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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a) AND
AMENDMENTS THERETO FILED
PURSUANT TO 13d-2(a)
(Amendment No. 2)
FRESH FOODS, INC.
-----------------
(Name of Issuer)
Common Stock, par value $1.00 per share
---------------------------------------
(Title of Class of Securities)
929330 10 8
--------------
(CUSIP Number)
CHARLES F. CONNOR, JR.
P. O. BOX 730
CLAREMONT, NORTH CAROLINA 28610
(704) 459-0821
---------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
FEBRUARY 1, 2000
------------------------------------
(Date of Event Which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box: [ ]
(Page 1 of 2 Pages)
(continued on following pages)
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<TABLE>
<CAPTION>
- --------------------------------------- ----------------------------------
13D
CUSIP No. 929330 10 8 Page 2 of 2 Pages
- --------------------------------------- ----------------------------------
=================== =============================================================================================
<S> <C> <C>
1 NAME OF REPORTING PERSON Charles F. Connor, Jr.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
=================== =============================================================================================
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
=================== =============================================================================================
3 SEC USE ONLY
=================== =============================================================================================
4 SOURCE OF FUNDS* OO
=================== =============================================================================================
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ]
=================== =============================================================================================
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
========================= ======== ==============================================================================
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES ======== ==============================================================================
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH ======== ==============================================================================
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH ======== ==============================================================================
10 SHARED DISPOSITIVE POWER
422,011
=================== =============================================================================================
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
422,011
=================== =============================================================================================
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
=================== =============================================================================================
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.2%
=================== =============================================================================================
14 TYPE OF REPORTING PERSON*
IN
=================== =============================================================================================
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 of the Schedule 13D is revised and amended and restated
in its entirety as set forth below:
(a) Mr. Connor is the beneficial owner of 422,011 shares of
Common Stock, representing approximately 7.2% of the Company's currently
outstanding Common Stock. The percentages calculated in this Item 5 are based
upon 5,848,649 shares of Common Stock outstanding as reported on the Company's
quarterly report on Form 10-Q for the quarterly period ended December 4, 1999.
(b) Mr. Connor has shared dispositive power with respect to
422,011 shares of Common Stock owned by James C. Richardson, Jr. solely by
virtue of Mr. Connor's security interest pursuant to a Pledge Agreement dated
January 31, 2000 between Mr. Connor and Mr. Richardson (the "Pledge Agreement").
A copy of the Pledge Agreement is filed as Exhibit 4 to this Amendment No. 2 to
Schedule 13D and is incorporated in its entirety herein by reference hereto.
(c) Mr. Connor has not effected any transaction in shares of
Common Stock during the past 60 days, except as disclosed in Item 6.
(d) To Mr. Connor's knowledge, no person other than Mr.
Richardson (and Mr. Connor, to the extent of his rights and remedies under the
Pledge Agreement) has the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the Common Stock.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Item 6 of the Schedule 13D is revised and amended and restated
in its entirety as set forth below:
In connection with the merger (the "Merger") of WSMP
Acquisition, Inc., a North Carolina corporation and wholly-owned subsidiary of
the Company ("Sub"), with and into Sagebrush, Inc., a North Carolina corporation
("Sagebrush"), pursuant to an Agreement and Plan of Merger dated as of November
14, 1997 (the "Merger Agreement") among the Company, Sub, Sagebrush, Mr. Connor
and L. Dent Miller, Mr. Connor entered into an Affiliate Agreement with the
Company dated January 29, 1998 (the "Affiliate Agreement"), whereby he agreed
not to sell, pledge, transfer or otherwise dispose of any Common Stock issued to
him in the Merger, except pursuant to an effective registration statement or in
compliance with Rule 145 or an exemption from the registration requirements of
the Securities Act.
In addition, in the Merger Agreement the Company agreed to
prepare and file with the Commission, within 30 days after the effective time of
the Merger, and thereafter use its
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reasonable best efforts to cause to be declared effective by the Commission, a
registration statement providing for the registration under the Securities Act
of those shares of Common Stock issued as consideration in the Merger to or for
the benefit of certain affiliates of Sagebrush (including Mr. Connor). Such
registration statement became effective on or before March 1999.
On December 22, 1999 Mr. Connor entered into a stock purchase
agreement (the "Stock Purchase Agreement") with Mr. Richardson whereby he agreed
to sell all shares of Common Stock beneficially owned by him to Mr. Richardson
at a price of $8.25 per share on or before January 31, 2000. The Stock Purchase
Agreement also covered shares held by Mr. Connor's wife and adult children as to
which shares Mr. Connor disclaims beneficial ownership. Under the Stock Purchase
Agreement, $100,000 of the purchase price was payable in escrow upon execution
of the Agreement, $2,400,000 of the purchase price was payable at closing and
the balance was payable under a note due no later than 3 years after the
closing, with a portion of the shares sold being held in escrow pending payment
of the note. A copy of the Stock Purchase Agreement is filed as Exhibit 3 to
this Amendment No. 2 to Schedule 13D and is incorporated in its entirety herein
by reference thereto.
As of January 31, 2000, Mr. Connor, County-Wide Insurance
Agency, Inc., Mr. Connor's wife and children and Mr. Richardson entered into an
Amendment to the Stock Purchase Agreement (the "Amendment") to correct, clarify
and modify certain terms of the Stock Purchase Agreement and to provide for the
joinder therein of those other shareholders. On February 1, 2000, the
transactions contemplated by the Stock Purchase Agreement, as amended, were
closed and all of the Common Stock beneficially owned by Mr. Connor was sold to
Mr. Richardson. A copy of the Amendment is filed as Exhibit 5 to this Amendment
No. 2 to Schedule 13D and is incorporated in its entirety herein by reference
thereto. As of January 31, 2000, Mr. Connor and Mr. Richardson also entered into
the Pledge Agreement.
In connection with Mr. Connor's disposition of all of his
investment in the Company, the Company entered into a consulting and
non-competition agreement with Mr. Connor, providing for payments to Mr. Connor
of $200,000 per year and family medical insurance coverage for five years, and
agreed to continue to do business with an insurance agency controlled by Mr.
Connor for a period of five years or alternatively to replace commissions that
would otherwise be earned at the rate of $25,000 per year.
Except as set forth in Item 4 and this Item 6, no contracts,
arrangements, understandings or relationships (legal or otherwise) exist among
Mr. Connor and any other person with respect to any securities of the Company,
including but not limited to transfer or voting of any such securities, finder's
fees, joint ventures, loan or option arrangements, puts or calls, guarantees of
profits, division of profits or loss, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 of the Schedule 13D is revised and amended and restated
in its entirety as set forth below:
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<PAGE> 5
1. Agreement and Plan of Merger dated as of November 14, 1997 among the
Company, Sub, Sagebrush, Mr. Connor and L. Dent Miller and the related
Plan of Merger (included as Appendix A to the Joint Proxy
Statement-Prospectus constituting a part of the Company's Registration
Statement on Form S-4 (Registration No. 333-43921) filed with the
Commission on January 8, 1998 and, pursuant to Rule 12b-32 under the
Exchange Act, incorporated by reference herein).
2. Affiliate Agreement dated as of January 29, 1998 between Mr. Connor and
the Company (included as Exhibit 2 to the Schedule 13D of Mr. Connor
filed with the Commission on February 9, 1998 and, pursuant to Rule
12b-32 under the Exchange Act, incorporated by reference herein).
3. Stock Purchase Agreement between Mr. Connor and Mr. Richardson dated
December 22, 1999 (included as Exhibit 3 to the Amendment No. 1 to the
Schedule 13D filed with the Commission on January 4, 2000, and,
pursuant to Rule 12b-32 under the Exchange Act, incorporated by
reference herein).
4. Pledge Agreement, dated as of January 31, 2000, between Mr. Connor and
Mr. Richardson (filed herewith).
5. Amendment to Stock Purchase Agreement, dated as of January 31, 2000,
among Mr. Connor, Mr. Richardson and certain other shareholders (filed
herewith).
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SIGNATURE
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
March 1, 2000
/s/ Charles F. Connor, Jr.
--------------------------
Charles F. Connor, Jr.
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EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
1 Agreement and Plan of Merger dated as of November 14, 1997 *
among the Company, Sub, Sagebrush, Mr. Connor and L. Dent
Miller and the related Plan of Merger (included as Appendix A
to the Joint Proxy Statement-Prospectus constituting a part of
the Company's Registration Statement on Form S-4 (Registration
No. 333-43921) filed with the Commission on January 8, 1998
and, pursuant to Rule 12b-32 under the Exchange Act,
incorporated by reference herein).
2 Affiliate Agreement dated as of January 29, 1998 between Mr. *
Connor and the Company (included as Exhibit 2 to the Schedule
13D of Mr. Connor filed with the Commission on February 9,
1998 and, pursuant to Rule 12b-32 under the Exchange Act,
incorporated by reference herein).
3 Stock Purchase Agreement between Mr. Connor and Mr. Richardson *
dated December 22, 1999 (included as Exhibit 3 to the
Amendment No. 1 to the Schedule 13D filed with the Commission
on January 4, 2000, and, pursuant to Rule 12b-32 under the
Exchange Act, incorporated by reference herein).
4 Pledge Agreement, dated as of January 31, 2000, between Mr. 8
Connor and Mr. Richardson.
5 Amendment to Stock Purchase Agreement, dated as of January 31, 12
2000, among Mr. Connor, Mr. Richardson and certain other
shareholders.
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<PAGE> 1
EXHIBIT 4
PLEDGE AGREEMENT
January 31, 2000
Charles F. Connor, Jr.
3238 West Main Street
Claremont, NC 28610
Dear Charles:
In connection with my purchase from you today of your shares of the
common stock of Fresh Foods, Inc. (the "Company") pursuant to a Stock Purchase
Agreement dated December 22, 1999 between us, as amended as of the date hereof
(as so amended, the "Stock Purchase Agreement"), and my payment of a portion of
the purchase price for such shares by my delivery to you of my promissory note
of even date herewith in the principal amount of $3,598,910.06 (the "Note), this
is to confirm the terms of my pledge to you of 422,011 of the shares of the
Company's common stock so purchased from you (the "Shares") to secure my
obligations to you hereunder and under the Note (the "Secured Obligations"),
pursuant to the terms of this Pledge Agreement (this "Agreement"). In connection
with this Agreement, Wachovia Securities, Inc. ("WSI"), you and I are
contemporaneously entering into a Securities Account Control Agreement in the
form attached hereto as Exhibit A (the "Securities Account Control Agreement"),
providing for the Shares to be held in a controlled account with WSI under my
name, designated as the James H. Richardson, Jr. Pledge Account, to perfect your
security interest in the Shares and any other Collateral described herein.
PLEDGE; TERMINATION OF PLEDGE. To secure the Secured Obligations, I hereby
pledge and grant to you a security interest in the Collateral, as defined
herein, subject to the terms of this Agreement. Such pledge and security
interest shall constitute a first priority lien upon the Collateral and shall
continue in full force and effect until all of the Secured Obligations shall
have been fully and finally paid. Upon the full and final payment of all of the
Secured Obligations, the pledge and security interest created hereby shall
terminate, you shall have no further interest in the Account or the other
Collateral, and you shall take any and all such actions as I reasonably request
to evidence your release of the pledge and security interest created hereby and
to terminate your interest in the Account.
COLLATERAL. The "Collateral" consists of:
(a) the Shares and, except as otherwise provided herein, all dividends
and distributions on or with respect to, and all securities, cash or other
property issued in exchange or substitution for (whether pursuant to merger,
consolidation, recapitalization, stock split or otherwise) the Shares or any of
the foregoing;
(b) all of my interests in the Account and the cash, securities and
other property held therein; and
(c) the proceeds of any of the foregoing.
<PAGE> 2
MAINTENANCE OF COLLATERAL. While the Collateral is subject to this Agreement,
(a) I shall not, and shall not have or exercise any authority to, sell,
exchange, pledge, hypothecate or otherwise dispose of any the Collateral or any
interest therein without your prior written consent, (b) I shall not, and shall
not have or exercise any authority to, have any certificates for the Shares or
any other Collateral consisting of securities transferred out of the Account or
to me or in my name, and (c) the Collateral shall be and remain free and clear
of any and all liens, encumbrances and adverse claims (including any
restrictions on transfer other than restrictions imposed by applicable
securities laws) other than the pledge and security interest hereunder. In the
event that any of the Collateral should come into my hands outside the Account,
I will promptly deposit the same into the Account. In the event that, due to
circumstances reasonably beyond your control, WSI fails or refuses to hold any
of the Collateral in the Account, such Collateral may be held directly by you
pursuant to and subject to the terms of this Pledge Agreement until such time as
I establish another account similar to the Account and reasonably acceptable to
you to hold such Collateral, which other account will then become the Account
hereunder. While held in the Account, the Collateral shall be deemed held for
your benefit to the extent of your security interest therein, and WSI or any
other person having custody of the Collateral in such Account shall be deemed
your agent for purposes of perfecting such security interest.
RIGHTS PRIOR TO DEFAULT. For so long as no Event of Default (defined herein) has
occurred and is continuing, I shall be entitled to (a) have and exercise all
voting and consensual rights and powers pertaining to the Shares or any other
securities included in the Collateral, (b) receive any and all Ordinary
Dividends with respect to the Shares free and clear of this pledge, and (c)
direct that any other cash held in the Account be applied to payment of the
Secured Obligations. "Ordinary Dividend" means any regular periodic dividend
paid on the Shares or other securities included in the Collateral that, together
with all other such dividends paid within the then-preceding 12 months, does not
exceed 6% of the then fair market value of the securities on which such dividend
is paid. If necessary and I so request, you shall issue appropriate instructions
to WSI as to my voting and consensual rights and rights to receive Ordinary
Dividends and apply payments to the Secured Obligations as provided in this
paragraph. Upon the occurrence and during the continuation of any Event of
Default, the foregoing rights shall terminate, and you shall be entitled to have
and exercise all such voting and consensual rights and to retain all such
Ordinary Dividends as part of the Collateral hereunder.
EVENTS OF DEFAULT. The occurrence of any one or more of the following shall
constitute an "Event of Default" hereunder and under the Note:
(a) My failure to make any payment or prepayment of principal of or interest on
the Note after the same becomes due, unless such failure is cured within
ten (10) days from the due date; or
(b) My failure to maintain life insurance on my life in an amount at least
equal to the outstanding principal balance of the Note with an appropriate
collateral assignment of such policy and the proceeds thereof reasonably
satisfactory to you to secure payment of the Note, subject to no other
liens, encumbrances or adverse claims (the "Collateral Assignment");
provided that until March 1, 2000 such failure shall not constitute an
Event of Default so long as I am diligently pursuing obtaining such life
insurance and providing such Collateral Assignment as soon as practicable
and by no later than March 1, 2000; or
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(c) My failure to perform any other obligations under this Agreement, the Note,
the Securities Account Control Agreement or the Collateral Assignment,
unless such failure is cured within fifteen (15) days after notice thereof
is given to me; or
(d) My failure to perform any of my obligations under my Guaranty Agreement of
even date herewith in favor of you (the "Guaranty Agreement"), unless such
failure is cured within fifteen (15) days after notice thereof is given to
me.
(e) The commencement of any proceedings by or against me, and with respect to
me as debtor, under any applicable bankruptcy, insolvency or similar laws
for the relief of debtors, other than an involuntary proceeding against me
that is dismissed within 60 days after commencement, or any general
assignment by me for the benefit of creditors, or any other action taken by
me or my creditors resulting in the marshalling of my assets and
liabilities to pay creditors.
REMEDIES UPON DEFAULT. In addition to any and all other rights and remedies you
may have under applicable law, or under the terms of the Note, the Guaranty
Agreement, the Securities Account Control Agreement, the Collateral Assignment
or any other instrument evidencing or securing the Secured Obligations, or
provided elsewhere in this Agreement, upon the occurrence and during the
continuation of an Event of Default you shall have, with respect to the
Collateral, all of the rights and remedies of a secured party under the North
Carolina Uniform Commercial Code. Without limiting the generality of the
foregoing, upon the occurrence and during the continuation of an Event of
Default, (a) you may assume exclusive control over the Account in accordance
with the terms of the Securities Account Control Agreement (provided that you
shall send to me a copy of any "Notice of Exclusive Control" given under the
Securities Account Control Agreement at the time it is sent to WSI), (b) you may
take possession of all or any part of the Collateral for purposes of exercising
your rights and remedies with respect thereto, (c) you may apply any portion of
the Collateral that consists of cash to the Secured Obligations, and (d) you may
sell any or all of the Collateral at public or private sale in such commercially
reasonable manner as you may determine and apply the proceeds of such sale first
to your reasonable costs and expenses of retaking, holding, preparing for
disposition, processing and disposing of the Collateral (including reasonable
attorneys' fees and legal expenses) and then to satisfaction of the Secured
Obligations in such order as you may determine, with any surplus to be paid to
me or to such other person as is legally entitled thereto. In the event that
such proceeds are insufficient to satisfy the Secured Obligations in full, I
shall remain liable for any deficiency. Any such sale may be conducted in any
commercially reasonable manner, and you shall not be liable for any diminution
in value of the Collateral pending such sale or pending your exercise of your
rights and remedies hereunder. You shall give me at least fifteen (15) days
notice prior to any such sale, and I agree that such notice shall be deemed
commercially reasonable. If any of the Collateral consisting of securities may
not be publicly sold due to restrictions imposed by applicable securities laws,
or because the applicable public securities markets will not absorb the volume
represented by such sale, it shall be commercially reasonable for you to sell
such Collateral in one or more private sales conducted in a commercially
reasonable manner, even though at a price per share or other unit less than the
price prevailing in the public securities markets.
FURTHER ASSURANCES. As reasonably requested by you, I will from time to time
execute and deliver such financing statements, stock powers, and other
instruments as you may reasonably
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request in order to maintain, perfect or evidence the pledge and security
interest granted hereby and to enable you to exercise your rights and remedies
hereunder.
NOTICES. Any notice to be given to me in connection with this Agreement or the
Note shall be in writing and shall be directed to me at the address set forth
below my signature hereto, or such other address in North Carolina as I may
hereafter provide to you in writing (my "Notice Address"). Such notice will be
deemed effective upon the earlier of my actual receipt thereof or the actual
delivery thereof to my Notice Address, addressed to me, whether or not I accept
receipt. Any notice to be given to you in connection with this Agreement or the
Note shall be in writing and shall be directed to you at the address set forth
below your signature hereto, or such other address in North Carolina as you may
hereafter provide to me in writing (your "Notice Address"). Such notice will be
deemed effective upon the earlier of your actual receipt thereof or the actual
delivery thereof to your Notice Address, addressed to you, whether or not you
accept receipt.
No waiver by you of any of your rights under this Agreement at any time
shall constitute or evidence any waiver of any other rights or any waiver of
such rights at any other time. If any provision hereof shall be invalid or
unenforceable, such shall not impair the validity or enforceability of any other
provisions hereof.
This Agreement shall be governed by the laws of the State of North
Carolina, including the applicable provisions of the North Carolina Uniform
Commercial Code.
Please indicate your acceptance of this Agreement by signing a copy of
this letter in the space provided below, whereupon it will become my binding
obligation effective the date hereof.
Very truly yours,
/s/ James C. Richardson, Jr.
-------------------------------
James C. Richardson, Jr.
NOTICE ADDRESS:
361 Second Street, N.W.
Hickory, North Carolina 28601
ACCEPTED:
/s/ Charles F. Connor, Jr.
- ----------------------------------
Charles F. Connor, Jr.
NOTICE ADDRESS:
3238 West Main Street
Claremont, NC 28610
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EXHIBIT 5
AMENDMENT TO STOCK PURCHASE AGREEMENT
This Amendment (this "Amendment") is made and entered as of January 31,
2000 by and among Charles F. Connor, Jr. ("Connor"), the other shareholders of
Fresh Foods, Inc. listed on Exhibit A hereto (with Connor, the "Selling
Shareholders), and James C. Richardson, Jr. ("Buyer").
RECITALS
A. Connor, as "Seller," and Buyer have entered into a Stock Purchase
Agreement dated as of December 22, 1999 (the "Stock Purchase Agreement"),
providing for the sale of certain shares of the common stock (the "Stock") of
Fresh Foods, Inc. (the "Corporation") to Buyer.
B. Connor and Buyer have agreed to enter into this Amendment to
correct, clarify and modify certain of the terms of the Stock Purchase Agreement
and to provide for the joinder therein of the other Selling Shareholders.
C. The other Selling Shareholders have agreed to enter into this
Amendment to provide for their sale to Buyer of their shares of the Stock to
Buyer under the terms of the Stock Purchase Agreement, as amended hereby.
D. Capitalized terms used herein and not otherwise defined herein but
defined in the Stock Purchase Agreement shall have the meanings herein that are
ascribed to them in the Stock Purchase Agreement.
NOW, THEREFORE, the parties hereby agree that the Stock Purchase
Agreement be and hereby is amended as follows:
1. All references in the Stock Purchase Agreement to "Seller" shall refer
collectively to the Selling Shareholders. The numbers of shares of the
Stock to be sold by each of the respective Selling Shareholders is set
forth by their respective names on Exhibit A hereto. The total number
of shares of the Stock to be sold pursuant to the Stock Purchase
Agreement shall be 715,163, rather than the 716,063 shares originally
stated therein.
2. The purchase price for the Stock to be purchased and sold under the
Stock Purchase Agreement shall be $8.528 per share, rather than the
$8.25 per share originally stated therein. The aggregate purchase price
to be paid in cash at the Closing shall be Two Million Five Hundred
Thousand Dollars ($2,500,000.00), including the $100,000.00 held as the
Earnest Money Deposit under the Stock Purchase Agreement. Such
aggregate purchase price to be paid in cash at the Closing shall be
paid for the accounts of the respective Selling Shareholders in the
respective amounts set forth on Exhibit A hereto, against receipt of
the shares so purchased, but shall be remitted to Connor as agent for
all such Selling Shareholders, to be remitted by him to the other
Selling Shareholders promptly upon his receipt thereof from Buyer in
accordance with the amounts to be paid to them as set forth on Exhibit
A. Each of the other Selling Shareholders hereby appoints Connor as
his, her or its agent to deliver his, her or its shares of the Stock at
the Closing and to receive payment of the cash purchase price therefor
for his, her, or its account and to promptly remit to him, her or it
<PAGE> 2
the amount to which he, she or it is so entitled therefrom. The Selling
Shareholders agree that such remittance to Connor shall be a full
acquittance of Buyer for his obligation to make such payments at the
Closing.
3. As provided in the Stock Purchase Agreement and as indicated on Exhibit
A hereto, a portion of the purchase price due Connor will be paid by
means of a Promissory Note for the balance due Connor, which shall be
in the principal amount of $3,598,910.06. It is further agreed that
such Promissory Note will be secured by the pledge of 422,011 shares of
the Stock. Connor and Buyer have agreed to the form of such Promissory
Note and of a Pledge Agreement to effect such pledge, both of which are
being executed and delivered as of the date hereof. The Promissory Note
and the Pledge Agreement address the matters originally addressed in
part in Articles II, IV and V of the Stock Purchase Agreement;
consequently, said Articles II, IV and V shall be superseded thereby
and are of no further force or effect. The terms set forth in Articles
VII and VIII of the Stock Purchase Agreement are also amended to
conform to the terms of the Promissory Note and the Pledge Agreement
and the terms of this Amendment.
4. It is agreed that, in the case of any shares of the Stock to be sold
under the Stock Purchase Agreement as amended hereby which are held by
a broker in "street name" for the account of the Seller Shareholder,
delivery of such shares may be made at the Closing by instructing the
broker to transfer such shares into an account held in the name of
Buyer (with the certificates for such shares to be subsequently
delivered to Buyer if Buyer so elects), except that any such shares
that are to be subject to the Pledge Agreement shall be delivered as
provided in the Pledge Agreement. Delivery of shares in such manner
shall be subject to appropriate confirmations reasonably satisfactory
to Buyer that such delivery is effective to transfer beneficial
ownership to Buyer free and clear of all liens, encumbrances, and
adverse claims.
5. Article VI of the Stock Purchase Agreement is hereby amended in its
entirety to provide as follows:
(a) Each of the Selling Shareholders hereby represents and warrants to
Buyer that, at the Closing, Buyer will acquire the shares of the Stock
being sold by such Selling Shareholder as set forth on Exhibit A free
and clear of all liens, encumbrances and adverse claims, other than (1)
in the case of the shares subject thereto, the Pledge Agreement in
favor of Connor and (2) restrictions on transfer imposed by applicable
securities laws. Each of the Selling Shareholders further represents
and warrants to Buyer that he, she or it agrees not to make any further
purchases of the Stock for a period of five (5) years after the date
hereof (or, in the case of Connor and any person or entity controlled
by him, during Connor's lifetime), other than purchases of Stock held
as security for the Note in the event it is sold upon a default
thereunder.
(b) Buyer hereby represents and warrants to each of the Selling
Shareholders that he is purchasing the shares of the Stock for
investment purposes and not with a view to or in connection with any
public resale thereof, and that he recognizes that Connor may be deemed
to be an "affiliate" of the Corporation and that, by reason thereof,
some or all of the Stock being purchased by him may be deemed to be
"restricted securities" as defined in Rule 144 under the federal
Securities Act of 1933, may be subject to a holding period prior to any
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public resale thereof pursuant to Rule 144, and may be required to be
held by him indefinitely, and that he will not dispose of such shares
in violation of the registration requirements of applicable federal or
state securities laws.
Except as expressly or by necessary implication amended hereby, the Stock
Purchase Agreement remains in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first above written.
BUYER:
/s/ James C. Richardson, Jr.
-------------------------------------
James C. Richardson, Jr.
SELLING SHAREHOLDERS:
/s/ Charles F. Connor, Jr.
-------------------------------------
Charles F. Connor, Jr.
COUNTY-WIDE INSURANCE AGENCY, INC.
By /s/ Charles F. Connor, Jr.
-------------------------------------
Charles F. Connor, Jr., President
/s/ Charles F. Connor, III
-------------------------------------
Charles F. Connor, III
/s/ Jean Connor
-------------------------------------
Jean Connor
/s/ Eric Connor
-------------------------------------
Eric Connor
/s/ Tracy Connor
-------------------------------------
Tracy Connor
3
