, in addition, in such other executive capacity or capacities
for Ewing as may be determined from time to time by the Company, and he will
devote his best efforts and all of his skill, knowledge and working time to the
conscientious performance of such duties, except (i) for reasonable vacation
time and absence for sickness or similar disability and (ii) such time as may be
devoted to the fulfillment of civic and personal responsibilities so long as
such responsibilities do not interfere with the responsible performance of
Executive's duties hereunder.
(C) RENEWAL. This Agreement shall be automatically
renewed for successive periods of one year each unless either party gives notice
to the other sixty (60) days prior to the expiration of the then current term.
On any renewal, Bishop may indicate that he intends to reduce his hours of
employment, in which case the parties hereto shall mutually agree to a
reasonable reduction of Executive's hours and a reasonable curtailment of
Executive's duties hereunder. If Bishop desires to renew this Agreement but such
renewal is not desired by the Company, then such circumstance shall be termed a
"Ewing Non-Renewal."
3. COMPENSATION. As full compensation for all services to be
rendered by Executive in the capacities referred to herein, during the Term,
Executive shall receive commissions in accordance with the Company's policies in
effect from time to time, which shall not be materially less than the schedule
of commissions set forth on Exhibit A hereto. Notwithstanding the foregoing,
each month during the Term prior to January 1, 2001 and for so long as Mr. Brian
Beach shall remain employed by Ewing, the Company shall pay $2,500 of
Executive's compensation hereunder to Mr. Beach for the benefit of Executive by
delivery of such sum to Mr. Beach in accordance with the Company's normal
payroll practices now or hereafter in effect.
4. BENEFITS. During the Term:
(A) GENERAL. The Company will provide to Executive
life insurance, medical insurance, disability insurance and other benefits as
are currently provided to Executive under the Company's group insurance policy;
(B) VACATION. For the remainder of calendar year
1999, Executive shall be entitled to twenty-one (21) days of paid vacation.
Beginning with calendar year 2000, Executive shall be entitled to four (4) weeks
of paid vacation per year during the Term;
(C) PARKING. The Company shall pay for the existing
parking space for Executive during the Term at the NationsBank Building in
Jacksonville, Florida;
(D) AUTOMOBILE. The Company will continue to pay for
and provide to Executive his currently leased automobile. In addition, the
Company will provide to Executive a new leased automobile upon the expiration of
the lease for his current automobile, and thereafter will provide Executive a
new leased automobile every two years for his use, which car will be a Cadillac
SLX or comparable automobile as chosen by Executive;
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<PAGE> 3
(E) OPTION/BENEFIT PLANS. So long as Executive is
employed hereunder, he shall be included as a participant in all present and
future employee benefit, retirement and compensation plans offered by the
Company to its management, consistent with his position as President and Chief
Executive Officer of Ewing; and
(F) SECRETARY. Executive shall keep at his desire the
services of Ms. Shaaron Anderson as Executive's personal secretary, whose salary
and benefits shall be continued at their present levels subject to annual
reviews.
5. EXPENSES. The Company shall reimburse Executive in
accordance with the Company's reimbursement policy from time to time in effect
for reasonable travel, lodging and meal expenses incurred by him in connection
with his performance of services hereunder, including expenses incurred in
entertaining clients of Ewing or the Company, upon submission of evidence,
satisfactory to the Company, of the incurrence and purpose of each such expense.
6. TERMINATION OF EMPLOYMENT.
(A) TERMINATION DUE TO DEATH OR DISABILITY.
Executive's employment shall automatically terminate upon his death or the
Company's determination of his Disability. For purposes of this Agreement,
"Disability" shall mean a physical or mental disability or infirmity that
prevents the performance by Executive of his duties hereunder lasting (or likely
to last, based on competent medical evidence) for a continuous period of three
months or longer. The reasoned and good faith judgment of the Company as to
Disability shall be final and shall be based on such competent medical evidence
as shall be presented to it by Executive or by any physician or group of
physicians or other competent medical experts employed by Executive or the
Company.
(B) TERMINATION BY THE COMPANY FOR CAUSE. Executive's
employment with the Company may be terminated for "Cause" by the Company.
"Cause" for termination of Executive's employment shall exist (i) if Executive
is convicted of (from which no appeal may be taken), or pleads guilty to, any
act of fraud, misappropriation or embezzlement, or any felony; (ii) if, in the
determination of the Board of Directors of the Company, Executive has (A)
engaged in misconduct materially damaging to the business of Ewing (it being
understood, however, that conduct pursuant to Executive's exercise of his good
faith business judgment shall not be grounds for such a determination by the
Board of Directors of the Company), or (B) committed an act that indicates
alcohol or drug abuse by Executive that adversely affects Executive's
performance hereunder; or (iii) upon a breach by Executive of any of the terms
or conditions of this Agreement, provided that the Company shall have given
Executive written notice of such breach and Executive shall have failed to cure
such breach within twenty (20) days after receipt of such notice.
(C) TERMINATION BY THE COMPANY WITHOUT CAUSE. The
Company may terminate Executive without Cause at any time and, except as
provided in Section 6(f) hereof, shall have no further obligation to pay
compensation except for sums then earned and commissions on transactions subject
to an executed written engagement letter which have not yet closed.
(D) TERMINATION BY EXECUTIVE. Executive may terminate
his employment for "Good Reason". "Good Reason" shall mean a termination of
employment by Executive
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within thirty (30) days following (i) any material diminution by the Company in
Executive's duties or job title, except in connection with termination of
Executive's employment for Cause as provided in Section 6(b) hereof or death or
Disability as provided in Section 6(a) hereof; (ii) any requirement by the
Company that Executive be based outside the Jacksonville metropolitan area;
(iii) the reduction, cessation or change in Ewing's operations or commission
schedule which materially impairs Executive's ability to earn compensation
hereunder; or (iv) the failure of the Company timely to pay Executive's salary,
commission, bonus or benefits; provided, however, that Executive shall have
given the Company written notice of the circumstances constituting Good Reason
and the Company shall have failed to cure such circumstances within twenty (20)
days after receipt of such notice; and (ii) Executive shall not have caused the
occurrence constituting Good Reason through the exercise of his authority as an
officer of Ewing.
(E) NOTICE AND EFFECT OF TERMINATION. Any termination
of Executive's employment by the Company pursuant to Section 6(a) (in the case
of Disability) or 6(b) hereof, or by Executive pursuant to Section 6(d) hereof,
shall be communicated by a written "Notice of Termination" addressed to
Executive or the Company, as appropriate. A "Notice of Termination" shall mean a
notice stating that Executive's employment hereunder has been or will be
terminated, indicating the specific termination provisions in this Agreement
relied upon and setting forth in reasonable detail the facts and circumstances
claimed to provide a basis for such termination of employment.
(F) PAYMENTS UPON TERMINATION. In the event of a
termination of Executive's employment hereunder, the Company shall pay to
Executive any amounts then due Executive, including commissions payable from the
sale of securities plus the commissions with respect to fees received by Ewing
at any time with respect to any transaction subject to an executed written
engagement letter on the Date of Termination (as defined in Section 6(g) below),
to which Executive would have been entitled had his employment not been
terminated. In addition, for a period of twelve (12) months after the Date of
Termination, Executive will continue to receive the benefits to which he was
entitled pursuant to Section 4(a) hereof as of the Date of Termination,
including health insurance. If for any reason at any time the Company is unable
to treat Executive as being or having been an employee of the Company under any
benefits plan in which he is entitled to participate and as a result thereof
Executive receives reduced benefits under such plan during such twelve (12)
month period, then the Company shall provide Executive with such benefits by
direct payment or, at the Company's option, by making available equivalent
benefits from other sources.
(G) DATE OF TERMINATION. As used in this Agreement,
the term "Date of Termination" shall mean (i) if Executive's employment is
terminated by his death, the date of his death; (ii) if Executive's employment
is terminated for Cause, then the date on which Notice of Termination is given
as contemplated by Section 6(e) hereof; and (iii) if Executive's employment is
terminated by the Company due to Executive's Disability or by Executive for Good
Reason, then 30 days after the date on which Notice of Termination is given as
contemplated by Section 6(e) hereof or, if no such Notice is given, 30 days
after the date of termination of employment.
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<PAGE> 5
7. RESTRICTIVE COVENANTS.
(A) DEFINITIONS. For purposes of this Section 7, the
following terms shall have the meanings ascribed thereto:
(i) Competitive Business. "Competitive
Business" shall mean any Person engaged in the business of offering
securities brokerage and investment banking services, including,
without limitation, the execution of orders, the processing of
transactions and the receipt, identification, custody and delivery of
customer funds and securities, to banks, institutional investors,
investment advisers and individual investor clients.
(ii) Confidential Information. "Confidential
Information" shall mean Ewing's or the Company's client and vendor
lists, marketing arrangements, business plans, projections, financial
information, training manuals, pricing manuals, product development
plans, market strategies, internal performance statistics and other
competitively sensitive information concerning Ewing or the Company
which is material to Ewing or the Company and not generally known by
the public, other than Trade Secrets, whether or not in written or
tangible form.
(iii) Ewing Market. "Ewing Market" shall
mean the geographic limits of the State of Florida.
(iv) Key Employee. "Key Employee" shall mean
any Person who is employed in a management, executive, supervisory,
training, marketing or sales capacity for another Person.
(v) Permitted Activities. "Permitted
Activities" shall mean (i) owning not more than 2% of the outstanding
shares of publicly-held corporations engaged in a Competitive Business
which have shares listed for trading on a securities exchange
registered with the Securities and Exchange Commission or through the
automatic quotation system of a registered securities association, or
(ii) serving as an officer, director or employee of Ewing or the
Company.
(vi) Person. "Person" shall mean any
individual, corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos
or testamentary), estate of a deceased, insane or incompetent
individual, business trust, joint stock company, joint venture or other
organization, entity or business, whether acting in an individual,
fiduciary or other capacity.
(vii) Trade Secrets. "Trade Secrets" shall
mean the whole or any portion or phase of any technical information,
designs, processes, procedures, formulas or improvements that are
valuable and not generally known to the competitors of Ewing or the
Company, whether or not in written or tangible form. Executive does not
know any Trade Secrets as of the date hereof.
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<PAGE> 6
(B) ADDITIONAL CONSIDERATION. Executive acknowledges
that (i) the Company separately bargained and paid additional consideration for
the restrictive covenants herein; and (ii) the Company has provided certain
benefits to Executive hereunder in reliance on such covenants in view of the
unique and essential nature of the services Executive performs or will perform
on behalf of the Company and the irreparable injury that would befall the
Company should Executive breach such covenants.
(C) UNIQUENESS OF SERVICES. Executive further
acknowledges that his services are of a special, unique and extraordinary
character and that his position with Ewing places or will place him in a
position of confidence and trust with employees of Ewing and with Ewing's and
the Company's other constituencies and allows him or will allow him access to
Confidential Information.
(D) REASONABLENESS OF RESTRICTIONS. Executive further
acknowledges that the type and periods of restrictions imposed by the covenants
in this Section 7 are fair and reasonable and that such restrictions will not
prevent Executive from earning a livelihood.
(E) NO INTERFERENCE WITH THE BUSINESS.
(i) Non-Solicitation of Customers. While
Executive is employed by the Company and for a period of one (1) year
after termination of Executive's employment (x) by the Company except
pursuant to Sections 6(a) or 6(c) hereof, or (y) by Executive except
pursuant to Section 6(d) hereof, or (z) pursuant to a "Ewing
Non-Renewal" as defined in paragraph 2(c), Executive will not directly
or indirectly solicit, induce or influence any customer, client,
lender, lessor or any other Person which then has a business
relationship with Ewing or the Company in the Ewing Market to
discontinue or reduce the extent of such relationship with Ewing or the
Company in the Ewing Market.
(ii) Non-Solicitation of Key Employees.
While Executive is employed by the Company and for a period of one (1)
year after termination of Executive's employment (x) by the Company
except pursuant to Sections 6(a) or 6(c) hereof, or (y) by Executive
except pursuant to Section 6(d) hereof, Executive will not (a) directly
or indirectly recruit, solicit or otherwise induce or influence any Key
Employee of Ewing or the Company to discontinue such employment or
agency relationship with Ewing or the Company, or (b) employ or seek to
employ, or cause or permit any Competitive Business to employ or seek
to employ as a Key Employee for any Competitive Business, any Person
who is then (or was at any time within six (6) months prior to the date
Executive or the Competitive Business employs or seeks to employ such
Person) employed by Ewing or the Company as a Key Employee.
(F) NO DISCLOSURE OF PROPRIETARY INFORMATION.
(i) No Use of Trade Secrets. Executive
hereby agrees that he will not directly or indirectly disclose to
anyone, or use or otherwise exploit for his own benefit or for the
benefit of anyone other than Ewing or the Company, any Trade Secrets
for as long as they remain Trade Secrets, except as permitted by
Section 7(h) hereof.
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(ii) No Disclosure of Confidential
Information. While Executive is employed by the Company and for a
period of three (3) years after termination of such employment for any
reason or for no reason, Executive will not directly or indirectly
disclose to anyone, or use or otherwise exploit for Executive's own
benefit or for the benefit of anyone other than Ewing and the Company,
any Confidential Information, except as permitted by Section 7(h)
hereof.
(G) TERMINATION OF SEVERANCE BENEFITS. If Executive's
employment by the Company is terminated (x) by the Company pursuant to Section
6(c) hereof or (y) by Executive pursuant to Section 6(d) hereof, and Executive
subsequently (A) solicits, induces or influences any customer, client, lender,
lessor or any other Person which then has a business relationship with Ewing or
the Company in the Ewing Market, to discontinue or reduce the extent of such
relationship with Ewing or the Company in the Ewing Market; (B) recruits,
solicits or otherwise induces or influences any Key Employee of Ewing or the
Company to discontinue such employment or agency relationship with Ewing or the
Company; or (C) employs or seeks to employ, or causes or permits any Competitive
Business to employ or seek to employ as a Key Employee for any Competitive
Business, any Person who is then (or was at any time within six (6) months prior
to the date Executive or the Competitive Business employs or seeks to employ
such Person) employed by Ewing or the Company as a Key Employee, then the
Company immediately terminate and shall not be required to continue on behalf of
Executive or his dependents and beneficiaries any employee benefit, retirement
and compensation plan benefits and other prerequisites provided to Executive by
the Company other than those benefits that the Company may be required to
maintain for Executive under applicable federal or state law.
(H) PERMITTED ACTIVITIES. The restrictions set forth
in Sections 7(e) and 7(f) hereof shall not apply to Permitted Activities or to
actions taken by Executive during the time he is employed by the Company to the
extent, but only to the extent, that such actions are expressly approved by the
Board or Directors of the Company. Notwithstanding any provision in this
Agreement to the contrary, if Executive's employment is terminated under the
provisions of Sections 6(a), 6(c) or 6(d), or in the event of a "Ewing
Non-Renewal" as defined in paragraph 2(c), Executive may seek employment with a
Competitive Business and he may take his "book" of clients and contacts with
him.
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8. INJUNCTIVE RELIEF WITH RESPECT TO COVENANTS. Executive
acknowledges and agrees that the covenants and obligations of Executive with
respect to non-competition and non-disclosure relates to special, unique and
extraordinary matters and that, notwithstanding any other provision of this
Agreement to the contrary, a violation of any of the terms of such covenant and
obligations will cause the Company and its affiliates irreparable injury for
which adequate remedies are not available at law. Therefore, Executive expressly
agrees that the Company and its affiliates (which shall be express third-party
beneficiaries of such covenant and obligations) shall be entitled to an
injunction (whether temporary or permanent), restraining order or such other
equitable relief (including the requirement to post bond) as a court of
competent jurisdiction may deem necessary or appropriate to restrain Executive
from committing any violation of the covenants and obligations contained in
Section 7 hereof.
9. ASSUMPTION OF AGREEMENT. The Company will require any
successor (by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Ewing or the Company, by
agreement in form and substance reasonably satisfactory to Executive, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Executive to compensation from the Company in the
same amount and on the same terms as Executive would be entitled hereunder if
the Company terminated his employment without cause as contemplated by Section
6(c) hereof, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" and "Ewing" shall mean the
Company or Ewing as hereinbefore defined, as applicable, and any successor to
its respective business and/or assets as aforesaid which executes and delivers
the agreement provided for in this Section 9 or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law.
10. ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Agreement constitutes the entire agreements among the parties
hereto with respect to the subject matter hereof.
11. MISCELLANEOUS.
(A) BINDING EFFECT. This Agreement shall be binding
on and inure to the benefit of the Company and its successors and permitted
assigns. This Agreement shall also be binding on and inure to the benefit of
Executive and his heirs, executors, administrators and legal representatives. If
Executive's employment is terminated by reason of his death, all amounts payable
by the Company pursuant to Section 6(f) hereof (or if Executive shall die after
his employment has terminated, any remaining amount of benefits otherwise
payable by the Company pursuant to Section 6(f) hereof) shall be paid in
accordance with the terms of this Agreement to Executive's devisee, legatee or
other designee or, if there be no such designee, to his estate.
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(B) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS THEREUNDER. ANY AND ALL SUITS, LEGAL
ACTIONS OR PROCEEDINGS AGAINST ANY PARTY HERETO ARISING OUT OF THIS AGREEMENT
SHALL BE BROUGHT IN ANY COURT OF APPROPRIATE JURISDICTION SITTING IN DUVAL
COUNTY, STATE OF FLORIDA, AND EACH PARTY HEREBY SUBMITS TO AND ACCEPTS THE
EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF SUCH SUIT, LEGAL ACTION
OR PROCEEDING. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, LEGAL
ACTION OR PROCEEDING IN ANY SUCH COURT AND HEREBY FURTHER WAIVES ANY CLAIM THAT
ANY SUCH SUIT, LEGAL ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(C) AMENDMENTS. No provisions of this Agreement may
be modified, waived or discharged unless such modification, waiver or discharge
is approved by the Company and is agreed to in writing by Executive and such
officers of the Company as may be specifically designated thereby. No waiver by
any party hereto at any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No waiver of any
provision of this Agreement shall be implied from any course of dealing between
or among the parties hereto or from any failure by any party hereto to assert
its rights hereunder on any occasion or series of occasions.
(D) SEVERABILITY. In the event that any one or more
of the provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
(E) NOTICES. Any notice or other communication
required or permitted to be delivered under this Agreement shall be (i) in
writing, (ii) delivered personally, by nationally recognized overnight courier
service or by certified or registered mail, first-class postage prepaid and
return receipt requested, (iii) deemed to have been received on the date of
delivery or on the third business day after the mailing thereof, and (iv)
addressed as follows (or to such other address as the party entitled to notice
shall hereafter designate in accordance with the terms hereof):
(A) if to the Company, to:
Intrepid Capital Corporation
50 North Laura Street, Suite 3550
Jacksonville, Florida 32202
Attention: Mr. Forrest Travis
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with a copy to (which will not constitute notice
to the Company):
Rogers & Hardin LLP
2700 International Tower, Peachtree Center
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Steven E. Fox, Esq.
(B) if to Executive, to him at the address listed on
the signature page hereof
with a copy (which will not constitute notice to
Executive) to:
Foley & Lardner
200 North Laura Street
Jacksonville, FL 32202
Attention: John T. Sefton
(F) SURVIVAL. Sections 7(e), 7(f) and 8 hereof shall
survive the termination of this Agreement and the termination of the employment
of Executive.
(G) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
(H) HEADINGS. The section and other headings
contained in this Agreement are for the convenience of the parties only and are
not intended to be a part hereof or to affect the meaning or interpretation
hereof.
[SIGNATURES NEXT PAGE]
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IN WITNESS WHEREOF, Ewing has caused this Agreement to be duly
executed and delivered by its duly authorized officer, and Executive has
executed and delivered this Agreement, all as of the date first above written.
INTREPID CAPITAL CORPORATION
By: /s/ Forrest Travis
--------------------------------------
Name: Forrest Travis
---------------------------------
Title: President and CEO
--------------------------------
Executive:
/s/ Benjamin C. Bishop, Jr.
-----------------------------------------
BENJAMIN C. BISHOP, JR.
Address:
-----------------------------------------
-----------------------------------------
Facsimile:
-------------------------------
Telephone:
-------------------------------
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EXHIBIT 99
NEWS RELEASE
INTREPID CAPITAL ACQUIRES ALLEN C. EWING FINANCIAL SERVICES, INC.
Intrepid Capital Corp. ("Intrepid") (Nasdaq: ICAP), acquired all of the
outstanding capital stock of Allen C. Ewing Financial Services, Inc., ("Ewing")
a Jacksonville, Florida based investment banker that has earned over its
30-plus year history a national reputation as a specialist in Florida bank and
thrift securities.
Forrest Travis, President and Chief Executive Officer of Intrepid,
estimated that the two companies' combined client assets will be between $400
and $500 million. The deal was consummated Wednesday for a combination of cash
and subordinated convertible promissory notes.
Travis said, "The merger complements the services we now offer, with
Ewing's expertise in making markets in Florida securities and providing
corporate finance services, including initial public offerings, mergers and
acquisitions, and private placements.
"Twelve talented people will be joining our team, doubling our
professional staff," said Travis. Benjamin C. Bishop, Jr., Ewing's chief
executive officer ("CEO"), and Arnold A. Heggestad, Ph.D., Holloway Professor
of Finance at the University of Florida, both members of the Ewing board, will
be elected to the Intrepid Board of Directors. Travis will join the Ewing board
and continues as President/CEO and Chairman of Intrepid.
Ewing will continue to operate as it does currently, but as a wholly-owned
subsidiary of Intrepid. Bishop will continue as CEO of Ewing, and Brian C.
Beach will be elected Executive Vice President of Ewing and a member of the
Ewing Board of Directors.
Ewing was established originally in Jacksonville, Florida, in the early
1960s. The present owners acquired the company in 1973. Ewing's primary office
is in Jacksonville and conducts its trading operations from an office in Tampa.
Ewing has represented more than 110 Florida independent banks in direct
merger negotiations and business appraisals, including the provision of
"fairness" opinions. Ewing also makes primary trading markets in almost all
publicly-held Florida community banks and thrifts and several other publicly
traded Florida companies.
Intrepid became a public company traded on the NASDAQ last year with the
merger of Enviroq Corporation with and into a subsidiary of Intrepid. After
the acquisition of Ewing, Intrepid will have four divisions -- Intrepid
Capital Management, Inc., Intrepid's core business of investment management,
Capital Research Corporation, Intrepid's existing broker-dealer, Allen C. Ewing
& Co., investment bankers, and Enviroq Corporation.
###
For further information: Forrest Travis, President/CEO 904/350-9999
This press release contains certain forward-looking statements within the
meaning of Section 21E of the Securities Exchange act of 1934, as amended, and
other applicable securities laws. All statements other than statements of
historical fact are "forward-looking statements" for purposes of these
provisions, including any projections of assets
<PAGE> 2
under management, any statements of the plans, strategies, and objectives of
management for future operation, any statements concerning proposed services
and any statement of belief. Such forward-looking statements are subject to
inherent risks and uncertainties, and actual results could differ materially
from those anticipated by the forward-looking statements. Although the Company
believes that the expectations reflected in any of its forward-looking
statements will prove to be correct, actual results could differ materially
from those projected or assumed in the Company's forward-looking statements.
These risks and uncertainties include, but are not limited to: risks inherent
in the securities and investment markets, changes in economic conditions,
competition from third parties, changes in interest rates, dependence on
suppliers, changes in the broker-dealer and investment advisory rules and
regulations, dependence upon key personnel, and other factors described from
time to time in the Company's reports filed with the Securities and Exchange
Commission, including the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1998 and its Form 10-QSB for the first quarter of fiscal
1999. In addition, there are inherent risks in consummating the transaction
described above and executing the strategy it entails. These risks include the
difficulty of integrating two business organizations, the difficulty of
achieving potential operational and business synergies, the necessity of
obtaining regulatory approvals, and the risk associated with the debt financing
of the transaction and future debt service requirements.
