SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June _14, 1996
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JW CHARLES FINANCIAL SERVICES, INC.
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(Exact name of Registrant as Specified in its Charter)
Florida 0-14772 58-1545984
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(State or other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation or Idenfication No.)
Organization)
980 North Federal Highway
Suite 210
Boca Raton, Florida 33432
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 338-2600
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On June 11, 1996, JW Charles Financial Services, Inc. (the
"Company") entered into a definitive agreement with Gilman CMG,
Inc. ("Gilman") for, and simultaneously consummated, the
repurchase of all of the Company's shares of common stock, $.001
par value per share ("Common Stock"), owned by Gilman under an
original stock repurchase agreement. Effective as of April 15,
1996, the Company had repurchased 315,510 shares of Common Stock
from Gilman pursuant to a predecessor agreement, which was
amended and restated by the June 11, 1996 agreement to accelerate
the repurchase by the Company of the remaining 1,600,339 shares
of Common Stock owned by Gilman. The total consideration paid by
the Company consists of a promissory note in the principal amount
of $6,125,000, along with the $1,155,000 in cash that was
previously paid to Gilman in connection with the April 15, 1996
installment purchase under the original stock repurchase
agreement.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) The following documents are filed as exhibits to this
Form 8-K:
(i) Amended and Restated Stock Repurchase Agreement
among JW Charles Financial Services, Inc.,
Gilman CMG, Inc., Marshall T. Leeds and Joel E.
Marks, dated June 11, 1996.
(ii) $6,125,000 Promissory Note issued by JW Charles
Financial Services, Inc. to Gilman CMG, Inc.,
dated June 11, 1996.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned hereunto duly authorized.
Date: June 14, 1996. JW CHARLES FINANCIAL SERVICES, INC.
/s/ Joel E. Marks
Joel E. Marks
Vice Chairman and Chief Financial
Officer
AMENDED AND RESTATED
STOCK REPURCHASE AGREEMENT
THIS AMENDED AND RESTATED STOCK REPURCHASE AGREEMENT (the
"Agreement") is made and entered into as of this 11th day of
June, 1996, by and among JW CHARLES FINANCIAL SERVICES, INC., a
Florida corporation ("Purchaser"), and GILMAN CMG, INC., a
Delaware corporation ("Seller"), and, solely for purposes of
Section 3 of this Agreement, MARSHALL T. LEEDS ("Leeds") and JOEL
E. MARKS ("Marks").
W I T N E S S E T H:
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WHEREAS, on May 15, 1995, Seller, Purchaser, Leeds and Marks
entered into an agreement (the "Stock Repurchase Agreement")
pursuant to which, among other things, Purchaser agreed to
purchase, and Seller agreed to sell, the 1,915,849 shares of the
$.001 par value per share common stock of Purchaser ("Common
Stock") then owned by Seller in installments from time to time,
but not later than April 15, 2000; and
WHEREAS, on May 14, 1996, the parties entered into that
certain Agreement in Principle ("Agreement in Principle")
pursuant to which, effective as of April 15, 1996, Purchaser
repurchased 315,510 shares of Common Stock (the "Purchased
Shares") pursuant to the Stock Repurchase Agreement, and the
parties undertook to restructure the repurchase of the remaining
1,600,339 shares of Common Stock (the "Remaining Shares") owned
by Seller, constituting approximately 44% of the issued and
outstanding Common Stock; and
WHEREAS, the Purchased Shares and related stock powers
remain in escrow with North American Transfer Co. (the "Escrow
Agent") pending Purchaser's repurchase of the Remaining Shares;
and
WHEREAS, pursuant to the Agreement in Principle, the parties
to the Stock Repurchase Agreement now desire to amend and restate
the Stock Repurchase Agreement to provide for the immediate
repurchase of the Remaining Shares by Purchaser, the release from
escrow and cancellation of the Purchased Shares and certain other
related matters;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows:
1. AMENDMENT AND RESTATEMENT; SALE AND REPURCHASE OF
REMAINING SHARES.
The Stock Repurchase Agreement is hereby amended and
restated in its entirety, and is no longer in force or effect to
any extent, being superseded and replaced by this Agreement from
and after this date. Subject in all respects to the terms and
provisions of this Agreement, Purchaser hereby repurchases, and
Seller hereby sells and transfers to Purchaser, the Remaining
Shares for a total repurchase price of $6,125,000 (the
"Repurchase Price"), payable in accordance with Section 2 hereof.
2. PAYMENT FOR REMAINING SHARES; DELIVERY OF CERTIFICATES.
Contemporaneously with the execution and delivery of this
Agreement:
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(a) Purchaser is delivering to Seller in full payment of
the Remaining Shares Purchaser's promissory note in the amount of
$6,125,000 in the form of Exhibit A to this Agreement (the
"Note");
(b) Pursuant to the terms of the Escrow Agreement by and
among Escrow Agent, Purchaser and Seller dated as of May 15,
1996, Seller and Purchaser are executing a joint Notice of
Release to the Escrow Agent which instructs the Escrow Agent to
take any and all actions necessary to cause the delivery to
Purchaser of the certificates representing the Purchased Shares
and the Remaining Shares and duly executed blank stock powers
therefor.
3. ELECTION OF BOARD OF DIRECTORS.
(a) Until all amounts due pursuant to (i) the Note and (ii)
that certain Loan Agreement dated May 15, 1995 by and between
Purchaser and Seller have been paid to Seller in full, Leeds,
Marks and Purchaser shall use their respective best efforts, and,
in the case of Leeds and Marks, vote their respective shares of
Purchaser, to cause the Board of Directors of Purchaser (the
"Board") to be comprised of an even number of directors, and at
no time less than four (4), with Seller entitled to designate
persons as nominees for one-half (1/2) of the total Board
positions. Each nominee designated by Seller must be reasonably
acceptable to Leeds and Marks. If the position of a director
designated by Seller becomes vacant for any reason, Seller shall
be entitled to designate the person to become the successor
director, provided that such successor director must be
reasonably acceptable to Leeds and Marks. If Seller notifies
Leeds and Marks in writing that it wishes to remove a director
whom it has designated, the parties hereto shall cooperate in
taking all lawful action necessary to effect the removal of such
director as promptly as practicable.
(b) Seller agrees to instruct its designees to act in good
faith and use their best efforts in discharging their respective
duties as a director of Purchaser.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller
represents and warrants to, and agrees with, Purchaser as
follows:
(a) Freedom from Encumbrances. Seller is the record and
lawful owner of the Remaining Shares. The Remaining Shares are
free and clear of all liens, charges, rights, pledges,
hypothecations, and encumbrances of any kind whatsoever in favor
of any person.
(b) Organization, Power, Etc. Seller is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of Delaware. Seller is duly qualified to conduct
business in all other states or jurisdictions in which the
failure to be so qualified would adversely affect Seller's
ability to perform its obligations hereunder. Seller has all
requisite corporate power and authority to carry on its business
as now being conducted, and to execute and deliver this Agreement
and to perform its obligations hereunder.
(c) Authorization of Agreement. The execution, delivery,
and performance of this Agreement by Seller and the consummation
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by it of the transactions contemplated hereby have been duly and
effectively authorized by all requisite corporate action. This
Agreement constitutes the legal, valid, and binding obligation of
Seller, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(d) Effect of Agreement. Neither the execution and
delivery by Seller of this Agreement nor the consummation by it
of the transactions contemplated hereby will violate any
provision of law, the Certificate of Incorporation or By-laws of
Seller, any judgment, award, or decree, or any indenture,
agreement, or other instrument to which Seller is a party, or by
which Seller or any of its properties or assets is bound, or
conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any such
indenture, agreement, or other instrument.
(e) No Brokers. No broker, agent, finder, consultant, or
other person has been retained by or has acted on behalf of
Seller (other than legal and accounting advisors), or is entitled
to be paid based upon any agreement or understanding made by
Seller in connection with the transactions contemplated by this
Agreement or the Stock Repurchase Agreement. Purchaser shall
have no liability for any broker's fee, finder's fee,
consultant's fee, or similar third party remuneration by reason
of any action of Seller.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to, and agrees with, Seller as follows:
(a) Organization, Power, Etc. Purchaser has all requisite
power and authority to execute and deliver this Agreement and the
Note and to perform its obligations hereunder and thereunder.
Purchaser represents and warrants that it is duly organized,
validly existing, and in good standing under the laws of the
State of Florida and is duly qualified to conduct business in all
other states and jurisdictions in which the failure to be so
qualified would adversely affect its ability to perform its
obligations hereunder.
(b) Authorization of Agreement. The execution, delivery,
and performance of this Agreement and of the Note by Purchaser
and the consummation by Purchaser of the transactions
contemplated hereby and thereby have been duly and effectively
authorized by all requisite corporate action. This Agreement and
the Note constitute the legal, valid, and binding obligation of
Purchaser, enforceable in accordance with their respective terms,
subject to bankruptcy, insolvency, and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles.
(c) Effect of Agreement. Neither the execution and
delivery by Purchaser of this Agreement or the Note nor the
consummation by Purchaser of the transactions contemplated hereby
or thereby will violate any provision of law, or any
organizational documents of Purchaser, any judgment, award, or
decree, or any indenture, agreement, or other instrument to which
Purchaser is a party, or by which Purchaser or any of its
properties or assets are bound, or conflict with, result in a
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breach of, or constitute (with due notice or lapse of time or
both) a default under any such indenture, agreement, or other
instrument.
(d) No Brokers. No broker, agent, finder, consultant, or
other person has been retained by or has acted on behalf of
Purchaser (other than legal and accounting advisors), or is
entitled to be paid based upon any agreement or understanding
made by Purchaser in connection with the transactions
contemplated by this Agreement or the Stock Repurchase Agreement.
Seller shall have no liability for any broker's fee, finder's
fee, consultant's fee, or similar third party remuneration by
reason of any action of Purchaser.
6. COVENANTS OF PURCHASER. Purchaser covenants and agrees
that at all times until the Note is paid in full:
(a) Indebtedness. Neither Purchaser nor any of its
subsidiaries, without the prior written consent of Seller, will
create, incur, assume, or suffer to exist liability for,
contingently or otherwise, any indebtedness for borrowed money
(including, without limitation, any guaranty of the indebtedness
of another person), if Purchaser's consolidated debt to equity
ratio, determined in accordance with generally accepted
accounting principles as applied in the United States of America
("GAAP") after giving effect to such indebtedness and (whether or
not in accordance with GAAP) treating any guaranty of the
indebtedness of another person as an indebtedness of Purchaser in
the amount covered by such guaranty, is greater than 3 to 1,
except that the following will be permitted in any event and will
not be included in the calculation of the debt to equity ratio as
set forth above:
(i) all current indebtedness of Purchaser to Seller
whether pursuant to this Agreement or otherwise;
(ii) unsecured current liabilities incurred with trade
creditors in the ordinary course of business other than
those which are for money borrowed or are evidenced by
bonds, debentures, notes, or other similar instruments;
(iii) money borrowed from banks or other financial
institutions in the ordinary course of business solely for
the purpose of purchasing securities for the account of
(A) any subsidiary of Purchaser that is registered as a
broker/dealer under the Securities Exchange Act of 1934, as
amended, or (B) customer margin accounts of any such
subsidiary;
(iv) notes or similar written instruments executed in
the ordinary course of business solely for the purpose of
providing fidelity bond insurance and insurance of customer
accounts in excess of the coverage provided by the
Securities Investor Protection Corporation (SIPC); and
(v) purchase money mortgage obligations incurred in
the ordinary course of business by Purchaser and its
subsidiaries that do not exceed $1,000,000 in the aggregate
on a consolidated basis at any time.
For purposes of this subsection (a), equity and stockholders'
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equity will be deemed to include all preferred stock of
Purchaser, whether redeemable or nonredeemable, regardless of the
treatment of such preferred stock under GAAP.
(b) Minimum Stockholders' Equity. Stockholders'
equity as of the end of any fiscal quarter, excluding outstanding
preferred stock, will not be less than $7,000,000, plus 30% of
Purchaser's net income for such fiscal quarter-end period, plus
75 % of net proceeds from any Common Stock issuances.
(c) Minimum Earnings. For four of the quarters within
any consecutive six quarterly period, Purchaser's reported net
income, as defined by GAAP, plus expenses for the amortization of
intangible expenses associated with the acquisition of assets or
equity, will in the aggregate exceed $1,500,000.
(d) Maintenance of Brokerage Business. Purchaser will
continue to operate retail securities brokerage offices through
locations owned by Purchaser's affiliates and through
independently owned offices that are correspondents of an
affiliate of Purchaser, and the operation of such brokerage
business will remain a substantial part of Purchaser's corporate
strategy for growth.
(e) Corporate Existence and Qualification. Purchaser
will do, or cause to be done, all things necessary to preserve,
renew, and maintain in full force and effect its corporate
existence and the corporate existence of Corporate Securities
Group, Inc., JW Charles Securities, Inc., and JW Charles Clearing
Corp. (collectively, the "Principal Subsidiaries") and their
respective rights, licenses, and permits. Purchaser and the
Principal Subsidiaries will comply with all material laws
applicable to them. The businesses of Purchaser and the
Principal Subsidiaries will be operated in a proper manner and
substantially as presently operated or proposed to be operated;
and at all times Purchaser will maintain, preserve, and protect
its franchises and trade names and preserve its property used or
useful in the conduct of the business of Purchaser or the
Principal Subsidiaries, and keep the same in good repair, working
order, and condition, and from time to time make, or cause to be
made, all needful and proper repairs, renewals, replacements,
betterments, and improvements thereto, so that the business
carried on in connection therewith may be properly and
advantageously conducted at all times.
(f) Financial Statements; SEC Reports. Purchaser will
keep its books of account in accordance with GAAP and furnish to
Seller within 120 days after the close of any fiscal year a
consolidated balance sheet as of the close of such year and
consolidated statements of income and retained earnings and
consolidated statements of cash flows for such year, each as
audited and certified by Purchaser's independent public
accountants. Within 60 days after each of the first three fiscal
quarters, Purchaser will furnish to Seller a balance sheet and
income statement for such quarter certified by Purchaser's chief
financial officer. Purchaser will furnish to Seller with
reasonable promptness such other data as Seller reasonably
requests and will at all times and from time to time permit
Seller by or through any of its officers, authorized agents,
attorneys, or accountants to inspect and make extracts from
Purchaser's books and records. Purchaser will furnish Seller,
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within five days of filing of or delivery to the Securities and
Exchange Commission, a copy of all Reports on Form 10-K, 10-Q and
8-K, and of all of Purchaser's proxy statements and annual or
quarterly reports to stockholders.
(g) Taxes and Claims. Purchaser will promptly pay and
discharge and cause its subsidiaries to promptly pay and
discharge (i) all taxes, assessments and governmental charges
upon or against Purchaser, its subsidiaries, or their respective
assets, including payroll taxes, prior to the date on which
penalties accrue with respect thereto, unless and to the extent
that such taxes are being diligently contested in good faith and
by appropriate proceedings and appropriate reserves therefor have
been established on the books and records of Purchaser; and (ii)
all lawful claims, whether for labor, materials, supplies,
services, or anything else that reasonably could, if unpaid,
result in the placement of a lien or charge upon the properties
or assets of Purchaser or its subsidiaries unless and to the
extent that the same are transferred to bond, and are being
diligently contested in good faith by appropriate proceedings,
and appropriate reserves therefor have been established on the
books and records of Purchaser.
(h) Books and Records. Purchaser will maintain at all
times true and correct books, records, and accounts in which true
and correct entries will be made of its transactions in
accordance with GAAP; and by means of appropriate quarterly
entries reflected in its accounts and in all financial statements
furnished pursuant to subsection (f) of this Section 6, establish
proper liabilities and reserves for all taxes and proper reserves
for depreciation, renewal, and replacement, obsolescence, and
amortization of its properties and bad debts, all in accordance
with GAAP.
(i) Inspection by Seller; Audits. Purchaser will
allow any authorized representative of Seller to visit and
inspect any of the properties of Purchaser and its subsidiaries,
to examine the books of account and other records and files of
Purchaser or any of its subsidiaries, to make copies thereof and
to discuss the affairs, business, finances, and accounts of
Purchaser or any of its subsidiaries with the officers and
employees of Purchaser or any of its subsidiaries, all at such
reasonable times and as often as Seller may reasonably request.
(j) Pay Indebtedness to Seller and Perform Other
Covenants. Purchaser will make full and timely payments of the
principal of and interest on the Note and all other indebtedness
of Purchaser to Seller, whether now existing or hereafter
arising, and duly comply with all the terms and covenants
contained in each of the instruments and documents given to
Seller pursuant to this Agreement in the manner set forth herein.
(k) Litigation. Purchaser will promptly notify Seller
upon the commencement of any action, suit, claim, counterclaim,
or proceeding against, or investigation of, Purchaser or any of
its subsidiaries in which the damages claimed exceed $500,000 or
which Purchaser reasonably believes may materially and adversely
affect the business of Purchaser or any of its subsidiaries;
provided that Purchaser will have no obligation to notify Seller
if the alleged liability is fully covered by insurance, excluding
application of any standard deductible. If the damages claimed
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in any action, suit, claim, counterclaim, or proceeding in which
the liability alleged is not covered by insurance exceed
$1,000,000 or if Purchaser reasonably believes the litigation
could materially and adversely affect its business or that of any
of its subsidiaries, Purchaser will also provide Seller, upon
request, with an opinion of counsel concerning the litigation or
investigation and the probable outcome thereof.
(l) Regulatory Enforcement Actions. Purchaser will
promptly notify Seller of the institution of any investigation or
indictment, the filing of any complaint, the issuance of any
cease and desist order or injunction, or the imposition of any
fine or non-monetary sanction, whether civil or criminal, by any
regulatory enforcement agency, district attorney's office,
attorney general's office or U.S. Attorney's office which
involves Purchaser or any of its subsidiaries and could
reasonably be expected to have a material adverse effect on
Purchaser or any of its subsidiaries. Such notification will
include a description of the event that led to such action by the
enforcement agency.
(m) Defaults or Assessments. Purchaser will promptly
notify Seller in writing of (i) any material assessment against
it by any taxing authority for unpaid taxes (and will supply
Seller with copies of all notices from the Internal Revenue
Service or any other taxing authority with respect to any such
matter); (ii) any default by Purchaser or any of its subsidiaries
in the performance of (or any material modification of, or
waivers granted in connection with) any of the material terms or
conditions contained in any material agreement, mortgage,
indenture or instrument to which Purchaser or any of its
subsidiaries is a party or which is binding upon Purchaser; and
(iii) any default by Purchaser in the payment of any indebtedness
which may, singly or in the aggregate, have a material adverse
effect on the business, assets, financial condition, operations,
or prospects of Purchaser and its subsidiaries taken as a whole.
(n) Change of Name, Principal Place of Business, Etc.
Purchaser will notify Seller immediately of any change in its
name, principal place of business, the office where its books and
records are kept, or its agent for service of process.
(o) Mergers, Etc. Without Seller's consent, Purchaser
will not wind up, liquidate or dissolve itself, reorganize, merge
or consolidate with or into, or convey, sell, assign, transfer,
lease, or otherwise dispose of all or substantially all of its
assets to any person.
(p) Bankruptcy or Insolvency. Purchaser shall not
bring any action seeking its dissolution or liquidation of its
assets or seeking the appointment of a trustee, interim trustee,
receiver, or other custodian for any of Purchaser's property; nor
shall Purchaser commence a voluntary case under the Federal
Bankruptcy Code, or institute a reorganization or arrangement
proceeding for the settlement, readjustment, composition, or
extension of Purchaser's debts upon any terms; nor shall
Purchaser otherwise bring an action or petition seeking similar
relief or alleging that Purchaser is insolvent or unable to pay
its debts as they mature.
(q) Limitation of Remedies. Seller's sole and exclusive
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remedy for a breach of or other failure to comply with this
Section 6 shall be limited to those remedies set forth in the
Note.
7. ADDITIONAL AGREEMENTS.
(a) Confidentiality.
(i) Seller covenants and agrees that it will receive,
hold, and maintain the Confidential Information, as defined
below, in the strictest confidence and will not disclose the same
to any individual, partnership, joint venture, corporation,
limited liability company, trust, unincorporated organization and
government. Seller agrees that it shall protect Confidential
Information from disclosure and in no event take any action
causing, or fail to take action necessary in order to prevent,
any Confidential Information disclosed to Seller to lose its
character as Confidential Information, except as required by law.
Seller agrees that it shall not use, reproduce, disclose, or
otherwise disseminate Confidential Information, except for its
designees, chosen in accordance with Section 3, to perform their
duties as directors of Purchaser.
(ii) For purposes of this Agreement, the term
"Confidential Information" means all technical, business, and
other information relating to Purchaser's customers, operations,
finances, and business which derives economic value, actual or
potential, from not being generally known to or readily
ascertainable by other persons. However, "Confidential
Information" shall not include information which (A) is generally
known to the public on the date hereof, (B) becomes generally
available to the public after the date hereof through no fault of
Seller, or (C) any information received after the date hereof in
good faith from any other Person who has the legal right to
disclose such information and who has not received such
information, either directly or indirectly, from Purchaser.
Confidential Information may include information that is not a
trade secret, but such information shall only constitute
Confidential Information for two (2) years after the Note has
been paid in full.
(iii) Seller will provide Purchaser with prompt
written notice (A) of any use or disclosure of Confidential
Information, whether intentional or not, that violates this
Agreement and of which Seller has any knowledge and (B) if it
becomes legally compelled to disclose any Confidential
Information, so that Purchaser may seek a protective order or
other appropriate remedy or waive compliance with the provisions
of this Agreement. If such protective order or other remedy is
not obtained, or if Purchaser waives compliance with the
provisions of this Agreement, Seller shall be entitled to
disclose in response to legal compulsion that portion of the
Confidential Information which its counsel advises it that it is
legally required to disclose, but in so doing Seller will
exercise reasonable efforts to obtain reliable assurance that
confidential treatment will be afforded such Confidential
Information.
(iv) If Seller considers any portion of the information
disclosed to it by Purchaser not to constitute Confidential
Information, Seller shall so advise the Board of Directors of
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Purchaser, stating its reasons therefor and legal authority upon
which it is relying.
(b) Arbitration.
(i) Any and all disputes arising out of or in connection
with the negotiation, execution, interpretation, performance or
nonperformance of this Agreement shall be solely and finally
settled by arbitration, which shall be conducted in Atlanta,
Georgia, or at such other location as the parties may agree in
writing. The arbitrator shall conduct the proceedings in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "Rules"). The arbitration
proceeding shall be initiated in accordance with the Rules. The
parties hereby renounce all recourse to litigation and agree that
any arbitration award shall be final and subject to no judicial
review. The arbitration shall be conducted before one
arbitrator, chosen in accordance with the Rules. The arbitrator
shall decide the issues submitted in accordance with (A) the
language and commercial purposes of this Agreement; and (B) what
is just and equitable under the circumstances, provided that all
substantive questions of law (excluding principles of conflicts
of laws) shall be determined under the laws of the State of
Florida.
(ii) The parties agree to facilitate the arbitration by:
(A) making available to one another and to the arbitrator for
examination, inspection and extraction all documents, books,
records and personnel under their control determined by the
arbitrator to be relevant to the dispute; (B) conducting
arbitration hearings to the greatest extent possible on
successive days; and (C) observing strictly the time periods
established by the Rules, or by the arbitrator, for submission of
evidence or briefs.
(iii) Judgment on the award of the arbitrator may be
entered in any court having jurisdiction over the party against
which enforcement of the award is being sought. All deposits and
other costs (other than fees of counsel) incurred in conducting
the arbitration shall be borne equally by the parties. Each
party shall be solely responsible for its own attorney's fees
incurred in connection with the arbitration.
(iv) This subsection (b) will survive completion or
termination of this Agreement, and will be specifically
enforceable in any court of competent jurisdiction. In no event
shall a demand for arbitration be made after the date when any
applicable statute of limitations, or period for claims under the
Agreement, would bar institution of a legal or equitable
proceeding based on such dispute or subject matter in question.
8. GENERAL PROVISIONS.
(a) Notices. Any notice, consent, request, or other
communication to a party required or permitted hereunder shall be
deemed to have been duly given or made (a) on the date delivered
in person, (b) on the date indicated on the return receipt if
mailed postage prepaid, by certified or registered U.S. Mail,
with return receipt requested, (c) on the date transmitted by
facsimile, if sent by 5:00 P.M., Eastern Time, and confirmation
of receipt thereof is reflected or obtained, or (d) if sent by
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Federal Express or other nationally recognized overnight courier
service or overnight express U.S. Mail, with service charges or
postage prepaid, then on the next business day after delivery to
the courier service or U.S. Mail (in time for and specifying next
day delivery). In each case such notices, requests, demands, and
other communications shall be sent to a party at its address or
facsimile number as follows, or as otherwise designated by the
party by notice in accordance herewith:
If to Seller: Gilman CMG, Inc.
111 West 50th Street
New York, New York
Attn.: John Faiella, President
Telecopy No.: (212) 582-7610
with a copy to: Stephen Cropper, Esq.
Gilman Investment Company
111 West 50th Street
New York, New York
Telecopy No.: (212) 582-7610
If to Purchaser: JW Charles Financial
Services, Inc.
1117 Perimeter Center West
Suite 500E
Atlanta, Georgia 30338
Attn.: Joel E. Marks, Chief
Financial Officer
Telecopy No.: (404) 353-5873
If to Leeds: Marshall T. Leeds
c/o JW Charles Financial Services,
Inc.
980 North Federal Highway
Suite 310
Boca Raton, Florida 33432
Telecopy No.: (407) 338-2827
If to Marks: Joel E. Marks
c/o JW Charles Financial Services,
Inc.
1117 Perimeter Center West
Suite 500E
Atlanta, Georgia 30338
Telecopy No.: (404) 353-5873
with a copy (in the
case of any of
Purchaser, Leeds,
or Marks) to: W. Randy Eaddy, Esq.
Kilpatrick & Cody
1100 Peachtree Street
Suite 2800
Atlanta, Georgia 30309
Telecopy No.: (404) 815-6555
or such other address or facsimile number as any party hereto
shall have designated by notice in writing to the other parties
hereto.
(b) Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of
-10-<PAGE>
Florida.
(c) Binding Effect, Benefits. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and
their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, nothing in
this Agreement, expressed or implied, is intended to confer on
any person other than the parties hereto or their respective
successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
(d) Severability. Each section of this Agreement, and any
and every provision herein, shall be severable from every other
section of this Agreement, and any and every provision thereof,
and the invalidity or unenforceability of any section herein or
provision thereof shall not affect the validity or enforceability
of any other section or provision or this Agreement.
(e) Counterparts and Headings. For the convenience of the
parties, this 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,
and it shall not be necessary for the same counterpart of this
Agreement to be signed by all of the undersigned in order for the
agreements set forth herein to be binding upon all of the
undersigned in accordance with the terms hereof. The headings
set out herein are for convenience of reference only and shall
not be deemed a part of this Agreement.
(f) Further Documents and Actions. The parties hereby
agree to take such further actions and execute and deliver each
to the other such further documents, as may be necessary or
convenient from time to time to more effectively convey and
transfer the Remaining Shares, the Purchased Shares or the
700,000 Shares of Series A Preferred Stock of Purchaser
previously transferred by Seller to Purchaser pursuant to the
Stock Repurchase Agreement, to carry out the intent and purposes
of this Agreement, and to establish and protect the rights and
remedies created or intended to be created hereunder.
(g) Entire Agreement. This Agreement constitutes the
entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and
understandings, oral and written, between the parties hereto with
respect to the subject matter hereof, including, without limit,
the Stock Repurchase Agreement, unless otherwise provided herein.
This Agreement may not be modified or amended except in writing
signed by both parties.
-11-<PAGE>
IN WITNESS WHEREOF, this Amended and Restated Stock
Repurchase Agreement has been duly executed and delivered by the
parties hereto or their duly authorized representatives as of the
date first above written.
"Seller"
GILMAN CMG, INC.
By: /s/ John Faiella
John Faiella, President
"Purchaser"
JW CHARLES FINANCIAL SERVICES, INC.
By: /s/ Joel E. Marks
Joel E. Marks, Vice Chairman and
Chief Financial Officer
Solely for purposes of Section 3, this Amended and Restated
Stock Repurchase Agreement has been duly executed and delivered
by the undersigned as of the date first above written.
/s/ Marshall T. Leeds
-------------------------
MARSHALL T. LEEDS
/s/ Joel E. Marks
-------------------------
JOEL E. MARKS
-12-
<PAGE>
PROMISSORY NOTE
U.S. $6,125,000 June __, 1996
Palm Beach County, Florida
FOR VALUE RECEIVED, JW Charles Financial Services, Inc., a Florida
corporation ("Maker"), hereby promises to pay to Gilman CMG, Inc., a
Delaware corporation ("Holder"), at its offices at 111 West 50th Street,
New York, New York 10020 (or at such other place or places as Holder may
designate in writing, from time to time), the principal sum of SIX
MILLION ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS (U.S. $6,125,000), in
lawful money of the United States of America, together with interest
accruing thereon at the rate and times hereinafter provided, calculated
on the daily principal balances hereof from time to time outstanding.
This Note is made and delivered pursuant and is subject to the terms and
conditions of that certain Amended and Restated Stock Repurchase
Agreement of even date herewith between Maker and Holder (the
"Agreement"). All capitalized terms not defined herein shall have the
respective meanings ascribed to them in the Agreement.
Maker promises to pay interest, calculated on the basis of a 365 or
366-day year, as applicable, for the actual number of days elapsed, on
the daily principal balances from time to time outstanding at the rate of
ten percent (10%) per annum.
Accrued interest and principal will be due and payable as follows:
(a) Except as otherwise provided herein, principal will be
payable on the fifteenth day of each April, commencing on April 15,
1997, in an amount that is equal to Maker's Modified Net Income for
the immediately preceding fiscal year. As used herein, "Modified
Net Income" will be equal to (i) Maker's consolidated net income, as
set forth in Maker's audited financial statements, for such fiscal
year, minus the aggregate amount of principal payments made during
such fiscal year with respect to any indebtedness of Maker to Holder
or any of its affiliates, successors or assigns pursuant to that
certain Loan Agreement dated May 15, 1995 between Maker and Holder
(the "1995 Loan Agreement") multiplied by (ii) fifty percent (50%).
Principal payments as provided above will be made by Maker to Holder
for so long as any principal amounts hereunder remain unpaid,
provided that a final principal payment of the entire outstanding
principal balance (without regard to the formula above), if any,
will be due and payable on April 15, 2000; and
(b) Accrued but unpaid interest will be payable quarterly on
the fifteenth day of each July, October, January and April,
commencing on July 15, 1996, calculated through the last day
preceding such payment dates, and continuing to be due and payable
on the fifteenth day of each succeeding July, October, January and
April thereafter so long as any amounts owing on this Note remain
outstanding, with a final payment of all accrued but unpaid interest
due and payable on the date indicated above on which the final
payment of principal is due hereunder.
A late charge equal to three percent (3%) of any installment of
interest or principal that is not paid within fifteen (15) days of the
date when the same becomes due and payable must be included with any such
late payment. At any time or times during which an Event of Default (as
hereafter defined) shall then exist, Holder shall be entitled to declare
that the interest rate under this Note shall be equal to the maximum rate
of interest permitted by applicable law (the "Default Rate of Interest")
until such Event of Default has been cured.<PAGE>
Maker may prepay the principal balance of this Note in whole or in
part at any time, but only if Maker also pays to Holder a prepayment
penalty equal to ten percent (10%) multiplied by the amount that is
prepaid. From and after any such prepayment in part, interest shall be
calculated on the resulting reduced principal balance. In the event of a
partial prepayment of principal, the amount so paid (excluding any
prepayment penalty) shall be applied to reduce on a dollar-for-dollar
basis the amount of the next succeeding installment or installments of
principal otherwise due hereunder, unless another application is
otherwise specified by Maker; provided, however, that accrued interest
calculated on the reduced principal balance shall continue to be due and
payable, until the entire principal of this Note is paid in full, on the
dates provided above whether or not any installment of principal is
required to be paid on such date as a result the application of a partial
prepayment of principal; and further provided, that no such reduction in
any subsequent installment amount shall be considered in calculating a
prepayment penalty pursuant to the first sentence of this paragraph if
Maker should elect to make a payment of principal in respect of any such
installment due date of all or any part of the reduced amount.
Nothing herein contained, nor any transaction related hereto, shall
be construed or so operate as to require Maker to pay interest at a
greater rate than is now lawful to contract for in such case, or to make
any payment, or to do any act, contrary to applicable law. Should any
interest or other charges paid by Maker result in the computation or
earning of interest in excess of the maximum rate of interest that is
legally permitted under applicable law, then any and all such excess
shall be and the same is hereby waived by Holder, and any and all such
excess shall be automatically credited against and in reduction of the
principal balance due under this indebtedness (and treated as a
prepayment of principal, without the incurrence of any prepayment penalty
hereunder if the same would be unlawful), and any portion of said excess
that exceeds the principal balance due under this indebtedness shall be
repaid by Holder to Maker.
The occurrence of any one or more of the following events will
constitute a default by Maker hereunder (each of which is sometimes
referred to herein as a "Default") and the continuation of any such
Default beyond the period (if any) provided below, within which such
Defaults may be cured, shall be an "Event of Default" hereunder:
(i) if Maker (A) shall file a voluntary petition under Title
11 of the United States Code (the "Bankruptcy Act") for adjudication
as a bankrupt; (B) shall file an answer seeking reorganization or an
arrangement under any bankruptcy or similar statute of the United
States of America or any subdivision thereof or of any foreign
jurisdiction in response to an involuntary petition; (C) shall
consent to the filing of a petition in any such bankruptcy or
reorganization proceeding; (D) shall consent to the appointment of a
receiver or trustee or officer performing similar functions with
respect to any substantial part of its property; (E) shall make a
general assignment for the benefit of its creditors; or (F) shall
execute a consent to any other type of insolvency proceedings (under
the Bankruptcy Act or otherwise) or any informal proceeding for the
dissolution or liquidation (whether or not related to any bankruptcy
or similar proceeding) of, or settlement of, claims against or
winding up of affairs of Maker; or (ii) the appointment of a
receiver or trustee or officer performing similar functions for
Maker or for any of its assets, or the filing against Maker of a
petition for adjudication as a bankrupt or insolvent or for
reorganization under any bankruptcy or similar laws of the United
-2-
<PAGE>
States of America or of any state thereof or of any foreign
jurisdiction, or the institution against Maker of any other type of
insolvency proceeding (under the Bankruptcy Act or otherwise) or of
any formal or informal proceeding for the dissolution or
liquidation, settlement of claims against or winding up of affairs,
of Maker, and the failure to have such appointment vacated or such
petition or proceeding dismissed within sixty (60) days after such
appointment, filing or institution; then, immediately and without
requirement of any notice, all principal and interest and any other
charges then owing under this Note or otherwise hereunder shall
forthwith mature and become due and payable without presentment,
demand, protest, or further notice of any kind, all of which are
hereby expressly waived.
(b) if (i) Maker fails to pay within five business days of the
due date any amount payable under this Note; (ii) Maker breaches or
otherwise fails to comply with any covenant or condition of the
Agreement; (iii) any statement, representation or warranty made by
Maker in connection with this Note, which includes, without
limitation, the representations and warranties set forth in the
Agreement, proves to have been untrue, incorrect, misleading, or
incomplete in any material respect as of the date made, and the same
then has a material adverse effect upon the interests of Holder
under this Note; or (iv) Marshall T. Leeds and Joel E. Marks,
considered together, (A) do not own beneficially the single largest
block of Maker's outstanding voting securities and (B) do not have
the legal right to cause the election of at least one-half (1/2) of
the members of the board of directors of Maker; then, upon the
occurrence of any such Default which continues for a period of five
(5) business days after the receipt by Maker of written notice
thereof from Holder, Holder, at its option, (x) may declare the
entire unpaid principal amount outstanding hereunder, together with
interest accrued thereon, immediately due and payable, or (y) may
elect not to accelerate the amounts due hereunder, but instead
increase the interest rate under this Note up to the Default Rate of
Interest
Except as provided in the preceding paragraph, Maker hereby waives
demand, presentment, notice of non-payment, dishonor, and protest.
Upon the occurrence and continuation of an Event of Default, (i)
Holder may proceed to protect and enforce its rights or remedies either
by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement, or other provision contained
herein or in the Agreement or to enforce the payment of this Note or any
other legal or equitable right or remedy; (ii) no right or remedy herein
conferred upon Holder is intended to be exclusive of any other right or
remedy contained herein or in the Agreement, and every such right or
remedy shall be cumulative and shall be in addition to every other such
right or remedy contained herein and therein or now or hereafter existing
at law or in equity or by statute or otherwise; and (iii) no course of
dealing between Maker and Holder or any failure or delay on the part of
Holder in exercising any rights or remedies hereunder shall operate as a
waiver of any rights or remedies of Holder, and no single or partial
exercise of any rights or remedies hereunder shall operate as a waiver or
preclude the exercise of any other rights or remedies hereunder.
Holder at any time may waive any Default or any Event of Default
that shall have occurred and any of its consequences, in which case the
parties hereto shall be restored to their former positions and rights and
obligations hereunder, respectively; but no such waiver shall extend to
-3-
<PAGE>
any subsequent or other Default or impair any right consequent thereon,
and no such waiver shall be effective unless it is in a written document
executed by a duly authorized officer of Holder.
In case this Note is collected by or through an attorney-at-law, all
costs of collection, including reasonable attorney's fees actually
incurred, shall be paid by Maker.
Time is of the essence.
The provisions of this Note shall be governed by, and construed and
enforced in accordance with, the laws of the State of Florida and the
Federal law of the United States. In the event of conflict between
Florida and Federal laws, the Federal law shall supersede and control.
Wherever possible, each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note.
This Note may not be amended or modified, nor shall any waiver of
any provisions hereof be effective, except by an instrument in writing
executed by the Holder. Maker has executed this Note as principal and
not as surety or accommodation party.
This Note shall be non-negotiable.
The word "Holder" as used herein shall include permitted
transferees, successors, and assigns of Holder, and all rights of Holder
hereunder shall inure to the benefit of its permitted transferees,
successors, and assigns. All obligations of Maker shall bind its legal
representatives, successors, and assigns.
MAKER, BY EXECUTION HEREOF, AND HOLDER, BY ACCEPTANCE HEREOF,
MUTUALLY AND WILLINGLY WAIVE THE RIGHT TO A TRIAL BY JURY OF ANY AND ALL
CLAIMS MADE BY OR BETWEEN THEM, INCLUDING, WITHOUT LIMITATION, ANY AND
ALL CLAIMS, DEFENSES, COUNTERCLAIMS, CROSSCLAIMS, THIRD PARTY CLAIMS, AND
INTERVENOR'S CLAIMS, WHETHER ARISING FROM OR RELATED TO THE NEGOTIATION,
EXECUTION, AND PERFORMANCE OF THE TRANSACTIONS TO WHICH THIS NOTE
RELATES.
-4-
<PAGE>
"Maker"
JW CHARLES FINANCIAL SERVICES, INC.
(CORPORATE SEAL)
By: ___________________________________
Marshall T. Leeds
President and Chief Financial
Officer
STATE OF FLORIDA
COUNTY OF PALM BEACH
SWORN TO AND SUBSCRIBED before me this __th day of June, 1996, by
Marshall T. Leeds, as President and Chief Executive Officer of JW Charles
Financial Services, Inc., a Florida corporation, on behalf of the
corporation.
______________________
Notary Public
My Commission Expires:
-5-
PROMISSORY NOTE
U.S. $6,125,000 June 11, 1996
Palm Beach County, Florida
FOR VALUE RECEIVED, JW Charles Financial Services, Inc., a Florida
corporation ("Maker"), hereby promises to pay to Gilman CMG, Inc., a
Delaware corporation ("Holder"), at its offices at 111 West 50th Street,
New York, New York 10020 (or at such other place or places as Holder may
designate in writing, from time to time), the principal sum of SIX
MILLION ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS (U.S. $6,125,000), in
lawful money of the United States of America, together with interest
accruing thereon at the rate and times hereinafter provided, calculated
on the daily principal balances hereof from time to time outstanding.
This Note is made and delivered pursuant and is subject to the terms and
conditions of that certain Amended and Restated Stock Repurchase
Agreement of even date herewith between Maker and Holder (the
"Agreement"). All capitalized terms not defined herein shall have the
respective meanings ascribed to them in the Agreement.
Maker promises to pay interest, calculated on the basis of a 365 or
366-day year, as applicable, for the actual number of days elapsed, on
the daily principal balances from time to time outstanding at the rate of
ten percent (10%) per annum.
Accrued interest and principal will be due and payable as follows:
(a) Except as otherwise provided herein, principal will be
payable on the fifteenth day of each April, commencing on April 15,
1997, in an amount that is equal to Maker's Modified Net Income for
the immediately preceding fiscal year. As used herein, "Modified
Net Income" will be equal to (i) Maker's consolidated net income, as
set forth in Maker's audited financial statements, for such fiscal
year, minus the aggregate amount of principal payments made during
such fiscal year with respect to any indebtedness of Maker to Holder
or any of its affiliates, successors or assigns pursuant to that
certain Loan Agreement dated May 15, 1995 between Maker and Holder
(the "1995 Loan Agreement") multiplied by (ii) fifty percent (50%).
Principal payments as provided above will be made by Maker to Holder
for so long as any principal amounts hereunder remain unpaid,
provided that a final principal payment of the entire outstanding
principal balance (without regard to the formula above), if any,
will be due and payable on April 15, 2000; and
(b) Accrued but unpaid interest will be payable quarterly on
the fifteenth day of each July, October, January and April,
commencing on July 15, 1996, calculated through the last day
preceding such payment dates, and continuing to be due and payable
on the fifteenth day of each succeeding July, October, January and
April thereafter so long as any amounts owing on this Note remain
outstanding, with a final payment of all accrued but unpaid interest
due and payable on the date indicated above on which the final
payment of principal is due hereunder.
A late charge equal to three percent (3%) of any installment of
interest or principal that is not paid within fifteen (15) days of the
date when the same becomes due and payable must be included with any such
late payment. At any time or times during which an Event of Default (as
hereafter defined) shall then exist, Holder shall be entitled to declare
that the interest rate under this Note shall be equal to the maximum rate
of interest permitted by applicable law (the "Default Rate of Interest")
until such Event of Default has been cured.<PAGE>
Maker may prepay the principal balance of this Note in whole or in
part at any time, but only if Maker also pays to Holder a prepayment
penalty equal to ten percent (10%) multiplied by the amount that is
prepaid. From and after any such prepayment in part, interest shall be
calculated on the resulting reduced principal balance. In the event of a
partial prepayment of principal, the amount so paid (excluding any
prepayment penalty) shall be applied to reduce on a dollar-for-dollar
basis the amount of the next succeeding installment or installments of
principal otherwise due hereunder, unless another application is
otherwise specified by Maker; provided, however, that accrued interest
calculated on the reduced principal balance shall continue to be due and
payable, until the entire principal of this Note is paid in full, on the
dates provided above whether or not any installment of principal is
required to be paid on such date as a result the application of a partial
prepayment of principal; and further provided, that no such reduction in
any subsequent installment amount shall be considered in calculating a
prepayment penalty pursuant to the first sentence of this paragraph if
Maker should elect to make a payment of principal in respect of any such
installment due date of all or any part of the reduced amount.
Nothing herein contained, nor any transaction related hereto, shall
be construed or so operate as to require Maker to pay interest at a
greater rate than is now lawful to contract for in such case, or to make
any payment, or to do any act, contrary to applicable law. Should any
interest or other charges paid by Maker result in the computation or
earning of interest in excess of the maximum rate of interest that is
legally permitted under applicable law, then any and all such excess
shall be and the same is hereby waived by Holder, and any and all such
excess shall be automatically credited against and in reduction of the
principal balance due under this indebtedness (and treated as a
prepayment of principal, without the incurrence of any prepayment penalty
hereunder if the same would be unlawful), and any portion of said excess
that exceeds the principal balance due under this indebtedness shall be
repaid by Holder to Maker.
The occurrence of any one or more of the following events will
constitute a default by Maker hereunder (each of which is sometimes
referred to herein as a "Default") and the continuation of any such
Default beyond the period (if any) provided below, within which such
Defaults may be cured, shall be an "Event of Default" hereunder:
(i) if Maker (A) shall file a voluntary petition under Title
11 of the United States Code (the "Bankruptcy Act") for adjudication
as a bankrupt; (B) shall file an answer seeking reorganization or an
arrangement under any bankruptcy or similar statute of the United
States of America or any subdivision thereof or of any foreign
jurisdiction in response to an involuntary petition; (C) shall
consent to the filing of a petition in any such bankruptcy or
reorganization proceeding; (D) shall consent to the appointment of a
receiver or trustee or officer performing similar functions with
respect to any substantial part of its property; (E) shall make a
general assignment for the benefit of its creditors; or (F) shall
execute a consent to any other type of insolvency proceedings (under
the Bankruptcy Act or otherwise) or any informal proceeding for the
dissolution or liquidation (whether or not related to any bankruptcy
or similar proceeding) of, or settlement of, claims against or
winding up of affairs of Maker; or (ii) the appointment of a
receiver or trustee or officer performing similar functions for
Maker or for any of its assets, or the filing against Maker of a
petition for adjudication as a bankrupt or insolvent or for
reorganization under any bankruptcy or similar laws of the United
-2-
<PAGE>
States of America or of any state thereof or of any foreign
jurisdiction, or the institution against Maker of any other type of
insolvency proceeding (under the Bankruptcy Act or otherwise) or of
any formal or informal proceeding for the dissolution or
liquidation, settlement of claims against or winding up of affairs,
of Maker, and the failure to have such appointment vacated or such
petition or proceeding dismissed within sixty (60) days after such
appointment, filing or institution; then, immediately and without
requirement of any notice, all principal and interest and any other
charges then owing under this Note or otherwise hereunder shall
forthwith mature and become due and payable without presentment,
demand, protest, or further notice of any kind, all of which are
hereby expressly waived.
(b) if (i) Maker fails to pay within five business days of the
due date any amount payable under this Note; (ii) Maker breaches or
otherwise fails to comply with any covenant or condition of the
Agreement; (iii) any statement, representation or warranty made by
Maker in connection with this Note, which includes, without
limitation, the representations and warranties set forth in the
Agreement, proves to have been untrue, incorrect, misleading, or
incomplete in any material respect as of the date made, and the same
then has a material adverse effect upon the interests of Holder
under this Note; or (iv) Marshall T. Leeds and Joel E. Marks,
considered together, (A) do not own beneficially the single largest
block of Maker's outstanding voting securities and (B) do not have
the legal right to cause the election of at least one-half (1/2) of
the members of the board of directors of Maker; then, upon the
occurrence of any such Default which continues for a period of five
(5) business days after the receipt by Maker of written notice
thereof from Holder, Holder, at its option, (x) may declare the
entire unpaid principal amount outstanding hereunder, together with
interest accrued thereon, immediately due and payable, or (y) may
elect not to accelerate the amounts due hereunder, but instead
increase the interest rate under this Note up to the Default Rate of
Interest
Except as provided in the preceding paragraph, Maker hereby waives
demand, presentment, notice of non-payment, dishonor, and protest.
Upon the occurrence and continuation of an Event of Default, (i)
Holder may proceed to protect and enforce its rights or remedies either
by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement, or other provision contained
herein or in the Agreement or to enforce the payment of this Note or any
other legal or equitable right or remedy; (ii) no right or remedy herein
conferred upon Holder is intended to be exclusive of any other right or
remedy contained herein or in the Agreement, and every such right or
remedy shall be cumulative and shall be in addition to every other such
right or remedy contained herein and therein or now or hereafter existing
at law or in equity or by statute or otherwise; and (iii) no course of
dealing between Maker and Holder or any failure or delay on the part of
Holder in exercising any rights or remedies hereunder shall operate as a
waiver of any rights or remedies of Holder, and no single or partial
exercise of any rights or remedies hereunder shall operate as a waiver or
preclude the exercise of any other rights or remedies hereunder.
Holder at any time may waive any Default or any Event of Default
that shall have occurred and any of its consequences, in which case the
parties hereto shall be restored to their former positions and rights and
obligations hereunder, respectively; but no such waiver shall extend to
-3-
<PAGE>
any subsequent or other Default or impair any right consequent thereon,
and no such waiver shall be effective unless it is in a written document
executed by a duly authorized officer of Holder.
In case this Note is collected by or through an attorney-at-law, all
costs of collection, including reasonable attorney's fees actually
incurred, shall be paid by Maker.
Time is of the essence.
The provisions of this Note shall be governed by, and construed and
enforced in accordance with, the laws of the State of Florida and the
Federal law of the United States. In the event of conflict between
Florida and Federal laws, the Federal law shall supersede and control.
Wherever possible, each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note.
This Note may not be amended or modified, nor shall any waiver of
any provisions hereof be effective, except by an instrument in writing
executed by the Holder. Maker has executed this Note as principal and
not as surety or accommodation party.
This Note shall be non-negotiable.
The word "Holder" as used herein shall include permitted
transferees, successors, and assigns of Holder, and all rights of Holder
hereunder shall inure to the benefit of its permitted transferees,
successors, and assigns. All obligations of Maker shall bind its legal
representatives, successors, and assigns.
MAKER, BY EXECUTION HEREOF, AND HOLDER, BY ACCEPTANCE HEREOF,
MUTUALLY AND WILLINGLY WAIVE THE RIGHT TO A TRIAL BY JURY OF ANY AND ALL
CLAIMS MADE BY OR BETWEEN THEM, INCLUDING, WITHOUT LIMITATION, ANY AND
ALL CLAIMS, DEFENSES, COUNTERCLAIMS, CROSSCLAIMS, THIRD PARTY CLAIMS, AND
INTERVENOR'S CLAIMS, WHETHER ARISING FROM OR RELATED TO THE NEGOTIATION,
EXECUTION, AND PERFORMANCE OF THE TRANSACTIONS TO WHICH THIS NOTE
RELATES.
-4-
<PAGE>
"Maker"
JW CHARLES FINANCIAL SERVICES, INC.
(CORPORATE SEAL)
By: /s/ Marshall T. Leeds
Marshall T. Leeds
President and Chief Executive
Officer
STATE OF FLORIDA
COUNTY OF PALM BEACH
SWORN TO AND SUBSCRIBED before me this 11th day of June, 1996, by
Marshall T. Leeds, as President and Chief Executive Officer of JW Charles
Financial Services, Inc., a Florida corporation, on behalf of the
corporation.
/s/ Sue Wakeling
Notary Public
My Commission Expires: January 20, 1998
-5-
