SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)
FLORIDA GAMING CORPORATION
(Name of Issuer)
COMMON STOCK, PAR VALUE $.10 PER SHARE
(Title of Class of Securities)
340689 10 8
(CUSIP Number)
James A. Giesel
Brown Todd & Heyburn, PLLC
400 West Market Street
32nd Floor
Louisville, Kentucky 40202
(502) 589-5400
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 26, 1997
(Date of Event Which Requires Filing of
This Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3)
or (4), check the following box. [ ]
Check the following box if a fee is being paid with this
statement. [ ]
CUSIP NO. - 340689 10 8
1. Name of reporting person. . . . . . . . . Freedom
Financial
Corporation
S.S. or I.R.S. No. of
above person. . . . . . . . . . . . . . . 35-1634756
2. Check the appropriate box
if a member of a group
(see instructions). . . . . . . . . . . . (a)
(b)
3. SEC use only. . . . . . . . . . . . . . .
4. Source of funds (see instructions). . . . 00
5. Check box if disclosure
of legal proceedings is
required pursuant to
Items 2(d) or 2(e). . . . . . . . . . . .
6. Citizenship or place
of organization . . . . . . . . . . . . . Indiana
Number of shares beneficially
owned by each reporting person
with:
7. Sole voting power. . . . . . . . . . . . . 2,557,480(1)
8. Shared voting power. . . . . . . . . . . . 0
9. Sole dispositive power . . . . . . . . . . 2,557,480(1)
10. Shared dispositive power . . . . . . . . . 0
11. Aggregate amount beneficially
owned by each reporting person . . . . . . 2,557,480
12. Check box if the aggregate amount
in Row (11) excludes certain
shares (see instructions). . . . . . . . .
13. Percent of class represented
by amount in Row (11). . . . . . . . . . . 39%
14. Type of reporting person . . . . . . . . . CO
(1) Includes 905,000 shares subject to currently exercisable
options but does not include any shares of common stock
issuable upon conversion of any shares of Series F 8%
Convertible Preferred Stock.
Reference is hereby made to that certain Schedule 13D dated
March 31, 1993, as amended (the "Schedule"), filed by Freedom
Financial Corporation ("Freedom") with respect to the common
stock, par value $.10 per share ("Common Stock"), of Florida
Gaming Corporation, formerly Lexicon Corporation, a Delaware
corporation (the "Issuer"). The Schedule is hereby amended to
add the following information to the items indicated, including
the reporting of the consummation of the Issuer's purchase from
Interstate Capital Corporation ("Interstate"), a wholly owned
subsidiary of Freedom, of certain unimproved properties and a
residential real estate development called Tara Club Estates.
Unless otherwise indicated, defined terms have the same meaning
as set forth in the Schedule.
Item 3. Source And Amount Of Funds Or Other Consideration.
Pursuant to that certain Assets Purchase Agreement between
Issuer, Freedom, and Interstate, dated as of September 24, 1997,
(a copy of which is attached as Exhibit 99.1 to the Amendment No. 5
to the Schedule dated September 24, 1997), and as amended on
October 9 and October 31, 1997, copies of which are included as
Exhibits 99.1 and 99.2, respectively, to this Amendment No. 6 to the
Schedule, on November 26, 1997, Issuer, Freedom, and Interstate
consummated the purchase by Issuer from Interstate of certain
unimproved properties and a residential real estate development
called Tara Club Estates (collectively, the "Properties"), all of
which are situated in Loganville, Walton County, Georgia. As
consideration for the purchase of the Properties, Issuer paid
Interstate $6,373,265 as follows: (i) the Issuer issued to
Interstate 2,084 shares (the "Series F Shares") of Series F 8%
Convertible Preferred Stock (the "Series F Preferred Stock") at a
stated value of $1,000 per share (convertible into the Issuer's
common stock ("Common Stock") on the basis of 296.6689 shares of
the Issuer's Common Stock for each $1,000 of stated value of the
Series F Preferred Stock), (ii) the Issuer assumed $1,081,102 of
first mortgage promissory notes to certain lenders secured by the
Properties, and (iii) the Issuer cancelled $3,208,163 owed by
Freedom to the Issuer.
Item 4. Purpose of Transaction.
Through Interstate, Freedom acquired the Series F Shares as
a result of the sale to the Issuer of the Properties. The Series
F Shares are subject to a lock-up agreement (the "Lock-Up
Agreement") which restricts the conversion of the Series F Shares
into the Issuer's Common Stock until November 10, 1998, as
described further in Item 6 below. The acquisition of the Series
F Shares by Interstate increases Freedom's significant equity
investment in the Issuer. At the present time, but subject to
Freedom's continuing evaluation of the factors previously noted
in this Schedule, it is intended that Interstate will directly
retain the Series F Shares. Freedom may purchase additional
shares of the Issuer in the future and, in particular, may
purchase additional shares of the Issuer pursuant to the Stock
Purchase Agreement dated as of March 29, 1993, (a copy of which
is attached as Exhibit A to the Schedule dated March 31, 1993),
or through the conversion of the Series F Preferred Stock
following the expiration of the restrictions set forth in the
Lock-Up Agreement. Freedom may also purchase additional shares of
the Issuer's Common Stock in open market transactions, privately
negotiated transactions, or otherwise.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to the Securities of
the Issuer.
On November 18, 1997, Freedom and Interstate entered into
the Lock-Up Agreement, a copy of which is attached as Exhibit 99.3
to this Schedule. Under the Lock-Up Agreement Interstate,
agreed to a restriction on the conversion of the Series F Shares
until November 10, 1998.
On December 5, 1997, the Issuer completed its redemption of
the Issuer's $1,200,000 5% Cumulative Convertible Debenture (the
"Debenture") which was issued to an investor on July 10, 1997,
pursuant to a Regulation S transaction. In connection with the
Debenture, Freedom pledged 300,000 shares of the Issuer's Common
Stock under a Guaranty and Stock Pledge Agreement (the "Stock
Pledge Agreement") to secure certain demand rights under the
Debenture. A copy of the Stock Pledge Agreement is included as
Exhibit 99.11 to Amendment No. 5 of the Schedule dated September 24,
1997. Since the Debenture has been redeemed in its entirety, the
Stock Pledge Agreement is no longer in effect and the 300,000
shares of the Issuer's Common Stock are no longer subject to any
pledge or restriction.
Item 7. Material to be Filed as Exhibits.
Exhibit 99.1 Addendum To Asset Purchase Agreement between
Florida Gaming Corporation, Freedom Financial
Corporation, and Interstate Capital
Corporation, dated October 9, 1997.
Exhibit 99.2 Second Addendum To Asset Purchase Agreement
between Florida Gaming Corporation, Freedom
Financial Corporation, and Interstate Capital
Corporation, dated October 31, 1997.
Exhibit 99.3 Lock-Up Agreement between Florida Gaming
Corporation and Interstate Capital
Corporation dated November 18, 1997.
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
FREEDOM FINANCIAL CORPORATION
By/s/ Timothy L. Hensley
Timothy L. Hensley,
Executive Vice President
Date: December 9, 1997
Index to Exhibits
Exhibit Page
Exhibit 99.1 Addendum To Asset Purchase Agreement 6
between Florida Gaming Corporation, Freedom
Financial Corporation, and Interstate
Capital Corporation, dated October 9, 1997.
Exhibit 99.2 Second Addendum To Asset Purchase Agreement 8
between Florida Gaming Corporation, Freedom
Financial Corporation, and Interstate
Capital Corporation, dated October 31, 1997.
Exhibit 99.3 Lock-Up Agreement between Florida Gaming 10
Corporation and Interstate Capital Corporation,
dated November 18, 1997.
ADDENDUM TO ASSET PURCHASE AGREEMENT
THIS ADDENDUM TO ASSET PURCHASE AGREEMENT ("Addendum") is
made and entered into by and among FLORIDA GAMING CORPORATION, a
Delaware corporation ("Buyer"), FREEDOM FINANCIAL CORPORATION, an
Indiana corporation ("Freedom") and INTERSTATE CAPITAL
CORPORATION, a Kentucky corporation ("Seller").
WITNESSETH:
WHEREAS, Buyer, Seller and Freedom entered into an Asset
Purchase Agreement ("Agreement") dated September 24, 1997
providing for the sale of Tara Club Estates and certain adjacent
commercial properties, including 2.98 acres designated as Tract
#3 (collectively the "Properties"); and
WHEREAS, the title opinion subsequently received on Tract
#3, which was to be attached as Exhibit B to the Agreement,
reflects that it is subject to two deeds to secure debt which
prohibit the sale and conveyance of Tract #3 without the consent
of the lenders whose notes are secured by such deeds; and
WHEREAS, Seller and Freedom have determined that it is not
feasible to obtain the consents necessary to permit them to
convey Tract #3 to Buyer by the anticipated closing date and
Buyer is willing to delete Tract #3 from the Properties being
purchased; and
WHEREAS, Tract #3 was valued at $153,000 for the purpose of
the Agreement; and
WHEREAS, the title opinion on the remainder of the
Properties excepts 3 lots sold to a builder or builders that were
subsequently transferred back to Seller and/or Freedom by an
unrecorded deed or deeds (the "Omitted Lots"); and
WHEREAS, it has not been determined whether the $97,500
value of the Omitted Lots was included in the aggregate
consideration being paid for the Properties by Buyer; and
WHEREAS, the parties hereto desire to amend the Agreement to
delete Tract #3 from the Properties being sold and to provide for
the subsequent review and inclusion and/or omission of the
Omitted Lots.
NOW, THEREFORE, in consideration of the premises and the
mutual promises of the parties hereto, they hereby covenant and
agree as follows:
1. The Agreement is hereby amended to delete Tract #3 from
the Properties being sold by deleting Exhibit B and all
references thereto.
2. Section 2 of the Agreement is amended to reduce the
aggregate purchase price by $153,000 from $6,526,265 to
$6,373,265.
3. Section 2(ii) of the Agreement is amended to read as
follows: "$2,084,000 by Buyer's issuance of 2,084 shares of
Preferred Stock (as hereinafter defined)".
4. Freedom and Seller agree to promptly provide evidence to
Buyer as to whether the $97,500 value of the Omitted Lots was or
was not included in the aggregate purchase price being paid by
Buyer. If the $97,500 value of the Omitted Lots was included in
the aggregate purchase price, Seller and Freedom agree to convey
the Omitted Lots to Buyer by general warranty deed. If the
$97,500 value of the Omitted Lots was not included in the
Aggregate Purchase Price, Buyer agrees that Freedom and Seller
shall retain the Omitted Lots.
5. The Agreement shall otherwise remain unchanged and in
full force and effect.
IN WITNESS WHEREOF, Florida Gaming Corporation, Freedom
Financial Corporation and Interstate Capital Corporation have
caused this Addendum to be signed by their officers thereunto
duly authorized as of the 9th day of October, 1997.
FLORIDA GAMING FREEDOM FINANCIAL
CORPORATION CORPORATION
By:/s/Timothy L. Hensley By:/s/W. Bennett Collett
Timothy L. Hensley W. Bennett Collett
Executive Vice President Chairman and Chief
Executive Officer
INTERSTATE CAPITAL
CORPORATION
By:/s/W. Bennet Collett
W. Bennett Collett
Chairman and Chief
Executive Officer
SECOND ADDENDUM TO ASSET PURCHASE AGREEMENT
THIS SECOND ADDENDUM TO ASSET PURCHASE AGREEMENT
("Addendum") is made and entered into by and among FLORIDA GAMING
CORPORATION, a Delaware corporation ("Buyer"), FREEDOM FINANCIAL
CORPORATION, an Indiana corporation ("Freedom") and INTERSTATE
CAPITAL CORPORATION, a Kentucky corporation ("Seller").
WITNESSETH:
WHEREAS, Buyer, Seller and Freedom entered into an Asset
Purchase Agreement dated September 24, 1997 and an Addendum
thereto dated October 9, 1997 (collectively the "Agreement")
providing for the sale of Tara Club Estates and certain adjacent
properties; and
WHEREAS, all of the conditions precedent to the closing of
the Agreement have been or will be be satisfied in the immediate
future; and
WHEREAS, Section 9 of the Agreement provides that the
closing shall occur not later than October 15, 1997; and
WHEREAS, Buyer, Seller and Freedom desire to amend Section 9
of the Agreement to extend the closing date.
NOW, THEREFORE, in consideration of the premises and the
mutual promises of the parties hereto, they hereby covenant and
agree as follows:
1. Section 9 of the Agreement is hereby amended to delete
"October 15, 1997" and to insert in lieu thereof "November 30,
1997".
2. The Agreement shall otherwise remain unchanged and in
full force and effect.
IN WITNESS WHEREOF, Florida Gaming Corporation, Freedom
Financial Corporation and Interstate Capital Corporation have
caused this Second Addendum to be signed by their officers
thereunto duly authorized as of the 31st day of October, 1997.
FLORIDA GAMING FREEDOM FINANCIAL
CORPORATION CORPORATION
By:/s/Timothy L. Hensley By:/s/W. Bennett Collett
Timothy L. Hensley W. Bennett Collett
Executive Vice President Chairman and Chief
Executive Officer
INTERSTATE CAPITAL
CORPORATION
By:/s/W. Bennett Collett
W. Bennett Collett
Chairman and Chief
Executive Officer
LOCK-UP AGREEMENT
This Lock-Up Agreement ("Agreement"), dated November 18,
1997, is by and between FLORIDA GAMING CORPORATION, a Delaware
corporation ("Florida Gaming") and INTERSTATE CAPITAL
CORPORATION, a Kentucky corporation ("Interstate").
Recitals
1. Pursuant to the Asset Purchase Agreement dated as of
September 24, 1997, (the "Asset Purchase Agreement") among
Florida Gaming, Freedom Financial Corporation and Interstate, in
exchange for certain unimproved properties and a residential real
estate development called Tara Club Estates, Florida Gaming
agreed to issue to Interstate 2,084 shares (the "Shares") of
Florida Gaming's Series F 8% Cumulative Convertible Preferred
Stock.
2. The Shares will be convertible into common stock of
Florida Gaming ("Common Stock") at any time, and from time to
time, at Interstate's option.
3. Florida Gaming desires to have Interstate agree to a
restriction on the conversion of the Shares beginning on the date
of the issuance of the Shares and ending on November 10, 1998.
NOW, THEREFORE, in consideration of the transactions
contemplated in the Asset Purchase Agreement and for other good
and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. Lock-Up. Interstate hereby agrees not to convert any
of the Shares into Common Stock for the period beginning on the
date of the issuance of the Shares and ending on November 10,
1998.
2. Legend on Certificate. Interstate hereby agrees to the
placement by Florida Gaming of the following restrictive legend
on the stock certificate for the Shares:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE
SUBJECT TO A CERTAIN LOCK-UP AGREEMENT, DATED
NOVEMBER 18, 1997, BY AND BETWEEN THE COMPANY
AND THE HOLDER (THE "AGREEMENT"), THE TERMS
OF WHICH PREVENT THE CONVERSION OF THE SHARES
UNDERLYING THIS CERTIFICATE UNTIL NOVEMBER
10, 1998, SUBJECT TO CERTAIN LIMITATIONS AND
RESTRICTIONS. THE AGREEMENT MAY BE EXAMINED
AT THE OFFICE OF THE COMPANY.
3. Transfer of the Shares. Subject to Section 4(a) below,
the Shares may be transferred by Interstate, provided, however,
that any transferee (a "Transferee") shall be bound by the terms
and conditions of this Agreement and that such Transferee agree
to be so bound in writing before the transfer is effected..
4. Representations and Warranties of Interstate.
Interstate hereby represents and warrants to Florida Gaming as
follows:
(a) Interstate will not transfer any Shares until
Interstate has complied with Section 3 of this Agreement; and
(b) This Agreement constitutes a legal, valid and
binding obligation of Interstate enforceable in accordance with
its terms.
5. Indemnification.
5.1 Interstate shall indemnify, defend and hold
Florida Gaming harmless from and against any and all liabilities,
penalties, fines, forfeitures, demands, claims, suits, causes of
action, costs and expenses which Florida Gaming may suffer,
incur, be responsible for or pay out as a result of injuries to
any person, damage or loss to any property, or any actual or
alleged violation of the statutes, ordinances, orders, rules or
regulations of any governmental entity caused by, directly or
indirectly, or arising solely from or out of (i) Interstate's
breach of this Agreement, or (ii) any breach of Interstate's
representations and warranties.
5.2 All indemnities set forth in this Agreement shall
include reasonable costs and attorneys' fees.
6. Entire Agreement. This Agreement and the Asset
Purchase Agreement, and any properly executed addendum hereto or
thereto, constitute the entire agreement between the parties with
respect to the Shares. This Agreement may not be modified orally
and no claimed modification shall be valid unless in writing and
signed by both parties. In the event of a conflict between the
terms of this Agreement and the Asset Purchase Agreement, the
terms of this Agreement shall prevail.
7. Waiver of Breach. The failure of a party to require
the performance of any term of this Agreement, or the waiver by a
party of any breach of this Agreement, shall not prevent a
subsequent enforcement of such terms nor be deemed a waiver of
any subsequent breach.
8. Successors and Assigns. The rights and obligations of
the parties under this Agreement shall be binding upon and shall
inure to the benefit of the parties, their successors or
permitted assigns.
9. Miscellaneous. This Agreement may be executed in a
number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
10. Governing Law. This Agreement shall be governed by the
laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the date first written above.
FLORIDA GAMING CORPORATION INTERSTATE CAPITAL CORPORATION
By:______________________ By:__________________________
Name: Timothy L. Hensely Name: W. Bennett Collett
Title: Executive Vice President &
Chief Financial Officer Title:
