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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
Information to be included in statements filed pursuant to Rule 13d-1(a)and
amendments thereto filed pursuant to Rule 13d-2(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 5 )*
TIS MORTGAGE INVESTMENT COMPANY
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
8725 27 10
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(CUSIP Number)
Marc C. Krantz, Kohrman Jackson & Krantz P.L.L.,
1375 East 9th Street, Cleveland, Ohio 44114, 216-736-7204
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
February 2, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box [ ].
NOTE: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7(b)
for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
Page 1 of 25 Pages
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SCHEDULE 13D
CUSIP NO. 8725 27 10
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Turkey Vulture Fund XIII, Ltd.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
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PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
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14 TYPE OF REPORTING PERSON*
OO
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Page 2 of 25 Pages
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CUSIP No. 8725 27 10
This Amendment No. 5 to Schedule 13D Statement is filed on behalf of Turkey
Vulture Fund XIII, Ltd. (the "Fund"), an Ohio limited liability company, for the
purpose of reporting the disposition of 793,700 shares of common stock, $0.001
par value per share (the "Common Stock"), of TIS Mortgage Investment Company, a
Maryland corporation ("TIS"), owned by the Fund and the revocation of the proxy
and option granted to Third Capital, LLC, a Tennessee limited liability company
("Third Capital"), Mr. Jarratt and Mr. Lewis, by the Fund .
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 to Schedule 13D is hereby amended and supplemented as follows:
Reference is hereby made to Amendment No. 4 to Schedule 13D Statement filed
with the Securities and Exchange Commission by the Fund on March 19, 1998
("Amendment No. 4"), describing the Option to Purchase 760,000 shares of Common
Stock of TIS, dated March 16, 1998 (the "Option"),and the Irrevocable Proxy (the
"Proxy") executed by the Fund appointing Christopher L. Jarratt or in his
absence James G. Lewis attorneys-in-fact for the purpose of voting, at their
discretion, all 760,000 shares of Common Stock subject to the Option at the
election of directors of TIS. A copy of the Option and the Proxy was attached to
Amendment No. 4 as Exhibit 7.4.
On February 1, 1999, TIS, the Fund, Richard M. Osborne, the sole Manager
of the Fund, Third Capital and Messrs. Jarratt and Lewis entered into an
agreement whereby (i) the Fund sold all of its 793,700 shares of Common Stock
to TIS for $2.50 per share; (ii) Messrs. Jarratt and Lewis sold all of their
personally-owned shares of Common Stock to TIS for $2.00 per share; and (iii)
the Fund, Third Capital and Messrs. Osborne, Jarratt and Lewis agreed that
for a period of seven years from the date of the agreement they would not (a)
acquire any shares of Common Stock of TIS, (b) solicit any proxies to vote
any shares of TIS, (c) effect or participate in any tender offers involving
TIS, (d) form, join or participate in a group (as that term is defined in the
Securities Exchange Act of 1934) with respect to TIS,(e) seek to control or
influence the management, board of directors or policies of TIS, (f) take any
action to compel TIS to hold an annual or special meeting of shareholders, or
(g) enter into any discussions or arrangements with any person regarding any
of the foregoing (the "TIS Agreement").
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In addition, Messrs. Osborne, Jarratt and Lewis resigned as directors of
TIS effective February 2, 1999, to allow TIS to proceed with a transaction with
Pacific Securitization, Inc.
The TIS Agreement is attached hereto as Exhibit 7.5 and incorporated by
reference. In accordance with the terms of the TIS Agreement, the Fund, Third
Capital, and Messrs. Osborne, Jarratt and Lewis entered into the Revocation of
Option and Proxy Agreement, whereby the Option and Proxy were revoked. The
Revocation of Option and Proxy Agreement is attached hereto as Exhibit 7.6 and
incorporated by reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is amended and supplemented as follows:
(a) According to the most recently available filing with the Securities and
Exchange Commission by TIS, there are 8,105,880 shares of Common Stock
outstanding.
The Fund beneficially owns zero shares of Common Stock, or 0.0% of the
outstanding shares of Common Stock.
(b) Mr. Osborne, as sole Manager of the Fund, has sole power to vote, or to
direct the voting of, and the sole power to dispose or to direct the disposition
of, the shares of Common Stock owned by the Fund.
(c) Since the filing of Amendment No. 4, the Fund has sold all 793,700
shares of Common Stock for $2.50 per share to TIS as mentioned in Item 4 above.
(d) Not Applicable.
(e) The Fund ceased to be the beneficial owner of more than 5.0% of the
outstanding shares of Common Stock of TIS on February 2, 1999.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
Item 6 to Schedule 13D is hereby amended and supplemented as follows:
Reference is hereby made to Item 4 which describes the TIS Agreement and
the Revocation of Option and Proxy Agreement, which agreements are attached
hereto as Exhibits 7.5 and 7.6, respectively.
Page 4 of 25 Pages
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 to Schedule 13D is hereby amended and supplemented as follows:
Exhibit 7.5 Agreement, as of February 1, 1999, by and among TIS Mortgage
Investment Company, a Maryland corporation, Turkey Vulture Fund
XIII, Ltd., an Ohio limited liability company, Richard M.
Osborne, Third Capital, LLC, a Tennessee limited liability
company, Christopher L. Jarratt and James G. Lewis
Exhibit 7.6 Revocation of Option and Proxy Agreement, as of February 2, 1999,
Turkey Vulture Fund XIII, Ltd., an Ohio limited liability
company, Richard M. Osborne, Third Capital, LLC, a Tennessee
limited liability company, Christopher L. Jarratt and James G.
Lewis
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CUSIP No. 8725 27 10
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 16, 1999 Turkey Vulture Fund XIII, Ltd.
/s/ Richard M. Osborne
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Richard M. Osborne, Manager
Page 6 of 25 Pages
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Exhibit Index
Exhibit 7.5 Agreement, as of February 1, 1999, by and among TIS Mortgage
Investment Company, a Maryland corporation, Turkey Vulture Fund
XIII, Ltd., an Ohio limited liability company, Richard M.
Osborne, Third Capital, LLC, a Tennessee limited liability
company, Christopher L. Jarratt and James G. Lewis
Exhibit 7.6 Revocation of Option and Proxy Agreement, as of February 2, 1999,
Turkey Vulture Fund XIII, Ltd., an Ohio limited liability
company, Richard M. Osborne, Third Capital, LLC, a Tennessee
limited liability company, Christopher L. Jarratt and James G.
Lewis
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EXHIBIT 7.5
AGREEMENT
THIS AGREEMENT is made as of February 1, 1999, by and among TIS Mortgage
Investment Company, a Maryland corporation (the "Company"), Turkey Vulture Fund
XIII, Ltd., an Ohio limited liability company ("TVF"), Richard M. Osborne
("Osborne"), Third Capital, LLC, a Tennessee limited liability company ("Third
Capital"), Christopher L. Jarratt ("Jarratt") and James G. Lewis ("Lewis"),
being sometimes collectively referred to as the "Parties", with reference to the
following:
A. TVF owns 793,700 shares of common stock, par value $0.001 per
share (the "Common Stock"), of the Company, which it acquired in open market
purchases from July 1996 through April 1997, and Jarratt and Lewis personally
own 20,000 and 12,000 shares of Common Stock, respectively. The shares of
Common Stock owned by TVF are sometimes referred to as the "TVF Shares", the
shares of Common Stock owned by Jarratt and Lewis are sometimes referred to as
the "Jarratt Shares" and "Lewis Shares", respectively, and the TVF Shares,
Jarratt Shares and Lewis Shares are sometimes collectively referred to as the
"Shares".
B. At the annual meeting of shareholders of the Company held on May
29, 1997, Osborne, Jarratt and Lewis, who had disagreed with management
regarding the future direction of the Company, were elected directors of the
Company. Osborne is the sole manager of TVF, Jarratt is the chief manager of
Third Capital and Jarratt and Lewis are the only members of Third Capital.
C. On March 16, 1998, TVF granted Third Capital the right to purchase
760,000 of the Shares (the "Option"). Concurrently with the grant of the
Option, TVF executed an irrevocable proxy (the "Proxy") granting Jarratt or, in
his absence, Lewis, the right to vote 760,000 of the TVF Shares for the election
of individuals to serve as directors of the Company.
D. The Company is negotiating with Pacific Securitization, Inc.
("Pacific") to acquire Novato Markets, Inc. in consideration of the issuance of
its shares. Such transaction is sometimes referred to as the "Pacific
Transaction."
E. It is a condition precedent to the closing of the Pacific
Transaction that the Company purchase the Shares for issuance to Pacific in the
Pacific Transaction and that Osborne, Jarratt and Lewis resign from the Board of
Directors of the Company.
NOW, THEREFORE, in consideration of the mutual promises and subject to
the terms and conditions herein set forth, the Parties agree as follows:
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1. PURCHASE AND SALE OF SHARES
(a) At the Closing (as defined below), TVF shall sell all
793,700 of the TVF Shares to the Company, and the Company shall purchase the TVF
Shares from TVF, for a total purchase price of $1,984,250, which shall be paid
by wire transfer to an account(s) designated by TVF. TVF and Third Capital each
acknowledge that payment of the purchase price by the Company to TVF shall
satisfy any ownership or other interest they may have in the TVF Shares
(including, without limitation, Third Capital's rights under the Option), that
their respective rights to the proceeds from sale of the TVF Shares are to be
determined among them and that the Company will have no further obligation
therefor.
(b) At the Closing, Jarratt shall sell the Jarratt Shares and
Lewis shall sell the Lewis Shares to the Company, and the Company shall purchase
the Jarratt Shares and the Lewis Shares, for a purchase price of $40,000 and
$24,000, respectively, which shall be paid by wire transfer to accounts
designated by each of Jarratt and Lewis.
2. CLOSING
The closing of the purchase of the Shares (the "Closing") shall
take place at such date and time as the Company shall designate to TVF, which
shall occur as soon as practicable after the Board of Directors of the Company
shall have approved a definitive purchase agreement relating to the Pacific
Transaction, but in no event shall the Closing occur later than February 1,
1999. The Closing shall consist of (i) transfer of the TVF Shares to the
Company by TVF by book transfer through the facilities of the Depository Trust
Company in a manner satisfactory to the Company, (ii) wire transfer by the
Company of $1,984,250 to an account(s) designated by TVF, (iii) transfer of the
Jarratt Shares and Lewis Shares to the Company by Jarratt and Lewis by book
transfer through the facilities of the Depository Trust Company in a manner
satisfactory to the Company or by delivery to the Company of certificates
evidencing such Shares endorsed or with stock powers attached in proper form for
transfer, (iv) wire transfer by the Company of $40,000 and $24,000 to Jarratt
and Lewis, respectively, to accounts designated by Jarratt and Lewis, and (v)
the other deliveries referred to in Section 6 below.
3. REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to each of the other Parties that as of the date
hereof and as of the Closing:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland.
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(b) The Company has all necessary power and authority,
corporate and otherwise, to execute and deliver this Agreement and all other
documents to be executed and delivered by it pursuant to this Agreement; and the
Company has taken all necessary actions required to be taken to authorize it to
execute and deliver this Agreement and such other documents, and to perform all
of its obligations to be observed and performed by it under this Agreement.
This Agreement has been duly executed and delivered by the Company, and
constitutes the valid and binding agreement of the Company enforceable against
the Company in accordance with its terms.
(c) The execution and delivery of this Agreement and the
actions contemplated by this Agreement will not constitute a violation of, or be
in conflict with, or result in a cancellation of, or constitute a default under:
(i) any term or provision of the articles of incorporation or bylaws of the
Company; (ii) any judgment, decree, order, regulation or rule of any court or
governmental authority; (iii) any statute or law, including without limitation
Section 3-601 ET. SEQ. of the Maryland GCL (as defined herein) ; or (iv) any
contract, agreement, indenture, lease or other commitment to which the Company
is a party or by which it is bound; and will not cause any material change in
the rights or obligations of any party under any such contract, agreement,
indenture, lease or commitment.
(d) The disinterested directors of the Company (being
those directors other than Ms. Legg, Ms. Howe, Osborne, Jarratt and Lewis) have
unanimously determined that the Pacific Transaction, if and when closed, and the
purchase of the Shares as contemplated by this Agreement are fair and in the
best interests of the Company and its stockholders.
3.2 REPRESENTATIONS AND WARRANTIES OF TVF. TVF hereby
represents and warrants to each of the other Parties that as of the date hereof
and as of the Closing:
(a) TVF is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Ohio.
(b) TVF has all necessary power and authority to execute
and deliver this Agreement and all other documents to be executed and delivered
by it pursuant to this Agreement; and TVF has taken all necessary actions
required to be taken to authorize it to execute and deliver this Agreement and
such other documents, and to perform all of its obligations to be observed and
performed by it under this Agreement. This Agreement has been duly executed and
delivered by TVF, and constitutes the valid and binding agreement of TVF
enforceable against TVF in accordance with its terms.
(c) The execution and delivery of this Agreement and the
actions contemplated by this Agreement will not constitute a violation of, or be
in conflict with, or result in a cancellation of, or constitute a default under:
(i) any term or provision of the operating agreement or other organizational
documents of TVF; (ii) any judgment,
Page 10 of 25 Pages
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decree, order, regulation or rule of any court or governmental authority; (iii)
any statute or law; or (iv) any contract, agreement, indenture, lease or other
commitment to which TVF is a party or by which it is bound; and will not cause
any material change in the rights or obligations of any party under any such
contract, agreement, indenture, lease or commitment.
(d) The TVF Shares are all held in book entry form in
account(s) at EVEREN Securities, Inc. and are owned by TVF free and clear of all
liens, claims, encumbrances, options, security agreements and adverse claims,
except for Osborne's margin account at EVEREN Securities, Inc. and the Option.
At Closing, the TVF Shares will be transferred to or for the account of the
Company free and clear of all liens, claims, encumbrances, options, security
agreements and adverse claims, including, but not limited to, the foregoing
margin account and the Option.
(e) Neither TVF nor any of its Affiliates (as defined
below), owns or has any rights to acquire any other shares of Common Stock other
than the TVF Shares.
3.3 REPRESENTATIONS AND WARRANTIES OF THIRD CAPITAL. Third
Capital hereby represents and warrants, and Jarratt and Lewis with respect to
Section 3.3(e) only hereby represent and warrant, to each of the other Parties
that as of the date hereof and as of the Closing (except as otherwise
indicated):
(a) Third Capital is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Tennessee.
(b) Third Capital has all necessary power and authority
to execute and deliver this Agreement and all other documents to be executed and
delivered by it pursuant to this Agreement; and Third Capital has taken all
necessary actions required to be taken to authorize it to execute and deliver
this Agreement and such other documents, and to perform all of its obligations
to be observed and performed by it under this Agreement. This Agreement has
been duly executed and delivered by Third Capital, and constitutes the valid and
binding agreement of Third Capital enforceable against Third Capital in
accordance with its terms.
(c) The execution and delivery of this Agreement and the
actions contemplated by this Agreement will not constitute a violation of, or be
in conflict with, or result in a cancellation of, or constitute a default under:
(i) any term or provision of the operating agreement or other organizational
documents of Third Capital; (ii) any judgment, decree, order, regulation or rule
of any court or governmental authority; (iii) any statute or law; or (iv) any
contract, agreement, indenture, lease or other commitment to which Third Capital
is a party or by which it is bound; and will not cause any material change in
the rights or obligations of any party under any such contract, agreement,
indenture, lease or commitment.
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(d) Third Capital has not assigned the Option or any
interest therein or rights thereto to any Person and, as of the Closing, the
Option will have been terminated and Third Capital will have no claim or right
to any of the Shares.
(e) Neither Third Capital, Jarratt or Lewis nor any of
their Affiliates owns or has any rights to acquire any shares of Common Stock,
except (i) under the Option at the date of this Agreement only, and (ii) Jarratt
and Lewis personally own the Jarratt Shares and Lewis Shares, respectively.
4. CERTAIN OTHER COVENANTS
4.1 COVENANTS OF TVF AND OSBORNE. For the benefit of the
Company, TVF and Osborne agree as follows:
(a) TVF shall not sell or otherwise transfer any TVF
Shares or any interest therein or rights related thereto before the Closing.
(b) Neither TVF or Osborne shall take any action to
cause any of TVF's representations and warranties to be untrue as of the
Closing.
(c) TVF shall revoke the Proxy as of the Closing.
(d) Osborne shall resign as a director of the Company as
of the Closing.
4.2 COVENANTS OF THIRD CAPITAL, JARRATT AND LEWIS. For the
benefit of the Company, Third Capital, Jarratt and Lewis agree as follows:
(a) Third Capital shall not assign the Option or any
interest therein or rights thereto to any person or entity, and will terminate
the Option as of the Closing.
(b) None of Third Capital, Jarratt and Lewis shall take
any action to cause any of Third Capital's representations and warranties to be
untrue as of the Closing.
(c) Jarratt and Lewis shall each resign as a director of
the Company and shall relinquish the Proxy as of the Closing.
(d) Neither Jarratt nor Lewis shall sell or otherwise
transfer the Jarratt Shares or the Lewis Shares, as the case may be, or any
interest therein or rights related thereto before the Closing.
5. CONDITIONS TO CLOSING
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5.1 THE COMPANY'S CONDITIONS TO CLOSING. The obligations of
the Company under this Agreement shall be subject to the following (any of which
may be waived by the Company in whole or in part):
(a) A definitive agreement between the Company and
Pacific evidencing the terms and conditions of the Pacific Transaction shall
have been unanimously approved by the disinterested directors of the Company.
(b) Each of the representations and warranties of TVF,
Third Capital, Jarratt and Lewis shall be true and accurate in all material
respects as of the Closing and each of them shall have performed their
respective covenants hereunder.
(c) No injunction, judgment, order, decree or ruling
shall have been entered in any action, suit or proceeding pending before any
court or agency of any federal, state or local jurisdiction that prevents the
performance of the Parties' obligations hereunder, including but not limited to
the purchase of the Shares contemplated by this Agreement.
5.2 TVF'S, JARRATT'S AND LEWIS' CONDITIONS TO CLOSING. The
obligations of TVF, Third Capital, Jarratt and Lewis under this Agreement shall
be subject to the following (any of which may be waived in whole or in part):
(a) A definitive agreement between the Company and
Pacific evidencing the terms and conditions of the Pacific Transaction shall
have been unanimously approved by the disinterested directors of the Company.
(b) Each of the representations and warranties of the
Company shall be true and accurate as of the Closing in all material respects
and the Company shall have performed its covenants hereunder.
(c) No injunction, judgment, order, decree or ruling
shall have been entered in any action, suit or proceeding pending before any
court or agency of any federal, state or local jurisdiction that prevents the
performance of the Parties' obligations hereunder, including but not limited to
the purchase of the Shares contemplated by this Agreement; provided, however,
that this shall not apply to any action, suit or proceeding initiated by any
Party (other than the Company) or any of such Party's Affiliates.
6. DELIVERIES BY THE PARTIES
The Parties shall deliver or cause to be delivered the following
at the Closing:
(a) The Company shall pay the purchase prices in the amount and
manner set forth in Section 2 of this Agreement.
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(b) TVF, Jarratt and Lewis shall effect a book transfer of the
Shares to or for the account of the Company through the facilities of the
Depository Trust Company in a manner satisfactory to the Company or shall
deliver certificates duly endorsed or with stock powers attached in proper form
for transfer.
(c) TVF and Third Capital shall deliver evidence satisfactory
to the Company that the Option has been terminated and the Proxy has been
revoked and relinquished.
(d) Osborne, Jarratt and Lewis shall each deliver their
resignations to the Company as directors of the Company, which resignations
shall be effective at the Closing.
7. RELEASES
7.1 THE COMPANY'S RELEASE. As of the Closing, and without
further action by any of the Parties, the Company, on behalf of itself and its
Affiliates, predecessors, successors and assigns, and all others claiming
through the Company (collectively, the "Company Releasors"), fully releases and
discharges TVF, Osborne, Third Capital, Jarratt and Lewis, and their Affiliates,
agents, predecessors, successors and assigns (the "Shareholder Releasees"), from
any and all claims, demands, disputes, controversies, damages, expenses,
obligations, liabilities, costs, fees (including reasonable attorneys' fees) and
causes of action of whatever kind or character which any of the Company
Releasors have, may have or may claim to have against any of the Shareholder
Releasees arising out of or relating to, directly or indirectly, the business or
affairs of the Company or the ownership of its stock.
7.2 OTHER PARTIES' RELEASE. As of the Closing, and without
further action by any of the Parties, TVF and Third Capital, on behalf of
themselves and their Affiliates, predecessors, successors and assigns, and all
others claiming through TVF or Third Capital, and Osborne, Jarratt and Lewis and
their Affiliates (collectively, the "Shareholder Releasors"), fully release and
discharge the Company and its Affiliates, agents, predecessors, successors and
assigns (the "Company Releasees"), from any and all claims, demands, disputes,
controversies, damages, expenses, obligations, liabilities, costs, fees
(including reasonable attorneys' fees) and causes of action of whatever kind or
character which any of the Shareholder Releasors have, may have or may claim to
have against any of the Company Releasees arising out of or relating, directly
or indirectly, to the business or affairs of the Company or the ownership of its
stock.
7.3 LIMITATIONS. Notwithstanding the foregoing, the releases
in Sections 7.1 and 7.2 shall not extend to any claims arising out of or
relating to the failure of any Party to perform its or his obligations under
this Agreement.
7.4 GENERAL RELEASE. The Parties understand and agree that the
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released claims are intended to and do include any and all claims of every
nature and kind whatsoever, known, unknown, suspected or unsuspected which each
has, or may have, against the other. The Parties hereby expressly waive the
provisions and benefits of Section 1542 of the California Civil Code and any
statute or other law of any other state similar or substantially similar to
Section 1542. Section 1542 provides:
A general release does not extend to claims which
the creditor does not know or suspect to exist in
his favor at the time of executing the release,
which if known by him must have materially affected
his settlement with the debtor.
The Parties also further acknowledge that they may hereafter discover facts
different from, or in addition to, those which they now know or believe to be
true. The Parties agree that, in such event, this Agreement shall nevertheless
be and remain effective in all respects, notwithstanding such different or
additional facts, or the discovery thereof.
7.5 NO ASSIGNMENT. The Parties each represent and warrant that
neither they nor any of their respective Affiliates have sold, assigned or
otherwise transferred any interest in any of the claims being released hereby.
If this representation and warranty is breached, the breaching Party shall
indemnify and hold harmless the other Parties and their respective Affiliates
from all claims, demands, fees (including reasonable attorneys' fees) and
expenses of every kind or character (including those arising from any interest
and any claim assigned to or transferred to any other person).
7.6 INDEMNIFICATION.
(a) In the event that any of the Parties commences any
suit or other proceeding or in any manner asserts any of the claims that are
released pursuant to this Agreement against another Party, then the Party
commencing such suit or other proceeding shall indemnify and hold such other
Party harmless, to the full extent provided by law, from and against any and all
such claims. This indemnity extends to any and all expenses incurred by such
other Party (including reasonable attorneys' fees) in the course of defending
against or settling any such claims, the amount of any judgment that might be
entered against such Party, and any amounts paid by such Party in settlement
thereof. This agreement of indemnity shall be deemed breached and a cause of
action shall be deemed to have accrued immediately upon the commencement of any
such suit or proceeding described above. In such event, this agreement of
indemnity may be pleaded as a full and complete defense thereto, as the basis
for an abatement of or injunction against said action, and as the basis of a
counterclaim or cross-claim for damages therein.
(b) The Company acknowledges that, upon the signing of
this Agreement and following their resignation from the Board of Directors of
the Company, Osborne, Jarratt and Lewis each will be and will continue to be
entitled to indemnification to the fullest extent permitted by the Maryland
General Corporation Law (the "Maryland
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GCL"), as provided in Section 7.3(b) of the Articles of Incorporation and
Section 6.2 of the Bylaws of the Company and, subject to the limitations of
Section 2-418 of the Maryland GCL, such indemnification shall include, without
limitation, indemnification for any act or omission involving the purchase and
sale of the Shares or otherwise in connection with this Agreement or the Pacific
Transaction. In the event that the Company or any Person who is not a Party
hereto commences any suit or other proceeding against Osborne, Jarratt or Lewis
involving any act or omission for which he is entitled to indemnification as
provided in the immediately preceding sentence, including, without limitation,
the purchase and sale of the Shares or otherwise in connection with, or arising
from, this Agreement or the Pacific Transaction, the Company agrees, subject to
the limitations of Section 2-418 of the Maryland GCL, to indemnify and hold him
harmless from and against all such claims and to pay or reimburse him for any
and all expenses incurred by him, including reasonable attorneys' fees, in
advance of the final disposition of such suit or other proceeding upon its
receipt of the written affirmations and undertakings required by Section
2-418(f) of the Maryland GCL.
8. STANDSTILL
TVF, Osborne, Third Capital, Jarratt and Lewis each agree that,
for a period commencing on the date of this Agreement and continuing for seven
years from the Closing or until termination of this Agreement under Section 9,
unless such shall have been specifically authorized in writing by the Company,
it or he will not, nor will any of its or his Affiliates, in any manner,
directly or indirectly:
(a) effect or seek, offer or propose (whether publicly or
otherwise) to effect, or cause to participate in or in any way assist any other
Person to effect or seek, offer or propose (whether publicly or otherwise) to
effect or participate in, (i) any acquisition of any securities or rights to
acquire securities (or beneficial ownership thereof) or assets of the Company or
any of its subsidiaries, (ii) any tender or exchange offer, merger or other
business combination involving the Company or any of its subsidiaries, (iii) any
recapitalization, restructuring, liquidation, dissolution or other extraordinary
transaction with the respect to the Company or any of its subsidiaries, or (iv)
any "solicitation" of "proxies" (as such terms are used in the proxy rules of
the Securities and Exchange Commission) or consents to vote any voting
securities of the Company;
(b) form, join or in any way participate in a "group" (as
defined under the Securities Exchange Act of 1934, as amended) with respect to
the Company;
(c) otherwise act, alone or in concert with others, to seek to
control or influence the management, Board of Directors or policies of the
Company or its subsidiaries;
(d) take any action or participate in or assist any other
Person to take any action to compel the holding of an annual or special meeting
of stockholders of the
Page 16 of 25 Pages
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Company;
(e) take any action that might cause the Company to make a
public announcement regarding any of the types of matters set forth in Section
8(a) above; or
(f) enter into any discussions or arrangements with any Person
with respect to any of the foregoing.
Notwithstanding the foregoing, TVF, Osborne, Third Capital, Jarratt and Lewis
shall not be restricted prior to the Closing with respect to any of the
activities covered in clauses (a), (b) or (c), or clauses (e) or (f) to the
extent they relate to clauses (a), (b) or (c), if prior to the Closing the
Company calls an annual or special meeting of its stockholders on its own
initiative and without being compelled to do so by court order. For purposes of
this Agreement, the term "subsidiaries" shall include all current and future
subsidiaries, partnerships, limited liability companies or other entities
controlled by the Company.
9. TERMINATION
This Agreement may be terminated:
(a) by the written agreement of the Company and TVF;
(b) by the Company by written notice to the other Parties if
any of the representations and warranties in Sections 3.2 and 3.3 are not true
and correct in all material respects;
(c) by TVF by written notice to the other Parties if any of the
representations and warranties of the Company in Section 3.1 are not true and
correct in all material respects; or
(d) by either the Company or TVF by written notice to the other
Parties if the purchase of the Shares contemplated hereby shall not have been
consummated by 5:00 P.M., Pacific Time, on February 1, 1999, unless caused by
the failure of the Company, on the one hand, or any of the other Parties, on the
other hand, as the case may be, to perform any of the covenants herein to be
performed by it or him prior to or at the Closing.
In the event of termination of this Agreement under this Section 9, this
Agreement shall be void and have no further effect, except for the liability of
a Party for breach of any of its or his covenants occurring before such
termination and for the provisions of Section 10 to the extent they pertain
thereto.
Page 17 of 25 Pages
<PAGE>
10. MISCELLANEOUS
10.1 ACKNOWLEDGMENT. TVF, Osborne, Third Capital, Jarratt and
Lewis each acknowledge that, personally or through their managers, as the case
may be, they have had access to such information (financial and other)
concerning the Company and its subsidiaries as they have requested, and have had
their questions about the Company and its subsidiaries answered to their
satisfaction.
10.2 ENTIRE AGREEMENT. This Agreement supersedes all prior
negotiations and understandings of any kind with respect to the subject matter
hereof and contains all of the terms and provisions of agreement between the
parties hereto with respect to the subject matter hereof.
10.3 BINDING EFFECT. This Agreement shall be binding upon, and
inure to the benefit of, the Parties and their respective Affiliates,
successors, assigns, transferees, legal representatives and all other persons or
entities succeeding to the rights or obligations of the Parties, and each of
them.
10.4 NOTICES. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and delivered
personally, by facsimile or by mail, postage prepaid, return receipt requested,
to the Parties, addressed as follows:
If to the Company, as follows:
TIS Mortgage Investment Company
655 Montgomery Street
San Francisco, CA 94111
Attention: Lorraine O. Legg
Facsimile: (415) 393-8006
with a copy to:
Heller Ehrman White & McAuliffe
333 Bush Street
San Francisco, CA 94104-2878
Attention: Daniel E. Titelbaum, Esq.
Facsimile: (415) 772-6268
If to TVF or Osborne, as follows:
Turkey Vulture Fund XIII, Ltd.
7001 Center Street
Mentor, OH 44060
Attention: Richard M. Osborne
Page 18 of 25 Pages
<PAGE>
Facsimile: (440) 255-8645
with a copy to:
Kohrman Jackson & Krantz P.L.L.
1375 East 9th Street
Cleveland, OH 44114
Attention: Marc C. Krantz
Facsimile: (216) 621-6536
If to Third Capital, Jarratt or Lewis, as follows:
Third Capital, LLC
314 Church Street
Nashville, TN 37201
Facsimile: (615) 255-3190
Such notices and other communications shall be deemed given upon personal
delivery, on the date of facsimile transmission with confirmation and on the
second business day following any mailing, as the case may be. Any Party may
change the address to which such notices and other communications are to be
directed by giving written notice to the other Parties in the manner provided in
this Section.
10.5 AMENDMENT AND WAIVER. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the Party against whom enforcement of
the change, waiver, discharge or termination is sought.
10.6 EXECUTION OF AGREEMENT. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same agreement. This Agreement shall not be effective
until each Party has executed its or his counterpart and delivered it to each
other Party. Execution and delivery of this Agreement may be effected by the
exchange of facsimile copies, and the parties' signatures thereon shall be
deemed to be their original signatures for purposes of proving the validity of
the execution and delivery of this Agreement.
10.7 EXPENSES. Subject to Sections 7.6 and 10.12, each Party
shall bear his or its own expenses, including attorneys' fees, incurred by it or
him in connection with the negotiation, execution, delivery and performance of
this Agreement.
10.8 SURVIVAL. All representations and warranties of the
Parties contained in this Agreement shall survive the Closing.
10.9 GOVERNING LAW. This Agreement shall be governed by, and
Page 19 of 25 Pages
<PAGE>
interpreted in accordance with, the laws of the State of California, without
regard to the laws as to choice or conflict of laws.
10.10 CONSTRUCTION OF AGREEMENT. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. This Agreement and all its
provisions shall be construed in accordance with its fair meaning and no rule of
strict construction shall be applied against any Party on the basis that it
drafted this Agreement or otherwise. Moreover, the following terms shall have
the definitions set forth below:
(a) "Affiliate" shall mean any Person which directly or
indirectly controls, is controlled by, or is under common control with such
Person. A Person shall be deemed to control another Person if such Person owns
10% or more of any class of stock of the "controlled" Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the controlled Person, whether through ownership of
equity securities of such Person, by contract, or otherwise. Affiliate shall
also include any Person who is a member of the Person's immediate family sharing
the same household, or who is an officer, director, manager or employee of such
Person or of any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such Person.
(b) "Person" shall mean any individual, corporation
(including any non-profit corporation), general or limited partnership, limited
liability company, joint venture, estate, trust, association, organization,
labor union, or other entity or governmental body.
10.11 FURTHER ASSURANCES. Each Party shall execute and deliver
such further documents and take such further actions as any other Party may
reasonably request in order to carry out the purpose and intent of this
Agreement.
10.12 ATTORNEYS' FEES. In the event of any action, arbitration
or other proceeding by one Party against any other Party arising from or in
connection with this Agreement or the releases contained herein, the prevailing
Party shall recover its or his reasonable attorneys' fees, expenses and costs,
including, without limitation, all fees, expenses and costs incurred in such
action, arbitration or other proceeding and any appeals or petitions relating
thereto.
10.13 DISPARAGING COMMUNICATIONS. Each Party agrees, for a
period commencing on the date of this Agreement and continuing for seven years
from the Closing or until termination of this Agreement under Section 9, not to,
and to cause its Affiliates not to, defame, or falsely disparage, discredit or
deprecate, or make false representations of fact, about any other Party or its
Affiliates, or otherwise provide inaccurate information tending to damage the
other Party or its Affiliates in its reputation, office, trade, business or
means of earning a livelihood, including, without limitation, by
Page 20 of 25 Pages
<PAGE>
stating that any other Party or its Affiliates has failed to exercise his, her
or its fiduciary duty to the stockholders of the Company. This Section 10.13
shall be limited to those matters that, directly or indirectly, relate to the
business or affairs of the Company or the ownership of its stock.
10.14 PUBLICITY. No Party shall make any disclosures or give any
notices to third parties or other publicity, including press releases,
concerning this Agreement or any of the transactions contemplated hereby (other
than the Pacific Transaction) without the prior approval of all the Parties to
this Agreement, except to the extent that counsel to the Company shall recommend
that a particular public disclosure or notice is or may be appropriate, in which
event the Company shall provide the content of the proposed disclosure or notice
to TVF which shall use its best efforts to promptly notify the Company of any
comments or that it has no comments, but the Company shall not make such public
disclosure or release such notice for 48 hours after providing TVF with the
content of the proposed disclosure or notice in the absence of a response from
TVF.
[The remainder of this page intentionally left blank]
Page 21 of 25 Pages
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first written above.
TIS MORTGAGE INVESTMENT COMPANY
By: /s/ Lorraine O. Legg
----------------------------------
Lorraine O. Legg
President
TURKEY VULTURE FUND XIII, LTD.
By: /s/ Richard M. Osborne
----------------------------------
Richard M. Osborne
Sole Manager
/s/ Richard M. Osborne
----------------------------------
Richard M. Osborne, individually
THIRD CAPITAL, LLC
By: /s/ Christopher L. Jarratt
----------------------------------
Christopher L. Jarratt
Chief Manager
/s/ Christopher L. Jarratt
----------------------------------
Christopher L. Jarratt, individually
/s/ James G. Lewis
----------------------------------
James G. Lewis, individually
Page 22 of 25 Pages
<PAGE>
EXHIBIT 7.6
REVOCATION OF OPTION AND PROXY AGREEMENT
THIS REVOCATION OF OPTION AND PROXY AGREEMENT (this "Agreement") is made as
of February 2, 1999 by and among Turkey Vulture Fund XIII, Ltd., an Ohio limited
liability company (the "Fund"), Richard M. Osborne ("Osborne"), Third Capital,
LLC, a Tennessee limited liability company ("Third Capital"), Christopher L.
Jarratt ("Jarratt"), and James G. Lewis ("Lewis"), being sometimes collectively
referred to as the "Parties."
RECITALS
A. Osborne is the sole Manager of the Fund. Jarratt is the chief manager
of Third Capital and Jarratt and Lewis are the only members of Third Capital.
B. The Fund owns 793,700 shares (the "Shares") of common stock, par value
$0.001 per share (the "Common Stock") of TIS Mortgage Investment Company, a
Maryland corporation ("TIS").
C. On March 16, 1998, the Fund granted to Third Capital the right to
purchase 760,000 of the Shares (the "Option"). Concurrently with the grant of
the Option, the Fund executed an irrevocable proxy granting Jarratt, or in his
absence, Lewis, the right to vote 760,000 of the Shares for the election of
individuals to serve as directors of TIS (the "Proxy").
D. Concurrently with the execution of this Agreement, the Parties have
entered into an agreement with TIS whereby the Fund will sell all of the 793,700
Shares to TIS (the "TIS Agreement").
E. The Parties desire to enter into an agreement whereby the Proxy will
be revoked, the Option will be terminated and none of the Parties will have any
rights under the Proxy or the Option as of the Closing (as that term is defined
in the TIS Agreement).
NOW, THEREFORE, in consideration of the mutual
Page 23 of 25 Pages
<PAGE>
promises and subject to the terms and conditions herein set forth, the Parties
agree as follows:
1. Third Capital, Jarratt and Lewis represent and warrant to the Fund
that as of the date hereof and as of the Closing (as that term is defined in the
TIS Agreement) that none of them have, or will have, assigned or transferred the
Proxy or the Option or any interest therein or rights thereto to any person or
entity.
2. Without any further actions by the Parties, concurrently with the
Closing (as that term is defined in the TIS Agreement) and payment for the
Shares pursuant to the terms of the TIS Agreement, the Proxy will be revoked and
relinquished, the Option will be terminated and neither will be valid or
enforceable.
3. (a) Any of the terms or conditions of this Agreement may be waived at
any time by the Party or Parties entitled to the benefit thereof but only by a
written notice signed by the Party or Parties waiving such terms or conditions.
(b) This Agreement may be amended, supplemented or interpreted at any
time only by written instrument duly executed by each of the Parties hereto.
(c) This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of Ohio, without regard to the laws as to
the choice or conflict of laws.
(d) This Agreement supersedes all prior negotiations and
understandings of any kind with respect to the subject matter hereof and
contains all of the terms and provisions of agreement between the Parties hereto
with respect to the subject matter hereof.
(e) The individuals executing this Agreement on behalf of the Fund
and Third Capital are duly authorized to execute this Agreement and have full
authority to bind the Fund and Third Capital.
(f) This Agreement shall be binding upon, and inure to the benefit
of, the Parties and their
Page 24 of 25 Pages
<PAGE>
respective successors and all other parties succeeding to the rights or
obligations of the Parties, and each of them. None of the rights or obligations
of any of the Parties hereto may be assigned without the prior written consent
of the other parties hereto.
(g) This Agreement may be executed in any number of counterparts,
each of which, when executed, shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument, provided that this
Agreement shall not be effective until each party has delivered its counterpart
to each other party.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.
TURKEY VULTURE FUND XIII, LTD.
By: /s/ Richard M. Osborne
------------------------------
Richard M. Osborne, Manager
/s/ Richard M. Osborne
------------------------------
Richard M. Osborne, individually
THIRD CAPITAL, LLC
By: /s/ Christopher L. Jarratt
------------------------------
Christopher L. Jarratt, Chief Manager
/s/ Christopher L. Jarratt
------------------------------
Christopher L. Jarratt, individually
/s/ James G. Lewis
------------------------------
James G. Lewis, individually
Page 25 of 25 Pages
