SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
KILLEARN PROPERTIES, INC.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
494125707
(CUSIP Number)
J.T. Williams
Killearn, Inc.
1570 Rock Quarry Road, Suite B
Stockbridge, GA 30281
(770) 389-2004
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 21, 1999
(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 that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check
the following box [ ].
CUSIP No. 494125707
1. Name of Reporting Persons I.R.S. Identification Nos. of Above Persons
Killearn, Inc. .
2. Check the Appropriate Box if a Member of a Group
(a) X (b) .
3. SEC Use Only .
4. Source of Funds WC, BK and OO .
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) .
6. Citizenship or Place of Organization Georgia .
Number of 7. Sole Voting Power 157,400 .
Shares
Beneficially 8. Shared Voting Power -0- .
Owned by Each
Reporting 9. Sole Dispositive Power 157,400 .
Person With
10. Shared Dispositive Power -0- .
11. Aggregate Amount Beneficially Owned by Each Reporting Person
157,400.
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares.
13. Percent of Class Represented by Amount in Row (11) 17.7% .
14. Type of Reporting Person CO .
CUSIP No. 494125707
1. Name of Reporting Persons I.R.S. Identification Nos. of Above Persons
J.T. Williams .
2. Check the Appropriate Box if a Member of a Group
(a) X (b) .
3. SEC Use Only .
4. Source of Funds PF .
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) .
6. Citizenship or Place of Organization United States .
Number of 7. Sole Voting Power 58,746 .
Shares
Beneficially 8. Shared Voting Power -0- .
Owned by Each
Reporting 9. Sole Dispositive Power 58,746 .
Person With
10. Shared Dispositive Power -0- .
11. Aggregate Amount Beneficially Owned by Each Reporting Person
58,746 .
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares.
13. Percent of Class Represented by Amount in Row (11) 6.6% .
14. Type of Reporting Person IN .
CUSIP No. 494125707
1. Name of Reporting Persons I.R.S. Identification Nos. of Above Persons
John R. Williams .
2. Check the Appropriate Box if a Member of a Group
(a) X (b) .
3. SEC Use Only .
4. Source of Funds PF .
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) .
6. Citizenship or Place of Organization United States .
Number of 7. Sole Voting Power 11,000 .
Shares
Beneficially 8. Shared Voting Power -0- .
Owned by Each
Reporting 9. Sole Dispositive Power 11,000 .
Person With
10. Shared Dispositive Power -0- .
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,000 .
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares.
13. Percent of Class Represented by Amount in Row (11) 1.2% .
14. Type of Reporting Person IN .
CUSIP No. 494125707
1. Name of Reporting Persons I.R.S. Identification Nos. of Above Persons
David K. Williams .
2. Check the Appropriate Box if a Member of a Group
(a) X (b) .
3. SEC Use Only .
4. Source of Funds PF .
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) .
6. Citizenship or Place of Organization United States .
Number of 7. Sole Voting Power 9,987 .
Shares
Beneficially 8. Shared Voting Power -0- .
Owned by Each
Reporting 9. Sole Dispositive Power 9,987 .
Person With
10. Shared Dispositive Power -0- .
11. Aggregate Amount Beneficially Owned by Each Reporting Person
9,987 .
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares.
13. Percent of Class Represented by Amount in Row (11) 1.1% .
14. Type of Reporting Person IN .
CUSIP No. 494125707
1. Name of Reporting Persons I.R.S. Identification Nos. of Above Persons
Killearn Development, Inc. .
2. Check the Appropriate Box if a Member of a Group
(a) X (b) .
3. SEC Use Only .
4. Source of Funds WC, BK and OO .
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) .
6. Citizenship or Place of Organization Georgia .
Number of 7. Sole Voting Power -0- .
Shares
Beneficially 8. Shared Voting Power -0- .
Owned by Each
Reporting 9. Sole Dispositive Power -0- .
Person With
10. Shared Dispositive Power -0- .
11. Aggregate Amount Beneficially Owned by Each Reporting Person -0- .
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares.
13. Percent of Class Represented by Amount in Row (11) 0% .
14. Type of Reporting Person CO .
This amendment no. 1 to Schedule 13D ("Amendment No. 1") is filed as the
first amendment to the Statement on Schedule 13D, dated January 19, 1999 (the
"Original Schedule 13D"), filed on behalf of Killearn, Inc., a Georgia
corporation ("Killearn"), relating to the common stock, par value $0.10 per
share (the "Common Stock"), of Killearn Properties, Inc., a Florida
corporation (the "Issuer"). This Amendment No. 1 reflects material changes in
the Original Schedule 13D, such material changes being more fully reflected in
Items 2, 3, 4, 5, 6 and 7 below and also reflects that the Schedule 13D is
filed jointly on behalf of Killearn, Killearn Development, Inc., a Georgia
corporation and the wholly owned subsidiary of Killearn ("Killearn
Development"), J.T. Williams, John R. Williams and David K. Williams
(individually, the "Reporting Person" and collectively, the "Reporting
Persons"). Killearn, Killearn Development and each of Messrs. Williams may
be deemed to be acting together in connection with the acquisition and
holding of the Common Stock. Nothing contained in this Schedule 13D,
however, shall be construed as an admission that any of the Reporting Persons
is the beneficial owner of the other Reporting Persons' Common Stock and each
Reporting Person expressly disclaims the beneficial ownership of the Common
Stock beneficially owned by the other Reporting Persons.
Item 2. Identity and Background.
Information regarding the Reporting Persons other than Killearn
Development was provided in the Original Schedule 13D. Item 2 of the Original
Schedule 13D is amended to provide for Killearn Development the information
required under Item 2. David K. Williams, John R. Williams and Joseph T.
Williams, III, are the President, Vice President and Secretary, respectively,
of Killearn Development. J.T. Williams, David K. Williams, John R. Williams
and Joseph T. Williams, III, are the directors of Killearn Development. The
information required under Instruction C to Schedule 13D for such persons
other than Joseph T. Williams, III, was provided in the Original Schedule 13D.
1. (a) Killearn Development, Inc., a Georgia corporation.
(b) 1570 Rock Quarry Road, Suite B, Stockbridge, Georgia 30281.
(c) Killearn Development was recently formed in connection with the
proposed merger more fully described in Item 4 below.
(d) Killearn Development has not been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) in the last
5 years.
(e) During the last 5 years, Killearn Development has not been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or state securities laws or
finding any violation with respect to such laws.
2. (a) Joseph T. Williams, III.
(b) 385 Country Club Drive, Stockbridge, Georgia 30281.
(c) Mr. Williams' principal occupation is as the Issuer's Vice
President - Development.
(d) Mr. Williams has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) in the last 5 years.
(e) During the last 5 years, Mr. Williams has not been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or state securities
laws or finding any violation with respect to such laws.
(f) United States of America.
Item 3. Source and Amount of Funds and Other Consideration.
J.T. Williams acquired the 58,746 shares of Common Stock beneficially
owned by him when the Issuer's profit sharing plan (the "Plan") dissolved and
distributed to the beneficiaries of the Plan the Common Stock owned by the
Plan. The Plan had acquired such Common Stock more than 5 years ago. The
aggregate purchase price of 11,000 shares of Common Stock beneficially owned
by John R. Williams was approximately $54,500, excluding commissions, and the
source of funds for acquiring the foregoing shares of Common Stock was
personal funds. The aggregate purchase price of 9,987 shares of Common Stock
beneficially owned by David K. Williams was approximately $50,500, excluding
commissions, and the source of funds for acquiring the foregoing shares of
Common Stock was personal funds. The source of funds or other consideration
for the transaction proposed by the Reporting Persons as disclosed in this
Amendment No. 1 are described in Item 6 below.
Item 4. Purpose of Transaction.
On April 20, 1999, the Issuer's Board of Directors preliminarily approved
the proposal of Killearn for the merger of the Issuer with Killearn
Development pursuant to which Killearn would acquire all of the outstanding
shares of Common Stock not already owned by the Reporting Persons for $5.50
per share in cash. The transaction was subject to among other things, (i) the
entering into a definitive merger agreement with respect to the transaction;
(ii) approval of the transaction by a special committee of the Issuer's Board
of Directors (the "Special Committee"), the Issuer's full Board of Directors
and the Issuer's shareholders; (iii) receipt of a fairness opinion from the
financial advisor to the Special Committee stating that the proposed
transaction is fair, from a financial point of view, to the Issuer's
shareholders (other than the Reporting Persons); and (iv) approval of the
merger by the Issuer's shareholders.
On May 7, 1999, the Special Committee received an oral opinion from the
financial advisor to the Special Committee stating that the proposed
transaction is fair, from a financial point of view, to the Issuer's
shareholders (other than the Reporting Persons), the Special Committee
unanimously recommended that the Issuer's Board of Directors approve and adopt
the agreement and plan of merger with Killearn and Killearn Development, a
copy of which is attached hereto as Exhibit B (the "Merger Agreement"), and
the Issuer's Board of Directors, based on the recommendation of the Special
Committee, voted unanimously to approve the Merger Agreement, to submit the
Merger Agreement to a vote of the Issuer's shareholders at a special meeting
called for such purpose and to recommend that the Issuer's shareholders
approve and adopt the Merger Agreement. The fairness opinion was confirmed
in writing by the Special Committee's financial advisor on May 10, 1999. It
is expected that the Merger Agreement will be submitted to a vote of the
Issuer's shareholders at a special meeting in July 1999.
The proposed transactions will, if and when consummated, result in the
Common Stock ceasing to be authorized for listing on the American Stock
Exchange and becoming eligible for termination of registration under Section
12(g)(4) of the Securities Exchange Act of 1934, as amended.
Except as described above, the Reporting Persons have no plans or
proposals that would result in any actions specified in clauses (a) through
(j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) As of the close of business on June 18, 1999, the Reporting Persons
beneficially owned an aggregate of 237,133 shares of Common Stock, which
constituted approximately 26.7 percent of the 887,412 shares of Common Stock
outstanding as reported in the Issuer's Current Report on Form 10-QSB for the
quarter ended January 31, 1999.
(b) Each of the Reporting Persons has the sole power to vote or direct
the vote, and the sole power to dispose or to direct the disposition of, all
the shares of Common Stock beneficially owned by such Reporting Person.
(c) None of the Reporting Persons has engaged in any transactions in
Common Stock in the period commencing 60 days prior to April 21, 1999 (the
date of event that required the filing of this Amendment No. 1) and ending on
the date hereof.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
The Reporting Persons may be deemed to be acting together in connection
with the acquisition and holding of the Common Stock. The relationship among
the Reporting Persons with respect to the Common Stock is an informal one and
there are no written contracts, arrangements or understandings among the
Reporting Persons related thereto.
Killearn is the holder of notes in the aggregate principal amount of
approximately $2.3 million executed by Wimberly Investment Funds, L.P.
("Wimberly"), and secured by the pledge of 315,430 shares of Common Stock
(the "Wimberly Notes"). A copy of the Wimberly Notes and the stock pledge
agreements related thereto are attached as Exhibits C and D, respectively, to
this Amendment No. 1. Wimberly and Killearn have informally agreed that in
connection with the Merger, Killearn will pay for the Common Stock securing
the Wimberly Notes by canceling $1,734,865 (or $5.50 per share) of the
principal and accrued interest outstanding under the Wimberly Notes.
Killearn is the holder of notes aggregating approximately $2.3 million
(including principal and accrued interest) executed by Proactive Technologies,
Inc. ("PTI"), and secured by the pledge of 132,000 shares of Common Stock (the
"PTI Notes"). A copy of the PTI Notes and the stock pledge agreements related
thereto are attached as Exhibits E and F, respectively, to this Amendment No.
1. PTI and Killearn have informally agreed that in connection with the
Merger, Killearn will pay for the Common Stock securing the PTI Notes by
canceling $726,000 (or $5.50 per share) of the principal and accrued interest
outstanding under the PTI Notes.
To purchase the remaining shares of Common Stock acquired in connection
with the Merger, Killearn will utilize working capital and borrow
approximately $900,000 under an existing line of credit with American Century
Bank, a copy of which is attached hereto as Exhibit H (the "Line of Credit").
The Line of Credit is secured by real property owned by Killearn. The
interest rate under the Line of Credit is prime rate plus 0.5 and the
documents related to the Line of Credit contain affirmative, negative and
financial covenants and events of default customary for credit facilities of
a similar size and type. Draws under the Line of Credit are subject to the
satisfaction of customary conditions for similar financing.
Item 7. Material to be Filed as Exhibits.
Exhibit A Statement of Joint Schedule 13D Filings, dated as of June 18,
1999, among Killearn, Inc., Killearn Development, Inc., J.T. Williams, John R.
Williams and David K. Williams
Exhibit B Agreement and Plan of Merger, dated as of May 10, 1999, by and
between Killearn, Inc., Killearn Development, Inc., and Killearn Properties,
Inc.
Exhibit C Promissory Notes of Wimberly Investment Funds, L.P., in favor
of Killearn, Inc., including extensions thereof
Exhibit D Security Agreements between Wimberly Investment Funds, L.P.,
and Killearn, Inc.
Exhibit E Promissory Notes of Proactive Technologies, Inc. in favor of
various creditors
Exhibit F Pledge Agreements between Proactive Technologies, Inc., and
various creditors
Exhibit G Agreement to Purchase Promissory Notes of Proactive
Technologies, Inc. between Killearn, Inc. and various creditors
Exhibit H Revolving Line of Credit with American Century Bank
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
June 22, 1999 KILLEARN, INC.
By:/S/ J.T. WILLIAMS, JR.
J.T. Williams,
President
KILLEARN DEVELOPMENT, INC.
By:/S/ DAVID K. WILLIAMS
David K. Williams,
President
/S/ J.T. WILLIAMS, JR.
J.T. Williams
/S/ JOHN R. WILLIAMS
John R. Williams
/S/ DAVID K. WILLIAMS
David K. Williams
EXHIBIT A
STATEMENT OF JOINT SCHEDULE 13D FILINGS
The undersigned acknowledge and agree that the Statement on Schedule 13D
with respect to the Common Stock, par value $.10 per share, of Killearn
Properties, Inc., a Florida corporation, and any amendments thereto, shall be
filed jointly on behalf of each of the undersigned.
June 22, 1999 KILLEARN, INC.
By:/S/ J.T. WILLIAMS, JR.
J.T. Williams,
President
KILLEARN DEVELOPMENT, INC.
By:/S/ DAVID K. WILLIAMS
David K. Williams,
President
/S/ J.T. WILLIAMS, JR.
J.T. Williams
/S/ JOHN R. WILLIAMS
John R. Williams
/S/ DAVID K. WILLIAMS
David K. Williams
Exhibit B
AMONG
KILLEARN, INC.,
KILLEARN DEVELOPMENT, INC.
AND
KILLEARN PROPERTIES, INC.
DATED AS OF MAY 10, 1999
Execution Copy
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of May 10, 1999,
among Killearn, Inc., a Georgia corporation ("Parent"), Killearn Development,
Inc., a Georgia corporation ("Sub"), and Killearn Properties, Inc., a Florida
corporation (the "Company").
PRELIMINARY STATEMENTS
A. Parent has proposed to the Company's Board of Directors that the
Company merge with and into Sub (the "Merger"), with the holders of all of
the outstanding shares of Common Stock, par value $0.10 per share, of the
Company (the "Common Stock") not currently owned by Parent or shareholders of
Parent receiving a cash payment of $5.50 in exchange for each of their shares
of Common Stock.
B. A Special Committee of the Company's Board of Directors (the "Special
Committee") has determined that the Merger is fair to, and in the best
interests of, the Public Shareholders (as defined in Section 2.1), and has
recommended the approval and adoption of this Agreement to the Company's Board
of Directors.
C. The Boards of Directors of Parent, Sub and the Company have approved
and adopted this Agreement and approved the Merger upon the terms and subject
to the conditions set forth herein.
D. The Company's Board of Directors believes it is in the best interests
of the Company and its shareholders to consummate the Merger upon the terms
and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties and agreements herein contained, and intending to
be legally bound hereby, Parent, Sub and the Company agree as follows:
ARTICLE 1
THE MERGER
1.1. The Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the General Corporation Act of the
State of Florida (the "Florida Business Corporation Act") and Georgia Business
Corporation Code of the State of Georgia (the "Georgia Business Corporation
Code"), at the Effective Time (as defined in Section 1.2), the Company shall
be merged with and into Sub and the separate existence of the Company shall
thereupon cease, with Sub being the surviving corporation in the Merger (the
"Surviving Corporation").
1.2. Effective Time of the Merger. Subject to the terms of this
Agreement, the Merger shall become effective when the Department of State of
the State of Florida (the "Florida Department of State") files the articles of
merger or other appropriate documents in accordance with the Florida Business
Corporation Act, and the Georgia Secretary of State files the articles of
merger or other appropriate documents in accordance with the Georgia Business
Corporation Code, or such other date as shall be specified in the articles of
merger, which articles of merger shall be delivered by Sub and the Company to
the Florida Department of State and the Georgia Secretary of State as soon as
practicable after the closing of the Merger contemplated by this Agreement in
accordance with Section 7.1. When used in this Agreement, the term "Effective
Time" shall mean the date and time at which such articles are so filed.
1.3. Effects of the Merger. The Merger shall have the effects set forth
in the Florida Business Corporation Act and the Georgia Business Corporation
Code.
1.4. Articles of Incorporation. The Articles of Incorporation of Sub,
as in effect immediately prior to the Effective Time, shall be the Articles
of Incorporation of the Surviving Corporation.
1.5. Bylaws. The Bylaws of Sub as in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation.
1.6. Directors. The directors of Sub immediately prior to the Effective
Time shall be the directors of the Surviving Corporation, who shall serve
until their respective successors are duly elected and qualified in the manner
provided in the Articles of Incorporation and Bylaws of the Surviving
Corporation, or as otherwise provided by law.
1.7. Officers. The officers of the Surviving Corporation shall initially
consist of the officers of Sub immediately prior to the Effective Time, until
their successors are duly elected and qualified in the manner provided in the
Articles of Incorporation and Bylaws of the Surviving Corporation, or as
otherwise provided by law.
ARTICLE 2
CONVERSION OF SHARES
2.1. Conversion of Shares. As of the Effective Time, by virtue of the
Merger and without any action on the part of any holder thereof:
(a) All shares of Common Stock (the "Shares") that are held by any
wholly owned subsidiary of the Company and any Shares held by Parent, Sub, any
other subsidiary of Parent or any shareholder of Parent, shall be canceled and
retired and shall cease to exist and no payment shall be made with respect
thereto.
(b) Each remaining outstanding Share shall, by virtue of the Merger
and without any action on the part of the holder thereof, be converted into
the right to receive $5.50 in cash, without any interest thereon, upon
surrender of the certificate representing such Share (such cash amount is
referred to herein as the "Merger Consideration; the Shares for which the
Merger Consideration is to be paid are referred to herein as the "Public
Shares" and the holders thereof are referred to herein as the "Public
Shareholders"). At the Effective Time, all such Public Shares shall no longer
be outstanding and shall automatically be canceled and retired and shall cease
to exist, and the Public Shareholders shall cease to have any rights as
shareholders of the Company except the right to receive the Merger
Consideration.
2.2. Exchange of Certificates. (a) As soon as reasonably practicable
after the Effective Time, Sub shall deposit in trust with a bank or trust
company designated by Parent ("Paying Agent"), cash in an aggregate amount
equal to the product of (x) the number of Public Shares issued and outstanding
immediately prior to the Effective Time, and (y) the Merger Consideration
(such amount being hereinafter referred to as the "Exchange Fund"). Paying
Agent shall, pursuant to irrevocable instructions, make the payments provided
for in Section 2.1(b) out of the Exchange Fund. Paying Agent shall invest the
Exchange Fund, as Parent directs, in direct obligations of the United States
of America, obligations for which the full faith and credit of the United
States of America is pledged to provide for the payment of all principal and
interest or commercial paper obligations receiving the highest rating from
either Moody's Investors Services, Inc. or Standard & Poor's, a division of
The McGraw Hill Companies, or a combination thereof, provided that, in any
such case, no instrument shall have a maturity exceeding 3 months. Any net
profit resulting from, or interest or income produced by, such investments
shall be payable to Parent. Parent shall replace any monies lost through any
investment made pursuant to this Section 2.2. The Exchange Fund shall not be
used for any other purpose except as provided in this Agreement.
(b) Promptly after the Effective Time, Parent shall cause Paying
Agent to mail to each record holder of certificates that immediately prior to
the Effective Time represented Public Shares (the "Certificates), a form
letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon proper
delivery of the Certificates to Paying Agent) and instructions for use in
surrendering Certificates and receiving payment therefor. Upon surrender to
Paying Agent of a Certificate, together with a properly completed and executed
letter of transmittal, the holder of such Certificate shall be entitled to
receive in exchange therefor cash in an amount equal to the product of the
number of Public Shares represented by such Certificate and the Merger
Consideration, less any applicable withholding tax, and such Certificate shall
forthwith be canceled. In the event any Certificate shall have been lost or
destroyed, Paying Agent, subject to such other reasonable conditions as Parent
may impose (including the posting of an indemnity bond or other surety in
favor of Sub with respect to the Certificates alleged to be lost or
destroyed), shall be authorized to accept an affidavit from the record holder
of such Certificate in a form reasonably satisfactory to Parent. No interest
shall be paid or accrued on the cash payable upon the surrender of the
Certificates. If payment is to be made to a person other than the person in
whose name the Certificate surrendered is registered, it shall be a condition
of payment that the Certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
payment shall pay any transfer or other tax required by reason of the payment
to a person other than the registered holder of the Certificate surrendered or
establish to the satisfaction of the Paying Agent and Parent that such tax has
been paid or is not applicable. Until surrendered in accordance with the
provisions of this Section 2.2(b), each Certificate shall represent for all
purposes only the right to receive the Merger Consideration into which the
Shares evidenced by the Certificates shall have been converted pursuant to
Section 2.1(b), without any interest thereon.
2.3. Closing of Company Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and no transfer of Shares shall
thereafter be made. If, after the Effective Time, certificates representing
Shares are presented to the Surviving Corporation or Paying Agent, they shall
be canceled and exchanged for cash as provided herein.
2.4. Dissenting Shares. In accordance with the Florida Business
Corporation Act, no shareholder shall have dissenter or appraisal rights with
respect to the Common Stock.
2.5. Withholding Rights. Sub and Paying Agent shall be entitled to
deduct and withhold from the amounts payable (including the Merger
Consideration) pursuant to this Agreement to any Public Shareholder such
amounts as Parent, Sub or Paying Agent is required to deduct and withhold with
respect to the making of such payment under applicable tax law. To the extent
that amounts are so deducted and withheld by Parent, Sub or Paying Agent, such
amounts shall be treated for all purposes of this Agreement as having been
paid to the relevant Public Shareholder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub that, except as
previously disclosed to Parent in writing:
3.1. (a) Corporate Organization. Each of the Company and the Company
Subsidiaries (as defined in Section 3.5 hereof) (i) is a corporation duly
incorporated, validly existing and in good standing under the laws of
jurisdiction of its incorporation; (ii) has all requisite corporate power and
authority to own, operate and lease the properties and assets it now owns,
operates and leases and to carry on its business as now being conducted; and
(iii) is qualified or licensed to do business and in good standing in every
jurisdiction in which the ownership, operation or lease of property by it or
the conduct of its business requires such qualification or licensing, except
for such failures, if any, to be so qualified and in good standing, that, when
taken together with all such other failures, would not in the aggregate have a
material adverse effect on the business, condition (financial or otherwise),
operations, prospects, properties, assets or liabilities (the "Business") of
the Company and the Company Subsidiaries taken as a whole.
3.2. Authorization; Recommendation of Merger. (a) The Company has full
corporate power and authority to execute and deliver this Agreement and,
subject to approval by the Company's shareholders, to consummate the
transactions contemplated hereby. The Company's Board of Directors has duly
approved this Agreement and has duly authorized the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
and has resolved to recommend that its shareholders approve this Agreement and
the Merger. This Agreement has been duly executed and delivered by the
Company and, subject to approval by the Company's shareholders, constitutes
(assuming due authorization, execution and delivery of this Agreement by the
other parties hereto), the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(b) The Special Committee has received the opinion of American
Express Incorporated dated May 10, 1999, that, as of the date of such opinion,
the Merger Consideration to be received by the Public Shareholders pursuant to
this Agreement is fair, from a financial point of view, to the Public
Shareholders.
(c) The Special Committee (at a meeting duly called and held at
which a quorum was present) has determined that the Merger is fair to, and in
the best interests of, the Public Shareholders, and has recommended the
adoption of this Agreement to the Company's Board of Directors, subject to the
right of the Special Committee to withdraw, modify or amend such
recommendation if the Special Committee determines, in good faith after
consultation with legal counsel, that failure to take such action would be
reasonably likely to result in a breach of its fiduciary duties to the
Company's shareholders under applicable law.
(d) The Company's Board of Directors (at a meeting duly called and
held at which a quorum was present) has determined that the Merger is fair to,
and in the best interests of, the Company's shareholders, has adopted this
Agreement and has recommended the adoption of this Agreement by the Company's
shareholders, subject to the right of the Company's Board of Directors to
withdraw, modify or amend such recommendation to the extent the Company's
Board of Directors determines, in good faith after consultation with legal
counsel, that failure to take such action would be reasonably likely to result
in a breach of its fiduciary duties to the Company's shareholders under
applicable law.
3.3. Consents and Approvals; No Violations. Except for (a) the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") relating to the Proxy Statement (as defined in Section 3.6 hereof; (b)
the Transaction Statement on Schedule 13E-3 to be filed pursuant to Rule 13e-3
promulgated under the Exchange Act (the "Schedule 13E-3"); and (c) the filing
of the articles of merger and other appropriate merger documents, if any, as
required by the laws of the States of Florida and Georgia, the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby will not: (i) violate any provision of the Articles of
Incorporation or Bylaws (or comparable governing documents) of the Company or
any Company Subsidiary; (ii) violate any statute, ordinance, rule, regulation,
order or decree of any court or of any public, governmental or regulatory body,
agency or authority applicable to the Company or any Company Subsidiary or by
which any of their respective properties or assets may be bound; (iii) require
any filing with, or permit, consent or approval of, or giving of any notice to,
any public, governmental or regulatory body, agency or authority; or (iv)
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, franchise, permit,
agreement or other instrument or obligation to which the Company or any
Company Subsidiary is a party, or by which any of them or any of their
respective properties or assets may be bound, excluding from the foregoing
clauses (ii), (iii) and (iv) violations, breaches and defaults that, and
filings, notices, permits, consents and approvals the absence of which, in the
aggregate, would not have a material adverse effect on the business of the
Company and the Company Subsidiaries taken as a whole and would not prevent or
delay the consummation of the transactions contemplated hereby.
3.4. Capitalization. The authorized capital stock of the Company
consists of 6,000,000 Shares. As of the date hereof, no Shares are held by
the Company in its treasury. As of May 10, 1999, 887,412 Shares are issued
and outstanding and no Shares are reserved for issuance for any reason. All
Shares that are outstanding as of the date hereof are duly authorized, validly
issued, fully paid and nonassessable, and are not subject to, nor were they
issued in violation of, any preemptive rights. Except as set forth above,
there are no shares of capital stock of the Company authorized or outstanding.
There are not any, and at the Effective Time there will not be any,
subscriptions, options, conversion or exchange rights, warrants or other
agreements, claims or commitments of any nature whatsoever obligating the
Company or any Company Subsidiary to issue, transfer, deliver or sell, or
cause to be issued, transferred, delivered or sold, additional shares of the
capital stock of the Company or any Company Subsidiary or obligating the
Company or any Company Subsidiary to grant, extend or enter into any such
agreement or commitment.
3.5. Subsidiaries. All the outstanding shares of capital stock of each
corporation of which the Company owns, directly or indirectly, 50 percent or
more of the outstanding capital stock (a "Company Subsidiary") have been
validly issued and are fully paid, nonassessable and are not subject to, nor
were they issued in violation of, any preemptive rights. All outstanding
shares of capital stock of the Company Subsidiaries are owned, directly or
indirectly, by the Company, free and clear of all liens, charges,
encumbrances, security interests, equities, options, restrictions on voting
rights or rights of disposition, and claims or third party rights of whatever
nature. Except for the Company Subsidiaries, the Company does not own,
directly or indirectly, any capital stock or other equity securities of any
corporation or have any direct or indirect equity or ownership interest in any
business and neither the Company nor any Company Subsidiary is subject to any
obligation or requirement to provide funds for or to make any investment (in
the form of a loan, capital contribution or otherwise) in any entity.
3.6. Proxy Statement and Schedule 13E-3. The proxy statement and related
materials to be furnished to the Company's shareholders in connection with the
Merger pursuant to Section 5.2 (each proxy statement, together with any
amendments thereof or supplements thereto, in each case in the form or forms
mailed to the Company's shareholders, being the "Proxy Statement") and the
Schedule 13E-3 will comply in all material respects with the Exchange Act and
the rules and regulations thereunder. The information supplied by the
Company for inclusion in the Proxy Statement or the Schedule 13E-3 shall not,
at the time the Proxy Statement is mailed, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or, at the time of
the meeting of the Company's shareholders, as the Proxy Statement is then
amended or supplemented, omit to state any material fact necessary to correct
any statement originally supplied by the Company for inclusion in the Proxy
Statement or the Schedule 13E-3 that has become false or misleading. If at
any time prior to the Effective Time any event occurs relating to the Company
or any Company Subsidiary, or relating to their respective officers, directors
or shareholders, that should be described in a supplement or amendment to the
Proxy Statement or the Schedule 13E-3 or any supplement or amendment thereto,
the Company will promptly so inform Parent, will furnish all necessary
information to Parent relating to such event, and will file with the Securities
and Exchange Commission (the "Commission"), and mail to its shareholders with
respect to the Proxy Statement, any required supplement or amendment to the
Proxy Statement and Schedule 13E-3 in accordance with the Exchange Act and the
rules and regulations thereunder. Notwithstanding the foregoing, no
representation or warranty is made with respect to any information with
respect to Parent or Sub or their respective officers, directors or affiliates
(i) provided to the Company by Parent or Sub in writing for inclusion in the
Proxy Statement or the supplements or amendments thereto; or (ii) included in
the Schedule 13E-3.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub jointly and severally represent and warrant to the Company
that:
4.1. Corporate Organization. Each of Parent and Sub (i) is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; (ii) has all requisite corporate power and
authority to own, operate and lease the properties and assets it now owns,
operates and leases and to carry on its business as now being conducted; and
(iii) is qualified or licensed to do business as a foreign corporation and in
good standing in every jurisdiction in which the ownership, operation or lease
of property by it or the conduct of its business requires such qualification
or licensing, except for such failures to be so qualified and in good standing,
if any, that when taken together with all such other failures, would not in
the aggregate have a material adverse effect on the business, condition
(financial or otherwise), operations, properties, assets or liabilities of
Parent and its subsidiaries taken as a whole.
4.2. Authorization. Each of Parent and Sub has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Board of Directors of each of Parent
and Sub, and Parent as the sole shareholder of Sub, have duly approved this
Agreement and have duly authorized the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Parent and Sub and
constitutes (assuming due authorization, execution and delivery of this
Agreement by the Company), the valid and binding agreement of Parent and Sub,
enforceable against each of them in accordance with its terms.
4.3. Consents and Approvals; No Violations. Except for (a) the
requirements of the Exchange Act relating to the Proxy Statement, the Schedule
13E-3 and the Merger; and (b) the filing of articles of merger and other
appropriate merger documents, if any, as required by the laws of the States of
Florida and Georgia, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not: (i) violate
any provision of the Articles of Incorporation or Bylaws (or other comparable
governing documents) of Parent or Sub; (ii) violate any statute, ordinance,
rule, regulation, order or decree of any court or of any public, governmental
or regulatory body, agency or authority applicable to Parent or Sub or by
which any of their respective properties or assets may be bound; (iii) require
any filing with or permit, consent or approval of, or the giving of any notice
to, any public, governmental or regulatory body or authority; or (iv) result
in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or
provisions or any note, bond, mortgage, indenture, license, franchise, permit,
agreement or other instrument or obligation to which Parent or Sub is a party,
or by which either of them or any of their respective properties or assets may
be bound, excluding from the foregoing clauses (ii), (iii) and (iv)
violations, breaches and defaults that, and filings, notices, permits,
consents and approvals the absence of which, in the aggregate, would not have
a material adverse effect on the business, condition (financial or otherwise),
operations, properties, assets or liabilities of Parent and its subsidiaries
taken as a whole and would not prevent or delay the consummation of the
transactions contemplated hereby.
4.4. Schedule 13E-3 and Proxy Statement. The information supplied by
Parent and Sub for inclusion in the Proxy Statement or the Schedule 13E-3
shall not, at the time the Proxy Statement is mailed, and the Schedule 13E-3
is filed with the Commission, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading or, at the time of the meeting of the
Company's shareholders, as the Proxy Statement and Schedule 13E-3 is then
amended or supplemented, omit to state any material fact necessary to correct
any statement originally supplied by Parent and Sub for inclusion in the Proxy
Statement or the Schedule 13E-3 that has become false or misleading. If at
any time prior to the Effective Time any event occurs relating to Parent or
Sub, or relating to their respective officers, directors or shareholders, that
should be described in a supplement or amendment to the Proxy Statement or the
Schedule 13E-3 or any supplement or amendment thereto, Parent and Sub will
promptly so inform the Company, will furnish all necessary information to the
Company relating to such event and will file with the Commission any required
supplement or amendment to the Schedule 13E-3 in accordance with the Exchange
Act and the rules and regulations thereunder. Notwithstanding the foregoing,
no representation or warranty is made with respect to any information with
respect to the Company or its officers, directors or affiliates included in
the Proxy Statement or Schedule 13E-3.
4.5. Financial Ability to Consummate Transaction. Parent has sufficient
funds to enable Sub to acquire all Shares owned by the Public Shareholders
pursuant to the Merger and to pay all fees and expenses payable by Parent and
Sub related to the transactions contemplated by this Agreement.
ARTICLE 5
COVENANTS
5.1. Conduct of the Company's Business. During the period commencing on
the date hereof and continuing until the Effective Time, the Company agrees
(except as expressly contemplated by this Agreement or to the extent that
Parent shall otherwise consent in writing; such consent, not to be
unreasonably withheld) that:
(a) The Company and each Company Subsidiary will carry on its
business in, and only in, the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and, to the extent
consistent with such business, use its commercially reasonable efforts to
preserve intact its present business organization, keep available the services
of its present officers and employees and preserve its relationships with
customers, consultants, suppliers and others having business dealings with it
to the end that its goodwill and ongoing business shall not be impaired at the
Effective Time.
(b) The Company will not, and will not permit any Company Subsidiary
to, dispose of or encumber any of its properties and assets, other than sales
in the ordinary course of business and collections of receivables in the
ordinary course of business.
(c) The Company will not split, combine or reclassify any Shares or
declare any dividends on or make other distributions in respect of the Shares.
Neither the Company nor any Company Subsidiary will amend its Articles of
Incorporation or Bylaws or similar governing documents.
(d) Neither the Company nor any Company Subsidiary will issue, sell,
authorize or propose the sale or issuance of, or purchase or acquisition of,
any shares of the capital stock of the Company or any Company Subsidiary or
securities convertible into, or rights, warrants or options (including
employee stock options) to acquire, any such shares or other convertible
securities.
(e) Neither the Company, nor any Company Subsidiary, or officer,
director or employee of (or any investment banker, attorney, accountant or
other representative retained by) the Company or any Company Subsidiary
shall, directly or indirectly, solicit, initiate or encourage (including by
way of furnishing information) any inquiries or proposals by, or engage in any
discussions or negotiations with, any corporation, partnership, person or
other entity or group that it is reasonably expected may lead to, or that
relates to, any takeover proposal; provided that if the Board of Directors of
the Company determines in good faith, after consultation with outside counsel,
that it is necessary to do so in order to comply with its fiduciary duties to
the Company's shareholders under applicable law, the Company may in response
to a takeover proposal from any person that was not solicited by the Company
and did not otherwise breach this subsection (i) furnish information with
respect to the Company to such person and (ii) participate in discussions or
negotiations with such person regarding any takeover proposal. The Company
will promptly advise Parent orally and in writing of the receipt and content
of any such inquiries or proposals. As used in this subsection (e), "takeover
proposal" shall mean any proposal for a merger or other business combination
involving the Company or for the acquisition of a 50% or greater interest in
the capital stock of the Company or all or substantially all of the assets of
the Company other than the one contemplated by this Agreement.
(f) Neither the Company nor any of the Company Subsidiaries will
(i) incur, assume or prepay any long-term debt or, except in the ordinary
course of business, incur or assume any short-term debt; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person
except wholly owned subsidiaries of the Company in the ordinary course of
business and consistent with past practices; or (iii) make any loans, advances
or capital contributions to, or investments in, any other person (other than
customary loans or advances to employees).
(g) The Company will not take, agree to take, or knowingly permit to
be taken any action or do or knowingly permit to be done anything in the
conduct of the Business of the Company and the Company Subsidiaries, or
otherwise, that would be contrary to or in breach of any of the terms or
provisions of this Agreement, or that would cause any of the representations
and warranties of the Company contained herein to be or become untrue in any
material respect.
5.2. Proxy Statement. As soon as practicable, the Company will prepare
and file with the Commission the Proxy Statement. The Company, Parent and Sub
will together prepare and file with the Commission the Schedule 13E-3. Each
of the Company, Parent and Sub will furnish all information required to be
included about such person in the Proxy Statement and the Schedule 13E-3 and,
after consultation with each other, shall respond promptly to any comments
made by the Commission with respect to the Proxy Statement and any preliminary
version thereof and the Schedule 13E-3. At the earliest practicable time, the
Company will cause the Proxy Statement to be mailed to its shareholders and,
if necessary, after the Proxy Statement shall have been so mailed, promptly
circulate amended, supplemental or supplemented proxy material and, if
required in connection therewith, resolicit proxies. The Proxy Statement
shall include the recommendation of the Company's Board of Directors to the
Company's shareholders (and reflect that the Special Committee has made a
similar recommendation to the Company's Board of Directors), subject to the
fiduciary duties under applicable law of such directors (including the
directors constituting the Special Committee), as determined by such directors
in good faith after consultation with counsel, in favor of the adoption of
this Agreement.
5.3. Shareholder Approval. As promptly as possible, the Company shall
call a meeting of its shareholders for the purpose of voting upon this
Agreement and the Merger and the Company agrees that this Agreement and the
Merger shall be submitted at a meeting of the shareholders of the Company and
the Company shall take all steps necessary to duly call, give notice of,
convene and hold such meeting. The Company shall use its commercially
reasonable efforts to obtain the necessary adoption of the Agreement by its
shareholders. Notwithstanding anything to the contrary in this Agreement, if
the Company's Board of Directors or the Special Committee determines, in good
faith after consultation with counsel, that in the exercise of its respective
fiduciary duties, under applicable law it is required to withdraw, modify or
amend its recommendation in favor of the Merger, such withdrawal, modification
or amendment shall not constitute a breach of this Agreement. Parent will
cause all Shares owned by Parent to be voted in favor of the Merger in the
same proportion as the other shareholders of the Company .
5.4. Reasonable Efforts. Subject to the terms and conditions herein
provided and the fiduciary duties under applicable law of the Company's
directors, including directors constituting the Special Committee, as
determined by such directors in good faith after consultation with counsel,
each of the parties hereto agrees to use its commercially reasonable efforts
to take, or cause to be taken, all action, and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including obtaining any consents, authorizations, exemptions
and approvals from, and making all filing with, any governmental, regulatory
or public body or authority that are necessary or, in the judgment of Parent
or the Company, desirable in connection with the transactions contemplated by
this Agreement. Parent and the Company shall each have the right to review
and approve in advance all characterizations of the information relating to
Parent or the Company, as the case may be, and any of their respective
subsidiaries, which appear in any filings made in connection with the
transactions contemplated by this Agreement with any governmental body.
5.5. Material Events. At all times prior to the Effective Time, each
party shall promptly notify the other in writing of the occurrence of any
event that will or may result in the failure to satisfy any of the conditions
specified in Article 6 hereof.
5.6. Public Announcements. At all times until the Effective Time, each
party shall promptly advise and cooperate with the other prior to issuing, or
permitting any of its subsidiaries, directors, officers, employees or agents
to issue, any press release or other information to the press or any third
party with respect to this Agreement or the transactions contemplated hereby.
5.7. Indemnification and Insurance.
(a) The Surviving Corporation and the Company agree that, except as may
be limited by applicable laws, for six years from and after the Effective
Time, the indemnification obligations set forth in the Company's Articles of
Incorporation and the Company's Bylaws, in each case as of the date of this
Agreement, shall survive the Merger and shall not be amended, repealed or
otherwise modified after the Effective Time in any manner that would adversely
affect the rights thereunder of the individuals who on or at any time prior to
the Effective Time were entitled to indemnification thereunder with respect to
matters occurring prior to the Effective Time.
(b) The Company shall maintain in effect, for three years or until the
applicable statute of limitations expires but in no event longer than four
years, from and after the Effective Time, directors' and officers' liability
insurance policies covering the persons who are currently covered in their
capacities as such directors and officers (the "Covered Parties") by the
Company's current directors' and officers' policies and on terms not
materially less favorable than the existing insurance coverage with respect
to matters occurring prior to the Effective Time; provided, however, in the
event the annual premium for such coverage exceeds an amount equal to 200% of
the last annual premium paid immediately prior to the date hereof by the
Company for such coverage, the Surviving Corporation shall notify the Covered
Parties who shall then elect as a group either (i) to allow the Surviving
Corporation to obtain as much comparable insurance as possible for an annual
premium equal to 200% of the last annual premium paid immediately prior to the
date hereof by the Company, or (ii) to seek coverage from another carrier, in
which event the Surviving Corporation shall reimburse the Covered Parties the
cost of such alternative coverage up to an amount equal to 200% of the last
annual premium paid immediately prior to the date hereof by the Company for
such coverage.
(c) In addition to, and not in lieu of the foregoing, the Surviving
Corporation shall indemnify, defend and hold harmless all officers and
directors of the Company (the "Indemnified Parties") to the fullest extent
permitted by Florida law and in the Articles of Incorporation and Bylaws of
the Company, as in effect as of the date hereof, from and against all
liabilities, costs, expenses and claims (including without limitation
reasonable legal fees and disbursements, which shall be paid, reimbursed or
advanced by the Surviving Corporation in a manner consistent with applicable
provisions of the Surviving Corporation's Bylaws) arising out of the actions
taken prior to the Effective Time in performance of their duties as directors
or officers of the Company, in connection with the Merger and other
transactions contemplated hereby, which may be asserted against the
Indemnified Parties from and after the date of this Agreement; provided,
however, that Surviving Corporation's obligations to the Indemnified Parties
under this Section 5.7(c) shall not be effective until consummation of the
Merger; provided, further, that the Surviving Corporation shall not have any
obligation hereunder to any Indemnified Party if the indemnification of such
Indemnified Party in the manner contemplated hereby is determined pursuant to
a final non-appealable judgment rendered by a court of competent jurisdiction
to be prohibited by applicable law or if the indemnification of the
Indemnified Party is not within the power of the Surviving Corporation under
Florida law.
d) In the event that any action, suit, proceeding or investigation
relating thereto or to the transactions contemplated by this Agreement is
commenced, whether before or after the Effective Time, the parties hereto
agree to cooperate and use their respective reasonable efforts to vigorously
defend against and respond thereto.
ARTICLE 6
CONDITIONS TO CONSUMMATION OF THE MERGER
6.1. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions:
(a) This Agreement shall have been approved and adopted by the
affirmative vote of the Company's shareholders by the requisite vote in
accordance with applicable law;
(b) No statute, rule, regulation, executive order, decree, order
or injunction shall have been enacted, entered, promulgated or enforced by
any court or governmental authority that prohibits or materially and
adversely restricts the consummation of the Merger;
6.2. Conditions to the Obligation of the Company to Effect the Merger.
The obligation of the Company to effect the Merger is further subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) The representations and warranties of Parent and Sub contained
in this Agreement shall be true and correct at and as of the Effective Time as
if made at and as of such time, except as affected by the transactions
contemplated hereby;
(b) Each of Parent and Sub shall have performed its obligations
under this Agreement required to be performed by it at or prior to the
Effective Time pursuant to the terms hereof; and
(c) No statute, rule, regulation or temporary, preliminary or
permanent order or injunction shall have been proposed, promulgated, enacted,
entered, enforced or deemed applicable by any state, Federal or other
government authority, court or government agency of competent jurisdiction
that prohibits the consummation of the Merger or the transactions contemplated
hereby or thereby.
Parent and Sub will furnish the Company with such certificates and other
documents to evidence the fulfillment of the conditions set forth in this
Section 6.2 as the Company may reasonably request.
6.3. Conditions to Obligation of Parent and Sub to Effect the Merger.
The obligations of Parent and Sub to effect the Merger are further subject to
the satisfaction at or prior to the Effective Time of the following conditions:
(a) The representations and warranties of the Company contained in
this Agreement shall be true and correct at and as of the Effective Time as if
made at and as of such time, except as affected by the transactions
contemplated hereby;
(b) The Company shall have performed each of its obligations under
this Agreement required to be performed by it at or prior to the Effective
Time pursuant to the terms hereof;
(c) No statute, rule, regulation or temporary, preliminary or
permanent order or injunction shall have been proposed, promulgated, enacted,
entered, enforced or deemed applicable by any state, Federal or other
government authority, court or government agency of competent jurisdiction
that prohibits the consummation of the Merger or the transactions contemplated
hereby or thereby; and
The Company will furnish Parent and Sub with such certificates and other
documents to evidence the fulfillment of the conditions set forth in this
Section 6.3 as Parent or Sub may reasonably request.
ARTICLE 7
CLOSING
7.1. Time and Place. Subject to the provisions of Articles 6 and 8
hereof, the closing of the Merger contemplated hereby (the "Closing") shall
take place at the Company's offices at 385 Country Club Road, Stockbridge,
Georgia 30281, at 10:00 a.m., local time, on a date (the "Closing Date") that
is no later than the third business day after the satisfaction or waiver of
the conditions set forth in Article 6 hereof or such other place, at other
time, or on such other date as Parent, Sub and the Company may mutually agree
upon for the Closing to take place.
7.2. Deliveries at the Closing. At the Closing:
(a) There shall be delivered to Parent, Sub and the Company the
certificates and other documents and instruments, if any, provided to be
delivered under Article 6 hereof.
(b) Sub and the Company shall cause the articles of merger to be
filed in accordance with the provisions of the Florida Business Corporation
Act and the Georgia Business Corporation Code and shall take any and all other
lawful actions and do any and all other lawful things necessary to effect the
Merger and to enable the Merger to become effective.
ARTICLE 8
TERMINATION AND ABANDONMENT
8.1. Termination. Notwithstanding approval and adoption of this
Agreement by the Company's shareholders, this Agreement may be terminated,
and the Merger abandoned, at any time prior to the Effective Time of the
Merger:
(a) by the mutual consent of Parent, Sub and the Company; or
(b) automatically, without action by any party hereto, if at the
Shareholders' Meeting, the Company's shareholders shall have not voted to
adopt this Agreement in accordance with the requirements set forth in Section
6.1(a); or
(c) by either Parent or the Company if, without fault of the
terminating party, the Merger shall not have been consummated on or before
December 31, 1999; or
(d) by either Parent or the Company's Board of Directors if the
Special Committee shall have withdrawn or modified in a manner adverse to
Parent or Sub its approval or recommendation of the Merger, this Agreement
or the transactions contemplated hereby; or
(e) by either Parent or the Company if any of the events set
forth in Sections 6.1(b) shall have occurred and shall not have been, on or
before the date of such termination, permanently waived by Parent or the
Company, as the case may be; or
(f) by either Parent or the Company, if any court of competent
jurisdiction or other governmental body in the United States shall have
issued an order, judgment or decree (other than a temporary restraining order)
restraining, enjoining or otherwise prohibiting the Merger and such order,
judgment or decree shall have become final and nonappealable; or
(g) by the Company if , prior to the receipt of its shareholder
approval of the Merger, the Board of Directors of the Company or the Special
Committee determines in good faith, after consultation with outside counsel,
that it is necessary to do so in order to comply with its fiduciary duties to
the shareholders of the Company under applicable law; or
(h) by the Company if (i) any of the conditions set forth in
Sections 6.2(a) or (b) that are required to be satisfied at or prior to the
Closing shall not have been satisfied prior to the Closing or shall have
become incapable of being satisfied; or (ii) if any of the events set forth
in Sections 6.2(c) shall have occurred prior to the Closing and, in the case
of (i) or (ii), shall not have been, on or before the date of such
termination, permanently waived by the Company; provided, however, that in
the case of Sections 6.2(a) and (b), Parent and Sub shall not have cured such
breach, in all material respects, within 10 business days following the
receipt of written notice from the Company of such breach; or
(i) by Parent if (i) any of the conditions set forth in Sections
6.3(a) or (b) that are required to be satisfied at or prior to the Closing
shall not have been satisfied prior to the Closing or shall have become
incapable of being satisfied; or (ii) if any of the events set forth in
Sections 6.3(c) shall have occurred prior to the Closing and, in the case of
(i) or (ii), shall not have been, on or before the date of such termination,
permanently waived by Parent; provided, however, that in the case of Sections
6.3(a) and (b), the Company shall not have cured such breach, in all material
respects, within 10 business days following the receipt of written notice from
Parent of such breach.
8.2. Effect of Termination. In the event of the termination of this
Agreement and the Merger pursuant to Section 8.1, this Agreement shall
terminate and the Merger shall be abandoned without any further action by any
of the parties hereto. If this Agreement is terminated as provided herein, no
party hereto shall have any liability or further obligation hereunder to any
other party to this Agreement, provided, however, that (i) any termination by
the Company arising out of a breach by Parent or Sub of any representation,
warranty, covenant or agreement contained in this Agreement shall be without
prejudice to the rights of the Company to seek damages with respect thereto;
and (ii) any termination by Parent arising out of a breach by the Company of
any representation, warranty, covenant or agreement contained in this
Agreement shall be without prejudice to the rights of Parent or Sub to seek
damages with respect thereto; provided further, however, that the obligations
set forth in this Section 8.2 and in Section 9.1 hereof shall survive any
such termination and continue in effect thereafter.
ARTICLE 9
MISCELLANEOUS
9.1. Expenses. All costs and expenses incurred in connection with this
Agreement, and the transactions contemplated hereby and thereby, shall be
paid by the party incurring such costs and expenses.
9.2. No Survival of Representations and Warranties. The respective
representations and warranties of the Company, Parent and Sub contained
herein or in any certificate or letter delivered pursuant hereto shall expire
with, and be terminated and extinguished by, the effectiveness of the Merger
or the termination of this Agreement (whichever is earlier) and shall not
survive the Effective Time or such termination.
9.3. Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
9.4. Notices. All notices, demands, requests, or other communications
that may be or are required to be given, served, or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall be hand
delivered, sent by overnight courier or mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, or transmitted by
telegram, telecopy or telex, addressed as follows:
If to Parent or Sub, to: Killearn, Inc.
1570 Rock Quarry Road, Suite B
Stockbridge, Georgia 30281
Attention: J.T. Williams, President
With a copy (which
shall not constitute
notice) to: Montello & Kenney, P.A.
777 Brickell Avenue, Suite 1070
Miami, Florida 33131
Attention: Louis R. Montello, Esquire
If to the Company, to: Killearn Properties, Inc.
385 Country Club Road
Stockbridge, Georgia 30281
Attention: Mallory E. Horne, Chairman of the
Board
With a copy (which
shall not constitute
notice) to: Greenberg, Traurig, P.A.
1221 Brickell Avenue
Miami, Florida 33131
Attention: Phillip J. Kushner, Esquire
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request or communication that shall be hand
delivered, sent, mailed, telecopied or telexed in the manner described above,
or that shall be delivered to a telegraph company, shall be deemed
sufficiently given, served, sent, received or delivered for all purposes at
such time as it is delivered to the addressee (with the return receipt, the
delivery receipt, or (with respect to a telecopy or telex) the answer back
being deemed conclusive, but not exclusive, evidence of such delivery) or at
such time as delivery is refused by the addressee upon presentation.
9.5. Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto without the prior written consent of the other parties
except that Sub may assign all of its rights, interests and obligations
hereunder to Parent or another wholly owned subsidiary of Parent, provided
that such subsidiary agrees in writing to be bound by all of the terms,
conditions and provisions contained herein.
9.6. Complete Agreement. This Agreement including the documents and
instruments referred to herein or delivered pursuant hereto together
constitute the entire understanding of the parties with respect to the Merger
and the related transactions and supersede all prior agreements and
understandings, both written and oral, among the parties, with respect thereto.
9.7. Modifications, Amendments and Waivers. At any time prior to the
Effective Time of the Merger (notwithstanding any shareholder approval), if
authorized by Parent, Sub and the Company and to the extent permitted by
law, (i) the parties hereto may, by written agreement, modify, amend or
supplement any term or provision of this Agreement; and (ii) any term or
provision of this Agreement may be waived by the party that is entitled to the
benefits thereof, provided that after such shareholder approval, no amendment
shall be made that decreases the consideration to be paid in the Merger
without shareholder approval. Any written instrument or agreement referred
to in this paragraph shall be validly and sufficiently authorized for the
purposes of this Agreement if signed on behalf of Parent, the Company and Sub
by a person authorized to sign this Agreement.
9.8. Counterparts. This Agreement may be executed in two or more
counterparts all of which shall be considered one and the same agreement and
each of which shall be deemed an original.
9.9. Governing Law. This Agreement shall be governed by the laws of the
State of Florida (regardless of the laws that might be applicable under
principles of conflicts of law) as to all matters, including, but not limited
to, matters of validity, interpretation, construction, effect, performance
and remedies.
9.10. 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 confer upon any other person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement.
9.11. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect to the maximum extent
permitted by law and shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
KILLEARN, INC.
By: /s/ J.T. Williams, Jr.
J.T. WILLIAMS, Jr.
President
KILLEARN DEVELOPMENT, INC.
By: /s/ David K. Williams
DAVID K. WILLIAMS,
President
KILLEARN PROPERTIES, INC.
By: /s/ Mallory E. Horne
MALLORY E. HORNE,
Chairman of the Board
Exhibit C
Promissory Note # 1 ($ 194,155.00 )
Borrower's Name and Address
"I" includes each borrower below, jointly and severally.
THE WIMBERLY INVESTMENT FUND, L.P.
Suite 300
300 Corporate Center Dr.
Morrow, Ga. 30260
Lender's Name and Address
"You" means the Lender, its successors and assigns.
KILLEARN, INC.
100 Eagle's Landing Way
Stockbridge, Ga., 30281
Loan Number:
Date: January 15, 1998
Maturity Date: January 15, 1999
Tax ID#: 58-2025217
For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of ONE HUNDRED THOUSAND ONE HUNDRED FIFTY FIVE
AND 00/100--------------Dollars $194,155.00.
SINGLE ADVANCE: I will receive all of this principal sum on January 15,
1998. No additional advances are contemplated under this note.
INTEREST: I agree to pay interest on the outstanding principal balance from
January 28, 1998 at the rate of 8.5% per year until January 15, 1999
ACCRUAL METHOD: Interest will be calculated on a ACTUAL/365 day basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this
note owing after maturity, and until paid in full, as stated below:
At a rate equal to 10% per annum
PAYMENTS: I agree to pay this note as follows:
INTEREST: I agree to pay accrued interest on January 15, 1999
PRINCIPAL: I agree to pay the principal on January 15, 1999
SECURITY: This note is separately secured by (describe separate document by
type and date):
26,780 shares of common stock of KILLEARN PROPERTIES, INC.
PURPOSE: The purpose of this loan is Investment
SIGNATURES AND SEALS: IN WITNESS WHEREOF, I have signed my name and affixed
my seal on this 28th day of January, 1998. By doing so, I agree to the terms
of this Note (including those on page 2). I have received a copy on today's
Date.
THE WIMBERLY INVESTMENT FUND, L.P.
BY: /s/ JAMES M. BAKER
------------------------------------
President of G.P.
SIGNATURE FOR LENDER
/s/ J.T. WILLIAMS, JR.
- - ---------------------------------------
J. T. Williams, Jr., PRESIDENT
Promissory Note # 2 ( $ 2,092,712.50 )
Borrower's Name and Address
"I" includes each borrower below, jointly and severally.
THE WIMBERLY INVESTMENT FUND, L.P.
Suite 300
300 Corporate Center Dr.
Morrow, Ga. 30260
Lender's Name and Address
"You" means the Lender, its successors and assigns.
KILLEARN, INC.
100 Eagle's Landing Way
Stockbridge, Ga., 30281
Loan Number:
Date: January 15, 1998
Maturity Date: January 15, 1999
Tax ID#: 58-2025217
For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of TWO MILLION NINETY TWO THOUSAND SEVEN
HUNDRED TWELVE AND 51/100--------------Dollars $2,092,712.50.
SINGLE ADVANCE: I will receive all of this principal sum on January 15,
1998. No additional advances are contemplated under this note.
INTEREST: I agree to pay interest on the outstanding principal balance from
January 15, 1998 at the rate of 8.5% per year until January 15, 1999
ACCRUAL METHOD: Interest will be calculated on a ACTUAL/365 day basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this
note owing after maturity, and until paid in full, as stated below:
At a rate equal to 10% per annum
PAYMENTS: I agree to pay this note as follows:
INTEREST: I agree to pay accrued interest on January 15, 1999
PRINCIPAL: I agree to pay the principal on January 15, 1999
SECURITY: This note is separately secured by (describe separate document by
type and date):
288,650 shares of common stock of KILLEARN PROPERTIES, INC.
PURPOSE: The purpose of this loan is Investment
SIGNATURES AND SEALS: IN WITNESS WHEREOF, I have signed my name and affixed
my seal on this 15th day of January, 1998. By doing so, I agree to the terms
of this Note (including those on page 2). I have received a copy on today's
Date.
THE WIMBERLY INVESTMENT FUND, L.P.
BY: /s/ JAMES M. BAKER
------------------------------------
President of G.P.
SIGNATURE FOR LENDER
/s/ J.T. WILLIAMS, JR.
- - ---------------------------------------
J. T. Williams, Jr., PRESIDENT
DEFINITIONS: As used on page 1, "__" means the terms that apply to this
loan. "I," "me" or "my" means each Borrower who signs this note and each
other person or legal entity (including guarantors, endorsers, and sureties)
who agrees to pay this note (together referred to as "us"). "You" or "your"
means the Lender and its successors and assigns.
APPLICABLE LAW: The law of the state of Georgia will govern this note. Any
term of this note which is contrary to applicable law will not be effective,
unless the law permits you and me to agree to such a variation. If any
provision of this agreement cannot be enforced according to its terms, this
fact will not affect the enforceability of the remainder of this agreement.
No modification of this agreement may be made without your express written
consent. Time is of the essence in this agreement.
PAYMENTS: Each payment I make on this note will first reduce the amount I
owe you for charges which are neither interest nor principal. The remainder
of each payment will then reduce accrued unpaid interest, and then unpaid
principal. If you and I agree to a different application of payments, we
will describe our agreement on this note. I may prepay a part of, or the
entire balance of this loan without penalty, unless we specify to the
contrary on this note. Any partial prepayment will not excuse or reduce any
later scheduled payment until this note is paid in full (unless, when I make
the prepayment, you and I agree in writing to the contrary).
INTEREST: Interest accrues on the principal remaining unpaid from time to
time, until paid in full. If I receive the principal in more than one
advance, each advance will start to earn interest only when I receive the
advance. The interest rate in effect on this note at any given time will
apply to the entire principal advanced at that time. You and I may provide
in this agreement for accrued interest not paid when due to be added to
principal. Notwithstanding anything to the contrary, I do not agree to pay
and you do not intend to charge any rate of interest that is higher than the
maximum rate of interest you could charge under applicable law for the
extension of credit that is agreed to here (either before or after maturity).
If any notice of interest accrual is sent and is in error, we mutually agree
to correct it, and if you actually collect more interest than allowed by law
and this agreement, you agree to refund it to me.
INDEX RATE: The index will serve only as a device for setting the rate on
this note. You do not guarantee by selecting this index, or the margin, that
the rate on this note will be the same rate you charge on any other loans or
class of loans to me or other borrowers.
ACCRUAL METHOD: The amount of interest that I pay on this loan will be
calculated using the interest rate and accrual method stated on page 1 of
this note. For the purpose of interest calculation, the accrual method will
determine the number of days in a "year." If no accrual method is stated,
then you may use any reasonable accrual method for calculating interest.
POST MATURITY RATE: For purposes of deciding when the "Post Maturity Rate"
(shown on page 1) applies, the term "maturity" means the date of the last
scheduled payment indicated on page 1 of this note or the date you accelerate
payment on the note, whichever is earlier.
SINGLE ADVANCE LOANS: If this is a single advance loan, you and I expect
that you will make only one advance of principal. However, you may add other
amounts to the principal if you make any payments described in the "PAYMENTS
BY LENDER" paragraph below, or if we have agreed that accrued interest not
paid when due may be added to principal.
MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I expect
that you will make more than one advance of principal. If this is closed end
credit, repaying a part of the principal will not entitle me to additional
credit.
PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I am
obligated to pay (such as property insurance premiums), then you may treat
those payments made by you as advances and add them to the unpaid principal
under this note, or you may demand immediate payment of the charges.
SET-OFF: I agree that you may set off any amount due and payable under this
note against any right I have to receive money from you.
"Right to receive money from you" means:
(1) any deposit account balance I have with you;
(2) any money owed to me on an item presented to you or in your possession
for collection or exchange; and
(3) any repurchase agreement or other nondeposit obligation.
"Any amount due and payable under this note" means the total amount of which
you are entitled to demand payment under the terms of this note at the time
you set off. This total includes any balance the due date for which you
properly accelerate under this note.
If my right to receive money from you is also owned by someone who has not
agreed to pay this note, your right of set off will apply to my interest in
the obligation and to any other amounts I could withdraw on my sole request
or endorsement. Your right of set-off does not apply to an account or other
obligation where my rights are only as a representative. It also does not
apply to any Individual Retirement Account or other tax deferred retirement
account.
You will not be liable for the dishonor of any check when the dishonor occurs
because you set off this debt against any of my accounts. I agree to hold
you harmless from any such claims arising as a result of your exercise of
your right of set-off.
REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate or
a residence that is personal property, the existence of a default and your
remedies for such a default will be determined by applicable law, by the
terms of any separate instrument creating the security interest and, to the
extent not prohibited by law and not contrary to the terms of the separate
security instrument, by the "Default" and "Remedies" paragraphs herein.
DEFAULT: I will be in default if any one or more of the following occur:
(1) I fail to make a payment on time or in the amount due; (2) I fail to keep
the property insured, if required; (3) I fail to pay, or keep any promise, on
any debt or agreement I have with you; (4) any other creditor of mine
attempts to collect any debt I owe him through court proceedings; (5) I die,
am declared incompetent, make an assignment for the benefit of creditors, or
become insolvent (either because my liabilities exceed my assets or I am
unable to pay my debts as they become due); (6) I make any written statement
or provide any financial information that is untrue or inaccurate at the time
it was provided; (7) I do or fail to do something which causes you to believe
that you will have difficulty collecting the amount I owe you; (8) any
collateral securing this note is used in a manner or for a purpose which
threatens confiscation by a legal authority; (9) I change my name or assume
an additional name without first notifying you before making such a change;
(10) I fail to plant, cultivate and harvest crops in due season; (11) any
loan proceeds are used for a purpose that will contribute to excessive
erosion of highly credible land or to the conversion of wetlands to produce
an agricultural commodity, as further explained in 7 C.F.R. Part 1940,
Subpart G, Exhibit M.
REMEDIES: If I am in default on this note you have, but are not limited to,
the following remedies:
(1) You make demand immediate payment of all I owe you under this note
(principal, accrued unpaid interest and other accrued charges).
(2) You may set off this debt against any right I have to the payment of money
from you, subject to the terms of the "Set-Off" paragraph herein.
(3) You may demand security, additional security, or additional parties to be
obligated to pay this note as a condition for not using any other remedy.
(4) You may refuse to make advances to me or allow purchases on credit by me.
(5) You may use any remedy you have under state or federal law.
By selecting any one or more of these remedies you do not give up your right to
later use any other remedy. By waiving your right to declare an event to be a
default, you do not waive your right to later consider the event as a default if
it continues or happens again.
COLLECTION COSTS AND ATTORNEY'S FEES: I agree to pay all costs of collection,
replevin or any other or similar type of cost if I am in default. In addition,
if you hire an attorney to collect this note, I also agree to pay any fee, not
to exceed 15 percent of the principal and interest then owed, you incur with
such attorney plus court costs (except where prohibited by law). To the extent
permitted by the United States Bankruptcy Code, I also agree to pay the
reasonable attorney's fees and costs you incur to collect this debt as awarded
by any court exercising jurisdiction under the Bankruptcy Code.
WAIVER: I give up my rights to require you to do certain things. I will not
require you to:
(1) demand payment of amounts due (presentment);
(2) obtain official certification of nonpayment (protest);
(3) give notice that amounts due have not been paid (notice of dishonor); or
(4) give me notice prior to seizure of my personal property when you are
seeking to foreclose a secured interest in any of my personal property used
to secure a commercial transaction.
I waive any defenses I have based on suretyship or impairment of collateral.
OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if
someone else has also agreed to pay it (by, for example, signing this form or
a separate guarantee of endorsement). You may sue me alone, or anyone else
who is obligated on this note, or any number of us together, to collect this
note. You may do so without any notice that is has not been paid (notice of
dishonor). You may without notice release any party to this agreement without
releasing any other party. If you give up any of your rights, with or
without notice, it will not affect my duty to pay this note. Any extension
of new credit to any of us, or renewal of this note by all or less than all
of us will not release me from my duty to pay it. (Of course, you are
entitled to only one payment in full.) I agree that you may at your option
extend this note or the debt represented by this note, or any portion of the
note or debt, from time to time without limit or notice and for any term
without affecting my liability for payment of the note. I will not assign my
obligation under this agreement without your prior written approval.
CREDIT INFORMATION: I agree and authorize you to obtain credit information
about me from time to time (for example, by requesting a credit report) and
to report to others your credit experience with me (such as a credit
reporting agency). I agree to provide you, upon request, any financial
statement or information you may deem necessary. I warrant that the
financial statements and information I provide to you are or will be
accurate, correct and complete.
NOTICE: Unless otherwise required by law, any notice to me shall be given by
delivering it or by mailing it by first class mail addressed to me at my last
known address. My current address is on page 1. I agree to inform you in
writing of any change in my address. I will give any notice to you my
mailing it first class to your address stated on page 1 of this agreement, or
to any other address that you have designated.
Exhibit D
SECURITY AGREEMENT # 1 ( $ 194,155.00 )
(Collateral Pledge Agreement)
Date: January 28, 1998
Debtor: THE WIMBERLY INVESTMENT FUND, L.P.
Business
Or Residence Suite 300
Address: 300 Corporate Center Drive
City, State
& Zip Code: Morrow, Ga., 30260
Secured Party: KILLEARN, INC.
Address: 100 Eagle's Landing Way
City, State
& Zip Code: Stockbridge, Ga., 30281
1. SECURITY INTEREST AND COLLATERAL.
To secure the debt, liability or obligation of the Debtor to secured party
evidence by the following: Promissory note dated January 28, 1998 in the
amount of $194,155.00 between the parties and any extensions, renewals or
replacements thereof therein referred to as the "Obligations").
Debtor hereby grants Secured Party a security interest (herein called the
"Security Interest") in the property owned by Debtor and held by Secured
Party that is described as follows: 26,780 shares of the common stock of
KILLEARN PROPERTIES, INC. together with all rights in connection with such
property (herein called the "Collateral").
2. REPRESENTATIONS, WARRANTIES AND COVENANTS. DEBTOR REPRESENTS,
WARRANTS AND COVENANTS THAT:
(a) Debtor will duly endorse, in blank, each and every instrument
constituting Collateral by signing on said instrument or by signing a
separate document of assignment or transfer, if required by Secured Party.
(b) Debtor is the owner of the Collateral free and clear of all
liens, encumbrances, security interests and restrictions, except the Security
Interest and any restrictive legend appearing on any instrument constituting
Collateral.
(c) Debtor will keep the Collateral free and clear of all liens,
encumbrances and security interests, except the Security Interest.
(d) Debtor will pay, when due, all taxes and other governmental
charges levied or assessed upon or against any Collateral.
(e) At any time, upon request by Secured Party, Debtor will
deliver to Secured Party all notices, financial statements, reports or other
communications received by Debtor as an owner or holder of the Collateral.
(f) Debtor will upon receipt deliver to Secured Party in pledge
ass additional Collateral all securities distributed on account of the
Collateral such as stock dividends and securities resulting from Stock
splits, reorganizations and recapitalizations.
THIS AGREEMENT CONTAINS ADDITIONAL PROVISIONS SET FORTH ON PAGES 2 AND 3
HEREOF, ALL OF WHICH ARE MADE A PART HEREOF.
DEBTOR'S NAME:
THE WIMBERLY INVESTMENT FUND, L. P.
By: /s/ JAMES M. BAKER
------------------------------------
Title: President of G. P.
---------------------------------
SECURITY AGREEMENT # 2 ( $ 2,092,712.50 )
(Collateral Pledge Agreement)
Date: January 15, 1998
Debtor: THE WIMBERLY INVESTMENT FUND, L.P.
Business
Or Residence Suite 300
Address: 300 Corporate Center Drive
City, State
& Zip Code: Morrow, Ga., 30260
Secured Party: KILLEARN, INC.
Address: 100 Eagle's Landing Way
City, State
& Zip Code: Stockbridge, Ga., 30281
1. SECURITY INTEREST AND COLLATERAL.
To secure the debt, liability or obligation of the Debtor to secured party
evidence by the following: Promissory note dated January 15, 1998 in the
amount of $2,092,712.50 between the parties and any extensions, renewals or
replacements thereof therein referred to as the "Obligations").
Debtor hereby grants Secured Party a security interest (herein called the
"Security Interest") in the property owned by Debtor and held by Secured
Party that is described as follows: 288,650 shares of the common stock of
KILLEARN PROPERTIES, INC. together with all rights in connection with such
property (herein called the "Collateral").
2. REPRESENTATIONS, WARRANTIES AND COVENANTS. DEBTOR REPRESENTS,
WARRANTS AND COVENANTS THAT:
(a) Debtor will duly endorse, in blank, each and every instrument
constituting Collateral by signing on said instrument or by signing a
separate document of assignment or transfer, if required by Secured Party.
(b) Debtor is the owner of the Collateral free and clear of all
liens, encumbrances, security interests and restrictions, except the Security
Interest and any restrictive legend appearing on any instrument constituting
Collateral.
(c) Debtor will keep the Collateral free and clear of all liens,
encumbrances and security interests, except the Security Interest.
(d) Debtor will pay, when due, all taxes and other governmental
charges levied or assessed upon or against any Collateral.
(e) At any time, upon request by Secured Party, Debtor will
deliver to Secured Party all notices, financial statements, reports or other
communications received by Debtor as an owner or holder of the Collateral.
(f) Debtor will upon receipt deliver to Secured Party in pledge
ass additional Collateral all securities distributed on account of the
Collateral such as stock dividends and securities resulting from Stock
splits, reorganizations and recapitalizations.
THIS AGREEMENT CONTAINS ADDITIONAL PROVISIONS SET FORTH ON PAGES 2 AND 3
HEREOF, ALL OF WHICH ARE MADE A PART HEREOF.
DEBTOR'S NAME:
THE WIMBERLY INVESTMENT FUND, L. P.
By: /s/ JAMES M. BAKER
------------------------------------
Title: President of G. P.
---------------------------------
ADDITIONAL PROVISIONS
3. RIGHTS OF SECURED PARTY. Debtor agrees that Secured Party may at
any time, whether before or after the occurrence of an Event of Default and
without notice or demand of any kind, (i) notify the obligor on or issuer of
any Collateral to make payment to Secured Party of any amounts due or
distributable thereon, (ii) in Debtor's name or Secured Party's name enforce
collection of any Collateral by suit or otherwise, or surrender, release or
exchange all or any part of it, or compromise, extend or renew for any period
any obligation evidenced by the Collateral, (iii) receive all proceeds of the
Collateral, and (iv) hold any increase or profits received from the
Collateral as additional security for the Obligations, except that any money
received from the Collateral shall, at Secured Party's option, be applied in
reduction of the Obligations, in such order of application as Secured Party
may determine, or be remitted to Debtor.
4. EVENTS OF DEFAULT. Each of the following occurrences shall
constitute an event of default under this Agreement (herein called "Event of
Default"); (i) Debtor shall fail to pay any or all of the Obligations when
due or (if payable on demand) on demand, or shall fail to observe or perform
any covenant or agreement herein binding on it; (ii) any representation or
warranty by Debtor set forth in this Agreement or made to Secured Party in
any financial statements or reports submitted to Secured Party by or on
behalf of Debtor shall prove materially false or misleading; (iii) a
garnishment summons or a writ of attachment shall be issued against or served
upon the Secured Party for the attachment of any property of the Debtor or
any indebtedness owing to Debtor; (iv) Debtor or any guarantor of any
Obligation shall (A) be or become insolvent (however defined); (B)
voluntarily file, or have filed against it involuntarily, a petition under
the United States Bankruptcy Code; or (C) if a corporation, partnership or
organization, be dissolved or liquidated or, if a partnership, suffer the
death of a partner or, if an individual, die; or (D) go out of business; (v)
Secured Party shall in good faith believe that the value then realizable by
collection or disposition of the Collateral, after deduction of expenses of
collection and disposition, is less than the aggregate unpaid balance of all
Obligations then outstanding; (vi) Secured Party shall in good faith believe
that the prospect of due and punctual payment of any or all of the
Obligations is impaired.
5. REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of an Event of
Default and at any time thereafter, Secured Party may exercise any one or
more of the following rights or remedies: (i) declare all unmatured
Obligations to be immediately due and payable, and the same shall thereupon
be immediately due and payable, without presentment or other notice or
demand; (ii) exercise all voting and other rights as a holder of the
Collateral; (iii) exercise and enforce any or all rights and remedies
available upon default to a secured party under the Uniform Commercial Code,
including the right to offer and sell the Collateral privately to purchasers
who will agree to take the Collateral for investment and not with a view to
distribution and who will agree to the imposition of restrictive legends on
the certificates representing the Collateral, and the right to arrange for a
safe which would otherwise qualify as exempt from registration under the
Securities Act of 1933; and if notice to Debtor of any intended disposition
of the Collateral or any other intended action is required by law in a
particular instance, such notice shall be deemed commercially reasonable if
given at least 10 calendar days prior to the date of intended disposition or
other action; (iv) exercise or enforce any or all other rights or remedies
available to Secured Party by law or agreement against the Collateral,
against Debtor or against any other person or property. Upon the occurrence
of the Event of Default described in Section 4(iv)(B), all Obligations shall
be immediately due and payable without demand or notice thereof.
6. MISCELLANEOUS. Any disposition of the Collateral is the manner
provided in Section 5 shall be deemed commercially reasonable. This
Agreement can be waived, modified, amended, terminated or discharged, and the
Security Interest can be released, only explicitly in a writing signed by
Secured Party. A waiver signed by Secured Party shall be effective only in
the specific instance and for the specific purpose given. Mere delay or
failure to act shall not preclude the exercise or enforcement of any of
Secured Party's rights or remedies. All rights and remedies of Secured Party
shall be cumulative and may be exercised singularly or concurrently, at
Secured Party's option, and the exercise or enforcement of any one such right
or remedy shall neither be a condition to nor bar the exercise or enforcement
of any other. All notices to be given to Debtor shall be deemed sufficiently
given if delivered or mailed by registered or certified mail, postage
prepaid, to Debtor at its address set forth above or at the most recent
address shown on Secured Party's records. Secured Party's duty of care with
respect to Collateral in its possession (as imposed by law) shall be deemed
fulfilled if Secured Party exercises reasonable care in physically
safekeeping such Collateral or, in the case of Collateral in the custody or
possession of a bailee or other third person, exercises reasonable care in
the selection of the bailee or other third person, and Secured Party need not
otherwise preserve, protect, insure or care for any Collateral. Secured Party
shall not be obligated to preserve any rights Debtor may have against prior
parties, to exercise at all or in any particular manner any voting rights
which may be available with respect to any Collateral, to realize on the
Collateral at all or in any particular manner or order, or to apply any cash
proceeds of Collateral in any particular order of application. Debtor will
reimburse Secured Party for all expenses (including reasonable attorney's
fees and legal expenses) incurred by Secured Party in the protection, defense
or enforcement of the Security Interest, including expenses incurred in any
litigation or bankruptcy or insolvency proceedings. This Agreement shall be
binding upon and inure to the benefit of Debtor and Secured Party and their
respective heirs, representatives, successors and assigns and shall take
effect when signed by Debtor and delivered to Secured Party, and Debtor
waives notice of Secured Party's acceptance hereof. This Agreement shall be
governed by laws of the state in which it is executed and, unless the context
otherwise requires, all terms used herein which are defined in Articles 1 and
9 of the Uniform Commercial Code, as in effect in said state, shall have the
meanings therein stated. If any provision or application of this Agreement
is held unlawful or unenforceable in any respect, such illegality or
unenforceability shall not affect other provisions or applications which can
be given effect, and this Agreement shall be construed as if the unlawful or
unenforceable provision or application had never been contained herein or
prescribed hereby. All representations and warranties contained in this
Agreement shall survive the execution,
delivery and performance of this Agreement and the creation and payment of
the Obligations. If this Agreement is signed by more than one person as
Debtor, the term "Debtor" shall refer to each of them separately and to both
or all of them jointly, all such persons shall be bound both severally and
jointly with the other(s); and the Obligations shall include any debts,
liabilities and obligations owed to Secured Party by a Debtor solely or by
both or several or all Debtors jointly or jointly and severally, and all
property described in Section 1 shall be included as part of the Collateral,
whether it is owned jointly by both or all Debtors or is owned in whole or in
part by one (or more) of them.
Exhibit E
PROMISSORY NOTE
$384,750.00 January 8, 1998
FOR VALUE RECEIVED, the undersigned, Proactive Technologies, Inc., a
Delaware corporation (the "Maker"), promises to pay to the order of O.
Mason Hawkins and Ann Butterfield Hawkins (collectively, "Hawkins") and the
principal sum of THREE HUNDRED EIGHTY-FOUR THOUSAND SEVEN HUNDRED FIFTY
DOLLARS ($384,750.00) on the earlier of (i) July 6, 1998, or (ii) the date
that the shareholders of Killearn Properties, Inc. ("Killearn") are paid
consideration pursuant to a merger between Maker and Killearn (such earlier
date, the "Due Date"), and interest from the date hereof at the "prime
rate" of interest announced from time to time in the Wall Street Journal
plus 1% per annum, payable on the Due Date. Interest shall be calculated
on the basis of a three hundred sixty (360) day year and actual days
elapsed.
This Note constitutes the promissory note referenced in that certain
Put and Call Agreement dated December 24, 1997 by and between Maker and
Hawkins. This Note and the indebtedness evidenced hereby are secured by a
pledge of 40,500 shares of common stock of Killearn pursuant to the terms
of that certain Pledge Agreement of even date herewith.
Maker, at its option, may prepay the indebtedness evidenced by this
Note, in whole or in part, without penalty or premium. Any partial
prepayment of this Note shall be applied first to accrued and unpaid
interest under this Note, and thereafter to outstanding principal.
The principal amount of this Note, and all accrued and unpaid interest
shall be payable to Hawkins in such coin and currency of the United States
of America as at the time of payment shall be legal tender therein for
payment of public and private debts, and may be made by Maker's check
payable to the order of Hawkins, mailed by first-class mail, postage
prepaid, to Hawkins at 6410 Poplar Avenue, Suite 900, Memphis, Tennessee
38119, or such other address as Hawkins shall notify Maker in writing.
This Note may not assigned or transferred by Hawkins and any attempt to
assign or transfer shall be void without the prior written approval of
Maker. This Note shall be deemed to be made under, and shall be construed
in accordance with and governed by the laws of the State of Florida,
without regard to the conflicts of laws principles thereof. This Note
shall be binding upon maker and its successors and assigns, and shall inure
to the benefit of Hawkins an their respective heirs, executors,
representatives and assigns.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
day and year first written above.
PROACTIVE TECHNOLOGIES, INC.
/s/ Mark A. Conner
MARK A. CONNER,
President
PROMISSORY NOTE
$394,250.00 January 8, 1998
FOR VALUE RECEIVED, the undersigned, Proactive Technologies, Inc., a
Delaware corporation (the "Maker"), promises to pay to the order of O.
Mason Hawkins ("Hawkins") the principal sum of THREE HUNDRED NINETY-FOUR
THOUSAND TWO HUNDRED FIFTY DOLLARS ($394,250.00) on the earlier of (i) July
6, 1998, or (ii) the date that the shareholders of Killearn Properties,
Inc. ("Killearn") are paid consideration pursuant to a merger between
Maker and Killearn (such earlier date, the "Due Date"), and interest from
the date hereof at the "prime rate" of interest announced from time to time
in the Wall Street Journal plus 1% per annum, payable on the Due Date.
Interest shall be calculated on the basis of a three hundred sixty (360)
day year and actual days elapsed.
This Note constitutes the promissory note referenced in that certain
Put and Call Agreement dated December 24, 1997 by and between Maker and
Hawkins. This Note and the indebtedness evidenced hereby are secured by a
pledge of 40,500 shares of common stock of Killearn pursuant to the terms
of that certain Pledge Agreement of even date herewith.
Maker, at its option, may prepay the indebtedness evidenced by this
Note, in whole or in part, without penalty or premium. Any partial
prepayment of this Note shall be applied first to accrued and unpaid
interest under this Note, and thereafter to outstanding principal.
The principal amount of this Note, and all accrued and unpaid interest
shall be payable to Hawkins in such coin and currency of the United States
of America as at the time of payment shall be legal tender therein for
payment of public and private debts, and may be made by Maker's check
payable to the order of Hawkins, mailed by first-class mail, postage
prepaid, to Hawkins at 6410 Poplar Avenue, Suite 900, Memphis, Tennessee
38119, or such other address as Hawkins shall notify Maker in writing.
This Note may not assigned or transferred by Hawkins and any attempt to
assign or transfer shall be void without the prior written approval of
Maker. This Note shall be deemed to be made under, and shall be construed
in accordance with and governed by the laws of the State of Florida,
without regard to the conflicts of laws principles thereof. This Note
shall be binding upon maker and its successors and assigns, and shall inure
to the benefit of Hawkins an their respective heirs, executors,
representatives and assigns.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
day and year first written above.
PROACTIVE TECHNOLOGIES, INC.
/s/ Mark A. Conner
MARK A. CONNER,
President
PROMISSORY NOTE
$475,000.00 January 8, 1998
FOR VALUE RECEIVED, the undersigned, Proactive Technologies, Inc., a
Delaware corporation (the "Maker"), promises to pay to the order of W.
Reid Sanders ("Sanders") the principal sum of FOUR HUNDRED AND SEVENTY
FIVE THOUSAND DOLLARS ($475,000.00) on the earlier of (i) July
6, 1998, or (ii) the date that the shareholders of Killearn Properties,
Inc. ("Killearn") are paid consideration pursuant to a merger between
Maker and Killearn (such earlier date, the "Due Date"), and interest from
the date hereof at the "prime rate" of interest announced from time to time
in the Wall Street Journal plus 1% per annum, payable on the Due Date.
Interest shall be calculated on the basis of a three hundred sixty (360)
day year and actual days elapsed.
This Note constitutes the promissory note referenced in that certain
Put and Call Agreement dated December 24, 1997 by and between Maker and
Hawkins. This Note and the indebtedness evidenced hereby are secured by a
pledge of 40,500 shares of common stock of Killearn pursuant to the terms
of that certain Pledge Agreement of even date herewith.
Maker, at its option, may prepay the indebtedness evidenced by this
Note, in whole or in part, without penalty or premium. Any partial
prepayment of this Note shall be applied first to accrued and unpaid
interest under this Note, and thereafter to outstanding principal.
The principal amount of this Note, and all accrued and unpaid interest
shall be payable to Hawkins in such coin and currency of the United States
of America as at the time of payment shall be legal tender therein for
payment of public and private debts, and may be made by Maker's check
payable to the order of Hawkins, mailed by first-class mail, postage
prepaid, to Hawkins at 6410 Poplar Avenue, Suite 900, Memphis, Tennessee
38119, or such other address as Hawkins shall notify Maker in writing.
This Note may not assigned or transferred by Hawkins and any attempt to
assign or transfer shall be void without the prior written approval of
Maker. This Note shall be deemed to be made under, and shall be construed
in accordance with and governed by the laws of the State of Florida,
without regard to the conflicts of laws principles thereof. This Note
shall be binding upon maker and its successors and assigns, and shall inure
to the benefit of Hawkins an their respective heirs, executors,
representatives and assigns.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
day and year first written above.
PROACTIVE TECHNOLOGIES, INC.
/s/ Mark A. Conner
MARK A. CONNER,
President
Exhibit F
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Pledge Agreement") is made this 9th day of January,
1998, by Proactive Technologies, Inc., a Delaware corporation ("Pledgor"), and
O. Mason Hawkins (Pledgee").
RECITALS:
WHEREAS, Pledgee and Pledgor have entered into that certain Put and Call
Agreement dated December 24, 1997 (the "Agreement"), pursuant to which Pledgee
granted a call to Pledgor to purchase 41,500 shares of the common stock
(the "Shares") of Killearn Properties, Inc., a Florida corporation (Killearn");
WHEREAS, on January 6, 1998, Pledgor exercised the call to purchase the
Shares;
WHEREAS, Pledgor has executed and delivered that certain Promissory Note
dated of even date herewith, payable to Pledgee in the principal amount of
$394,250.00 (the "Note"), representing the purchase price of the Shares; and
WHEREAS, to secure payment of the Note, Pledgee has required Pledgor to
grant to Pledgee a security interest in the Shares pursuant to the terms and
conditions of this Pledge Agreement.
NOW THEREFORE, in consideration of the mutual covenants set forth herein
and intending to be legally bound, Pledgee and Pledgor hereby agree as
follows:
1. Pledge. Pledgor hereby pledges and grants to Pledgee a security
interest in the Shares to secure the timely payment of all principal and
interest due under the Note (the "Indebtedness").
2. Delivery and Possession of Shares. All certificates or instruments
representing or evidencing the Shares shall be delivered to and held by Pledgee
pursuant hereto and shall be accompanied by a duly executed stock power in
blank. Pledgee shall hold the Shares and all certificates or instruments
related to the Shares, including the Note, until such time as Pledgor has
satisfied its Indebtedness. As long as no Event of Default (as defined in
Section 3 hereof) has occurred (i) Pledgee may not sell, transfer, assign,
encumber or dispose of the Shares during the term hereof, and (ii) Pledgor
shall have the right to vote the Shares, to receive dividends on the Shares
and to exercise any other rights of ownership of the Shares.
3. Events of Default
(a) The occurrence of any of the following shall constitute an "Event
of Default" under this Pledge Agreement:
(i) Failure by Pledgor to pay the principal or interest under the
Note when due, if such failure continues for a period of ten (10)days after
written notice of such failure is given to Pledgor or Pledgee.
(ii) The appointment of a receiver for Pledgor or for any of
Pledgor's assets, or any assignment for the benefit of creditors or filing
of a petition under bankruptcy, insolvency or debtor's relief law that is
not dismissed within 90 days of such filing, or for any readjustment of
indebtedness, composition or extension by Pledgor.
(b) If an event of Default shall occur and be continuing, Pledgee
may exercise any right or remedy provided by the Commercial Code of the
State of Tennessee, as the same may be in effect from time to time,
Including, without limitation, the right of foreclosure.
4. Amendment. No amendment or waiver of any provision of this Pledge
Agreement nor consent to any departure by Pledgor herefrom shall in any event
be effective unless the same shall be in writing and signed by Pledgee and
Pledgor, and then such waiver or consent shall be effective only in the
Specific instance and for the specific purpose for which given.
5. Notices. All notices required hereunder shall be in writing and
shall be deemed given and received upon personal delivery (whether by courier
or messenger delivery) to the person for whom intended, or by facsimile
(confirmed receipt), or upon depositing such notice in the United States Mail,
postage prepaid, addressed to the party for whom intended at the following
address:
Pledgee: O. Mason Hawkins
6410 Poplar Avenue, Suite 900
Memphis, Tennessee 38119
Facsimile: 901-818-5210
Pledgor: Proactive Technologies, Inc.
7118 Beech Ridge Trail
Tallahassee, Florida 32312
Facsimile: 850-668-9100
or to such other address as may be designated by written notice given in
accordance with the provisions hereof.
6. Continuing Security Interest, Assignment, Termination. This Pledge
Agreement shall create a continuing security interest in the Shares and shall
remain in full force and effect until payment in full of the Indebtedness, and
be binding upon Pledgee and Pledgor, and their successors and permitted assigns.
Pledgee shall not assign or otherwise transfer the Note to any other person or
entity, and any attempt to assign or transfer the Note shall be void without
the prior written notice to and approval of Pledgor. Upon the payment in full
of the Indebtedness, this Pledge Agreement shall terminate and Pledgee shall
return to Pledgor the Shares and stock power.
7. Governing Law. This Pledge Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, without any
regard to the conflicts of law rules thereof.
8. Counterparts. This pledge Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9. Captions. The captions used in this Agreement are used for convenience
only and are not to be used in construing or interpreting this Pledge Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Pledge Agreement as of the date written above.
PLEDGOR:
PROACTIVE TECHNOLOGIES, INC.
/s/ Mark A. Conner
MARK A. CONNER
President
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Pledge Agreement") is made this 9th day of January,
1998, by Proactive Technologies, Inc., a Delaware corporation ("Pledgor"), and
W. Reid Sanders ("Pledgee").
RECITALS:
WHEREAS, Pledgee and Pledgor have entered into that certain Put and Call
Agreement dated December 24, 1997 (the "Agreement"), pursuant to which Pledgee
granted a call to Pledgor to purchase 50,500 shares of the common stock
(the "Shares") of Killearn Properties, Inc., a Florida corporation (Killearn");
WHEREAS, on January 6, 1998, Pledgor exercised the call to purchase the
Shares;
WHEREAS, Pledgor has executed and delivered that certain Promissory Note
dated of even date herewith, payable to Pledgee in the principal amount of
$475,000.00 (the "Note"), representing the purchase price of the Shares; and
WHEREAS, to secure payment of the Note, Pledgee has required Pledgor to
grant to Pledgee a security interest in the Shares pursuant to the terms and
conditions of this Pledge Agreement.
NOW THEREFORE, in consideration of the mutual covenants set forth herein
and intending to be legally bound, Pledgee and Pledgor hereby agree as
follows:
1. Pledge. Pledgor hereby pledges and grants to Pledgee a security
interest in the Shares to secure the timely payment of all principal and
interest due under the Note (the "Indebtedness").
2. Delivery and Possession of Shares. All certificates or instruments
representing or evidencing the Shares shall be delivered to and held by Pledgee
pursuant hereto and shall be accompanied by a duly executed stock power in
blank. Pledgee shall hold the Shares and all certificates or instruments
related to the Shares, including the Note, until such time as Pledgor has
satisfied its Indebtedness. As long as no Event of Default (as defined in
Section 3 hereof) has occurred (i) Pledgee may not sell, transfer, assign,
encumber or dispose of the Shares during the term hereof, and (ii) Pledgor
shall have the right to vote the Shares, to receive dividends on the Shares
and to exercise any other rights of ownership of the Shares.
3. Events of Default
(a) The occurrence of any of the following shall constitute an "Event
of Default" under this Pledge Agreement:
(i) Failure by Pledgor to pay the principal or interest under the
Note when due, if such failure continues for a period of ten (10)days after
written notice of such failure is given to Pledgor or Pledgee.
(ii) The appointment of a receiver for Pledgor or for any of
Pledgor's assets, or any assignment for the benefit of creditors or filing
of a petition under bankruptcy, insolvency or debtor's relief law that is
not dismissed within 90 days of such filing, or for any readjustment of
indebtedness, composition or extension by Pledgor.
(b) If an event of Default shall occur and be continuing, Pledgee
may exercise any right or remedy provided by the Commercial Code of the
State of Tennessee, as the same may be in effect from time to time,
Including, without limitation, the right of foreclosure.
4. Amendment. No amendment or waiver of any provision of this Pledge
Agreement nor consent to any departure by Pledgor herefrom shall in any event
be effective unless the same shall be in writing and signed by Pledgee and
Pledgor, and then such waiver or consent shall be effective only in the
Specific instance and for the specific purpose for which given.
5. Notices. All notices required hereunder shall be in writing and
shall be deemed given and received upon personal delivery (whether by courier
or messenger delivery) to the person for whom intended, or by facsimile
(confirmed receipt), or upon depositing such notice in the United States Mail,
postage prepaid, addressed to the party for whom intended at the following
address:
Pledgee: O. Mason Hawkins
6410 Poplar Avenue, Suite 900
Memphis, Tennessee 38119
Facsimile: 901-818-5210
Pledgor: Proactive Technologies, Inc.
7118 Beech Ridge Trail
Tallahassee, Florida 32312
Facsimile: 850-668-9100
or to such other address as may be designated by written notice given in
accordance with the provisions hereof.
6. Continuing Security Interest, Assignment, Termination. This Pledge
Agreement shall create a continuing security interest in the Shares and shall
remain in full force and effect until payment in full of the Indebtedness, and
be binding upon Pledgee and Pledgor, and their successors and permitted assigns.
Pledgee shall not assign or otherwise transfer the Note to any other person or
entity, and any attempt to assign or transfer the Note shall be void without the
prior written notice to and approval of Pledgor. Upon the payment in full of
the Indebtedness, this Pledge Agreement shall terminate and Pledgee shall
return to Pledgor the Shares and stock power.
7. Governing Law. This Pledge Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, without any
regard to the conflicts of law rules thereof.
8. Counterparts. This pledge Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9. Captions. The captions used in this Agreement are used for convenience
only and are not to be used in construing or interpreting this Pledge Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Pledge Agreement as of the date written above.
PLEDGOR:
PROACTIVE TECHNOLOGIES, INC.
/s/ Mark A. Conner
MARK A. CONNER
President
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Pledge Agreement") is made this 9th day of January,
1998, by Proactive Technologies, Inc., a Delaware corporation ("Pledgor"), and
O. Mason Hawkins and Ann Butterfield Hawkins ("Pledgees").
RECITALS:
WHEREAS, Pledgee and Pledgor have entered into that certain Put and Call
Agreement dated December 24, 1997 (the "Agreement"), pursuant to which Pledgee
granted a call to Pledgor to purchase 40,500 shares of the common stock
(the "Shares") of Killearn Properties, Inc., a Florida corporation (Killearn");
WHEREAS, on January 6, 1998, Pledgor exercised the call to purchase the
Shares;
WHEREAS, Pledgor has executed and delivered that certain Promissory Note
dated of even date herewith, payable to Pledgee in the principal amount of
$384,750.00 (the "Note"), representing the purchase price of the Shares; and
WHEREAS, to secure payment of the Note, Pledgee has required Pledgor to
grant to Pledgee a security interest in the Shares pursuant to the terms and
conditions of this Pledge Agreement.
NOW THEREFORE, in consideration of the mutual covenants set forth herein
and intending to be legally bound, Pledgee and Pledgor hereby agree as
follows:
1. Pledge. Pledgor hereby pledges and grants to Pledgee a security
interest in the Shares to secure the timely payment of all principal and
interest due under the Note (the "Indebtedness").
2. Delivery and Possession of Shares. All certificates or instruments
representing or evidencing the Shares shall be delivered to and held by Pledgee
pursuant hereto and shall be accompanied by a duly executed stock power in
blank. Pledgee shall hold the Shares and all certificates or instruments
related to the Shares, including the Note, until such time as Pledgor has
satisfied its Indebtedness. As long as no Event of Default (as defined in
Section 3 hereof) has occurred (i) Pledgee may not sell, transfer, assign,
encumber or dispose of the Shares during the term hereof, and (ii) Pledgor
shall have the right to vote the Shares, to receive dividends on the Shares
and to exercise any other rights of ownership of the Shares.
3. Events of Default
(a) The occurrence of any of the following shall constitute an "Event
of Default" under this Pledge Agreement:
(i) Failure by Pledgor to pay the principal or interest under the
Note when due, if such failure continues for a period of ten (10)days after
written notice of such failure is given to Pledgor or Pledgee.
(ii) The appointment of a receiver for Pledgor or for any of
Pledgor's assets, or any assignment for the benefit of creditors or filing
of a petition under bankruptcy, insolvency or debtor's relief law that is
not dismissed within 90 days of such filing, or for any readjustment of
indebtedness, composition or extension by Pledgor.
(b) If an event of Default shall occur and be continuing, Pledgee
may exercise any right or remedy provided by the Commercial Code of the
State of Tennessee, as the same may be in effect from time to time,
Including, without limitation, the right of foreclosure.
4. Amendment. No amendment or waiver of any provision of this Pledge
Agreement nor consent to any departure by Pledgor herefrom shall in any event
be effective unless the same shall be in writing and signed by Pledgee and
Pledgor, and then such waiver or consent shall be effective only in the
Specific instance and for the specific purpose for which given.
5. Notices. All notices required hereunder shall be in writing and
shall be deemed given and received upon personal delivery (whether by courier
or messenger delivery) to the person for whom intended, or by facsimile
(confirmed receipt), or upon depositing such notice in the United States Mail,
postage prepaid, addressed to the party for whom intended at the following
address:
Pledgee: O. Mason Hawkins
6410 Poplar Avenue, Suite 900
Memphis, Tennessee 38119
Facsimile: 901-818-5210
Pledgor: Proactive Technologies, Inc.
7118 Beech Ridge Trail
Tallahassee, Florida 32312
Facsimile: 850-668-9100
or to such other address as may be designated by written notice given in
accordance with the provisions hereof.
6. Continuing Security Interest, Assignment, Termination. This Pledge
Agreement shall create a continuing security interest in the Shares and shall
remain in full force and effect until payment in full of the Indebtedness, and
be binding upon Pledgee and Pledgor, and their successors and permitted assigns.
Pledgee shall not assign or otherwise transfer the Note to any other person or
entity, and any attempt to assign or transfer the Note shall be void without the
prior written notice to and approval of Pledgor. Upon the payment in full of
the Indebtedness, this Pledge Agreement shall terminate and Pledgee shall
return to Pledgor the Shares and stock power.
7. Governing Law. This Pledge Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, without any
regard to the conflicts of law rules thereof.
8. Counterparts. This pledge Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9. Captions. The captions used in this Agreement are used for convenience
only and are not to be used in construing or interpreting this Pledge Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Pledge Agreement as of the date written above.
PLEDGOR:
PROACTIVE TECHNOLOGIES, INC.
/s/ Mark A. Conner
MARK A. CONNER
President
Exhibit G
This agreement made and entered into this 2nd day of March 1999 by and
between Killearn, Inc. ("Purchaser") and D. Mason Hawkins, Ann Butterfield
Hawkins, and W. Reid Sanders ("Sellers"):
WITNESSTH THAT
WHEREAS, Sellers are the owners of a promissory note ("Note") dated
January 8, 1998 in the original amount of $1,254,000 executed by
Proactive Technologies, Inc. in favor of Sellers, a copy of which is
attached hereto as Exhibit "A", and
WHEREAS, the Note is secured by 132,000 shares of the common stock
of Killearn Properties, Inc. and such stock certificates are in the
possession of Sellers and,
WHEREAS, Sellers agree to sell the note, and assign, without
recourse, the Note together with the collateral to Purchaser and
Purchaser agrees to Purchase such Note with the related collateral under
the following terms and conditions;
NOW THEREFORE, for and in consideration of the foregoing premises, and
in consideration of the mutual promises and covenants set forth herein, the
receipt and sufficiency thereof are hereby acknowledged, the parties do hereby
agree as follows:
1. Sellers warrant that the present principal balance of the Note is
$1,254,000.
2. Sellers agree to sell the Note and to assign, without recourse
the Note and the related collateral to Purchaser upon the
payment of $1,150,000.
3. Purchaser agrees to pay to Sellers $50,000 upon execution of
this agreement by both parties, and to pay to Sellers
$1,100,000 on or before March 25, 1999.
4. Sellers agree to assign the Note and related collateral to
Purchaser simultaneous with the payment in full, of the $1,150,000.
5. Sellers agree that it will not alter or amend the Note or related
collateral without the written consent of Purchaser and that any
monies paid on the Note will reduce the amount due from Purchaser
by the same amount.
6. In the event either party seeks enforcement of this agreement by court
action, the prevailing party's reasonable legal and court costs shall
be paid by the other party.
7. This agreement shall be governed by the laws of the State of Georgia.
8. This agreement is subject to approval by the Maker of the Note of its
assignment to Purchaser.
IN WITNESS WHEREOF, the parties have executed this document as of the date
first above written.
Killearn, Inc. "Sellers"
/s/ O. Mason Hawkins
O.MASON HAWKINS
/s/ Ann Butterfield Hawkins
ANN BUTTERFIELD HAWKINS
/s/ W. Reid Sanders
W. REID SANDERS
Exhibit H
KILLEARN, INC. AMERICAN CENTURY BANKING CORP.
1570 B ROCK QUARRY ROAD 2750 HIGHWAY 42 NORTH PO BOX 2130
STOCKBRIDGE, GA 30281 STOCKBRIDGE, GA 30281
Borrower's Name and Address Lender's Name and Address
Line of Credit No. 5000667
Date March 24, 1999
Max. Credit Amt. $2,000,000.00
Loan Ref. No. 5000667
You have extended to me a line of credit in the
AMOUNT of TWO MILLION AND NO/100 $2,000,000.00
You will make loans to me from time to time until 4 PM on March 22, 2000.
Although the line of credit expires on that date, I will remain obligated to
perform all my duties under this agreement so long as I owe you any money
advanced according to the terms of this agreement, as evidenced by any note or
note I have signed promising to repay these amounts.
This line of credit is an agreement between you and me. It is not intended
that any third party receive any benefit from this agreement, whether by direct
payment, reliance for future payment or in any other manner. This agreement
is not a letter of credit.
1. AMOUNT: This line of credit is:
X-OBLIGATORY: You may not refuse to make loan to me under this line of
Credit unless one of the following occurs;
a. I have borrowed the maximum amount available to me;
b. This line of credit has expired;
c. I have defaulted on the note (or notes) which show my indebtedness
under this line of credit;
d. I have violated any term of this line of credit or any note or other
agreement entered into in connection with this line of credit:
__ DISCRETIONARY: You may refuse to make a loan to me under this line of
credit once the aggregate outstanding advances equal or exceed ______$ _____.
Subject to the obligatory or discretionary limitations above, this line of
Is:
X OPEN-END (Business or Agricultural only): I may borrow up to the
Maximum amount of principal more than one time.
__ CLOSED-END: I may borrow up to the maximum only one time.
2. PROMISSORY NOTE: I will repay any advances made according to this line of
credit agreement as set out in the promissory note, I signed on March 24, 1999,
or any note(s) I sign at a later time which represent advances under this
agreement. The note(s) set(s) out the terms relating to maturity, interest
rate, repayment and advances. If indicated on the promissory note, the
advances will be made as follows: per customers verbal or written request.
3. RELATED DOCUMENTS: I have signed the following documents in connection
with this line of credit and note(s) entered into in accordance with this line
of credit:
__security agreement dated _____ X DEED TO SECURE DEBT OF EVEN DATE.
__mortgage dated _______________
X guaranty dated MARCH 24, 1999
4. REMEDIES: If I am in default on the note(s) you may:
a. take any action as provided in the related documents;
b. without notice to me, terminate this line of credit,
by selecting any of these remedies you do not give up your right to later
use any other remedy. By deciding not to use any remedy should I default,
you do not waive your right to later consider the event a default, if it
happens again.
5. COSTS AND FEES: If you hire an attorney to enforce this agreement I will
pay your reasonable attorney's fees, where permitted by law. I will also pay
your court costs and costs of collection, where permitted by law.
6. COVENANTS: For as long as this line of credit is in effect or I owe you
money for advances made in accordance with the line of credit, I will do the
following:
a. maintain books and records of my operations relating to the need for this
line of credit.
b. permit you or any of your representatives to inspect and/or copy these
records;
c. provide to you any documentation requested by you which support the reason
for making any advance under this line of credit;
d. permit you to make any advance payable to the seller (or seller and me)
of any items being purchased with that advance;
e.
7. NOTICES: All notices or other correspondence with me should be sent to
my address stated above. The notice or correspondence shall be effective when
deposited in the mail, first class, or delivered to me in person.
8. MISCELLANEOUS: This line of credit may not be changed except by a written
agreement signed by you and me. The law of the state in which you are located
will govern this agreement. Any item of this agreement which is contrary to
applicable law will not be effective, unless the law permits you and me to
agree to such a variation.
FOR THE LENDER SIGNATURES: I AGREE TO THE TERMS OF
THIS LINE OF CREDIT. I HAVE RECEIVED
A COPY ON TODAY'S DATE.
By: /s/ Guy Quinn By: /s/ John R. Williams
GUY QUINN JOHN R WILLIAMS
President Vice President
