SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 5, 1997 (January 22, 1997)
Ridgewood Hotels, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-14019 58-1656330
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
2859 Paces Ferry Road, Suite 700
Atlanta, Georgia 30339
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 434-3670
Ridgewood Properties, Inc.
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(Former name, former address and former fiscal year,
if changed since last report)
ITEM 5. OTHER EVENTS
Exercise of Stock Options --
On January 31, 1997, the Company's President and
Chief Financial Officer elected to exercise their stock
options granted to them by Ridgewood Hotels, Inc. (the
"Company") with respect to 375,000 and 75,000 shares of
common stock, respectively, par value $.01 per share (the
"Shares") at a price of $1.00 per share.
The President elected to pay for his shares with
$100,000 cash and a promissory note to the Company in the
principal amount of $275,000. Interest accrues on the
principal balance at the rate per annum of 8.25%, and the
entire amount shall be due and payable in full on or before
February 28, 1997.
The Chief Financial Officer elected to pay for
her shares with a promissory note to the Company in the
principal amount of $75,000. Interest accrues on the
principal balance at the rate per annum of 8.25%, and the
entire amount shall be due and payable on or before January
31, 1998.
Both the President and Chief Financial Officer
signed Share Security Agreements pledging the above shares
as security for the performance of the obligations under
the notes, as well as personally guaranteeing payment of
the notes.
Following the exercise of the stock options by
the President and Chief Financial Officer, there are
1,538,480 shares of common stock outstanding. Of the
Company's issued and outstanding shares of common stock,
approximately 50.7% and 6.5% are owned by the President and
Chief Financial Officer, respectively.
Change of Corporation Name --
On January 22, 1997, the shareholders of the
Company approved an amendment to the Company's Certificate
of Incorporation to change the name of the corporation to
Ridgewood Hotels, Inc.
ITEM 7. EXHIBITS
3 Certificate of Amendment to Certificate of
Incorporation of Ridgewood Properties,
Inc.
4(a) Notice of Exercise by N. Russell Walden
dated January 31, 1997
4(b) Notice of Exercise by Karen S. Hughes
dated January 31, 1997
4(c) Share Security Agreement between N.
Russell Walden and Ridgewood Properties,
Inc. dated January 31, 1997
4(d) Share Security Agreement between Karen S.
Hughes and Ridgewood Properties, Inc.
dated January 31, 1997
10(a) Promissory Note between N. Russell Walden
and Ridgewood Properties, Inc. dated
January 31, 1997
10(b) Promissory Note between Karen S. Hughes
and Ridgewood Properties, Inc. dated
January 31, 1997
RIDGEWOOD HOTELS, INC.
By: /S/ Karen S. Hughes______
Karen S. Hughes
Vice President,
Chief Accounting Officer
Date: February 7, 1997
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
RIDGEWOOD PROPERTIES, INC.
RIDGEWOOD PROPERTIES, INC. (the "Corporation"), a
corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, does
hereby certify:
FIRST: That, the Board of Directors of the Corporation
unanimously adopted a resolution setting forth a proposed
amendment to the Certificate of Incorporation of the
Corporation, declaring said amendment to be advisable, and
directing that said amendment be presented to the
stockholders of the Corporation for consideration at a
special meeting of the stockholders or by written consent of
the stockholders. The resolution setting forth the proposed
amendment is as follows:
"RESOLVED, that the Certificate of
Incorporation of the Corporation be
amended to change the name of the
Corporation and that such amendment be
effected by deleting Article 1 in its
entirety and substituting the following
in lieu thereof:
Article 1
"The name of the Corporation is
RIDGEWOOD HOTELS, INC."
SECOND: That the foregoing resolution has been adopted
by written consent of the holders of record of the majority
of outstanding stock of the Corporation entitled to vote
thereon.
THIRD: That the aforesaid amendment was duly adopted
in accordance with the provisions of Section 242 and 228 of
the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this
certificate to be signed as of this ____ day of January,
1997.
RIDGEWOOD PROPERTIES, INC.
By: /s/ N. R. Walden__________
N. Rusell Walden, President
Attested by:
/s/ Karen S. Hughes
Karen S. Hughes, Secretary
NOTICE OF EXERCISE
TO: Stock Option Committee
Ridgewood Properties, Inc.
Pursuant to the provisions of the Ridgewood Properties,
Inc. 1993 Stock Option Plan, as amended (referred to herein as
the "Plan"), I hereby give notice that I elect to exercise the
stock option granted to me by the Company under the Plan with
respect to 375,000 shares of the common stock, par value $.01
per share (the "Shares"), of Ridgewood Properties, Inc. (the
"Company"), as of the date on which this notice is delivered to
the Company, at a price of $1.00 per share, and accordingly, I
hereby agree to purchase the Shares on the terms established
under the Plan. Full payment for such shares is enclosed, which
consists of my personal check in the amount of $100,000.00 and a
promissory note in the principal amount of $275,000.00.
I hereby acknowledge that I have received the prospectus
most recently issued by the Company pertaining to the Plan prior
to the date hereof.
I hereby agree that the stock option granted to me under
the Plan shall be deemed to have been exercised to the extent
specified in this notice on the date set forth below my
signature, and I hereby warrant that on such date this notice
was delivered to the Stock Option Committee of the Company.
Sincerely,
/s/ N. R. Walden
N. RUSSELL WALDEN
DATED: 1/31/97
NOTICE OF EXERCISE
TO: Stock Option Committee
Ridgewood Properties, Inc.
Pursuant to the provisions of the Ridgewood Properties,
Inc. 1993 Stock Option Plan, as amended (referred to herein as
the "Plan"), I hereby give notice that I elect to exercise the
stock option granted to me by the Company under the Plan with
respect to 75,000 shares of the common stock, par value $.01 per
share (the "Shares"), of Ridgewood Properties, Inc. (the
"Company"), as of the date on which this notice is delivered to
the Company, at a price of $1.00 per share, and accordingly, I
hereby agree to purchase the Shares on the terms established
under the Plan. Full payment for such shares is enclosed, which
consists of a promissory note in the principal amount of
$75,000.00.
I hereby acknowledge that I have received the prospectus
most recently issued by the Company pertaining to the Plan prior
to the date hereof.
I hereby agree that the stock option granted to me under
the Plan shall be deemed to have been exercised to the extent
specified in this notice on the date set forth below my
signature, and I hereby warrant that on such date this notice
was delivered to the Stock Option Committee of the Company.
Sincerely,
/s/ Karen S. Hughes
KAREN S. HUGHES
DATED: 1/31/97
Exhibit 4(c)
SHARE SECURITY AGREEMENT
This SHARE SECURITY AGREEMENT (the "Agreement") is made as
of the ___ day of January, 1997, by and between N. RUSSELL
WALDEN, an individual resident of the State of Georgia
("Pledgor"), and RIDGEWOOD PROPERTIES, INC., a Delaware
corporation (the "Pledgee").
W I T N E S S E T H:
WHEREAS, the Pledgor is an employee of Pledgee;
WHEREAS, the Pledgor has issued a promissory note of even
date herewith (the "Note"); and
WHEREAS, the Pledgor has agreed to enter into this
Agreement and to pledge 375,000 shares of the common stock, par
value $.01 per share (the "Shares"), of Pledgee as security for
the performance of Pledgor's obligations under the Note.
NOW THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, and to secure the payment and
performance of the Pledgor's obligations under the Note, the
parties hereto agree as follows:
1. Pledge. As collateral security for the due and
punctual payment of the Note, Pledgor hereby pledges,
hypothecates, transfers, sets over, delivers and assigns to
Pledgee, and hereby grants Pledgee a first security interest in,
the following:
(a) the Shares and the certificates representing the
Shares, and all cash, securities and other property or proceeds
at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for all or
any portion of the Shares;
(b) all securities hereafter delivered to Pledgor by
Pledgee in substitution for or in addition to any of the
foregoing, and all certificates and instruments representing or
evidencing such securities, together with all interest, cash,
securities and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for or on conversion of any or all thereof (all such
Shares, indebtedness, shares, certificates, interest, cash,
securities and other property received, receivable or otherwise
distributed in respect of any or all thereof being included
within the definition of "Collateral" for purposes of this
Agreement).
TO HAVE AND TO HOLD the Collateral, together with all
rights, titles, interests, privileges and preferences
appertaining or incidental thereto, unto Pledgee, its successors
and assigns, forever, subject, however, to the terms, covenants
and conditions hereinafter set forth.
2. Indebtedness and Obligations Secured. This Agreement
and the Collateral secure repayment of the indebtedness and the
obligations of Pledgor indicated below (collectively, the
"Obligations"), equally and ratably as to all such indebtedness
and obligations and without preference or priority as to any
class of such indebtedness or obligations or any component
thereof:
(a) the indebtedness evidenced by the Note (and any
promissory note of Pledgor issued in exchange for, or
replacement of, or substitution for, the Note, which shall be
included in the term "Note" as used herein), with interest and
premiums thereon as therein provided;
(b) all other amounts payable by Pledgor under the Note,
including without limitation, all fees, costs, expenses and
indemnities payable by Pledgor thereunder;
(c) all indebtedness of Pledgor arising under this
Agreement and all costs and expenses of Pledgee in enforcing
this Agreement and the Note; and
(d) all renewals and extensions, in whole or in part, of
the Note or of any other indebtedness or obligation described
above in this Section.
3. Representations and Warranties. As of the date hereof,
(i) Pledgor is the holder of record of all of the Shares;
Pledgor has good, right and lawful authority to enter into this
Agreement and to pledge the Collateral in the manner hereby
contemplated and will defend Pledgor's title thereto against the
claims of all persons whomsoever, (ii) there are no liens,
claims, pledges, security interests, encumbrances or rights of
third parties whatsoever with respect to the Collateral, (iii)
this Agreement has been duly authorized, executed and delivered
and constitutes the legal, valid and binding obligation of
Pledgor, enforceable in accordance with its terms, and (iv) no
consent or approval of any court, governmental body or
regulatory authority (federal, state or local) is or was
necessary to the validity of the pledge granted hereby.
4. Appointment of Agents; Registration in Nominee Name.
Pledgee shall have the right to appoint one or more agents for
the purpose of retaining physical possession of the certificates
or instruments representing or evidencing the Collateral, which
certificates or instruments may be held (in the discretion of
Pledgee) in the name of the Pledgor, endorsed or assigned in
blank or in favor of Pledgee, or in the name of Pledgee or any
agent appointed by Pledgee to retain physical possession of such
certificates or instruments, or in the name of any nominee of
Pledgee or any such agent. In addition, Pledgee shall at all
times have the right to exchange certificates or instruments
representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations. The Pledgor
hereby agrees that any registrar or transfer agent for any
securities included in the Collateral shall be entitled to rely
on the provisions of this Section as conclusive evidence of the
authority of Pledgee to effect re-registration of any such
securities in the name of Pledgee or that of its agents or its
or their nominees or to exchange certificates or instruments
representing or evidencing such Collateral for certificates or
instruments of smaller or larger denominations, notwithstanding
any notice or direction to such registrar or transfer agent from
the Pledgor to the contrary.
5. Pledgor's Rights and Powers. So long as no Event of
Default (as defined in Section 6 of this Agreement) shall have
occurred and be continuing, Pledgor may, during the term of this
Agreement, exercise all rights and privileges of a shareholder
of Pledgee with respect to the Shares. Upon the occurrence and
during the continuance of an Event of Default hereunder, all
rights of Pledgor to exercise the rights and powers that Pledgor
is entitled to exercise pursuant to this Section 5 shall cease,
and all such rights shall thereupon become vested in Pledgee,
who shall have the sole and exclusive right and authority to
exercise such rights and powers.
6. Events of Default. The occurrence or continuation of
any of the following events shall constitute an Event of Default
hereunder:
(a) Failure of Pledgor to pay, when due, any amount
payable under the Note;
(b) Any other Event of Default as defined in the Note or
any other applicable agreement; and
(c) Any default in the due observance or performance of
any term, covenant, warranty, agreement or condition contained
in this Agreement, which default continues for ten (10) calendar
days after Pledgee gives notice of such failure to Pledgor.
7. Remedies upon Default. Upon the occurrence and during
the continuance of an Event of Default hereunder, Pledgee may,
without giving any notice to Pledgor other than as required in
paragraph (b) below and in addition to the exercise by Pledgee
of its rights and remedies under any other section of this
Agreement or under the Note, or otherwise available to it at law
or in equity:
(a) apply the cash (if any) then held by it as Collateral
hereunder to the payment of any Obligations, whether or not then
due and in any order selected by Pledgee; and
(b) if there shall be no such cash or the cash so applied
shall be insufficient to pay all such Obligations in full,
exercise all the rights and remedies of a secured party under
the Uniform Commercial Code in effect in the State of Georgia at
that time and sell (in compliance with applicable securities
laws) the Collateral, or any part thereof, at public or private
sale, at any broker's board, upon any securities exchange, at
Pledgee's offices or elsewhere, for cash, upon credit or for
future delivery, as Pledgee may deem appropriate in the
circumstances and commercially reasonable. In connection
therewith, Pledgee shall have the right to impose such
limitations and restrictions on the sale of the Collateral as
Pledgee may deem to be necessary or appropriate to comply with
any law, rule or regulation (federal, state or local) having
applicability to the sale, including, without limitation,
restrictions on the number and qualifications of the offerees
and requirements for any necessary governmental approvals, and
Pledgee shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective offerees or
purchasers to persons who will represent and agree that they are
purchasing securities included in the Collateral for their own
account and not with a view to the distribution or sale thereof
in violation of applicable securities laws. Upon consummation
of any such sale, Pledgee shall have the right to assign,
transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall
hold the property sold absolutely, free from any claim or right
on the part of Pledgor, and Pledgor hereby waives (to the extent
permitted by law) all rights of redemption, stay or appraisal
that it now has or may at any time in the future have under any
rule of law or statute now existing or hereafter enacted. To
the extent that notice of sale shall be required to be given by
law, Pledgee shall give Pledgor at least ten (10) calendar days'
prior written notice of Pledgee's intention to make any public
or private sale of such Collateral. Such notice shall state the
time and place fixed for sale, and the Collateral, or portion
thereof, to be offered for sale. Any such sale shall be held at
such time or times within ordinary business hours and at such
place or places as Pledgee may fix in the notice of such sale.
At any such sale, the Collateral, or portion thereof, to be sold
may be sold in one lot as an entirety or in separate parcels, as
Pledgee may (in its sole and absolute discretion) determine, and
Pledgee may itself bid for (which bid may be in whole or in part
in the form of cancellation of Obligations) and purchase the
whole or any part of the Collateral.
Pledgee shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of the Collateral may have been given.
Pledgee may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for sale, and
such sale may, without further notice, be made at the time and
place to which the same was so adjourned. In case the sale of
all or any part of the Collateral is made on credit or for
future delivery, the Collateral so sold may be retained by
Pledgee until the sale price is paid by the purchaser or
purchasers thereof, but Pledgee shall not incur any liability in
case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure,
such Collateral may be sold again upon like notice. As an
alternative to exercising the power of sale herein conferred
upon it, Pledgee may proceed by a suit or suits at law or in
equity to foreclose this Agreement and sell the Collateral, or
any portion thereof, pursuant to a judgment or decree of a court
or courts of competent jurisdiction.
8. Application of Proceeds of Sale; Deficiency. The
proceeds of the sale of the Collateral sold pursuant to Section
7 hereof shall be applied by Pledgee as follows:
First: to the payment of the costs and expenses of such
sale, including the out-of-pocket expenses of Pledgee and the
reasonable fees and out-of-pocket expenses of counsel employed
in connection therewith, and the payment of all costs and
expenses incurred by Pledgee in connection with the
administration and enforcement of this Agreement, to the extent
that such costs and expenses shall not have been previously
reimbursed or paid to Pledgee;
Second: to the payment or prepayment in full of all other
Obligations, whether or not then due and in any order selected
by Pledgee; and
Third: the balance (if any) of such proceeds shall be paid
to Pledgor or as a court of competent jurisdiction may direct.
Pledgor shall be liable for any deficiency.
9. Pledgee Appointed Attorney-In-Fact. Pledgor hereby
appoints Pledgee as Pledgor's attorney-in-fact, with full power
of substitution, for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any
agreement or instrument on behalf of Pledgor that Pledgee may
deem necessary or advisable to accomplish the purposes hereof,
which appointment is coupled with an interest and is
irrevocable. Without limiting the generality of the foregoing,
Pledgor agrees and understands that Pledgee shall have the right
and power to receive, endorse and collect all checks and other
orders for the payment of money made payable to Pledgor which
represents any dividend, principal or interest payment or other
distribution payable or distributable in respect of the
Collateral or any part thereof and to give full discharge for
the same.
10. Responsibility of Pledgee; Care of Collateral.
Neither Pledgee, nor any director, officer, employee or agent of
Pledgee, shall be liable for any action taken or omitted to be
taken by it or them with respect to this Agreement or any of the
Collateral, except for its or their gross negligence or willful
misconduct, and Pledgee shall not be liable for any action or
omission to act on the part of any agent appointed by Pledgee to
act hereunder or with respect to the Collateral (or any part
thereof), if selected by Pledgee with reasonable care.
Notwithstanding the provisions of Section 5 hereof, Pledgee
shall have no duty to exercise any voting or any other
consensual rights and powers becoming vested in Pledgee with
respect to the Collateral or any part thereof, to exercise any
right to redeem, convert or exchange any securities included in
the Collateral, to enforce or see to the payment of any
dividend, principal or interest or any other distribution
payable or distributable on or with respect to the Collateral or
any part thereof or otherwise to preserve any rights with
respect to the Collateral against any third parties, and Pledgee
shall not be liable or accountable to Pledgor in respect of any
of the foregoing. Pledgee shall be deemed to have exercised
reasonable care in the custody and preservation of the
Collateral if Pledgee shall take such action for such purpose as
Pledgor may request in writing, but the failure of Pledgee to
take any action requested by Pledgor shall not, in and of
itself, be deemed to constitute a failure on the part of Pledgee
to exercise reasonable care with respect to the custody and
preservation of the Collateral or any part thereof.
11. Expenses. Pledgor agrees to pay Pledgee, upon its
demand, all of Pledgee's out-of-pocket expenses (including its
reasonable attorneys' fees) incurred in connection with the
administration or enforcement of this Agreement, the care and
custody of the Collateral (or any part thereof), the
registration, re-registration or transfer of the Collateral (or
any part thereof) and the sale or collection of the Collateral
(or any part thereof). Should Pledgor fail to do any act or
thing that Pledgor has covenanted to do hereunder, or should any
representation or warranty on the part of Pledgor contained
herein be breached, Pledgee may (but shall not be obligated to)
do the same or cause it to be done, or remedy any such breach,
and there shall be added to the liabilities of Pledgor hereunder
the cost or expense to Pledgee in so doing, and any and all
amounts expended by Pledgee in taking any such action shall be
repayable to it by Pledgor upon Pledgee's demand.
12. Release of Collateral. After the repayment of
Pledgor's indebtedness and obligations to Pledgee under the
Note, Pledgee will release to Pledgor the Collateral pledged
hereunder and deliver to Pledgor certificates for the number of
shares listed above.
13. Restriction on Transfer. Pledgor shall not sell,
transfer, pledge, hypothecate or otherwise dispose of any shares
of Shares except in compliance with this Agreement and the
Ridgewood Properties, Inc. 1993 Stock Option Plan, as amended
(the "Plan"). Any purported sale, transfer, pledge,
hypothecation or other disposition of the Shares in
contravention of the terms of this Agreement or the Plan shall
be null, void and of no force and effect.
14. Miscellaneous.
a. Notices. Any notice required or permitted
hereunder shall be given in writing and shall be deemed
effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified
mail with postage and fees prepaid, addressed to Pledgor at
Pledgor's address shown on Pledgee's employment records and
to Pledgee at the address of its principal corporate
offices (Attention: President) or at such other address as
such party may designate by advance written notice to the
other party hereto.
b. Further Assurances. The Pledgor agrees to do
such further acts and things, and to execute and deliver
such agreements and instruments, including without
limitation stock and bond powers, as Pledgee may at any
time request in connection with the administration or
enforcement of this Agreement or related to the Collateral
or any part thereof or in order better to assure and
confirm unto Pledgee its rights, powers and remedies
hereunder.
c. Binding Agreement; Assignment. This
Agreement, and the terms, covenants and conditions hereof,
shall be binding upon and inure to the benefit of the
parties hereto, and their respective heirs, administrators,
successors and assigns, as the case may be, except that the
Pledgor shall not be permitted to assign this Agreement or
any interest in the Collateral, or any part thereof, or
otherwise pledge, encumber or grant any option with respect
to the Collateral, or any part thereof, or any cash or
property held by Pledgee as collateral under this
Agreement, without the prior written consent of Pledgee.
d. Waiver, Modification, etc. Neither this
Agreement nor any provisions hereof may be amended,
modified, waived, discharged or terminated, nor may any of
the Collateral be released or the pledge or the security
interest created hereby extended, except by an instrument
in writing signed on behalf of the party to be charged.
The Section headings used herein are for convenience of
reference only and shall not define or limit the provisions
of this Agreement. This Agreement may be executed in
counterparts, each of which shall be deemed to be an
original and both of which together shall constitute the
Agreement.
e. Governing Law; Consent to Jurisdiction and
Venue. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE
STATE OF GEORGIA AND SHALL BE INTERPRETED, AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF GEORGIA (WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS). AS PART OF THE CONSIDERATION
FOR THE BENEFITS RECEIVED BY THE PLEDGOR, PLEDGOR HEREBY
CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE STATE OF GEORGIA, AND CONSENTS THAT ALL
SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL
DIRECTED TO SUCH PARTY AT THE ADDRESS SET FORTH ON THE SIGNATURE
PAGE TO THIS AGREEMENT, AND SERVICE SO MADE SHALL BE DEEMED TO
BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR FIVE
(5) CALENDAR DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS,
PROPER POSTAGE PREPAID. TO THE EXTENT PERMITTED BY LAW, EACH
SUCH PARTY TO THIS AGREEMENT WAIVES ANY OBJECTION SUCH PARTY MAY
HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM
NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING INSTITUTED
HEREUNDER. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF
PLEDGEE TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR AFFECT THE RIGHT OF PLEDGEE TO BRING ANY ACTION OR
PROCEEDING AGAINST PLEDGOR OR PLEDGOR'S PROPERTIES IN THE
COURTS OF ANY OTHER JURISDICTION THAT HAS JURISDICTION OVER
PLEDGOR OR PLEDGOR'S PROPERTY.
IN WITNESS WHEREOF, Pledgee has caused this Agreement to be
duly executed and delivered by its duly authorized officers, and
Pledgor has executed and delivered this Agreement, all as of the
day and year first above written.
/s/ N. R. Walden (SEAL)
RUSSELL WALDEN, Pledgor
Address: 3190 Ridgewood Road
Atlanta, GA 30327
RIDGEWOOD PROPERTIES, INC.
[CORPORATE SEAL] By: /s/ Karen S. Hughes
Its: Vice President
ATTEST:
/s/ Gregory T. Weigle
Assistant Secretary
Exhibit 4(d)
SHARE SECURITY AGREEMENT
This SHARE SECURITY AGREEMENT (the "Agreement") is made as
of the ___ day of January, 1997, by and between KAREN S. HUGHES,
an individual resident of the State of Georgia ("Pledgor"), and
RIDGEWOOD PROPERTIES, INC., a Delaware corporation (the
"Pledgee").
W I T N E S S E T H:
WHEREAS, the Pledgor is an employee of Pledgee;
WHEREAS, the Pledgor has issued a promissory note of even
date herewith (the "Note"); and
WHEREAS, the Pledgor has agreed to enter into this
Agreement and to pledge 75,000 shares of the common stock, par
value $.01 per share (the "Shares"), of Pledgee as security for
the performance of Pledgor's obligations under the Note.
NOW THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, and to secure the payment and
performance of the Pledgor's obligations under the Note, the
parties hereto agree as follows:
1. Pledge. As collateral security for the due and
punctual payment of the Note, Pledgor hereby pledges,
hypothecates, transfers, sets over, delivers and assigns to
Pledgee, and hereby grants Pledgee a first security interest in,
the following:
(a) the Shares and the certificates representing the
Shares, and all cash, securities and other property or proceeds
at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for all or
any portion of the Shares;
(b) all securities hereafter delivered to Pledgor by
Pledgee in substitution for or in addition to any of the
foregoing, and all certificates and instruments representing or
evidencing such securities, together with all interest, cash,
securities and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for or on conversion of any or all thereof (all such
Shares, indebtedness, shares, certificates, interest, cash,
securities and other property received, receivable or otherwise
distributed in respect of any or all thereof being included
within the definition of "Collateral" for purposes of this
Agreement).
TO HAVE AND TO HOLD the Collateral, together with all
rights, titles, interests, privileges and preferences
appertaining or incidental thereto, unto Pledgee, its successors
and assigns, forever, subject, however, to the terms, covenants
and conditions hereinafter set forth.
2. Indebtedness and Obligations Secured. This Agreement
and the Collateral secure repayment of the indebtedness and the
obligations of Pledgor indicated below (collectively, the
"Obligations"), equally and ratably as to all such indebtedness
and obligations and without preference or priority as to any
class of such indebtedness or obligations or any component
thereof:
(a) the indebtedness evidenced by the Note (and any
promissory note of Pledgor issued in exchange for, or
replacement of, or substitution for, the Note, which shall be
included in the term "Note" as used herein), with interest and
premiums thereon as therein provided;
(b) all other amounts payable by Pledgor under the Note,
including without limitation, all fees, costs, expenses and
indemnities payable by Pledgor thereunder;
(c) all indebtedness of Pledgor arising under this
Agreement and all costs and expenses of Pledgee in enforcing
this Agreement and the Note; and
(d) all renewals and extensions, in whole or in part, of
the Note or of any other indebtedness or obligation described
above in this Section.
3. Representations and Warranties. As of the date hereof,
(i) Pledgor is the holder of record of all of the Shares;
Pledgor has good, right and lawful authority to enter into this
Agreement and to pledge the Collateral in the manner hereby
contemplated and will defend Pledgor's title thereto against the
claims of all persons whomsoever, (ii) there are no liens,
claims, pledges, security interests, encumbrances or rights of
third parties whatsoever with respect to the Collateral, (iii)
this Agreement has been duly authorized, executed and delivered
and constitutes the legal, valid and binding obligation of
Pledgor, enforceable in accordance with its terms, and (iv) no
consent or approval of any court, governmental body or
regulatory authority (federal, state or local) is or was
necessary to the validity of the pledge granted hereby.
4. Appointment of Agents; Registration in Nominee Name.
Pledgee shall have the right to appoint one or more agents for
the purpose of retaining physical possession of the certificates
or instruments representing or evidencing the Collateral, which
certificates or instruments may be held (in the discretion of
Pledgee) in the name of the Pledgor, endorsed or assigned in
blank or in favor of Pledgee, or in the name of Pledgee or any
agent appointed by Pledgee to retain physical possession of such
certificates or instruments, or in the name of any nominee of
Pledgee or any such agent. In addition, Pledgee shall at all
times have the right to exchange certificates or instruments
representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations. The Pledgor
hereby agrees that any registrar or transfer agent for any
securities included in the Collateral shall be entitled to rely
on the provisions of this Section as conclusive evidence of the
authority of Pledgee to effect re-registration of any such
securities in the name of Pledgee or that of its agents or its
or their nominees or to exchange certificates or instruments
representing or evidencing such Collateral for certificates or
instruments of smaller or larger denominations, notwithstanding
any notice or direction to such registrar or transfer agent from
the Pledgor to the contrary.
5. Pledgor's Rights and Powers. So long as no Event of
Default (as defined in Section 6 of this Agreement) shall have
occurred and be continuing, Pledgor may, during the term of this
Agreement, exercise all rights and privileges of a shareholder
of Pledgee with respect to the Shares. Upon the occurrence and
during the continuance of an Event of Default hereunder, all
rights of Pledgor to exercise the rights and powers that Pledgor
is entitled to exercise pursuant to this Section 5 shall cease,
and all such rights shall thereupon become vested in Pledgee,
who shall have the sole and exclusive right and authority to
exercise such rights and powers.
6. Events of Default. The occurrence or continuation of
any of the following events shall constitute an Event of Default
hereunder:
(a) Failure of Pledgor to pay, when due, any amount
payable under the Note;
(b) Any other Event of Default as defined in the Note or
any other applicable agreement; and
(c) Any default in the due observance or performance of
any term, covenant, warranty, agreement or condition contained
in this Agreement, which default continues for ten (10) calendar
days after Pledgee gives notice of such failure to Pledgor.
7. Remedies upon Default. Upon the occurrence and during
the continuance of an Event of Default hereunder, Pledgee may,
without giving any notice to Pledgor other than as required in
paragraph (b) below and in addition to the exercise by Pledgee
of its rights and remedies under any other section of this
Agreement or under the Note, or otherwise available to it at law
or in equity:
(a) apply the cash (if any) then held by it as Collateral
hereunder to the payment of any Obligations, whether or not then
due and in any order selected by Pledgee; and
(b) if there shall be no such cash or the cash so applied
shall be insufficient to pay all such Obligations in full,
exercise all the rights and remedies of a secured party under
the Uniform Commercial Code in effect in the State of Georgia at
that time and sell (in compliance with applicable securities
laws) the Collateral, or any part thereof, at public or private
sale, at any broker's board, upon any securities exchange, at
Pledgee's offices or elsewhere, for cash, upon credit or for
future delivery, as Pledgee may deem appropriate in the
circumstances and commercially reasonable. In connection
therewith, Pledgee shall have the right to impose such
limitations and restrictions on the sale of the Collateral as
Pledgee may deem to be necessary or appropriate to comply with
any law, rule or regulation (federal, state or local) having
applicability to the sale, including, without limitation,
restrictions on the number and qualifications of the offerees
and requirements for any necessary governmental approvals, and
Pledgee shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective offerees or
purchasers to persons who will represent and agree that they are
purchasing securities included in the Collateral for their own
account and not with a view to the distribution or sale thereof
in violation of applicable securities laws. Upon consummation
of any such sale, Pledgee shall have the right to assign,
transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall
hold the property sold absolutely, free from any claim or right
on the part of Pledgor, and Pledgor hereby waives (to the extent
permitted by law) all rights of redemption, stay or appraisal
that it now has or may at any time in the future have under any
rule of law or statute now existing or hereafter enacted. To
the extent that notice of sale shall be required to be given by
law, Pledgee shall give Pledgor at least ten (10) calendar days'
prior written notice of Pledgee's intention to make any public
or private sale of such Collateral. Such notice shall state the
time and place fixed for sale, and the Collateral, or portion
thereof, to be offered for sale. Any such sale shall be held at
such time or times within ordinary business hours and at such
place or places as Pledgee may fix in the notice of such sale.
At any such sale, the Collateral, or portion thereof, to be sold
may be sold in one lot as an entirety or in separate parcels, as
Pledgee may (in its sole and absolute discretion) determine, and
Pledgee may itself bid for (which bid may be in whole or in part
in the form of cancellation of Obligations) and purchase the
whole or any part of the Collateral.
Pledgee shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of the Collateral may have been given.
Pledgee may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for sale, and
such sale may, without further notice, be made at the time and
place to which the same was so adjourned. In case the sale of
all or any part of the Collateral is made on credit or for
future delivery, the Collateral so sold may be retained by
Pledgee until the sale price is paid by the purchaser or
purchasers thereof, but Pledgee shall not incur any liability in
case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure,
such Collateral may be sold again upon like notice. As an
alternative to exercising the power of sale herein conferred
upon it, Pledgee may proceed by a suit or suits at law or in
equity to foreclose this Agreement and sell the Collateral, or
any portion thereof, pursuant to a judgment or decree of a court
or courts of competent jurisdiction.
8. Application of Proceeds of Sale; Deficiency. The
proceeds of the sale of the Collateral sold pursuant to Section
7 hereof shall be applied by Pledgee as follows:
First: to the payment of the costs and expenses of such
sale, including the out-of-pocket expenses of Pledgee and the
reasonable fees and out-of-pocket expenses of counsel employed
in connection therewith, and the payment of all costs and
expenses incurred by Pledgee in connection with the
administration and enforcement of this Agreement, to the extent
that such costs and expenses shall not have been previously
reimbursed or paid to Pledgee;
Second: to the payment or prepayment in full of all other
Obligations, whether or not then due and in any order selected
by Pledgee; and
Third: the balance (if any) of such proceeds shall be paid
to Pledgor or as a court of competent jurisdiction may direct.
Pledgor shall be liable for any deficiency.
9. Pledgee Appointed Attorney-In-Fact. Pledgor hereby
appoints Pledgee as Pledgor's attorney-in-fact, with full power
of substitution, for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any
agreement or instrument on behalf of Pledgor that Pledgee may
deem necessary or advisable to accomplish the purposes hereof,
which appointment is coupled with an interest and is
irrevocable. Without limiting the generality of the foregoing,
Pledgor agrees and understands that Pledgee shall have the right
and power to receive, endorse and collect all checks and other
orders for the payment of money made payable to Pledgor which
represents any dividend, principal or interest payment or other
distribution payable or distributable in respect of the
Collateral or any part thereof and to give full discharge for
the same.
10. Responsibility of Pledgee; Care of Collateral.
Neither Pledgee, nor any director, officer, employee or agent of
Pledgee, shall be liable for any action taken or omitted to be
taken by it or them with respect to this Agreement or any of the
Collateral, except for its or their gross negligence or willful
misconduct, and Pledgee shall not be liable for any action or
omission to act on the part of any agent appointed by Pledgee to
act hereunder or with respect to the Collateral (or any part
thereof), if selected by Pledgee with reasonable care.
Notwithstanding the provisions of Section 5 hereof, Pledgee
shall have no duty to exercise any voting or any other
consensual rights and powers becoming vested in Pledgee with
respect to the Collateral or any part thereof, to exercise any
right to redeem, convert or exchange any securities included in
the Collateral, to enforce or see to the payment of any
dividend, principal or interest or any other distribution
payable or distributable on or with respect to the Collateral or
any part thereof or otherwise to preserve any rights with
respect to the Collateral against any third parties, and Pledgee
shall not be liable or accountable to Pledgor in respect of any
of the foregoing. Pledgee shall be deemed to have exercised
reasonable care in the custody and preservation of the
Collateral if Pledgee shall take such action for such purpose as
Pledgor may request in writing, but the failure of Pledgee to
take any action requested by Pledgor shall not, in and of
itself, be deemed to constitute a failure on the part of Pledgee
to exercise reasonable care with respect to the custody and
preservation of the Collateral or any part thereof.
11. Expenses. Pledgor agrees to pay Pledgee, upon its
demand, all of Pledgee's out-of-pocket expenses (including its
reasonable attorneys' fees) incurred in connection with the
administration or enforcement of this Agreement, the care and
custody of the Collateral (or any part thereof), the
registration, re-registration or transfer of the Collateral (or
any part thereof) and the sale or collection of the Collateral
(or any part thereof). Should Pledgor fail to do any act or
thing that Pledgor has covenanted to do hereunder, or should any
representation or warranty on the part of Pledgor contained
herein be breached, Pledgee may (but shall not be obligated to)
do the same or cause it to be done, or remedy any such breach,
and there shall be added to the liabilities of Pledgor hereunder
the cost or expense to Pledgee in so doing, and any and all
amounts expended by Pledgee in taking any such action shall be
repayable to it by Pledgor upon Pledgee's demand.
12. Release of Collateral. After the repayment of
Pledgor's indebtedness and obligations to Pledgee under the
Note, Pledgee will release to Pledgor the Collateral pledged
hereunder and deliver to Pledgor certificates for the number of
shares listed above.
13. Restriction on Transfer. Pledgor shall not sell,
transfer, pledge, hypothecate or otherwise dispose of any shares
of Shares except in compliance with this Agreement and the
Ridgewood Properties, Inc. 1993 Stock Option Plan, as amended
(the "Plan"). Any purported sale, transfer, pledge,
hypothecation or other disposition of the Shares in
contravention of the terms of this Agreement or the Plan shall
be null, void and of no force and effect.
14. Miscellaneous.
a. Notices. Any notice required or permitted
hereunder shall be given in writing and shall be deemed
effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified
mail with postage and fees prepaid, addressed to Pledgor at
Pledgor's address shown on Pledgee's employment records and
to Pledgee at the address of its principal corporate
offices (Attention: President) or at such other address as
such party may designate by advance written notice to the
other party hereto.
b. Further Assurances. The Pledgor agrees to do
such further acts and things, and to execute and deliver
such agreements and instruments, including without
limitation stock and bond powers, as Pledgee may at any
time request in connection with the administration or
enforcement of this Agreement or related to the Collateral
or any part thereof or in order better to assure and
confirm unto Pledgee its rights, powers and remedies
hereunder.
c. Binding Agreement; Assignment. This
Agreement, and the terms, covenants and conditions hereof,
shall be binding upon and inure to the benefit of the
parties hereto, and their respective heirs, administrators,
successors and assigns, as the case may be, except that the
Pledgor shall not be permitted to assign this Agreement or
any interest in the Collateral, or any part thereof, or
otherwise pledge, encumber or grant any option with respect
to the Collateral, or any part thereof, or any cash or
property held by Pledgee as collateral under this
Agreement, without the prior written consent of Pledgee.
d. Waiver, Modification, etc. Neither this
Agreement nor any provisions hereof may be amended,
modified, waived, discharged or terminated, nor may any of
the Collateral be released or the pledge or the security
interest created hereby extended, except by an instrument
in writing signed on behalf of the party to be charged.
The Section headings used herein are for convenience of
reference only and shall not define or limit the provisions
of this Agreement. This Agreement may be executed in
counterparts, each of which shall be deemed to be an
original and both of which together shall constitute the
Agreement.
e. Governing Law; Consent to Jurisdiction and
Venue. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE
STATE OF GEORGIA AND SHALL BE INTERPRETED, AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF GEORGIA (WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS). AS PART OF THE CONSIDERATION
FOR THE BENEFITS RECEIVED BY THE PLEDGOR, PLEDGOR HEREBY
CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE STATE OF GEORGIA, AND CONSENTS THAT ALL
SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL
DIRECTED TO SUCH PARTY AT THE ADDRESS SET FORTH ON THE SIGNATURE
PAGE TO THIS AGREEMENT, AND SERVICE SO MADE SHALL BE DEEMED TO
BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR
FIVE (5) CALENDAR DAYS AFTER DEPOSIT IN THE UNITED STATES
MAILS, PROPER POSTAGE PREPAID. TO THE EXTENT PERMITTED BY
LAW, EACH SUCH PARTY TO THIS AGREEMENT WAIVES ANY OBJECTION SUCH
PARTY MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE
OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING
INSTITUTED HEREUNDER. NOTHING IN THIS SECTION SHALL AFFECT THE
RIGHT OF PLEDGEE TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF PLEDGEE TO BRING ANY
ACTION OR PROCEEDING AGAINST PLEDGOR OR PLEDGOR'S PROPERTIES IN
THE COURTS OF ANY OTHER JURISDICTION THAT HAS JURISDICTION
OVER PLEDGOR OR PLEDGOR'S PROPERTY.
IN WITNESS WHEREOF, Pledgee has caused this Agreement to be
duly executed and delivered by its duly authorized officers, and
Pledgor has executed and delivered this Agreement, all as of the
day and year first above written.
/s/ Karen S. Hughes (SEAL)
KAREN S. HUGHES, Pledgor
Address: 2377 Emory Lane
Marietta, GA 30068
RIDGEWOOD PROPERTIES, INC.
[CORPORATE SEAL] By: /s/ N. R. Walden
Its: President
ATTEST:
/s/ Gregory T. Weigle
Assistant Secretary
Exhibit 10(a)
PROMISSORY NOTE
$275,000.00 January 31, 1997
FOR VALUE RECEIVED, N. RUSSELL WALDEN, an individual
resident of the State of Georgia ("Maker"), hereby promises
to pay to the order of RIDGEWOOD PROPERTIES, INC., a
Delaware corporation ("Payee"), at its principal offices
located at 2859 Paces Ferry Road, Suite 700, Atlanta,
Georgia 30339 or at such other place as Payee may direct
in writing, the principal sum of Two Hundred Seventy-Five
Thousand Dollars ($275,000.00), together with interest
thereon as hereinafter set forth, in such coin or currency
of the United States of America as at the time of payment
shall be legal tender for the payment of public and private
debts.
From and after the date hereof, interest shall accrue
on the outstanding principal balance hereof at the rate per
annum equal to eight and twenty-five one hundredths percent
(8.25%) until all amounts of principal and accrued interest
outstanding hereunder are paid in full.
The entire principal balance hereof, together with all
accrued and unpaid interest and all other amounts
outstanding hereunder, shall be due and payable in full on
or before February 28, 1997 (the "Maturity Date").
All payments received hereunder shall be applied first
to accrued and unpaid interest and then to the principal
balance outstanding hereunder. Maker at any time or from
time to time may prepay all or any portion of the
outstanding principal balance of this Note (together with
accrued interest thereon through the date of such
prepayment) without penalty or premium.
If this Note becomes due and payable on a Saturday,
Sunday or public holiday under the laws of the State of
Georgia, such payment date shall be extended to the next
business day.
This Note shall be secured by a pledge of certain
stock held by the Maker pursuant to that certain Share
Security Agreement by and between Maker (as Pledgor) and
Payee (as Pledgee) dated as of the date hereof (the
"Security Agreement").
The occurrence and continuation of any one of the
following events ("Event of Default") shall constitute a
default hereunder: (i) Maker shall fail to make due and
punctual payment of the principal of or interest on this
Note; (ii) Maker violates any covenant in this Note (other
than payment when due of principal or interest on this
Note) or the Security Agreement, and Maker fails to cure
such violation within ten (10) days after notice thereof
from Payee; or (iii) Maker makes an assignment for the
benefit of creditors, files a petition in bankruptcy, is
adjudicated insolvent or bankrupt, petitions a court for
the appointment of any receiver or trustee for Maker or any
substantial part of Maker's property, commences any
proceeding relating to Maker under any arrangement or debt
readjustment law or statute of any jurisdiction whether now
or hereafter in effect or there is commenced against Maker
any such proceeding which remains undismissed for sixty
(60) days, or Maker by any act indicates consent to,
approval of or acquiescence in any such proceeding or the
appointment of any receiver or trustee for Maker or any
substantial part of Maker's property, or suffers any such
receivership or trusteeship to continue undischarged for
sixty (60) days.
If an Event of Default occurs and is continuing
hereunder, then, at the option of Payee, the entire
principal amount outstanding hereunder, together with all
accrued and unpaid interest thereon shall, upon written
notice from Payee to Maker, become immediately due and
payable. The rights, remedies, powers and privileges
provided for herein are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
No waiver by Payee of any default shall be effective
unless in writing, nor shall it operate as a waiver of any
other default or of the same default on a future occasion.
No delay or omission by Payee in exercising any of its
rights, remedies, powers and privileges hereunder or at law
and no course of dealing between Payee and Maker or any
other person shall be deemed a waiver by Payee of any of
such rights, remedies, powers and privileges even if such
delay or omission is continuous or repeated, nor shall any
single or partial exercise of any right, remedy, power or
privilege preclude any other or further exercise thereof by
Payee or the exercise of any other right, remedy, power or
privilege by Payee.
Maker hereby waives presentment, demand, protest and
notice of any kind (including notice of presentment,
demand, protest, dishonor or nonpayment).
If this Note is placed in the hands of any attorney
for collection, or if collected by suit or through any
bankruptcy or other legal proceedings, Maker hereby agrees
to pay all expenses incurred by the holder of this Note,
including attorneys' fees and costs, all of which shall
become a part of the principal hereof.
Each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable
law, but if any provision of this Note shall be prohibited
by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note.
This Note shall be binding upon Maker and Maker's
heirs, administrators, successors and assigns and shall
inure to the benefit of Payee and its successors and
assigns.
This Note in all respects shall be governed by and
construed and enforced in accordance with the laws of the
State of Georgia, without giving effect to any principles
of conflicts of laws. This Note may not be changed orally,
but only by an instrument in writing executed by the
parties hereto.
Time is of the essence of this Note.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Note as of the date and year first set forth
above.
/s/ N. R. Walden (SEAL)
N. RUSSELL WALDEN, Maker
Exhibit 10(b)
PROMISSORY NOTE
$75,000.00 January 31, 1997
FOR VALUE RECEIVED, KAREN S. HUGHES, an individual
resident of the State of Georgia ("Maker"), hereby promises
to pay to the order of RIDGEWOOD PROPERTIES, INC., a
Delaware corporation ("Payee"), at its principal offices
located at 2859 Paces Ferry Road, Suite 700, Atlanta,
Georgia 30339 or at such other place as Payee may direct
in writing, the principal sum of Seventy-Five Thousand
Dollars ($75,000.00), together with interest thereon as
hereinafter set forth, in such coin or currency of the
United States of America as at the time of payment shall be
legal tender for the payment of public and private debts.
From and after the date hereof, interest shall accrue
on the outstanding principal balance hereof at the rate per
annum equal to eight and twenty-five one hundredths percent
(8.25%) until all amounts of principal and accrued interest
outstanding hereunder are paid in full.
The entire principal balance hereof, together with all
accrued and unpaid interest and all other amounts
outstanding hereunder, shall be due and payable in full on
or before January 31, 1998 (the "Maturity Date").
All payments received hereunder shall be applied first
to accrued and unpaid interest and then to the principal
balance outstanding hereunder. Maker at any time or from
time to time may prepay all or any portion of the
outstanding principal balance of this Note (together with
accrued interest thereon through the date of such
prepayment) without penalty or premium.
If this Note becomes due and payable on a Saturday,
Sunday or public holiday under the laws of the State of
Georgia, such payment date shall be extended to the next
business day.
This Note shall be secured by a pledge of certain
stock held by the Maker pursuant to that certain Share
Security Agreement by and between Maker (as Pledgor) and
Payee (as Pledgee) dated as of the date hereof (the
"Security Agreement").
The occurrence and continuation of any one of the
following events ("Event of Default") shall constitute a
default hereunder: (i) Maker shall fail to make due and
punctual payment of the principal of or interest on this
Note; (ii) Maker violates any covenant in this Note (other
than payment when due of principal or interest on this
Note) or the Security Agreement, and Maker fails to cure
such violation within ten (10) days after notice thereof
from Payee; or (iii) Maker makes an assignment for the
benefit of creditors, files a petition in bankruptcy, is
adjudicated insolvent or bankrupt, petitions a court for
the appointment of any receiver or trustee for Maker or any
substantial part of Maker's property, commences any
proceeding relating to Maker under any arrangement or debt
readjustment law or statute of any jurisdiction whether now
or hereafter in effect or there is commenced against Maker
any such proceeding which remains undismissed for sixty
(60) days, or Maker by any act indicates consent to,
approval of or acquiescence in any such proceeding or the
appointment of any receiver or trustee for Maker or any
substantial part of Maker's property, or suffers any such
receivership or trusteeship to continue undischarged for
sixty (60) days.
If an Event of Default occurs and is continuing
hereunder, then, at the option of Payee, the entire
principal amount outstanding hereunder, together with all
accrued and unpaid interest thereon shall, upon written
notice from Payee to Maker, become immediately due and
payable. The rights, remedies, powers and privileges
provided for herein are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
No waiver by Payee of any default shall be effective
unless in writing, nor shall it operate as a waiver of any
other default or of the same default on a future occasion.
No delay or omission by Payee in exercising any of its
rights, remedies, powers and privileges hereunder or at law
and no course of dealing between Payee and Maker or any
other person shall be deemed a waiver by Payee of any of
such rights, remedies, powers and privileges even if such
delay or omission is continuous or repeated, nor shall any
single or partial exercise of any right, remedy, power or
privilege preclude any other or further exercise thereof by
Payee or the exercise of any other right, remedy, power or
privilege by Payee.
Maker hereby waives presentment, demand, protest and
notice of any kind (including notice of presentment,
demand, protest, dishonor or nonpayment).
If this Note is placed in the hands of any attorney
for collection, or if collected by suit or through any
bankruptcy or other legal proceedings, Maker hereby agrees
to pay all expenses incurred by the holder of this Note,
including attorneys' fees and costs, all of which shall
become a part of the principal hereof.
Each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable
law, but if any provision of this Note shall be prohibited
by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note.
This Note shall be binding upon Maker and Maker's
heirs, administrators, successors and assigns and shall
inure to the benefit of Payee and its successors and
assigns.
This Note in all respects shall be governed by and
construed and enforced in accordance with the laws of the
State of Georgia, without giving effect to any principles
of conflicts of laws. This Note may not be changed orally,
but only by an instrument in writing executed by the
parties hereto.
Time is of the essence of this Note.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Note as of the date and year first set forth
above.
/s/ Karen S. Hughes (SEAL)
KAREN S. HUGHES, Maker
