-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FhQRhNaCf0uydpL8jufLJpbgt0YQIpKP7gPxhn99RFVanjknw0gfTZ0H6nFCBdvI O4fHGEX+QhrGCtLlf6OicQ== /in/edgar/work/20000811/0000950144-00-009935/0000950144-00-009935.txt : 20000921 0000950144-00-009935.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950144-00-009935 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KOGER EQUITY INC CENTRAL INDEX KEY: 0000835664 STANDARD INDUSTRIAL CLASSIFICATION: [6798 ] IRS NUMBER: 592898045 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09997 FILM NUMBER: 693393 BUSINESS ADDRESS: STREET 1: 8880 FREEDOM CROSSING TRAIL CITY: JACKSONVILLE STATE: FL ZIP: 32256 BUSINESS PHONE: 9047321000 MAIL ADDRESS: STREET 1: 8880 FREEDOM CROSSING TRAIL CITY: JACKSONVILLE STATE: FL ZIP: 32256 10-Q 1 e10-q.txt KOGER EQUITY, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 2000 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number 1-9997 KOGER EQUITY, INC. (Exact name of registrant as specified in its charter) FLORIDA 59-2898045 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 8880 FREEDOM CROSSING TRAIL JACKSONVILLE, FLORIDA 32256 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (904) 732-1000 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at July 31, 2000 Common Stock, $.01 par value 26,762,274 shares 2 KOGER EQUITY, INC. AND SUBSIDIARIES INDEX
PAGE NO. PART I. FINANCIAL INFORMATION Independent Accountants' Report.............................................................................. 3 Item 1. Financial Statements: Condensed Consolidated Balance Sheets June 30, 2000 and December 31, 1999....................................................................... 4 Condensed Consolidated Statements of Operations for the Three and Six Month Periods Ended June 30, 2000 and 1999.................................................................................... 5 Condensed Consolidated Statement of Changes in Shareholders' Equity for the Six Month Period Ended June 30, 2000 ...................................................................................... 6 Condensed Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 2000 and 1999................................................... 7 Notes to Condensed Consolidated Financial Statements for the Three and Six Month Periods Ended June 30, 2000 and 1999.................................................................................... 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................................................. 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk............................................ 13 PART II. OTHER INFORMATION Item 1. Legal Proceedings..................................................................................... 14 Item 4. Submission of Matters to a Vote of Security Holders................................................... 14 Item 5. Other Information..................................................................................... 15 Item 6. Exhibits and Reports on Form 8-K...................................................................... 17 Signatures..................................................................................................... 18
2 3 INDEPENDENT ACCOUNTANTS' REPORT To the Board of Directors and Shareholders of Koger Equity, Inc. Jacksonville, Florida We have reviewed the accompanying condensed consolidated balance sheet of Koger Equity, Inc. and subsidiaries (the "Company") as of June 30, 2000 and the related condensed consolidated statements of operations for the three and six month periods ended June 30, 2000 and 1999, the condensed consolidated statement of changes in shareholders' equity for the six month period ended June 30, 2000 and the condensed consolidated statements of cash flows for the six month periods ended June 30, 2000 and 1999. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to such condensed consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of the Company as of December 31, 1999, and the related consolidated statements of operations, changes in shareholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated February 18, 2000, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1999 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. DELOITTE & TOUCHE LLP Certified Public Accountants Jacksonville, Florida July 25, 2000 3 4 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS KOGER EQUITY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED - SEE INDEPENDENT ACCOUNTANTS' REPORT) (IN THOUSANDS)
JUNE 30, DECEMBER 31, 2000 1999 ------------ ------------ ASSETS Real Estate Investments: Operating properties: Land $ 142,093 $ 140,061 Buildings 815,220 784,769 Furniture and equipment 2,550 2,693 Accumulated depreciation (145,680) (137,452) ------------ ------------ Operating properties - net 814,183 790,071 Properties under construction: Land 2,128 8,347 Buildings 6,195 41,912 Undeveloped land held for investment 13,899 16,034 Undeveloped land held for sale, net of allowance 557 1,103 Cash and temporary investments 4,974 -- Accounts receivable, net of allowance for uncollectible accounts of $351 and $440 10,796 10,512 Investment in Koger Realty Services, Inc. 2,328 2,319 Cost in excess of fair value of net assets acquired, net of accumulated amortization of $1,111 and $1,025 1,445 1,530 Other assets 11,976 13,911 ------------ ------------ TOTAL ASSETS $ 868,481 $ 885,739 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgages and loans payable $ 348,952 $ 351,528 Accounts payable 4,062 12,716 Accrued real estate taxes payable 8,412 1,383 Accrued liabilities - other 16,542 13,162 Dividends payable 9,330 9,370 Advance rents and security deposits 7,319 6,570 ------------ ------------ Total Liabilities 394,617 394,729 ------------ ------------ Minority interest 23,216 23,184 ------------ ------------ Shareholders' Equity: Common stock 292 288 Capital in excess of par value 462,568 457,945 Notes receivable from stock sales (5,393) -- Retained earnings 23,068 30,546 Treasury stock, at cost (29,887) (20,953) ------------ ------------ Total Shareholders' Equity 450,648 467,826 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 868,481 $ 885,739 ============ ============
See Notes to Condensed Consolidated Financial Statements. 4 5 KOGER EQUITY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED - SEE INDEPENDENT ACCOUNTANTS' REPORT) (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTH PERIOD SIX MONTH PERIOD ENDED JUNE 30, ENDED JUNE 30, 2000 1999 2000 1999 ------- -------- ------- ------- REVENUES Rental and other rental services $42,131 $ 39,062 $83,537 $77,183 Management fees 241 504 651 1,094 Interest 193 47 249 95 Income (loss) from Koger Realty Services, Inc. 231 (167) 161 446 ------- -------- ------- ------- Total revenues 42,796 39,446 84,598 78,818 ------- -------- ------- ------- EXPENSES Property operations 16,275 15,294 31,697 29,968 Depreciation and amortization 8,591 7,688 17,126 15,289 Mortgage and loan interest 6,998 5,448 13,677 11,012 General and administrative 8,979 2,333 14,087 4,054 Direct cost of management fees 162 223 298 663 Other 57 54 136 113 ------- -------- ------- ------- Total expenses 41,062 31,040 77,021 61,099 ------- -------- ------- ------- INCOME BEFORE GAIN ON SALE OR DISPOSITION OF ASSETS, INCOME TAXES AND MINORITY INTEREST 1,734 8,406 7,577 17,719 Gain on sale or disposition of assets 4,404 4 4,404 4 ------- -------- ------- ------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 6,138 8,410 11,981 17,723 Income taxes -- (39) 155 173 ------- -------- ------- ------- INCOME BEFORE MINORITY INTEREST 6,138 8,449 11,826 17,550 Minority interest 298 325 631 676 ------- -------- ------- ------- NET INCOME $ 5,840 $ 8,124 $11,195 $16,874 ======= ======== ======= ======= EARNINGS PER SHARE: Basic $ 0.22 $ 0.30 $ 0.42 $ 0.63 ======= ======== ======= ======= Diluted $ 0.22 $ 0.30 $ 0.41 $ 0.63 ======= ======== ======= ======= WEIGHTED AVERAGE SHARES: Basic 26,615 26,683 26,705 26,632 ======= ======== ======= ======= Diluted 26,959 27,020 27,027 26,953 ======= ======== ======= =======
See Notes to Condensed Consolidated Financial Statements. 5 6 KOGER EQUITY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED - SEE INDEPENDENT ACCOUNTANTS' REPORT) (IN THOUSANDS)
COMMON STOCK NOTES ------------------ CAPITAL IN RECEIVABLE TOTAL SHARES PAR EXCESS OF FROM STOCK RETAINED TREASURY SHAREHOLDERS' ISSUED VALUE PAR VALUE SALES EARNINGS STOCK EQUITY ------ ----- ---------- ---------- -------- --------- ------------- Balance, December 31, 1999 28,756 $ 288 $ 457,945 $ 30,546 $ (20,953) $ 467,826 Common stock sold 123 $ (4,003) 4,771 891 Treasury stock purchased (13,996) (13,996) 401(k) Plan contribution 134 128 262 Restricted stock issued (48) (48) Options exercised 391 4 4,414 (1,390) 163 3,191 Dividends declared (18,673) (18,673) Net income 11,195 11,195 ------ ----- ---------- -------- -------- --------- --------- Balance, June 30, 2000 29,147 $ 292 $ 462,568 $ (5,393) $ 23,068 $ (29,887) $ 450,648 ====== ===== ========== ======== ======== ========= =========
See Notes to Condensed Consolidated Financial Statements. 6 7 KOGER EQUITY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED - SEE INDEPENDENT ACCOUNTANTS' REPORT) (IN THOUSANDS)
SIX MONTH PERIOD ENDED JUNE 30, 2000 1999 --------- --------- OPERATING ACTIVITIES Net income $ 11,195 $ 16,874 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 17,126 15,289 Income from Koger Realty Services, Inc. (161) (446) Provision for uncollectible accounts 339 120 Minority interest 631 676 Gain on sale or disposition of assets (4,404) (4) Changes in assets and liabilities: Increase in accounts payable, accrued liabilities and other liabilities 3,234 126 Decrease (increase) in receivables and other assets 747 (2,684) --------- --------- Net cash provided by operating activities 28,707 29,951 --------- --------- INVESTING ACTIVITIES Property acquisitions (10) -- Building construction expenditures (9,767) (28,169) Tenant improvements to first generation space (2,341) (2,717) Tenant improvements to existing properties (4,555) (5,778) Building improvements (1,522) (1,560) Energy management improvements (210) (6) Deferred tenant costs (1,759) (1,288) Additions to furniture and equipment (244) (572) Dividends received from Koger Realty Services, Inc. 152 152 Proceeds from sales of assets 28,857 6 --------- --------- Net cash provided by (used in) investing activities 8,601 (39,932) --------- --------- FINANCING ACTIVITIES Proceeds from exercise of stock options 2,675 1,424 Proceeds from sales of common stock 891 216 Proceeds from mortgages and loans 52,783 53,943 Dividends paid (18,713) (15,950) Distributions paid to limited partners (599) (507) Treasury stock purchased (13,996) (852) Principal payments on mortgages and loans (55,359) (27,556) Financing costs (16) (161) --------- --------- Net cash (used in) provided by financing activities (32,334) 10,557 --------- --------- Net increase in cash and cash equivalents 4,974 576 Cash and cash equivalents - beginning of period -- 4,827 --------- --------- Cash and cash equivalents - end of period $ 4,974 $ 5,403 ========= ========= SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the period for interest, net of amount capitalized $ 13,520 $ 10,938 ========= ========= Cash paid during the period for income taxes $ 155 $ 94 ========= =========
See Notes to Condensed Consolidated Financial Statements. 7 8 KOGER EQUITY, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2000 AND 1999 (UNAUDITED - SEE INDEPENDENT ACCOUNTANTS' REPORT) 1. BASIS OF PRESENTATION. The condensed consolidated financial statements include the accounts of Koger Equity, Inc., its wholly-owned subsidiaries and Koger-Vanguard Partners, L.P. (the "Company"). All material intercompany transactions have been eliminated. The financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission related to interim financial statements. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 1999, included in the Company's Form 10-K Annual Report for the year ended December 31, 1999. The balance sheet at December 31, 1999, has been derived from the audited financial statements at that date and is condensed. All adjustments of a normal recurring nature which, in the opinion of management, are necessary to present a fair statement of the results for the interim periods have been made. Results of operations for the six month period ended June 30, 2000, are not necessarily indicative of the results to be expected for the full year. In December 1999, the Securities and Exchange Commission issued Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements." The objective of this SAB is to provide further guidance on revenue recognition issues in the absence of authoritative literature addressing a specific arrangement or a specific industry. The Company is required to adopt the guidance in the SAB no later than the fourth quarter of 2000. Adoption of this guidance is not expected to have a material impact on the Company's financial position or results of operations. The SEC has recently indicated it intends to issue further guidance with respect to adoption of specific issues addressed by SAB No. 101. Until such time as this additional guidance is issued, the Company is unable to assess the impact, if any, it may have on its financial position or results of operations. 2. ORGANIZATION. Koger Equity, Inc. ("KE"), a Florida corporation, was incorporated in 1988 for the purpose of investing in the ownership of income producing properties, primarily commercial office buildings. KE is self-administered and self-managed. Koger-Vanguard Partners, L.P. ("KVP") is a Delaware limited partnership, for which KE is the general partner. Koger Equity's common stock is listed on the New York Stock Exchange under the ticker symbol KE. In addition to managing its own properties, KE, through certain related entities, provides property management services to third parties. In conjunction with Koger Real Estate Services, Inc. ("KRES"), a Florida corporation and a wholly-owned subsidiary of KE, KE manages eight office buildings owned by Centoff Realty Company, Inc. ("Centoff"), a subsidiary of Morgan Guaranty Trust Company of New York. 3. FEDERAL INCOME TAXES. The Company is operated in a manner so as to qualify, and has elected tax treatment, as a real estate investment trust under the Internal Revenue Code (a "REIT"). As a REIT, the Company is required to distribute annually at least 95 percent of its REIT taxable income to its shareholders. To the extent that the Company pays dividends equal to 100 percent of REIT taxable income, the earnings of the Company are not taxed at the corporate level. However, the use of net operating loss carryforwards, which may be used to reduce REIT taxable income, are limited for alternative minimum tax purposes. Since the Company had no REIT taxable income during 1999 and does not expect to have REIT taxable income during 2000, no provision has been made for Federal income taxes. However, the Company has recorded a provision of $130,000 for alternative minimum tax for the six month period ended June 30, 2000. 8 9 4. STATEMENTS OF CASH FLOWS. Cash in excess of daily requirements is invested in short-term monetary securities. Such temporary cash investments have an original maturity date of less than three months and are deemed to be cash equivalents for purposes of the statements of cash flows. During the six month period ended June 30, 2000, the Company contributed 15,557 shares of common stock to the Company's 401(k) Plan. These shares had a value of approximately $262,000 based on the closing price of the Company's common stock on the American Stock Exchange on December 31, 1999. During the six month period ended June 30, 1999, the Company contributed 15,603 shares of common stock to the Company's 401(k) Plan. These shares had a value of approximately $268,000 based on the closing price of the Company's common stock on the American Stock Exchange on December 31, 1998. In addition, the Company issued 19,695 shares of common stock as payment for certain 1998 bonuses for senior management. These shares had a value of approximately $285,000 based on the closing price of the Company's common stock on the American Stock Exchange on February 18, 1999. 5. EARNINGS PER COMMON SHARE. Basic earnings per common share has been computed based on the weighted average number of shares of common stock outstanding for each period. Diluted earnings per common share is similar to basic earnings per share except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if the dilutive common shares (options) had been issued. The treasury stock method is used to calculate dilutive shares which reduces the gross number of dilutive shares by the number of shares purchasable from the proceeds of the options assumed to be exercised. 6. MORTGAGES AND LOANS PAYABLE. At June 30, 2000, the Company had $348,952,000 of loans outstanding, which are collateralized by mortgages on certain operating properties. Annual maturities for mortgages and loans payable are as follows (in thousands):
YEAR ENDING DECEMBER 31, 2000 $ 2,165 2001 98,106 2002 12,704 2003 5,202 2004 5,632 Subsequent Years 225,143 --------- Total $ 348,952 =========
7. DIVIDENDS. The Company paid a quarterly dividend of $0.35 per share on February 3, 2000, to shareholders of record on December 31, 1999. The Company paid a quarterly dividend of $0.35 per share on May 4, 2000, to shareholders of record on March 31, 2000. During the quarter ended June 30, 2000, the Company's Board of Directors declared a quarterly dividend of $0.35 per share payable on August 3, 2000, to shareholders of record on June 30, 2000. A portion of the dividends paid during 2000 may be treated as return of capital for income tax purposes. 8. NOTES RECEIVABLE FROM STOCK SALES. During February 2000, the Company's Board of Directors (the "Board") approved a program to lend up to $2.5 million to executive officers and department heads for the purpose of exercising options. The loans have a term of 60 months and bear interest at 150 basis points over the applicable LIBOR rate. Through June 30, 2000, options have been exercised to acquire 185,027 shares of common stock under this program. In conjunction with the Company's plan to repurchase up to 2.65 million shares of common stock (the "Shares"), the Board granted to Thomas Crocker, Chief Executive Officer, the right to purchase up to 500,000 Shares and to Robert Onisko, Chief Financial Officer, the right to purchase up to 150,000 Shares. These officers are entitled to make purchases of one Share of every three Shares purchased by the Company as part of this plan. The Shares may be purchased at the same time and for the same prices as the Company purchases Shares. In addition, the Company will loan up to 75 percent of the purchase price for these Shares to Mr. Crocker and Mr. Onisko. These loans will be collateralized by the Shares purchased, will be without recourse and will bear interest at 150 basis points over the applicable LIBOR rate. Through June 30, 2000, Mr. Crocker acquired 207,970 Shares and Mr. Onisko acquired 69,323 Shares under this plan. 9 10 9. STOCK OPTIONS. During the quarter ended June 30, 2000, the Company granted options to purchase 600,000 shares of its common stock. All options were granted with an exercise price equal to the market value at the date of grant. 10. SUBSEQUENT EVENTS. On July 10, 2000, the Company sold approximately 5.6 acres of undeveloped land located in Richmond, Virginia (with a book value of $481,000) for $850,000. During July 2000, the Company signed an agreement to sell the El Paso Center. The sale of this office park is expected to close during the quarter ending September 30, 2000. Selected information for the El Paso Center, as of June 30, 2000, is provided below: Number of buildings 17 Gross square feet 386,000 Usable square feet 315,583 Percent leased 84% Net book value (in thousands) $ 18,213
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the condensed consolidated financial statements and related notes appearing elsewhere in this Form 10-Q, and the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Annual Report on Form 10-K for the period ended December 31, 1999. RESULTS OF OPERATIONS. Rental and other rental services revenues totaled $42,131,000 for the quarter ended June 30, 2000, compared to $39,062,000 for the quarter ended June 30, 1999. This increase in rental revenues resulted primarily from (i) increases in the Company's average rental rate and (ii) increases in rental revenues ($4,327,000) from the properties acquired and construction completed during 1999 and 2000. The effect of these increases was partially offset by the reduction of rental revenues ($3,740,000) caused by the sale of two office parks during 1999 and another office park on June 1, 2000. At June 30, 2000, the Company's buildings were on average 90 percent leased with an average rental rate of $17.35. Excluding the five buildings which were in the lease-up period at June 30, 2000, the remainder of the Company's buildings were on average 92 percent leased. At June 30, 1999, the Company's buildings were on average 90 percent leased with an average rental rate of $16.31. Rental and other rental services revenues increased to $83,537,000 during the six month period ended June 30, 2000, compared to $77,183,000 during the same period last year. This increase resulted primarily from (i) increases in the Company's average rental rate and (ii) increases in rental revenues ($8,207,000) from the properties acquired and construction completed during 1999 and 2000. The effect of these increases was partially offset by the reduction of rental revenues ($6,966,000) caused by the sale of office parks as described above. Management fee revenues totaled $241,000 for the quarter ended June 30, 2000, compared to $504,000 for the quarter ended June 30, 1999. This decrease was due primarily to the reduction in fees earned under the management contract with Centoff due to the management contract for one of the Centoff centers being transferred from the Company to Koger Realty Services, Inc. ("KRSI") on January 1, 2000. The Company earned management fee revenues totaling $204,000 for the management and leasing of this property during the quarter ended June 30, 1999. Management fee revenues decreased to $651,000 during the six month period ended June 30, 2000, compared to $1,094,000 during the same period last year, due to the reduction in fees earned under the management contract with Centoff. The Company earned management fee revenues totaling $404,000 for the management and leasing of the transferred property during the six months ended June 30, 1999. During March 1999, Centoff sold one of the centers for which the Company had provided management services. The Company earned management fee revenues totaling $194,000 for the management and leasing of this property during 1999. Another agreement to manage one commercial office building was terminated by the Company during February 1999. The Company earned fees of $82,000 for the management of this building during 1999. 10 11 Income (loss) from Koger Realty Services, Inc. totaled $231,000 for the quarter ended June 30, 2000, compared to $(167,000) for the quarter ended June 30, 1999. This increase was due primarily to the decrease in the accrual for compensation expense related to a bonus plan which is based on KE's common stock price. For the six months ended June 30, 2000, income from Koger Realty Services, Inc. declined $285,000, compared to the same period last year, primarily due to an increase in general and administrative expenses. Property operations expense includes charges for utilities, real estate taxes, janitorial, maintenance, property insurance, provision for uncollectible rents and management costs. The amount of property operations expense and its percentage of total rental revenues for the applicable periods are as follows:
PERCENT OF TOTAL PERIOD AMOUNT RENTAL REVENUES - --------------------------- ----------- ---------------- June 30, 2000 - Quarter $16,275,000 38.6% June 30, 1999 - Quarter 15,294,000 39.2% June 30, 2000 - Six Months 31,697,000 37.9% June 30, 1999 - Six Months 29,968,000 38.8%
Property operations expense increased primarily due to (i) increased accruals for real estate taxes, (ii) increased accruals to provision for uncollectible accounts and (iii) increases in property operations expense ($1,816,000 and $3,259,000, respectively, for the three and six month periods ended June 30, 2000) for the properties acquired and construction completed during 1999 and 2000. The effect of these increases was partially offset by the decline in property operations expense ($1,523,000 and $2,935,000, respectively, for the three and six month periods ended June 30, 2000) caused by the sale of two office parks during 1999 and another office park on June 1, 2000. Depreciation expense has been calculated on the straight-line method based upon the useful lives of the Company's depreciable assets, generally 3 to 40 years. Depreciation expense increased $847,000 and $1,699,000, respectively, for the three and six month periods ended June 30, 2000, compared to the same periods last year, due to the properties acquired and construction completed during 1999 and 2000. Amortization expense increased $56,000 and $138,000, respectively, for the three and six month periods ended June 30, 2000, compared to the same periods last year, due primarily to deferred tenant costs which were incurred after June 30, 1999. Interest expense increased by $1,550,000 and $2,665,000, respectively, during the three and six month periods ended June 30, 2000, compared to the same periods last year, primarily due to the increase in the average balance of mortgages and loans payable. At June 30, 2000, the weighted average interest rate on the Company's outstanding debt was approximately 8.07 percent. General and administrative expenses for the three month periods ended June 30, 2000 and 1999, totaled $8,979,000 and $2,333,000, respectively. This increase is primarily due to certain non-recurring charges associated with a corporate reorganization which totaled approximately $6,832,000. These non-recurring charges include (i) charges for termination benefits and impact of curtailment under the supplemental executive retirement plan ($2,490,000), (ii) charges for severance payments ($3,265,000), (iii) reorganization expenses ($862,000) and (iv) accrued compensation related to accelerated vesting of stock options ($215,000). General and administrative expenses for the six month periods ended June 30, 2000 and 1999, totaled $14,087,000 and $4,054,000, respectively. This increase is primarily due to certain non-recurring charges for (i) costs of a corporate reorganization ($6,832,000), (ii) severance payments made to certain former senior executives ($2,562,000), (iii) changes in termination benefits under the supplemental executive retirement plan ($584,000), (iv) payments to retiring directors ($138,000) and (v) initial fees for listing on the New York Stock Exchange ($161,000). Direct costs of management contracts decreased $61,000 for the three month period ended June 30, 2000, compared to the same period last year, due to decreased costs associated with providing property management services for the Centoff management contract caused by the transfer of the management contract for one of the Centoff centers to KRSI. The Company incurred costs totaling $43,000 for the management and leasing of this property during the quarter ended June 30, 1999. Compared to the prior 11 12 year, direct costs of management contracts decreased $365,000 for the six months ended June 30, 2000. The Company incurred costs totaling $164,000, during the six months ended June 30, 1999, for the management and leasing of the property for which the management contract was transferred to KRSI. During the six months ended June 30, 1999, the Company incurred costs totaling $138,000 for the management and leasing of the property which was sold by Centoff. Net income totaled $5,840,000 for the quarter ended June 30, 2000, compared to net income of $8,124,000 for the corresponding period of 1999. This decrease is due primarily to (i) an increase in general and administrative expenses due to corporate reorganization costs, (ii) an increase in property operations expense, (iii) an increase in interest expense and (iv) an increase in depreciation and amortization expense. These items were partially offset by increases in (i) gain on sale or disposition of assets and (ii) rental revenues. Net income decreased $5,679,000 during the six month period ended June 30, 2000, compared to the same period last year. This decrease is due primarily to increases in (i) general and administrative expenses as explained above, (ii) property operations expense, (iii) interest expense and (iv) depreciation and amortization expense. These items were partially offset by increases in (i) gain on sale or disposition of assets and (ii) rental revenues. LIQUIDITY AND CAPITAL RESOURCES. OPERATING ACTIVITIES - During the six months ended June 30, 2000, the Company generated approximately $28.7 million in net cash from operating activities. The Company's primary internal sources of cash are (i) the collection of rents from buildings owned by the Company and (ii) the receipt of management fees paid to the Company in respect of properties managed on behalf of Centoff. As a REIT for Federal income tax purposes, the Company is required to pay out annually, as dividends, 95 percent of its REIT taxable income (which, due to non-cash charges, including depreciation and net operating loss carryforwards, may be substantially less than cash flow). In the past, the Company has paid out dividends in amounts at least equal to its REIT taxable income. The Company believes that its cash provided by operating activities will be sufficient to cover debt service payments and to pay the dividends required to maintain REIT status through 2000. The level of cash flow generated by rents depends primarily on the occupancy rates of the Company's buildings and changes in rental rates on new and renewed leases and under escalation provisions in existing leases. At June 30, 2000, leases representing approximately 10.8 percent of the gross annualized rent from the Company's properties, without regard to the exercise of options to renew, were due to expire during the remainder of 2000. This represents 448 leases for space in buildings located in 19 of the 24 centers or locations in which the Company owns buildings. Certain of these tenants may not renew their leases or may reduce their demand for space. During the six months ended June 30, 2000, leases were renewed on approximately 52 percent of the Company's usable square feet, which were scheduled to expire during the six month period. For those leases which were renewed, the average rental rate increased from $16.49 to $17.73, an increase of 7.5 percent. Based upon the number of leases which will expire during 2000 and the competition for tenants in the markets in which the Company operates, the Company has and expects to continue to offer incentives to certain new and renewal tenants. These incentives may include the payment of tenant improvement costs and in certain markets reduced rents during initial lease periods. The Company continues to benefit from existing economic conditions and stable vacancy levels for office buildings in many of the metropolitan areas in which the Company owns buildings. The Company believes that the southeastern and southwestern regions of the United States offer excellent growth potential due to their diverse regional economies, expanding metropolitan areas, skilled work force and moderate labor costs. However, the Company cannot predict whether such economic growth will continue. Cash flow from operations could be reduced if economic growth were not to continue in the Company's markets and if this resulted in lower occupancy and rental rates for the Company's buildings. Governmental tenants (including the State of Florida and the United States Government) which account for approximately 19.9 percent of the Company's leased space at June 30, 2000, may be subject to budget reductions in times of recession and governmental austerity measures. Consequently, there can be no assurance that governmental appropriations for rents may not be reduced. Additionally, certain of the Company's private sector tenants may reduce their need for office space in the future. 12 13 INVESTING ACTIVITIES - At June 30, 2000, substantially all of the Company's invested assets were in real properties. Improvements to the Company's existing properties have been financed through internal operations. During the six month period ended June 30, 2000, the Company's expenditures for improvements to existing properties decreased $1,057,000 from the corresponding period of the prior year primarily due to a decrease in expenditures for tenant improvements. This decrease in expenditures for tenant improvements was primarily due to (i) the sale of two office parks during the third quarter of 1999 and (ii) fewer leased square feet expiring during the first six months of 2000 compared to 1999. On June 1, 2000, the Company sold the Tulsa Center (containing 476,400 usable square feet and 10 acres of undeveloped land) for approximately $28,844,000, net of selling costs. These properties were sold to KWIRP-Tulsa Associates, L.P. The sale of the Tulsa Center when combined with certain property adjustments resulted in a gain of $4,404,000 during the quarter ended June 30, 2000. The Company has two buildings under construction, which will contain approximately 148,000 usable square feet. Expenditures for construction of these two buildings are expected to total approximately $14.9 million, excluding land and tenant improvement costs. FINANCING ACTIVITIES - The Company has a $150 million secured revolving credit facility ($93.5 million of which was outstanding on June 30, 2000 at a weighted average interest rate of 8.17 percent) provided by First Union National Bank of Florida, AmSouth Bank, N.A., Citizens Bank of Rhode Island, Compass Bank and Guaranty Federal Bank. Loan maturities and normal amortization of mortgages and loans payable are expected to total approximately $4.5 million over the next 12 months. However, the Company's secured revolving credit facility will mature in December 2001. The Company has filed shelf registration statements with respect to the possible issuance of up to $300 million of its common and/or preferred stock and the Company has issued $91.6 million of its common stock under such registration statements. At June 30, 2000, the Company had 23 office buildings, containing approximately 1.7 million usable square feet, which were unencumbered. The foregoing discussion contains forward-looking statements concerning 2000. The actual results of operations for 2000 could differ materially from those projected because of factors affecting the financial markets, reactions of the Company's existing and prospective investors, the ability of the Company to identify and execute development projects and acquisition opportunities, the ability of the Company to renew and enter into new leases on favorable terms, and other risk factors. See Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - - Cautionary Statement Relevant to Forward-Looking Information for Purpose of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995" in the Company's Annual Report on Form 10-K for the Fiscal Year Ended December 31, 1999. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK INTEREST RATE RISK. The Company currently has a $150 million secured revolving credit facility with variable interest rates. The Company may incur additional variable rate debt in the future to meet its financing needs. Increases in interest rates on such debt could increase the Company's interest expense, which would adversely affect the Company's cash flow and the amount of distributions to its shareholders. The Company has not entered into any interest rate hedge contracts to mitigate this interest rate risk. As of June 30, 2000, the Company had $93.5 million outstanding under the secured revolving credit facility. If the weighted average interest rate on this variable rate debt changes 100 basis points higher or lower, annual interest expense would be increased or decreased by approximately $935,000. 13 14 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The Company held its 2000 Annual Meeting of Shareholders on May 18, 2000. (b) Not Applicable. (c) At the Company's 2000 Annual Meeting of Shareholders in addition to the election of directors, the following matters were considered, voted upon and approved: 1. The amendment to the Koger Equity, Inc. Articles of Incorporation: SHARES VOTED FOR: 23,082,080 SHARES VOTED AGAINST: 66,767 SHARES ABSTAINED: 58,667 BROKER NON-VOTE: 0
2. The Koger Equity, Inc. 1998 Equity and Cash Incentive Plan, as Amended and Restated: SHARES VOTED FOR: 19,930,403 SHARES VOTED AGAINST: 3,191,591 SHARES ABSTAINED: 85,520 BROKER NON-VOTE: 0
14 15 ITEM 5. OTHER INFORMATION (a) The following table sets forth, with respect to each Koger Center or location at June 30, 2000, gross square feet, usable square feet, percentage leased, and the average annual rent per usable square foot leased.
AVERAGE ANNUAL RENT PER GROSS USABLE PERCENT SQUARE KOGER CENTER/ LOCATION SQUARE FEET SQUARE FEET LEASED (1) FOOT (2) - ---------------------- ----------- ----------- ---------- -------- Atlanta Chamblee 1,199,800 982,673 97% $ 18.11 Atlanta Gwinnett (3) 274,400 228,066 81% 20.10 Atlanta Perimeter 184,000 151,175 100% 21.96 Austin 458,400 370,948 99% 22.16 Birmingham Colonnade (3) 471,200 393,926 80% 18.15 Birmingham Colonnade-Retail 112,600 112,186 96% 11.19 Charlotte Carmel 339,200 285,526 91% 19.47 Charlotte University 190,600 161,805 98% 19.68 Charlotte Vanguard 548,200 484,601 91% 13.20 El Paso (3) 386,000 315,583 84% 16.04 Greensboro South 749,200 610,866 78% 16.03 Greensboro Wendover 98,300 80,978 54% 19.34 Greenville Park Central 161,700 138,478 84% 18.44 Greenville Roper Mt. 431,000 350,199 90% 17.74 Jacksonville Baymeadows 793,400 664,363 98% 13.19(4) Jacksonville JTB 322,500 276,544 100% 13.25 Memphis Germantown (3) 562,600 459,528 88% 19.36 Orlando Central 699,700 552,549 97% 16.30 Orlando Lake Mary 318,000 268,472 96% 21.91 Orlando University 337,800 276,366 100% 19.57 Richmond Paragon 154,300 126,621 97% 19.80 San Antonio Airport 258,800 202,149 92% 19.32 San Antonio West 1,102,200 915,683 85% 16.49 St. Petersburg (3) 715,500 579,676 79% 16.23 Tallahassee 960,300 786,092 88% 19.04 ----------- ------------ Total 11,829,700 9,775,053 =========== ============ Weighted Average - Total Company 90% $ 17.35 ========= ======= Weighted Average - Operational Buildings 92% $ 17.30 ========= ======= Weighted Average - Buildings in Lease-up 45% $ 21.14 ========= =======
(1) The percent leased rates have been calculated by dividing total multi-tenant usable square feet leased in an office building by multi-tenant usable square feet in such building. (2) Rental rates are computed by dividing (a) total annualized base rents (which excludes expense pass-throughs and reimbursements) for a Koger Center or location as of June 30, 2000 by (b) the multi-tenant usable square feet applicable to such total annualized rents. (3) Includes a building which is currently in the lease-up period. (4) Excludes corporate office space from calculation. Includes the effect of three net leases where tenants lease the entire building and pay certain operating costs in addition to base rent. 15 16 (b) The following schedule sets forth for all of the Company's buildings (i) the number of leases which will expire during the remainder of calendar year 2000 and calendar years 2001 through 2008, (ii) the total multi-tenant usable area in square feet covered by such leases, (iii) the percentage of total multi-tenant usable square feet represented by such leases, (iv) the average annual rent per square foot for such leases, (v) the current annualized rents represented by such leases, and (vi) the percentage of gross annualized rents contributed by such leases. This information is based on the buildings owned by the Company on June 30, 2000 and on the terms of leases in effect as of June 30, 2000, on the basis of then existing base rentals, and without regard to the exercise of options to renew. Furthermore, the information below does not reflect that some leases have provisions for early termination for various reasons, including, in the case of government entities, lack of budget appropriations. Leases were renewed on approximately 52 percent of the Company's multi-tenant usable square feet, which were scheduled to expire during the six month period ended June 30, 2000.
PERCENTAGE OF AVERAGE PERCENTAGE TOTAL SQUARE ANNUAL RENT TOTAL OF TOTAL NUMBER OF NUMBER OF FEET LEASED PER SQUARE ANNUALIZED ANNUAL. RENTS LEASES SQUARE FEET REPRESENTED FOOT UNDER RENTS UNDER REPRESENTED BY PERIOD EXPIRING EXPIRING EXPIRING LEASES EXPIRING LEASES EXPIRING LEASES EXPIRING LEASES - ------ --------- ----------- --------------- --------------- --------------- --------------- 2000 448 947,265 11.0% $ 17.17 $ 16,267,314 10.8% 2001 555 1,727,521 20.0% 16.43 28,385,794 18.9% 2002 402 1,301,873 15.0% 17.91 23,319,026 15.5% 2003 319 1,497,985 17.3% 17.53 26,259,037 17.5% 2004 265 1,341,070 15.5% 16.98 22,764,974 15.2% 2005 78 535,294 6.2% 18.83 10,080,936 6.7% 2006 15 246,516 2.8% 20.86 5,143,027 3.4% 2007 8 256,979 3.0% 16.31 4,191,598 2.8% 2008 12 181,755 2.1% 19.78 3,594,627 2.4% OTHER 16 617,048 7.1% 16.46 10,153,830 6.8% ----- ---------- ----- ------- ------------- ----- TOTAL 2,118 8,653,306 100.0% $ 17.35 $ 150,160,163 100.0% ===== ========== ===== ======= ============= =====
(c) The Company believes that Funds from Operations is one measure of the performance of an equity real estate investment trust. Funds from Operations should not be considered as an alternative to net income as an indication of the Company's financial performance or to cash flow from operating activities (determined in accordance with generally accepted accounting principles) as a measure of the Company's liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company's needs. Funds from Operations is calculated as follows (in thousands):
Three Month Period Six Month Period Ended June 30, Ended June 30, --------------------- -------------------- 2000 1999 2000 1999 -------- -------- -------- -------- Net Income $ 5,840 $ 8,124 $ 11,195 $ 16,874 Depreciation - real estate 7,738 6,914 15,459 13,803 Amortization - deferred tenant costs 483 442 931 828 Amortization - goodwill 42 43 85 85 Minority interest 298 325 631 676 Gain on sale of operating properties (4,676) -- (4,676) -- Loss (gain) on sale or disposition of non-operating assets 272 -- 272 (4) -------- -------- -------- -------- Funds from Operations $ 9,997 $ 15,848 $ 23,897 $ 32,262 ======== ======== ======== ========
16 17 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits
EXHIBIT NUMBER DESCRIPTION 10(a)(1) Employment Agreement between Koger Equity, Inc. and Thomas J. Crocker, effective January 17, 2000. 10(a)(2) Promissory Note (No Recourse Note), dated as of February 17, 2000, executed by Thomas J. Crocker as maker in favor of Koger Equity, Inc. as Lender. 10(a)(3) Promissory Note (25% Recourse Note), dated as of February 17, 2000, executed by Thomas J. Crocker as maker in favor of Koger Equity, Inc. as Lender. 10(a)(4) Stock Pledge Security Agreement between Koger Equity, Inc. and Thomas J. Crocker, dated as of February 17, 2000. 10(a)(5) Stock Purchase and Loan Agreement between Thomas J. Crocker and Koger Equity, Inc., dated as of February 17, 2000. 10(a)(6) Stock Option Agreement between Koger Equity, Inc. and Thomas J. Crocker, dated as of February 17, 2000. 10(b)(1) Employment Agreement between Koger Equity, Inc. and Robert E. Onisko, effective January 17, 2000. 10(b)(2) Promissory Note (No Recourse Note), dated as of February 17, 2000, executed by Robert E. Onisko as maker in favor of Koger Equity, Inc. as Lender. 10(b)(3) Promissory Note (25% Recourse Note), dated as of February 17, 2000, executed by Robert E. Onisko as maker in favor of Koger Equity, Inc. as Lender. 10(b)(4) Stock Pledge Security Agreement between Koger Equity, Inc. and Robert E. Onisko, dated as of February 17, 2000. 10(b)(5) Stock Purchase and Loan Agreement between Robert E. Onisko and Koger Equity, Inc., dated as of February 17, 2000. 10(b)(6) Stock Option Agreement between Koger Equity, Inc. and Robert E. Onisko, dated as of February 17, 2000. 11 Earnings Per Share Computations. 15 Letter re: Unaudited interim financial information. 27 Financial Data Schedule.
(b) Reports on Form 8-K On June 16, 2000, the Company filed a Form 8-K reporting under Item 5, Other Events, a major management reorganization involving staff reduction and the costs associated with this restructuring and providing under Item 7, Financial Statements and Exhibits, Koger Equity, Inc. News Release dated June 16, 2000. 17 18 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. KOGER EQUITY, INC. Registrant /s/ ROBERT E. ONISKO ------------------------- ROBERT E. ONISKO SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER Dated: August 10, 2000 /s/ JAMES L. STEPHENS ------------------------- JAMES L. STEPHENS VICE PRESIDENT AND CHIEF ACCOUNTING OFFICER 18 EX-10.(A)(1) 2 ex10-a1.txt EMPLOYMENT AGREEMENT, THOMAS J. CROCKER 1 EXHIBIT 10(A)(1) EMPLOYMENT AGREEMENT This is an agreement (the "Agreement") between Koger Equity, Inc. (the "Company"), a Florida corporation with its principal place of business at Jacksonville, Florida, and Thomas J. Crocker (the "Executive"), effective as of February 17, 2000 (the "Effective Date"). WHEREAS, the operations of the Company require direction and leadership in a variety of areas; WHEREAS, the Executive has experience and expertise, as a senior executive, that qualify him to provide that direction and leadership, and the Company therefore wishes to employ him as its chief executive officer, and he wishes to accept such employment. NOW, THEREFORE, the parties agree as follows: 1. Employment; Term. The Company hereby agrees to employ the Executive, and the Executive hereby agrees to enter the employ of the Company in accordance with the terms and conditions set forth herein, for a term (the "Term of Employment"), commencing on March 1, 2000 and terminating, unless otherwise terminated earlier in accordance with Section 4 hereof, on the third anniversary of such date (the "Original Employment Term"), provided that the Employment Term shall automatically be extended, subject to earlier termination as provided in Section 4 hereof, for successive one year periods (each an "Additional Term") unless at least ninety (90) days prior to the end of the Original Employment Term or the then Additional Term, the Company or the Executive has notified the other in writing that the Term of Employment shall terminate at the end of the then current term. 2. Capacity and Performance. During the Term of Employment: (a) the Executive shall serve the Company on a substantially full-time basis as its chief executive officer at the Company's offices in Jacksonville and Boca Raton, Florida; (b) the Executive shall have such duties, authorities and responsibilities as commensurate with chief executive officers of public entities of similar size, including, without limitation, the general supervisory authority over (i) the management of the business and affairs of the Company and (ii) the other executive officers of the Company, subject to the direction of the Board of Directors of the Company (the "Board"), and shall perform such other duties, authorities and responsibilities as may be designated from time to time by the Board commensurate with the position of chief executive officer, and the Company agrees to amend its By-Laws prior to March 1, 2000 to reflect and authorize the forgoing (including, without limitation, specifying that the Chairman's duties shall be limited to presiding over the Board); the Executive shall devote substantially all of his business time, attention and efforts to the performance of his duties hereunder, provided the foregoing will not prevent the Executive from participating in charitable, community or industry affairs, from managing his and his family's personal investments, and assisting with the liquidation of the Crocker Realty Trust, to the extent that the aforementioned activities do not materially interfere with the performance of the Executive's duties hereunder; and 2 (c) the Company agrees to cause Executive's election to the Board during the Term of Employment. 3. Compensation and Benefits. (a) Base Salary. During the Term of Employment, the Company shall pay the Executive base salary ("Base Salary") at the rate of $300,000 per year, prorated for any partial period. All Base Salary shall be payable in accordance with the payroll practices of the Company for its senior executives and shall be subject to increase from time to time by the Board (or its Compensation Committee) in its sole discretion. (b) Bonus. The Executive shall be eligible for year-end annual bonuses in an amount of at least $200,000 (the "Target Bonus"). Payment of the Target Bonus to the Executive shall be within the total discretion of the Compensation Committee of the Board and shall be based upon the Company's performance. (c) Stock Purchase Loan. The Company shall provide the Executive a loan to purchase up to 500,000 shares of the Company's common stock, $.01 par value (the "Common Stock") subject in all respects to the terms and conditions of agreements, in the form and substance substantially similar to the agreements attached as Exhibit A hereto. (d) Option Grant. Executive will be entitled, pursuant to the grant made to Executive on February 17, 2000 (on which day Executive was appointed a member of the Board), to receive from the Company, a stock option (the "Stock Option") to purchase a total of 700,000 shares of Common Stock, with a per share exercise price equal to the fair market value of a share of the Company's Common Stock as of February 17, 2000. The Stock Option shall be for a term of ten years. In the case of (i) the termination of Executive's employment (A) by the Company without Cause or by Executive for Good Reason (as such terms are defined in Section 4 hereof) or (B) pursuant to a notice by either the Company or the Executive to the other of a non-renewal of the Term of Employment in accordance with Section 1 hereof, (ii) the Executive's death or Disability (as defined in Section 4 hereof) or (iii) a Change of Control of the Company (as defined in Section 7.2(b) of the Company's Equity and Cash Incentive Plan (the "1998 Plan"), the Stock Option and any other Company stock option then held by Executive shall become immediately 100% vested (provided, that in the case of a termination pursuant to clause (i)(B), such vesting shall be postponed until the last day of the then Term of Employment) and shall remain exercisable for the remainder of their respective terms. Subject to accelerated vesting as set forth in this Agreement, the Stock Option shall vest and become exercisable as to one-third of the shares originally subject to the Stock Option on each anniversary of the Effective Date, so as to be 100% vested on the third anniversary thereof, conditioned upon Executive's continued employment with the Company as of each vesting date. The Stock Option (and all other options for shares of Common Stock issued to Executive) shall be adjusted to reflect any corporate event or transaction with respect to the Company as specified in Section 2(b) of the stock option agreement attached as Exhibit A hereto (the "Option Agreement"). The Company shall file and maintain a Form S-8 with regard to the Option and shall file a form S-3 as reasonably requested by the Executive with respect to any shares of Common Stock issued upon exercise of the Option. Subject to the foregoing, the Stock Option shall in all respects be subject to the terms, definitions and provisions of the Option Agreement. 2 3 (e) Vacations. During the Term of Employment the Executive shall be entitled to five weeks of vacation per year, prorated for partial calendar years, to be taken at such times and intervals as he wishes, subject to the reasonable business needs of the Company. The Executive shall be entitled to cash compensation for vacation time not taken only to the extent approved by the Board. (f) Other Benefits. During the Term of Employment the Executive shall be entitled to participate in all employee benefit plans, programs and arrangements (including insurance plans) generally provided to comparable senior officers of the Company. The Executive's participation shall be subject to (i) the terms of the applicable plan documents and (ii) generally applicable Company policies. The Company may alter, modify, supplement or delete its employee benefit plans at any time as it sees fit, without recourse by the Executive. (g) Business Expenses. The Company shall pay or reimburse the Executive for all reasonable, customary business expenses incurred or paid by the Executive in the performance of the duties and responsibilities of his position, subject to any restrictions on such expenses set by the Board or in Company policies and to such reasonable substantiation and documentation as may be required by the Company. (h) Travel Between Company Offices. The Company agrees to (i) reimburse the Executive for the expenses, including, without limitation, travel and lodging costs, incurred by the Executive for travel between the Company's offices and (ii) gross-up the Executive for any taxes imposed on such reimbursements. 4. Termination of Employment. (a) Death. In the event of the Executive's death (i) the Stock Option and all other stock option or equity grants to Executive shall vest in full upon the date of death so as to become fully exercisable and (ii) the Company shall promptly pay and provide Executive's estate (A) any unpaid Base Salary and accrued vacation through the date of termination, (B) any unpaid bonus accrued with respect to the fiscal year ending on or preceding the date of termination, (C) reimbursement for any unreimbursed expenses incurred through the date of termination and (D) all other payments, benefits or fringe benefits to which Executive has earned at the time of termination in accordance with, the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant (collectively, items (A) through (D) hereinafter referred to as "Accrued Benefits") and (E) an amount equal to the Target Bonus amount for the year of termination, multiplied by a fraction, the numerator of which is the number of days in the bonus period prior to Executive's termination and the denominator of which is the number of days in the bonus period (the "Prorated Bonus"). (b) Disability. (i) If by reason of the same or related physical or mental illness or incapacity, the Executive is unable to carry out his material duties pursuant to this Agreement for more than one hundred eighty (180) consecutive days, the Company may terminate Executive's employment for Disability. A termination for Disability hereunder shall not be effective if Executive returns to the full time performance of his material duties within such thirty (30) day period. Such termination shall be upon thirty (30) days written notice at any time thereafter 3 4 while Executive consecutively continues to be unable to carry out his duties as a result of the same or related physical or mental illness or incapacity. The Executive may, and at the request of the Company shall, submit to a medical examination by a physician selected by the Company, to whom the Executive or his duly appointed guardian has no reasonable objection, to determine whether the Executive is disabled. Such determination shall be conclusive. If the Executive fails to submit to such medical examination, the Company's determination of the Executive's disability shall be conclusive. (ii) If Executive's employment is terminated by reason of Executive's Disability, Executive shall be entitled to receive the payments and benefits to which his representatives would be entitled under Section 4(a) hereof in the event of a termination of employment by reason of his death. (c) Termination by the Company for Cause. (i) The Company may terminate the Executive's employment hereunder for Cause at any time pursuant to a Notice of Termination for Cause (as defined below). For purposes of this Agreement, Cause shall mean (A) willful misconduct by Executive with regard to the Company that has a material adverse effect on the Company or (B) the Executive being convicted of a felony (other than a felony involving a traffic violation or as a result of vicarious liability). For purposes of this paragraph, no act, or failure to act, on Executive's part shall be considered "willful" unless done or omitted to be done, by him not in good faith and without reasonable belief that his action or omission was in the best interests of the Company. Upon termination of the Executive's employment for Cause, the Company shall have no further obligations under this Agreement other than to pay to the Executive the Accrued Benefits. (ii) For purposes of this Agreement, a "Notice of Termination for Cause" shall mean a notice that shall indicate the specific termination provision in Section 4(c) relied upon and shall set forth in reasonable detail the facts and circumstances which provide for a basis for termination for Cause. Further, a Notification of Termination for Cause shall be required to include a copy of a resolution duly adopted by at least two-thirds (_) of the entire membership of the Board at a meeting of the Board which was called for the purpose of considering such termination and which Executive and his representative had the right to attend and address the Board, finding that, in the good faith of the Board, Executive engaged in conduct set forth in the definition of Cause herein and specifying the particulars thereof in reasonable detail. The date of termination for a termination for Cause shall be the date indicated in the Notice of Termination for Cause. Any purported termination for Cause that is held by a court not to have been based on the grounds set forth in this Section 4(c) or not to have followed the procedures set forth in this Agreement shall be deemed a termination by the Company without Cause. (d) Termination by Company Without Cause or Termination by Executive for Good Reason. (i) The Company may terminate the Executive's employment other than for Cause at any time upon written notice. The Executive may terminate employment for Good Reason pursuant to clause (ii) below. In the event of either such termination of the 4 5 Executive's employment, the Executive shall be entitled to payment of the Accrued Benefits and the following: (A) The Company shall pay the Executive as soon as practicable following the termination a lump sum cash payment equal to the product of (x) and (y) where (x) equals 2, or if greater, the number of years (and parts thereof) remaining in the Term of Employment and where (y) equals the sum (i) of the Executive's annual Base Salary at the time of termination (ignoring any reduction in rate that constitutes Good Reason hereunder) and (ii) the Target Bonus for the year of termination; (B) The Company shall pay the Executive the Prorata Bonus as soon as practicable following the termination; (C) The Stock Option and all other stock option or equity grants to Executive shall vest in full so as to become fully exercisable effective as of the date of termination; and (D) Continued participation in the Company's medical and life insurance arrangements during the remainder of the Term of Employment (but for a period of no less than two (2) years) at no cost to the Executive; provided that to the extent continued participation in such plans are unavailable, the Company shall make a lump-sum payment to the Executive in the amount such that the Executive can purchase such benefits separately at no after-tax cost to Executive. (ii) For purposes of this Agreement, the Executive may terminate employment for Good Reason by written notice given within ninety (90) days after the occurrence of the event that constitutes Good Reason, unless such circumstances are fully corrected prior to the date of termination specified in the Notice of Termination for Good Reason (as defined below). For purposes of this Agreement, "Good Reason" shall mean the occurrence or failure to cause the occurrence, as the case may be, without Executive's express written consent, of any of the following circumstances: (i) any material diminution of Executive's positions, duties or responsibilities hereunder (except in each case in connection with the termination of Executive's employment for Cause or Disability or as a result of Executive's death, or temporarily as a result of Executive's illness or other absence), or, the assignment to Executive of duties or responsibilities that are inconsistent with Executive's then position; (ii) removal of the Executive from position of chief executive officer of the Company; (iii) a relocation of the Company's executive office in Boca Raton or Jacksonville to a location more than thirty-five (35) miles from its current location or more than thirty-five (35) miles further from the Executive's residence at the time of relocation; (iv) any material breach by the Company of any provision of this Agreement; (v) Executive's removal from or failure to be elected or reelected to the Board; or (vi) failure of any successor to the Company (whether direct or indirect and whether by merger, acquisition, consolidation or otherwise) to assume in a writing delivered to Executive upon the assignee becoming such, the obligations of the Company hereunder. For purposes of this Agreement, a "Notice of Termination for Good Reason" shall mean a notice that shall indicate the specific termination provision in Section 4(d)(ii) relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination for Good Reason. The failure by Executive to set forth in the Notice of Termination for Good 5 6 Reason any facts or circumstances which contribute to the showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder. The Notice of Termination for Good Reason shall provide for a date of termination not less than ten (10) nor more than sixty (60) days after the date such Notice of Termination for Good Reason is given, provided that in the case of the events set forth in Sections 4(d)(i) or (ii) or the date may be five (5) days after the giving of such notice. (f) Without Good Reason. Executive may terminate his employment at any time without Good Reason by written notice to the Company. In the event that Executive's employment with the Company is terminated during the Term of Employment by Executive without Good Reason, Executive shall not be entitled to any additional payments or benefits hereunder, other than Accrued Benefits; provided, however, that any then vested Stock Option and any other Company stock option, shall remain exercisable until the earlier of ten years from the employment termination date or the expiration of the option. (g) In the event of any termination of employment hereunder, Executive shall be under no obligation to seek other employment and there shall be no offset against any amounts due Executive under this Agreement on account of any remuneration attributable to any subsequent employment that Executive may obtain. The amounts payable hereunder shall not be subject to setoff, counterclaim, recoupment, defense or other right which the Company may have against the Executive or others, except upon obtaining by the Company of a final unappealable judgment against Executive. (h) Gross-up Payment. The payments and benefits called for by this agreement are not in any way conditioned on a change of ownership or control of the Company. The Company intends such payments and benefits to be reasonable compensation for services rendered by the Executive, and intends that the Executive receive the full economic benefit of such payments and benefits. Therefore, in the event that it is determined that any payment or benefit provided by the Company to or for the benefit of Executive, either under this Agreement or otherwise, will be subject to the excise tax imposed by section 4999 of the Internal Revenue Code or any successor provision ("section 4999"), the Company will, prior to the date on which any amount of the excise tax must be paid or withheld, make an additional lump-sum payment (the "gross-up payment") to Executive. The gross-up payment will be sufficient, after giving effect to all federal, state and other taxes and charges (including interest and penalties, if any) with respect to the gross-up payment, to make Executive whole for all taxes (including withholding taxes) and any associated interest and penalties, imposed under or as a result of section 4999. Determinations under this Section 4(h) will be made by the Company's independent auditors unless Executive has reasonable objections to the use of that firm, in which case the determinations will be made by a comparable firm chosen by Executive after consultation with the Company (the firm making the determinations to be referred to as the "Firm"). The determinations of the Firm will be binding upon the Company and Executive except as the determinations are established in resolution (including by settlement) of a controversy with the Internal Revenue Service to have been incorrect. All fees and expenses of the Firm will be paid by the Company. 6 7 If the Internal Revenue Service asserts a claim that, if successful, would require the Company to make a gross-up payment or an additional gross-up payment, the Company and Executive will cooperate fully in resolving the controversy with the Internal Revenue Service. The Company will make or advance such gross-up payments as are necessary to prevent Executive from having to bear the cost of payments made to the Internal Revenue Service in the course of, or as a result of, the controversy. The Firm will determine the amount of such gross-up payments or advances and will determine after resolution of the controversy whether any advances must be returned by Executive to the Company. The Company will bear all expenses of the controversy and will gross Executive up for any additional taxes that may be imposed upon Executive as a result of its payment of such expenses. 5. Nondisclosure. During the Term of Employment, the Executive may become aware of information which is nonpublic, confidential or proprietary in nature with respect to the Company or with respect to other companies, persons, entities, ventures or business opportunities in which the Company has, or, if it were disclosed to the Company, the Company might have, an interest ("Confidential Information"). All Confidential Information will be kept strictly confidential by the Executive and the Executive shall not: (a) copy, reproduce, distribute or disclose any Confidential Information to any third party except in the course of his employment by the Company; (b) use any Confidential Information for any purpose other than in connection with his employment by the Company; or (c) use any Confidential Information in any way that is detrimental to the Company. Confidential Information shall not include information which: (a) is or becomes generally available to the public other than by breach by the Executive of his agreement herein; (b) is disclosed by the Executive, pursuant to obligations under law, regulation or court order; or (c) was prior to the Effective Date, or thereafter becomes, known to the Executive on a nonconfidential basis. Upon termination of the Executive's employment, he shall immediately return or destroy all Confidential Information, including all notes, copies, reproductions, summaries, analyses, or extracts thereof, then in his possession. Such return or destruction shall not abrogate the continuing obligations of the Executive under this Agreement. In the event that the Executive is requested or required (by interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information, he shall provide the Company with prompt written notice so that it may seek a protective order or other appropriate remedy. In the event such protection or other remedy is not obtained, the Executive shall furnish only that portion of the Confidential Information which he is advised by counsel is legally required. The Executive hereby acknowledges that he is aware that the United States securities laws prohibit any person who has material, nonpublic information concerning the Company from purchasing or selling securities of the Company or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. The obligations of the Executive stated in 7 8 this Section 5 shall, except where expressly limited as to time, continue without limit as to time and without regard to the employment status of the Executive. 6. Conflicting Agreements. The Executive hereby represents and warrants that the execution of this Agreement and the performance of his obligations hereunder will not breach or be in conflict with any other agreement to which he is a party or is bound and that he is not now subject to any covenants against competition or similar covenants that would affect the performance of his obligations hereunder. The Executive will not disclose to or use on behalf of the Company any proprietary information of a third party without such party's consent. 7. Withholding. All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law. 8. Cost of Enforcement. The Company shall pay reasonable costs and expenses (including fees and expenses of counsel) associated with entering into this agreement and those incurred by the Executive in connection with an action to enforce his rights under this Agreement in which action the Executive prevails. 9. Indemnification. The Company shall, to the maximum extent permitted from time to time under the law of the State of Florida, indemnify and upon request shall advance expenses to the Executive in the event he is or was a party or is threatened to be made a party to any threatened, pending or completed action, suit, proceeding or claim, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was or has agreed to be a director, officer or employee of the Company or while a director, officer or employee is or was serving at the request of the Company as a director, officer, partner, trustee, employee or agent of any corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorney's fees and expenses), judgments, fines, penalties and amounts paid in settlement incurred in connection with the investigation, preparation to defend or defense of such action, suit, proceeding or claim; provided, however, that the foregoing shall not require the Company to indemnify or advance expenses to the Executive in connection with any action, suit, proceeding, claim or counterclaim initiated by or on behalf of the Executive. The Executive shall be deemed to have met the standard of conduct required for such indemnification unless the contrary shall be established. The provisions of this Section 9 shall be in addition to any right of indemnification to which the Executive may be entitled under the Company's charter or by-laws, pursuant to any other contract, or by operation of law. 10. Assignment. Except as provided in this Section 10, neither the Company nor the Executive may make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other. The Company may without the consent of the Executive assign its rights and obligations under this Agreement to any wholly-owned subsidiary of the Company or to any corporation or other business entity into which the Company has merged or with which it has consolidated or which has acquired substantially all of the Company's assets, provided that no such assignment shall relieve the 8 9 Company of its obligations under this Agreement. This Agreement shall inure to the benefit of and be binding upon the Company and the Executive, their respective successors, executors, administrators, heirs and permitted assigns. 11. Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior communications, agreements and understandings, written or oral, with respect to the subject matter hereof. The Executive may have other rights and obligations under other agreements, insurance policies and plans and employee benefit and welfare plans of the Company. 12. Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by an expressly authorized representative of the Company. 13. Governing Law. This is a Florida contract and shall be construed and enforced under and be governed in all respects by the laws of the State of Florida. IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Company, by its duly authorized representative, and by the Executive, as of the date first above written. KOGER EQUITY, INC. By /s/ W. Lawrence Jenkins ------------------------ Name: W. Lawrence Jenkins Title: Vice president EXECUTIVE /s/ Thomas J. Crocker --------------------------- Thomas J. Crocker 9 EX-10.(A)(2) 3 ex10-a2.txt PROMISSORY NOTE (NO RECOURSE), THOMAS J. CROCKER 1 Exhibit 10(a)(2) PROMISSORY NOTE (No Recourse Note) Dated as of February 17, 2000 Executed at: Telluride, Colorado FOR VALUE RECEIVED, THOMAS J. CROCKER ("Maker") hereby promises to pay to the order of KOGER EQUITY, INC., a Florida corporation ("Lender"), at its offices at 8880 Freedom Crossing Trial, Jacksonville, Florida 32256 (or at such other place or places as Lender or the holder hereof may designate in writing, from time to time), the principal sum advanced to Maker pursuant to the Loan Agreement (defined below) as such principal sum is outstanding as indicated on the Draw Schedule (defined below) upon Maker's purchase of Loan Stock pursuant to Plan Purchases or Subsequent Plan Purchases (as defined in the Loan Agreement), or such lesser sum as has been advanced and is outstanding at the time when payment is due hereunder, in lawful money of the United States of America, together with interest accruing thereon from the date of such advances at the rates and times hereinafter provided, calculated on the daily principal balances from time to time outstanding. This Promissory Note (this "Note") is given by Maker pursuant to the terms of that certain Stock Purchase and Loan Agreement dated the date hereof between Maker and Lender (the "Loan Agreement"). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Loan Agreement. Lender is hereby authorized to record on the Draw Schedule attached hereto as Exhibit "A" ("Draw Schedule") and incorporated herein the (a) date and amount of each advance by Lender, and (b) date and amount of each principal payment made by Maker with respect to the principal amount outstanding under this Note; provided, however, that the failure of Lender to make any such entry shall not limit or otherwise affect the obligations of Maker under this Note, or the right of Lender to enforce the terms of this Note against Maker. The aggregate unpaid principal amount advanced and Outstanding as set forth from time to time in the Draw Schedule, or any continuation thereof, shall be rebuttable presumptive evidence of the unpaid principal amount due under this Note. 1. Interest. Interest shall accrue on the unpaid principal balance of this Note from the date such principal is advanced as set forth in the Draw Schedule at the LIBOR Market Index Rate, plus one hundred fifty (150) basis points, as that rate may change on each Payment Date (defined below) in accordance with changes in the LIBOR Market Index Rate (the "Interest Rate"). "LIBOR Market Index Rate," for any day, is the rate for 1 month U.S. dollar deposits as reported on Telerate page 3750 as of 11:00 a.m., London time, on such day, or if such day is not a London business day, then the immediately preceding London business day (or if not so reported, then as determined by Lender from another recognized source of interbank quotation). Notwithstanding the foregoing, the Interest Rate hereunder shall be limited to a maximum of ten percent (10%) per annum. Page 1 of 7 2 2. Payments. The debt evidenced by this Note shall be repaid as follows: (i) Commencing on the last calendar day of June, and thereafter on the last calendar day of each of the months of September, December, March and June (each a "Payment Date") until the Maturity Date (defined below), monthly payments of interest only, in arrears, at the Interest Rate, shall be due and payable by Maker to Lender; (ii) Unless payable earlier pursuant to the terms hereof, the total unpaid principal amount disbursed by Lender to Maker under this Note, and then outstanding, plus all accrued but unpaid interest and any other sums owing by Maker to Lender under the terms of the Loan Documents, shall be due and payable on the last day of the earlier of: (i) ten (10) years from the date of this Note, to wit: February 17, 2010; or (ii) the second anniversary of Maker's termination of employment by Lender under the Employment Agreement with "Cause" pursuant to Section 4(c) of Maker's Employment Agreement with Lender, dated as of February 17, 2000 (such date is referred to herein as the "Maturity Date"); and 3. Prepayment. This Note may be prepaid in whole or in part at any time without penalty or premium. 4. Late Charge. In the event that Maker fails to pay any payment of principal and/or interest within thirty (30) days after such payment is due, a late charge equal to five percent (5%) of the amount of such payment shall be due and payable. From and after the date upon which any payment of principal or interest hereunder becomes due and payable (whether by acceleration or otherwise) if the same is not paid within thirty (30) days of such due date, interest shall be payable on all sums outstanding hereunder at the maximum rate permitted by applicable law, and shall be due and payable ON DEMAND. 5. Intent Not to Commit Usury. Nothing herein contained, nor any transaction related thereto, shall be construed or so operate as to require Maker to pay interest at a greater rate than is now lawful in such case to contract for, or to make any payment, or to do any act contrary to applicable law. Should any interest or other charges paid by Maker, or parties liable for the payment of this Note, in connection with the loan evidenced by this Note, Loan Agreement securing the payment of this Note, or any other document delivered in connection with the loan evidenced hereby, result in the computation or earning of interest in excess of the maximum rate of interest that is legally permitted under applicable law, then any and all such excess shall be and the same is hereby waived by Lender and holder hereof, and any and all such excess shall be automatically credited against and in reduction of the balance due under this indebtedness, and the portion of said excess which exceeds the balance due under this indebtedness shall be paid by Lender to Maker and parties liable for the payment of this Note. Page 2 of 7 3 6. Default. In addition to such other remedies as may be available to Lender, upon the occurrence of any Event of Default (as defined in the Loan Agreement or the Security Agreement) which remains uncured for a period of thirty (30) days, then Lender or the holder hereof may, elect to declare and may demand payment in full of the entire unpaid principal amount outstanding hereunder, together with interest accrued thereon. 7. NO RECOURSE AS TO PRINCIPAL. EXCEPT AS PROVIDED BELOW, THIS NOTE SHALL BE NON-RECOURSE TO MAKER SUCH THAT LENDER SHALL NOT SEEK TO ENFORCE AGAINST MAKER INDIVIDUALLY, ANY MONETARY JUDGEMENT WITH RESPECT TO THE SUMS DUE UNDER THIS NOTE EXCEPT THROUGH RECOURSE TO THE COLLATERAL GIVEN AS SECURITY FOR THIS NOTE AND SOLELY AGAINST SUCH COLLATERAL. THE NON-RECOURSE NATURE OF THIS NOTE IS A MATERIAL INDUCEMENT TO MAKER BORROWING FUNDS FROM LENDER UNDER THIS NOTE, ENTRY INTO THE LOAN AGREEMENT AND OTHER LOAN DOCUMENTS. NOTWITHSTANDING THE FOREGOING, MAKER SHALL BE INDIVIDUALLY LIABLE FOR ONE HUNDRED PERCENT (100%) OF THE INTEREST DUE UNDER THE NOTE INSOFAR AS THE COLLATERAL GIVEN AS SECURITY FOR REPAYMENT IS INSUFFICIENT TO PAY SUCH INTEREST. 8. Waivers; Attorneys' Fees; Venue. Maker and all endorsers and guarantors of this Note hereby waive demand, presentment, notice of non-payment (except as provided herein), dishonor and protest, and agree in case suit shall be brought for the collection hereof, or if it is necessary to place the same in the hands of an attorney for collection, to pay reasonable attorneys' fees for making such collection, including but not limited to, all fees and costs incident to any appellate, post-judgment, and bankruptcy proceedings that may result, whether the holder hereof is obligated therefor or not. Maker agrees that Palm Beach County, Florida is the proper venue for any and all legal proceedings arising out of this Note. 9. Governing Law. The provisions of this Note and the provisions of the Loan Agreement, and any other document or instrument evidencing or securing the loan evidenced by this Note, shall be construed according to the laws of the State of Florida, except if federal law would allow the payment of interest hereunder at a higher maximum rate than would applicable Florida law, such federal law shall apply to the determination of the highest applicable lawful rate of interest hereunder. 10. Amendment. This Note may not be amended or modified, nor shall any waiver of any provisions hereof be effective, except by an instrument in writing executed by the holder of this Note. 11. WAIVER OF JURY TRIAL. THE PARTIES HERETO MUTUALLY AND WILLINGLY WAIVE THE RIGHT TO A TRIAL BY JURY OF ANY AND ALL CLAIMS MADE BETWEEN THEM WHETHER NOW EXISTING OR ARISING IN THE FUTURE, INCLUDING WITHOUT LIMITATION, ANY AND ALL CLAIMS, DEFENSES, COUNTERCLAIMS, CROSSCLAIMS, THIRD PARTY CLAIMS AND INTERVENOR'S Page 3 of 7 4 CLAIMS WHETHER ARISING FROM OR RELATED TO THE NEGOTIATION, EXECUTION AND PERFORMANCE OF THE TRANSACTIONS TO WHICH THIS DOCUMENT RELATES. IN WITNESS WHEREOF, Maker has executed and delivered this Note to Lender as of the date and year first above written. MAKER: THOMAS J. CROCKER, individually Page 4 of 7 5 EXHIBIT "A" DRAW SCHEDULE FOR DEMAND PROMISSORY NOTE DATED _________, 2000
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Amount of Amount of Balance of Date of Principal Principal Principal Signature Transaction Advanced Repaid Outstanding of Maker - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- ----------- - ------------ ----------- ---------- ----------- -----------
Page 7 of 7 EX-10.(A)(3) 4 ex10-a3.txt PROMISSORY NOTE (25% RECOURSE), THOMAS J. CROCKER 1 Exhibit 10(a)(3) PROMISSORY NOTE (25% Recourse Note) Dated as of February 17, 2000 Executed at: Telluride, Colorado FOR VALUE RECEIVED, THOMAS J. CROCKER ("Maker") hereby promises to pay to the order of KOGER EQUITY, INC., a Florida corporation ("Lender"), at its offices at 8880 Freedom Crossing Trial, Jacksonville, Florida 32256 (or at such other place or places as Lender or the holder hereof may designate in writing, from time to time), the principal sum advanced to Maker pursuant to the Loan Agreement (defined below) as such principal sum is outstanding as indicated on the Draw Schedule (defined below) upon Maker's purchase of Loan Stock pursuant to Plan Purchases or Subsequent Plan Purchases (as defined in the Loan Agreement), or such lesser sum as has been advanced and is outstanding at the time when payment is due hereunder, in lawful money of the United States of America, together with interest accruing thereon from the date of such advances at the rates and times hereinafter provided, calculated on the daily principal balances from time to time outstanding. This Promissory Note (this "Note") is given by Maker pursuant to the terms of that certain Stock Purchase and Loan Agreement dated the date hereof between Maker and Lender (the "Loan Agreement"). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Loan Agreement. Lender is hereby authorized to record on the Draw Schedule attached hereto as Exhibit "A" ("Draw Schedule") and incorporated herein the (a) date and amount of each advance by Lender, and (b) date and amount of each principal payment made by Maker with respect to the principal amount outstanding under this Note; provided, however, that the failure of Lender to make any such entry shall not limit or otherwise affect the obligations of Maker under this Note, or the right of Lender to enforce the terms of this Note against Maker. The aggregate unpaid principal amount advanced and Outstanding as set forth from time to time in the Draw Schedule, or any continuation thereof, shall be rebuttable presumptive evidence of the unpaid principal amount due under this Note. 1. Interest. Interest shall accrue on the unpaid principal balance of this Note from the date such principal is advanced as set forth in the Draw Schedule at the LIBOR Market Index Rate, plus one hundred fifty (150) basis points, as that rate may change on each Payment Date (defined below) in accordance with changes in the LIBOR Market Index Rate (the "Interest Rate"). "LIBOR Market Index Rate," for any day, is the rate for 1 month U.S. dollar deposits as reported on Telerate page 3750 as of 11:00 a.m., London time, on such day, or if such day is not a London business day, then the immediately preceding London business day (or if not so reported, then as determined by Lender from another recognized source of interbank quotation). Notwithstanding the foregoing, the Interest Rate hereunder shall be limited to a maximum of ten percent (10%) per annum. Page 1 of 7 2 2. Payments. The debt evidenced by this Note shall be repaid as follows: (i) Commencing on the last calendar day of June, and thereafter on the last calendar day of each of the months of September, December, March and June (each a "Payment Date") until the Maturity Date (defined below), monthly payments of interest only, in arrears, at the Interest Rate, shall be due and payable by Maker to Lender; (ii) Unless payable earlier pursuant to the terms hereof, the total unpaid principal amount disbursed by Lender to Maker under this Note, and then outstanding, plus all accrued but unpaid interest and any other sums owing by Maker to Lender under the terms of the Loan Documents, shall be due and payable on the last day of the earlier of: (i) ten (10) years from the date of this Note, to wit: February 17, 2010; or (ii) the second anniversary of Maker's termination of employment by Lender under the Employment Agreement with "Cause" pursuant to Section 4(c) of Maker's Employment Agreement with Lender, dated as of February 17, 2000 (such date is referred to herein as the "Maturity Date"); and 3. Prepayment. This Note may be prepaid in whole or in part at any time without penalty or premium. 4. Late Charge. In the event that Maker fails to pay any payment of principal and/or interest within thirty (30) days after such payment is due, a late charge equal to five percent (5%) of the amount of such payment shall be due and payable. From and after the date upon which any payment of principal or interest hereunder becomes due and payable (whether by acceleration or otherwise) if the same is not paid within thirty (30) days of such due date, interest shall be payable on all sums outstanding hereunder at the maximum rate permitted by applicable law, and shall be due and payable ON DEMAND. 5. Intent Not to Commit Usury. Nothing herein contained, nor any transaction related thereto, shall be construed or so operate as to require Maker to pay interest at a greater rate than is now lawful in such case to contract for, or to make any payment, or to do any act contrary to applicable law. Should any interest or other charges paid by Maker, or parties liable for the payment of this Note, in connection with the loan evidenced by this Note, Loan Agreement securing the payment of this Note, or any other document delivered in connection with the loan evidenced hereby, result in the computation or earning of interest in excess of the maximum rate of interest that is legally permitted under applicable law, then any and all such excess shall be and the same is hereby waived by Lender and holder hereof, and any and all such excess shall be automatically credited against and in reduction of the balance due under this indebtedness, and the portion of said excess which exceeds the balance due under this indebtedness shall be paid by Lender to Maker and parties liable for the payment of this Note. Page 2 of 7 3 6. Default. In addition to such other remedies as may be available to Lender, upon the occurrence of any Event of Default (as defined in the Loan Agreement or the Security Agreement) which remains uncured for a period of thirty (30) days, then Lender or the holder hereof may, elect to declare and may demand payment in full of the entire unpaid principal amount outstanding hereunder, together with interest accrued thereon. 7. 25% RECOURSE. EXCEPT AS PROVIDED BELOW, THIS NOTE SHALL BE NON-RECOURSE TO MAKER SUCH THAT LENDER SHALL NOT SEEK TO ENFORCE AGAINST MAKER INDIVIDUALLY, ANY MONETARY JUDGEMENT WITH RESPECT TO THE SUMS DUE UNDER THIS NOTE EXCEPT THROUGH RECOURSE TO THE COLLATERAL GIVEN AS SECURITY FOR THIS NOTE AND SOLELY AGAINST SUCH COLLATERAL. THE NON-RECOURSE NATURE OF THIS NOTE IS A MATERIAL INDUCEMENT TO MAKER BORROWING FUNDS FROM LENDER UNDER THIS NOTE, ENTRY INTO THE LOAN AGREEMENT AND OTHER LOAN DOCUMENTS. NOTWITHSTANDING THE FOREGOING, MAKER SHALL BE INDIVIDUALLY LIABLE FOR TWENTY FIVE PERCENT (25%) OF THE PRINCIPAL AMOUNT AND ONE HUNDRED PERCENT (100%) OF THE INTEREST DUE UNDER THE NOTE INSOFAR AS THE COLLATERAL GIVEN AS SECURITY FOR REPAYMENT IS INSUFFICIENT TO PAY THE SUMS DUE HEREUNDER. 8. Waivers; Attorneys' Fees; Venue. Maker and all endorsers and guarantors of this Note hereby waive demand, presentment, notice of non-payment (except as provided herein), dishonor and protest, and agree in case suit shall be brought for the collection hereof, or if it is necessary to place the same in the hands of an attorney for collection, to pay reasonable attorneys' fees for making such collection, including but not limited to, all fees and costs incident to any appellate, post-judgment, and bankruptcy proceedings that may result, whether the holder hereof is obligated therefor or not. Maker agrees that Palm Beach County, Florida is the proper venue for any and all legal proceedings arising out of this Note. 9. Governing Law. The provisions of this Note and the provisions of the Loan Agreement, and any other document or instrument evidencing or securing the loan evidenced by this Note, shall be construed according to the laws of the State of Florida, except if federal law would allow the payment of interest hereunder at a higher maximum rate than would applicable Florida law, such federal law shall apply to the determination of the highest applicable lawful rate of interest hereunder. 10. Amendment. This Note may not be amended or modified, nor shall any waiver of any provisions hereof be effective, except by an instrument in writing executed by the holder of this Note. 11. WAIVER OF JURY TRIAL. THE PARTIES HERETO MUTUALLY AND WILLINGLY WAIVE THE RIGHT TO A TRIAL BY JURY OF ANY AND ALL CLAIMS MADE BETWEEN THEM WHETHER NOW EXISTING OR ARISING IN THE FUTURE, INCLUDING WITHOUT LIMITATION, ANY AND ALL CLAIMS, DEFENSES, Page 3 of 7 4 COUNTERCLAIMS, CROSSCLAIMS, THIRD PARTY CLAIMS AND INTERVENOR'S CLAIMS WHETHER ARISING FROM OR RELATED TO THE NEGOTIATION, EXECUTION AND PERFORMANCE OF THE TRANSACTIONS TO WHICH THIS DOCUMENT RELATES. IN WITNESS WHEREOF, Maker has executed and delivered this Note to Lender as of the date and year first above written. MAKER: /s/ Thomas J. Crocker THOMAS J. CROCKER, individually Page 4 of 7 5 EXHIBIT "A" DRAW SCHEDULE FOR DEMAND PROMISSORY NOTE DATED _________, 2000
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Page 7 of 7 EX-10.(A)(4) 5 ex10-a4.txt STOCK PLEDGE SECURITY AGREEMENT, THOMAS J. CROCKER 1 EXHIBIT 10(a)(4). STOCK PLEDGE SECURITY AGREEMENT (SECURITIES) AGREEMENT by and between KOGER EQUITY, INC., ("Lender") and THOMAS J. CROCKER ("Borrower") dated as set forth in subsection 1.5 below. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Loan Agreement (as defined below). 1. DEFINITIONS The terms set forth below shall be defined as follows: 1.1 "Account" means securities account number 040-21651 at Bear, Stearns Securities Corp. 1.2 "Borrower" means Thomas J. Crocker, an individual. 1.3 "Borrower's Address" is: 3580 Polo Drive, Gulf Stream, Florida 33483. 1.4 "Borrower's Collateral" means (i) the Loan Stock; (ii) the Account, all funds, Financial Assets and Investment Property therein and all certificates and instruments from time to time representing or evidencing the Account or any funds, securities, investments, Financial Assets, Investment Property or other property deposited and held in the Account (including, without limitation, all Loan Stock deposited in the Account) and all other property or rights assigned or allocable to the Account; (iii) all notes, certificates of deposit, deposit amounts, checks and other investments from time to time hereafter delivered to or otherwise possessed by Borrower in substitution for any or all of the foregoing; (iv) all interest, cash, instruments and other property from time to time received, receivable, or distributed in respect of any or all of the foregoing; (v) all Security Entitlements of Borrower in or with respect to any and all of the foregoing; (vi) all rights of Borrower under the Control Agreement; and (vii) all proceeds of any and all of the foregoing. 1.5 "Collateral Account Control Agreement" means that certain Account Control Agreement among Lender, Bear, Stearns Securities Corp. and Borrower being executed contemporaneously herewith. 1.6 "Date of Agreement" is: dated as of February 17, 2000. 1.7 "Event of Default" means each and every event specified in Section 4 of this Agreement. 2 1.8 "Lender's Address" is: 8880 Freedom Crossing Trial, Jacksonville, Florida 32256. 1.9 "Loan" means that certain loan from Lender to Borrower as set forth in the Loan Agreement and as evidenced by the Notes. 1.10 "Loan Agreement" means the Stock Purchase and Loan Agreement between Borrower and Lender being executed herewith. 1.11 "Loan Amount" means the total amount of the loan from Lender to Borrower as set forth in the Notes which amount is sufficient to enable Borrower to purchase up to a maximum of 500,000 shares of Lender's common stock as provided in the Loan Agreement. 1.12 "Loan Stock" means the common stock of the Lender purchased by Borrower with proceeds from the Loan. 1.13 "Notes" means the 25% Recourse Note and the No Recourse Note both as described in the Loan Agreement. 1.14 "Obligations" means all indebtedness, obligations and liabilities of Borrower to Lender arising pursuant to the Loan Agreement and the Notes and all interest, taxes, fees, charges, expenses and reasonable attorneys' fees chargeable to Borrower or incurred by Lender under this Agreement, or any other document or instrument delivered in connection with the Loan Agreement. 1.15 "Uniform Commercial Code" means the Uniform Commercial Code as enacted in the State of Florida and in effect from time to time. To the extent not defined in Section 1 or the Loan Agreement, unless the context otherwise requires, all other terms contained in this Agreement shall have the meanings attributed to them by the Uniform Commercial Code in force in the State of Florida, as of the Date of Agreement, to the extent that same are used or defined therein. To the extent not defined in Section 1, unless the context otherwise requires, all other accounting terms contained in this Agreement shall have the meanings attributed to them by generally accepted accounting principals, as of the Date of Agreement, to the extent that same are used or defined therein. 2. GRANT OF SECURITY INTEREST To secure payment and performance of Borrower's obligations and duties under the terms of the Loan Agreement and the Notes, Borrower hereby 3 pledges, assigns and transfers to Lender, and grants to Lender a continuing lien on and security interest in and to Borrower's Collateral. 3. SPECIFIC REPRESENTATIONS, WARRANTIES AND COVENANTS WITH RESPECT TO BORROWER'S COLLATERAL With respect to Borrower's Collateral, Borrower hereby represents and warrants and covenants with Lender, as follows: 3.1 Borrower agrees to reimburse Lender, on demand, for any amounts paid or advanced by Lender for the purpose of preserving Borrower's Collateral or any part thereof and/or any liabilities or expenses incurred by Lender as the transferee or holder of Borrower's Collateral. 3.2 Lender shall be under no duty to: 3.2.1 Collect or protect Borrower's Collateral or any proceeds thereof or give any notice with respect thereto. 3.2.2 Preserve the rights of Borrower with respect to Borrower's Collateral against prior parties. 3.2.3 Preserve rights against any parties to any instrument or chattel paper which may be a part of Borrower's Collateral. 3.2.4 Sell or otherwise realize upon Borrower's Collateral. 3.2.5 Seek payment from any particular source. Without limiting the generality of the foregoing, Lender shall not be obligated to take any action in connection with any conversion, call, redemption, retirement, or any other event relating to any of Borrower's Collateral. 3.3 Lender shall exercise reasonable care in the custody and preservation of Borrower's Collateral to the extent required by applicable statute and use its best efforts to take such action as the Borrower may reasonably request in writing but the failure to do any such act shall not be deemed a failure to exercise reasonable care. 3.4 Borrower will not withdraw any money or property from the Account, nor sell nor offer to sell nor otherwise transfer any portion of the Borrower's Collateral, except upon Crocker's payment to Lender of the "Per Share 3 4 Release Price" from the proceeds derived from the sale of the Loan Stock as provided in Section 2.2(E) of the Loan Agreement. Such sums or securities may be withdrawn only upon notice to and the prior written consent of Lender which shall not be withheld provided that Crocker pays Lender the Per Share Release Price. Lender acknowledges that the total value of the Account may exceed the Loan Amount, but that Lender's right to recovery upon the Loan Agreement, the Notes and this Agreement shall be limited to the amounts specified in the Notes. If no Event of Default has occurred or is continuing, Borrower may make trades in such account. Borrower may exercise any voting or consensual rights with respect to the Borrower's Collateral. 3.5 If the Borrower's Collateral is in a securities account maintained by Borrower or on behalf of Borrower at a third party, Borrower will furnish or cause to be furnished to Lender a control agreement signed by Borrower and such third party pursuant to which such third party agrees, among other things, to take no instructions with respect to the Borrower's Collateral, except as provided in such agreement. 4. EVENTS OF DEFAULT AND ACCELERATION 4.1 The occurrence of any one or more of the following events shall constitute an Event of Default hereunder: 4.1.1 Failure to perform or observe any covenant, term or agreement herein set forth or set forth in the Notes beyond any applicable grace period; 4.1.2 Occurrence of any Event of Default beyond any applicable grace period provided for in the Loan Agreement; 4.1.3 Termination of the Account except as permitted by the Collateral Account Control Agreement; and 4.1.4 Termination of any Collateral Account Control Agreement except as provided in such agreement. 4.2 If any Event of Default shall occur and be continuing beyond any applicable grace period, then or at any time thereafter, while such Event of Default shall continue, Lender may declare all Obligations to be due and payable, without notice, protest, presentment or demand, all of which are hereby expressly waived by Borrower. 4.3 If any Event of Default shall occur hereunder or under the Loan Agreement, Borrower shall, if required by Lender, cease making trades in the Account. 4 5 5. RIGHTS AND REMEDIES Lender shall have the rights and remedies set forth in the Loan Agreement, together with: 5.1 The right to proceed at law or in equity against the Account and without demand or advertisement (which are hereby waived) but on ten (10) days prior written notice to Borrower, to sell, assign and deliver the whole or any of the Borrower's Collateral at any time or times, at such prices as it may deem best, either at any broker's board or at public or private sale in Florida or elsewhere; and at any sale at broker's board or at public auction, Lender may purchase and hold the whole or any part of the Borrower's Collateral sold, free from any claim or right of redemption of Borrower and the Borrower's Collateral sold may be retained by Lender until the selling price is paid by the purchaser; Lender shall incur no liability in the case of the failure of the purchaser to take up and pay for the Borrower's Collateral so sold, and in the event of such failure, the Borrower's Collateral may again be sold; and upon the sale of any Borrower's Collateral, the Lender shall apply the net proceeds thereof to the payment of expenses of such sale and the reduction in payment of the Loan Amount, accounting to Borrower for any surplus. 5.2 The right to file a copy (including a carbon, photographic or other reproduction) of this Security Agreement in lieu of a financing statement. 6. GENERAL PROVISIONS 6.1 This Agreement is a security agreement within the meaning of the Uniform Commercial Code in force in the State of Florida. 6.2 The terms and conditions set forth in the Loan Agreement shall be fully applicable and are incorporated herein as terms and conditions of this Agreement. 7. WAIVER OF JURY TRIAL BORROWER WAIVES TRIAL BY JURY AND CONSENTS TO AND CONFERS PERSONAL JURISDICTION ON COURTS OF THE STATE OF NEW JERSEY OR OF THE FEDERAL DISTRICT OF FLORIDA, AND EXPRESSLY WAIVES ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH COURTS AND AGREES THAT SERVICE OF PROCESS MAY BE MADE ON BORROWER BY MAILING A COPY OF THE SUMMONS TO 5 6 BORROWER AT BORROWER'S ADDRESS. LENDER LIKEWISE WAIVES TRIAL BY JURY. 6 7 IN WITNESS WHEREOF, the undersigned has set his hand and seal as of the day and year first written above. LENDER: KOGER EQUITY, INC., a Florida corporation By: /s/ W. Lawrence Jenkins ---------------------------------------- Name: W. Lawrence Jenkins -------------------------------------- Title: Vice President ------------------------------------- BORROWER: By: /s/ Thomas J. Crocker ---------------------------------------- Thomas J. Crocker, individually 7 EX-10.(A)(5) 6 ex10-a5.txt STOCK PURCHASE & LOAN AGREEMENT, THOMAS J. CROCKER 1 EXHIBIT 10(a)(5) STOCK PURCHASE AND LOAN AGREEMENT BETWEEN THOMAS J. CROCKER ("CROCKER") AND KOGER EQUITIES, INC., A FLORIDA CORPORATION (THE "COMPANY") DATED AS OF FEBRUARY 17, 2000 2 TABLE OF CONTENTS
Page ARTICLE I DEFINITIONS....................................................................................................1 SECTION 1.1 DEFINITIONS. .....................................................................................1 SECTION 1.2 OTHER DEFINITIONAL PROVISIONS......................................................................4 ARTICLE II PURCHASE OF LOAN STOCK AND AMOUNT AND TERMS OF THE STOCK PURCHASE LOAN...............................5 SECTION 2.1 PURCHASE OF LOAN STOCK ............................................................................5 SECTION 2.2 THE STOCK PURCHASE LOAN............................................................................8 SECTION 2.3 INTENT NOT TO COMMIT USURY........................................................................10 SECTION 2.4 USE OF PROCEEDS...................................................................................10 ARTICLE III SECURITY FOR THE STOCK PURCHASE LOAN...............................................................10 SECTION 3.1 SECURITY INTEREST.................................................................................10 SECTION 3.2 SECURITY DOCUMENTS................................................................................10 SECTION 3.3 FILING AND RECORDING..............................................................................10 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................................................11 SECTION 4.1 DUE AUTHORIZATION; ENFORCEABILITY.................................................................11 SECTION 4.2 FEDERAL REGULATION................................................................................11 ARTICLE V CROCKER'S COVENANTS..................................................................................11 SECTION 5.1 TAXES AND CLAIMS..................................................................................11 SECTION 5.2 PAY INDEBTEDNESS TO THE COMPANY AND PERFORM OTHER COVENANTS.......................................12 ARTICLE VI COVENANTS OF THE COMPANY............................................................................12 SECTION 6.1 PLAN SHARES.......................................................................................12 SECTION 6.2 REGISTRATION OF PLAN SHARES AND DIRECT PURCHASE SHARES............................................12 SECTION 6.3 SALE OF PLAN SHARES...............................................................................12 ARTICLE VII EVENTS OF DEFAULT..................................................................................13 SECTION 7.1 EVENTS OF DEFAULT.................................................................................13 SECTION 7.2 WAIVER OF DEFAULT.................................................................................13 ARTICLE VIII REMEDIES FOR EVENTS OF DEFAULT....................................................................14 SECTION 8.1 REMEDIES FOR EVENTS OF DEFAULT....................................................................14
i 3 SECTION 8.2 ACTION FOR ENFORCEMENT............................................................................14 SECTION 8.3 SALE OF COLLATERAL ...............................................................................14 SECTION 8.4 RIGHTS AND REMEDIES CUMULATIVE....................................................................14 ARTICLE IX FEES AND PAYMENTS...................................................................................15 SECTION 9.1 COSTS, TAXES AND ATTORNEYS' FEES..................................................................15 ARTICLE X MISCELLANEOUS........................................................................................15 SECTION 10.1 NOTICES..........................................................................................15 SECTION 10.2 ATTORNEYS' FEES..................................................................................16 SECTION 10.3 SEVERABILITY.....................................................................................16 SECTION 10.4 COUNTERPARTS.....................................................................................17 SECTION 10.5 INTERPRETATION...................................................................................17 SECTION 10.6 CONFLICT.........................................................................................17 SECTION 10.7 HEADINGS.........................................................................................17 SECTION 10.8 JURISDICTION AND VENUE...........................................................................17 SECTION 10.9 AMENDMENTS.......................................................................................18 SECTION 10.10 GOVERNING LAW; BENEFIT..........................................................................18 EXHIBIT "A" CERTIFICATE AND LOAN ADVANCE REQUEST..........................................................................20
ii 4 STOCK PURCHASE AND LOAN AGREEMENT THIS STOCK PURCHASE AND LOAN AGREEMENT (this "Agreement") is entered into as of this 17th day of February, 2000 (the "Effective Date") between KOGER EQUITY, INC., a Florida corporation, having a place of business at 8880 Freedom Crossing Trail, Jacksonville, Florida 32256 (the "Company") and THOMAS J. CROCKER, whose address is 3580 Polo Drive, Gulf Stream, Florida 33483 ("Crocker"). RECITALS: A. The Company and Crocker have entered into an Employment Agreement, dated as of February 17th, 2000 (the "Employment Agreement"), pursuant to which Crocker has been hired by the Company to serve as the Company's chief executive officer. B. Pursuant to Section 3(c) of the Employment Agreement, the Company has agreed to lend Crocker certain funds in connection with certain optional purchases by Crocker of up to a maximum of 500,000 shares of the Company's Common Stock (the "Loan Stock"). C. Pursuant to a repurchase plan adopted by resolution of the Board of Directors of the Company, the Company intends to repurchase approximately 2,650,000 shares of the Company's Common Stock (the "Repurchase Plan"). TERMS: NOW, THEREFORE, in consideration of the mutual promises, conditions, representations and warranties hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION I.1 DEFINITIONS. As used in this Agreement, the Exhibits and Schedules attached hereto, if any, and in any Loan Document executed in connection herewith, the following terms shall have the following meanings unless the context otherwise requires: "25% RECOURSE NOTE" means each 25% Recourse Note in the form of Exhibit B hereto. 5 "ACCOUNT" means securities account number 040-21651 at Bear, Stearns Securities Corp., where all Loan Stock shall be deposited and held subject to the terms hereof. "AGREEMENT" shall mean this Stock Purchase and Loan Agreement, as the same may be amended, supplemented or otherwise modified from time to time by an agreement in writing signed by Crocker and the Company. "BUSINESS DAY" shall mean a day other than Saturday, Sunday or other day on which commercial banks in Palm Beach County, Florida are authorized or required by law to close. "CLOSING" shall mean the execution and delivery of this Agreement by the parties hereto. "CLOSING DATE" shall mean the date on which the Closing takes place. "COLLATERAL" means (i) the Pledged Shares; (ii) the Account, all funds, Financial Assets and Investment Property therein and all certificates and instruments from time to time representing or evidencing the Account or any funds, securities, investments, Financial Assets, Investment Property or other property deposited and held in the Account (including, without limitation, all Pledged Shares deposited in the Account) and all other property or rights assigned or allocable to the Account; (iii) all notes, certificates of deposit, deposit amounts, checks and other investments from time to time hereafter delivered to or otherwise possessed by Crocker in substitution for any or all of the foregoing; (iv) all interest, cash, instruments and other property from time to time received, receivable, or distributed in respect of any or all of the foregoing; (v) all Security Entitlements of Crocker in or with respect to any and all of the foregoing; (vi) all rights of Crocker under the Control Agreement; and (vii) all proceeds of any and all of the foregoing. "COMMON STOCK" means the Company's Common Stock, $.01 par value. "COLLATERAL SECURITY AGREEMENT" means the Collateral Security Agreement, dated as of even date herewith, between Crocker and the Company. "CONTROL AGREEMENT" shall mean the Account Control Agreement, dated as of even date herewith, among Crocker, the Company and Bear, Stearns Securities Corp. "DIRECT PURCHASE" has the meaning set forth in Section 2.1(B)(ii) hereof. "DIRECT PURCHASE LIMIT" has the meaning set forth in Section 2.1(B)(ii) hereof. "DOLLARS" AND "$" shall mean dollars in lawful currency of the United States of America. "ENTITLEMENT ORDER" shall have the meaning set forth in Section 678.1021 of the Uniform Commercial Code. "EVENT OF DEFAULT" shall mean any of the events specified in Section 7.1 hereof. 2 6 "FAIR MARKET VALUE" of a share of Repurchased Common Stock on any date of reference shall mean the "Closing Price" (as defined below) of the Common Stock on the business day immediately preceding such date. For the purpose of determining Fair Market Value, the "Closing Price" of the Common Stock on any business day shall be (i) if the Common Stock is listed or admitted for trading on any United States national securities exchange, or if actual transactions are otherwise reported on a consolidated transaction reporting system, the last reported sale price of Common Stock on such exchange or reporting system, as reported in any newspaper of general circulation, (ii) if the Common Stock is quoted on the National Association of Securities Dealers Automated Quotations System ("NASDAQ"), or any similar system of automated dissemination of quotations of securities prices in common use, the mean between the closing high bid and low asked quotations for such day of Common Stock on such system, (iii) if neither clause (i) or (ii) is applicable, the mean between the high bid and low asked quotations for the Common Stock as reported by the National Quotation Bureau, Incorporated if at least two securities dealers have inserted both bid and asked quotations for Common Stock on at least five of the ten preceding days, or (iv) if neither clause (i), (ii) or (iii) are applicable, the fair market value of the Common Stock shall be determined by the Company's Board of Directors. "FINANCIAL ASSET" shall have the meaning set forth in Section 678.1021 of the Uniform Commercial Code. "INTERIM PURCHASE" shall have the meaning set forth in Section 2.1(B)(ii) hereof. "INVESTMENT PROPERTY" shall have the meaning set forth in Section 679.115 of the Uniform Commercial Code. "LOAN" means the Stock Purchase Loan. "LOAN ADVANCE REQUEST" means the Certificate and Loan Advance Request in the form of Exhibit A hereto. "LOAN DOCUMENTS" shall mean this Agreement, each Note, the Collateral Security Agreement, the Control Agreement and all other documents, agreements, instruments or certificates delivered to the Company in connection with the Loan (whether at, prior to or after the Closing). "LOAN STOCK" has the meaning set forth in the Recitals. "LOAN TO VALUE RATIO" has the meaning set forth in Section 2.1(B)(iv) hereof. "NO RECOURSE NOTE" means each No Recourse Note in the form of Exhibit C hereto. "NOTE" means each 25% Recourse Note and each No Recourse Note. "OPEN MARKET PURCHASES" has the meaning set forth in Section 2.1(B)(ii) hereof. 3 7 "PLAN" means the Koger Equity, Inc. 1998 Equity and Cash Incentive Plan. "PLAN PURCHASES" has the meaning set forth in Section 2.1(B)(i) hereof. "PLEDGED SHARES" shall mean all shares of Loan Stock purchased by Crocker the purchase of which is funded in whole or in part by the Company pursuant to the terms hereof. "RECONCILIATION DATE" has the meaning set forth in Section 2.1(B)(iv) hereof. "REPURCHASED COMMON STOCK" has the meaning set forth in Section 2.1(B)(ii) hereof. "SECURITY DOCUMENTS" shall have the meaning set forth in Section 3.3 hereof. "SECURITY ENTITLEMENT" shall have the meaning set forth in Section 678.1021 of the Uniform Commercial Code. "SHARE CAP" has the meaning set forth in Section 2.1(A) hereof. "STOCK PURCHASE EXPENSES" shall mean all costs and expenses incurred by Crocker, if any, in the acquisition of the Loan Stock, whether by Open Market Purchases or Direct Purchases, including with respect to Open Market Purchases all brokerage commissions and fees. "STOCK PURCHASE LOAN" shall mean the facility described in Section 2.1 hereof the proceeds of which shall be used by Crocker to purchase the Loan Stock and pay all Stock Purchase Expenses. "STOCK PURCHASE LOAN INTEREST RATE" means the interest rate set forth in the Notes. "SUBSEQUENT PLAN PURCHASES" has the meaning set forth in Section 2.1(B)(iii) hereof. "UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code as enacted in the State of Florida and in effect from time to time. SECTION I.2 OTHER DEFINITIONAL PROVISIONS 4 8 (a) All of the terms defined in this Agreement shall have such defined meanings when used in other documents issued under, or delivered pursuant to, this Agreement unless the context shall otherwise require; (b) all terms defined in this Agreement in the singular shall have comparable meanings when used in the plural, and vice versa; (c) accounting terms to the extent not otherwise defined shall have the respective meanings given them under, and shall be construed in accordance with, GAAP; (d) the words "hereby," "hereto," "hereof," "herein," "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and (e) whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the heirs, personal representatives, participants, successors and assigns of such parties unless the context shall expressly provide otherwise. ARTICLE II PURCHASE OF LOAN STOCK AND AMOUNT AND TERMS OF THE STOCK PURCHASE LOAN SECTION II.1 PURCHASE OF LOAN STOCK (A) Generally. Pursuant to the Employment Agreement, the Company has agreed to provide Crocker with the Stock Purchase Loan to enable Crocker to purchase the Loan Stock. The total maximum number of shares of Loan Stock that the Company will finance pursuant to the Stock Purchase Loan is 500,000 shares of Common Stock ("Share Cap"). If there shall occur any recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other distribution with respect to such shares, or any other change in the corporate structure affecting the quantity of such shares, the Share Cap shall be equitably adjusted to preserve Crocker's right to purchase the maximum number of shares originally contemplated by this Agreement. (B) Method of Purchases. Crocker shall have the right, in Crocker's sole and absolute discretion, to purchase any number of shares of Loan Stock (up to the Share Cap), in the following manner: (i) Plan Purchases. As of the date hereof, 198,700 shares of Common Stock are reserved for issuance pursuant to the Plan, up to 149,025 shares of which may be purchased by Crocker. In the event that Crocker elects to purchase all or any part of such Common Stock as Loan Stock pursuant to the Plan ("Plan Purchases"), the Company shall, upon the execution and delivery by Crocker of a Loan Advance Request, lend to Crocker, pursuant to the Plan, an amount equal to one hundred percent (100%) of the purchase price of such shares of Loan Stock, plus applicable Stock Purchase Expenses, if any. All Loan Stock so purchased shall be deposited in the Account and shall be subject to the terms of the Loan Documents and the other Security Documents. (ii) Interim Purchases. In the event that Crocker shall opt to purchase Loan Stock other than pursuant to the Plan or any successor plan thereto (each such purchase, an "Interim Purchase"), upon the execution and delivery by Crocker of a Loan Advance Request, the Company 5 9 shall lend to Crocker, an amount equal to fifty percent (50%) of the purchase price of such shares of Loan Stock, plus applicable Stock Purchase Expenses, if any. Interim Purchases may be effected by open market purchases via Crocker's own securities broker or through private negotiations between Crocker and a third-party (each such purchase being an "Open Market Purchase"). Interim Purchases may also be effected by direct purchases of Loan Stock from the Company (a "Direct Purchase") following any purchase by the Company of its Common Stock pursuant to the Repurchase Plan. The Company shall immediately notify Crocker of each repurchase of Common Stock under the Repurchase Plan or otherwise (a "Notification of Common Stock Repurchase"), which notification shall specify in writing the number of shares of Common Stock so repurchased ("Repurchased Common Stock"). Provided that Crocker shall provide notice to the Company of his intent to purchase a number of shares of such Repurchased Common Stock (which number shall not exceed twenty five percent (25%) of such Repurchased Common Stock (the "Direct Purchase Limit")) on the date of Crocker's receipt of such Notification of Common Stock Repurchase, the Company shall sell to Crocker on such date such number of shares of Repurchased Common Stock at the price per share paid by the Company for such shares of Repurchased Common Stock (excluding all of the Company's fees, costs and expenses associated with effecting such repurchase). In the event that Crocker fails for any reason to deliver such notice to the Company on the date of any such repurchase, Crocker may, within fifteen (15) Business Days after Crocker's receipt of a Notification of Common Stock Repurchase and by written notice to the Company, elect to purchase from the Company a number of shares of such Repurchased Common Stock (not to exceed the Direct Purchase Limit) at a price per share equal to the Fair Market Value per share on the date that Crocker delivers such notice to the Company. Any notice to be delivered by Crocker under this Section 2.1(B)(ii) shall specify the total number of shares Crocker elects to purchase up to the Direct Purchase Limit (which amount, together with any previously purchased Loan Stock, may not exceed the Share Cap), and shall provide such other information as is reasonably necessary for the Company to transfer such shares to Crocker. Upon receipt of such notice, the Company shall take all action necessary to properly transfer such Repurchased Common Stock purchased by Crocker to Crocker and to register Crocker as the owner of same. All Loan Stock so purchased by Crocker (including all shares of Loan Stock purchased in part with Crocker's own funds and whether purchased in an Open Market Purchase or as a Direct Purchase) shall be deposited in the Account and shall be subject to the terms of the Loan Documents and the other Security Documents. (iii) Subsequent Plan Purchases. A minimum of one million (1,000,000) additional shares of Common Stock will be reserved for issuance under the Plan (or a successor plan) upon the approval of the Company's shareholders. In the event that Crocker elects to purchase additional Loan Stock pursuant to the Plan (or a successor plan) ("Subsequent Plan Purchases"), the Company shall, upon the execution and delivery by Crocker of a Loan Advance Request, lend to Crocker, pursuant to the Plan (or such successor plan), an amount up to one hundred percent (100%) of the purchase price of such shares of Loan Stock, plus applicable Stock Purchase Expenses, if any. All Loan Stock so purchased shall be deposited in the Account and shall be subject to the terms of the Loan Documents and the other Security Documents. (iv) Reconciliation of Loan to Value. 6 10 (a) Payments by Crocker. In the event that the aggregate amount loaned by the Company to Crocker in connection with the purchase of Loan Stock (whether purchased as a Plan Purchase, an Interim Purchase or a Subsequent Plan Purchase) shall, on September 1, 2001 (the "Reconciliation Date"), exceed seventy-five percent (75%) of the aggregate purchase price of the Loan Stock purchased as of the Reconciliation Date (the "Loan to Value Ratio"), Crocker shall promptly pay to the Company such amounts in reduction of the principal amount of the Loan as shall cause the Loan to Value Ratio to be less than or equal to seventy-five percent (75%). (b) Payments by Company. In the event that the aggregate amount of Crocker's own funds paid by Crocker in connection with the purchase of Loan Stock hereunder (whether purchased as a Plan Purchase, an Interim Purchase or a Subsequent Plan Purchase) shall, on the Reconciliation Date, exceed twenty-five percent (25%) of the aggregate purchase price of the Loan Stock purchased as of the Reconciliation Date, the Company shall (i) forgive such portion of the aggregate principal amount of the 25% Recourse Note as shall cause the notional amount paid by Crocker toward the purchase of all Loan Stock to equal twenty-five percent (25%) of the aggregate purchase price thereof and (ii) promptly pay to Crocker such amounts as shall be necessary to compensate Crocker for any income taxes imposed upon Crocker as a result of such forgiveness of loan principal. (C) Method of Payment. Crocker shall pay for purchases of Loan Stock as follows: (i) Payment for Plan Purchases. Crocker shall pay for all Plan Purchases of Loan Stock from the Company within three (3) Business Days after Crocker receives written notice from Crocker's broker that the applicable number of shares of Loan Stock have been transferred by the Company to Crocker's brokerage account. Payment for Plan Purchases of Loan Stock will be made by Crocker's execution and delivery of a Loan Advance Request to the Company in a principal amount equal to the aggregate purchase price of the Loan Stock being purchased. The Company shall pay for any Stock Purchase Expenses. (ii) Payment for Open Market Purchases. Crocker shall pay for all Open Market Purchases of Loan Stock by: (i) wire transferring directly to Crocker's broker or a third-party, as the case may be, fifty percent (50%) of the aggregate purchase price for such shares of Loan Stock being purchased, (ii) the Company advancing to Crocker an amount equal to fifty percent (50%) of the aggregate purchase price of such shares, plus Stock Purchase Expenses (the "Draw Amount") and (iii) Crocker's execution and delivery of a Loan Advance Request to the Company in a principal amount equal to fifty percent (50%) of the aggregate purchase price of the Loan Stock being purchased (plus Stock Purchase Expenses). The Company shall wire transfer the Draw Amount to Crocker's broker or such third-party, as the case may be, within one (1) Business Day after receiving written notice from Crocker containing: (a) the total number of shares of Loan Stock being purchased; (b) the aggregate purchase price for all such shares of Loan Stock being purchased; (c) evidence confirming such purchase from Crocker's broker or third-party, as the case may be; and (d) wire transfer instructions to the broker or such third-party, as the case may be. The Company shall deliver all Draw Amounts directly to Crocker's securities 7 11 broker or such third-party, as the case may be, in accordance with such broker's or such third-party's requirements. (iii) Payment for Direct Purchases from Company. Crocker shall pay for all Direct Purchases of Loan Stock from the Company within three (3) Business Days after Crocker receives written notice from Crocker's broker that the applicable number of shares of Loan Stock have been transferred by the Company to the Account. Crocker shall pay for Direct Purchases of Loan Stock by: (i) wire transferring directly to the Company fifty percent (50%) of the aggregate purchase price of the shares of Loan Stock being purchased and (ii) executing and delivery a Loan Advance Request to the Company in a principal amount equal to fifty percent (50%) of the aggregate purchase price of the Loan Stock being purchased. Any Stock Purchase Expenses shall be paid by the Company. (iv) Payment for Subsequent Plan Purchases. Crocker shall pay for all Subsequent Plan Purchases of Loan Stock from the Company within three (3) Business Days after Crocker receives written notice from Crocker's broker that the applicable number of shares of Loan Stock have been transferred by the Company to Crocker's brokerage account. Payment for Subsequent Plan Purchases of Loan Stock will be made by (i) Crocker's execution and delivery of a Loan Advance Request to the Company in a principal amount equal to the Company funded portion of the of Loan Stock (plus Stock Purchase Expenses) being purchased and (ii) Crocker wire transferring directly to the Company the portion of the purchase price of the Loan Stock not being funded by the Company. Any Stock Purchase Expenses shall be paid by the Company. (D) Indemnification for Failure to Fund. The Company shall defend, indemnify, and hold harmless Crocker from and against all claims, defense costs (including reasonable attorneys' fees), judgments and other expenses arising out of or in connection with a breach by the Company of any of its obligations under Section 2.1(C) above, time being of the essence with respect to each such obligation. (E) Other Purchases. Notwithstanding anything herein to the contrary, the Share Cap set forth herein is only applicable to shares of Loan Stock purchased by Crocker, in whole or in part, with funds loaned to Crocker by the Company and Crocker may purchase such of the Companies securities with his own funds as he desires, without restriction by the Company, except as provided by law. SECTION II.2 THE STOCK PURCHASE LOAN (A) The Stock Purchase Loan. Subject to the Share Cap and each of the other terms, conditions and other requirements set forth in this Agreement and in the Loan Documents, the Company agrees to lend Crocker (the "Stock Purchase Loan") an amount equal to (i) one hundred percent (100%) of the total purchase price of the Loan Stock purchased by Crocker in a Plan Purchase, (ii) fifty percent (50%) of the total purchase price of the Loan Stock (plus any and all Stock Purchase Expenses) purchased by Crocker in an Open Market Purchase, in a Direct Purchase, or in a combination thereof and (iii) up to one hundred percent (100%) of the total 8 12 purchase price of the Loan Stock (plus any and all Stock Purchase Expenses) purchased by Crocker in a Subsequent Plan Purchase. At the Closing, Crocker shall execute and deliver to the Company the Collateral Security Agreement, the Control Agreement, the 25% Recourse Note and the No Recourse Note. Each advance under the Notes shall be funded following Crocker's execution and delivery to the Company of a Loan Advance Request. (B) Non-Recourse. Except as provided below, the Stock Purchase Loan shall be non-recourse to Crocker such that the Company shall not seek to enforce any monetary judgement with respect to the Stock Purchase Loan or any sums due under any Note or any of the Loan Documents against Crocker, individually, except through recourse to the Collateral and solely to the Collateral. The non-recourse nature of the Stock Purchase Loan is a material inducement to Crocker agreeing to accept employment under the Employment Agreement and Crocker would not have agreed to accept such employment nor borrow any funds from the Company under the Stock Purchase Loan, but for the non-recourse nature of the Stock Purchase Loan. Notwithstanding the foregoing, Crocker shall be individually liable for twenty five percent (25%) of the amounts due under the 25% Recourse Note insofar as such amounts are advanced in connection with a Plan Purchase or a Subsequent Plan Purchase. (C) Interest Rate. The Stock Purchase Loan shall accrue interest, at the Stock Purchase Loan Interest Rate, as provided in each Note. Interest under each Note shall commence to accrue as of the date of disbursal or wire transfer by the Company. When monies are disbursed by wire transfer, such monies shall be considered advanced at the time of receipt thereof by the receiving institution. (D) Repayment and Term. The Stock Purchase Loan shall be repaid as provided in each Note, which shall be generally as follows: quarterly payments of accrued interest only shall be due on June 30, September 30, December 31 and March 31 during each year during the term of the Loan and shall be paid within thirty (30) days after the due date thereof, and all accrued interest and outstanding principal shall be paid on the Maturity Date (as defined below). The Stock Purchase Loan shall mature at the earlier of (the "Maturity Date"): (i) ten (10) years from the date of this Agreement; or (ii) two (2) years following termination of Crocker's employment by the Company under the Employment Agreement with "Cause" pursuant to Section 4(C) of the Employment Agreement. (E) Prepayments and Sale of Loan Stock. The Stock Purchase Loan may be prepaid, in whole or in part, any time without any penalty or premium. Except for prepayments made by Crocker pursuant to Section 2.1(B)(iv) hereof, prepayments shall first be applied to accrued interest, then to principal. At any time Crocker shall have the right to sell all or any portion of the Loan Stock constituting the Collateral provided that Crocker pays the Company the "Per Share Release Price" from the proceeds derived from such sale. The "Per Share Release Price" shall be an amount calculated by dividing the outstanding principal amount of and accrued interest on the Stock Purchase Loan as of the date of such sale by the total number of shares of Loan Stock subject to the Collateral Security Agreement immediately prior to such sale. 9 13 (F) Security. The Stock Purchase Loan shall be secured by the Loan Stock pursuant to a Collateral Security Agreement, as more particularly provided for in Article III below. (G) Shareholder Rights. Crocker shall have all rights of a stockholder with respect to the Loan Stock, including without limitation, the right to vote such Loan Stock and the right to receive dividends; provided that Crocker may not sell, transfer, assign, or hypothecate the Loan Stock or take any action which would violate the terms of the Stock Pledge Agreement unless, in respect of each share of such Loan Stock, Crocker has paid the Company the Per Share Release Price described above. SECTION II.3 INTENT NOT TO COMMIT USURY Crocker does not intend or expect to pay, nor does the Company intend or expect to charge, accept or collect, any interest under this Agreement, any Note or any other Loan Document or other instrument executed in connection herewith greater than the maximum legal rate of interest which may be charged under applicable law. Should any event result in the computation or earning of interest in excess of such maximum legal rate, any and all such excess shall be refunded to Crocker. Notwithstanding anything to the contrary contained in this Agreement, any Note or other Loan Document or instrument delivered in connection herewith, the amount of interest due under the terms of this Agreement, each Note, each other Loan Document or any other instrument shall in no event exceed the maximum amount of interest permitted to be charged by law. SECTION II.4 USE OF PROCEEDS The proceeds of the Stock Purchase Loan shall be used by Crocker solely to purchase the Loan Stock as provided in this Agreement. ARTICLE III SECURITY FOR THE STOCK PURCHASE LOAN SECTION III.1 SECURITY INTEREST As security for the full and timely payment of the principal and interest under the Stock Purchase Loan, Crocker grants to the Company a first priority and continuing security interest in and lien upon the Collateral. SECTION III.2 SECURITY DOCUMENTS Crocker, in order to set forth the terms and conditions under which the Collateral described in Section 3.1 hereof will be held by the Company, shall execute and deliver to the Company, in form and substance reasonably satisfactory to the Company, any and all security agreements, hypothecation agreements, assignments, pledge agreements, financing statements, 10 14 notices of lien, guarantees and any other documents relating to any security as the Company shall reasonably require from time to time (all herein referred to collectively as the "Security Documents"). SECTION III.3 FILING AND RECORDING The Company shall bear the cost and expense of causing such of the Security Documents to be duly recorded and/or filed in all places necessary, in the reasonable opinion of the Company, to perfect and protect the interest of the Company in the Collateral covered thereby. Crocker hereby authorizes the Company to file any financing statement or notice of lien in respect of any security interest created pursuant to this Agreement which may at any time be required or which, in the reasonable opinion of the Company, may at any time be desirable, although the same may have been executed only by the Company, or, at the reasonable opinion of the Company, to sign such financing statement or notice of lien on behalf of Crocker and file the same. In the event that any rerecording or refilling thereof (or the filing of any statements of continuation or assignment of any financing statement) is required to protect and preserve security interests in favor of the Company, the Company shall bear the cost and expense of causing the same to be recorded and/or refiled at the time and in the manner reasonably required by the Company. The Company shall provide Crocker with written notice before recording or filing any documents pursuant to this provision. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY SECTION IV.1 DUE AUTHORIZATION; ENFORCEABILITY This Agreement, the Stock Pledge Agreement and the Control Agreement have been duly executed and delivered by the Company and each constitutes, the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, and other laws affecting the rights of creditors generally and by general principles of equity regardless of whether enforcement is pursuant to a proceeding in equity or at law. SECTION IV.2 FEDERAL REGULATION The Company represents and warrants to Crocker that the Stock Purchase Loan does not violate, and is not inconsistent with, the provisions of Regulation U of the Board of Governors of the Federal Reserve System or any other law. 11 15 ARTICLE 5 CROCKER'S COVENANTS SECTION V.1 TAXES AND CLAIMS Crocker shall properly pay and discharge: (a) all taxes, assessments and governmental charges upon the Collateral, prior to the date on which penalties attach thereto, unless and to the extent that such taxes are being diligently contested in good faith and by appropriate proceedings and appropriate reserves therefor have been established; and (b) all lawful claims, whether for labor, materials, supplies, services or anything else which might or could, if unpaid, become a lien or charge upon the Collateral unless and to the extent only that the same are transferred to bond, being diligently contested in good faith and by appropriate proceedings, and appropriate reserves therefor have been established. SECTION V.2 PAY INDEBTEDNESS TO THE COMPANY AND PERFORM OTHER COVENANTS Crocker shall: (a) make full and timely payments of the principal of and interest due under each Note; (b) duly comply with all the terms and covenants contained in each of the Loan Documents and all other instruments and documents given to the Company pursuant to this Agreement at the times and places and in the manner set forth herein; and (c) at all times maintain the liens and security interests provided for under or pursuant to this Agreement as valid and perfected liens and security interests on the property intended to be covered thereby. ARTICLE VI COVENANTS OF THE COMPANY SECTION VI.1 PLAN SHARES The Company shall use its best efforts and shall take all necessary corporate action to obtain, prior to June 1, 2000, shareholder approval for an increase in the number of shares of Common Stock reserved for issuance under the Plan (or a successor plan) to at least 700,000 shares, such that Crocker may, if he desires, elect to purchase 500,000 shares of Loan Stock under the Plan (or a successor plan). SECTION VI.2 REGISTRATION OF PLAN SHARES AND DIRECT PURCHASE SHARES The Company shall take all necessary action to ensure that all Loan Stock purchased by Crocker under the Plan (or any successor plan), pursuant to a Direct Purchase or otherwise (if not already registered under the Securities Act of 1933, as amended (the "Act") or if registration is terminated as a result of such acquisition or otherwise) is registered under the Act within thirty (30) days from the date that such Loan Stock is purchased by Crocker. SECTION VI.3 SALE OF PLAN SHARES 12 16 The Company will not sell any shares under the Plan (or any successor plan) to any person or entity (other than up to 150,000 shares to Robert Onisko) unless Crocker shall consent thereto. Such consent right shall terminate thirty (30) days after Crocker shall be notified by the Company that a sufficient number of shares to permit purchase by Crocker of the Share Cap are reserved for issuance under the Plan (or any successor plan). ARTICLE VII EVENTS OF DEFAULT SECTION VII.1 EVENTS OF DEFAULT (A) Events of Default - Payment-In-Full Without Notice The occurrence of any one of more of the following events, whether or not notice is given by the Company, shall constitute an Event of Default: (1) Crocker: (a) shall file a voluntary petition under the United States Code for adjudication as a bankrupt; (b) shall file an answer seeking reorganization or an arrangement under any bankruptcy or similar statute of the United States of America or any subdivision thereof or of any foreign jurisdiction in response to an involuntary petition; (c) shall consent to the filing of a petition in any such bankruptcy or reorganization proceeding; (d) shall consent to the appointment of a receiver or trustee or officer performing similar functions with respect to any substantial part of its property; (e) shall make a general assignment for the benefit of its creditors; or (f) shall execute a consent to any other type of insolvency proceedings (under the Bankruptcy Act or otherwise); (B) Events of Default - Payment-In-Full With Notice The occurrence of any one or more of the following and giving of a written notice by the Company shall constitute an Event of Default: (1) Default by Crocker in the payment of any sum due under any Note or otherwise under the Loan Documents that is not made within thirty (30) days after the due date therefor; or (2) Default in the performance of any other liability, obligation or covenant of Crocker to the Company hereunder or any of the Loan Documents that is not cured 13 17 within thirty (30) days after Crocker's receipt of notice from the Company specifying such default. SECTION VII.2 WAIVER OF DEFAULT The Company may, at any time, waive any Event of Default which shall have occurred and any of its consequences, in which case the parties hereto shall be restored to their former positions and rights and obligations hereunder, respectively; but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereon, and no such waiver shall be effective unless it is in a written document executed by a duly authorized officer. ARTICLE VIII REMEDIES FOR EVENTS OF DEFAULT SECTION VIII.1 REMEDIES FOR EVENTS OF DEFAULT Upon the occurrence and continuation of an Event of Default provided in Section 7.1(A) of this Agreement without notice or an Event of Default provided in Section 7.1(B) of this Agreement after the giving of any applicable notice and expiration of any applicable cure or grace period, the Stock Purchase Loan hereby granted and all obligations to make loans or additional draws under the Stock Purchase Loan shall immediately terminate, and all principal and interest owing hereunder and under the Notes shall be accelerated and become due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived and the Company may sell any or all of the Collateral and apply the proceeds thereof to reduce the outstanding principal of the Stock Purchase Loan. SECTION VIII.2 ACTION FOR ENFORCEMENT The Company may proceed to protect and enforce its rights or remedies either by suit in equity or by action at law, or both, whether for the specific performance of any covenant, agreement or other provision contained herein, in any Note, the other Loan Documents or in any document or instrument delivered in connection with or pursuant to this Agreement, or to enforce the payment of any Note or any other legal or equitable right or remedy or sell the Collateral and apply the proceeds thereof in repayment of the Stock Purchase Loan; provided, however, the Company shall not seek to enforce any monetary judgement with respect to the Stock Purchase Loan or any sums due under any Note or any of the other Loan Documents against Crocker, individually, except as set forth in Section 2.2(B). 14 18 SECTION VIII.3 SALE OF COLLATERAL The Company shall have the right to sell any and all of the Collateral and apply the proceeds thereof to reduce the outstanding balance of the Loan upon an Event of Default under Section 7.1 of this Agreement and the expiration any applicable notice and cure period. SECTION VIII.4 RIGHTS AND REMEDIES CUMULATIVE No right or remedy herein conferred upon the Company is intended to be exclusive of any other right or remedy contained herein, in any Note, the other Security Documents or in any instrument or document delivered in connection with or pursuant to this Agreement, and every such right or remedy shall be cumulative and shall be in addition to every other such right or remedy contained herein and therein or now or hereafter existing at law or in equity or by statute or otherwise. In the event of any conflict among the Loan Documents as to the notice required before resort to any remedy, the shortest notice provision shall control. ARTICLE IX FEES AND PAYMENTS SECTION IX.1 COSTS, TAXES AND ATTORNEYS' FEES Whether or not the Closing is effectuated and the transactions contemplated hereby shall be consummated, the Company agrees: (a) to pay all out-of-pocket costs, expenses, disbursements and fees incurred by the Company in connection with the origination, preparation, execution and delivery of and any amendment, supplement or modification to, any of the Loan Documents and any other documents prepared in connection herewith, and the consummation of the transactions contemplated hereby and thereby (whether incurred before or after the Closing), including, without limitation, title search, examination and insurance charges, UCC searches, judgment and tax lien searches, recording fees, charges and taxes, documentary stamps, intangible taxes, disbursement fees, appraisal fees, reasonable fees and disbursements of counsel to the Company in connection with the origination and/or the Closing of the Stock Purchase Loan. The agreements contained in this Section shall survive repayment of the Notes and all other amounts payable hereunder or under the other Loan Documents. 15 19 ARTICLE X MISCELLANEOUS SECTION X.1 NOTICES All notices, requests, consents and other communications hereunder to any party, shall be deemed to be sufficient if in writing and: (i) delivered in person, (ii) sent by telex or telecopier, (iii) sent by first class, registered or certified mail return receipt requested and postage prepaid or (iv) sent by overnight delivery service, addressed to such party at the address set forth below (or at such other addresses as shall be specified by like notice): If to Crocker: Thomas J. Crocker 3580 Polo Drive Gulf Stream, Florida 33483 with a required copy to: Proskauer Rose LLP One Boca Place, Suite 340 West 2255 Glades Road Boca Raton, Florida 33431 Telecopier: (407) 241-7145 Attn: Christopher C. Wheeler, Esq. If to the Company: Koger Equity, Inc. 8880 Freedom Crossing Trail Jacksonville, Florida 32256 with a copy to: Ropes and Gray One International Place Boston, Massachusetts 02110 Attn: Ron Groves with a copy to: Boling & McCart 1000 Riverside Avenue Suite 555 Jacksonville, Florida 32204 Attn: Harold F. McCart, Jr. All such notices and communications shall be deemed to have been received: (i) on the date delivered if by personal delivery, (ii) on the date telecommunicated if sent by telex, telecopier or 16 20 other telegraphic method, (iii) on the date sent if sent by first class, registered or certified mail, or (iv) on the following date if received by overnight delivery; provided, further, that rejection or other refusal to accept or inability to deliver because of changed address or telecopier number for which no notice has been received shall also constitute receipt. SECTION X.2 ATTORNEYS' FEES Any and all references to the payment of attorneys' fees and disbursements herein or in any of the other Loan Documents shall include those incurred before, during and after litigation, whether in negotiating, drafting, closing, attempting collection without litigation, investigating and litigating in all trial and appellate levels, as well as those incurred in any bankruptcy proceedings and post-judgment proceedings. Attorneys' fees includes fees of paraprofessionals such as paralegals and investigators. SECTION X.3 SEVERABILITY Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION X.4 COUNTERPARTS This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Confirmation of execution by telex or by telecopied facsimile signature page shall be binding upon any party so confirming or telecopying. A set of the copies of this Agreement signed by all the parties hereto shall be lodged with Crocker and the Company. SECTION X.5 INTERPRETATION Each of the parties hereto acknowledges that they have been represented by their own counsel throughout the negotiations and at the execution of this Agreement and all of the other Loan Documents and therefore none of the parties hereto shall, while this Agreement is effective or after its termination, claim or assert that any provisions of this Agreement or any of the other Loan Documents should be construed against the drafter of this Agreement or any of the other Loan Documents. 17 21 SECTION X.6 CONFLICT If the terms and provisions of any of the other Loan Documents should conflict with any of the terms and provisions of this Agreement, the terms and provisions of this Agreement shall be interpreted as being paramount, superior and controlling. SECTION X.7 HEADINGS The headings of the Articles, Sections, and Subsections of this Agreement are for convenience of reference only, and are not to be considered a part hereof, and do not limit or otherwise affect any of the terms hereof. SECTION X.8 JURISDICTION AND VENUE Each of the parties irrevocably and unconditionally: (a) agrees that any suit, action or other legal proceeding arising out of or relating to this Agreement may, and to the extent permitted by the courts of the State of Florida shall be brought in the courts of record of the State of Florida in Palm Beach County or the District Court of the United States, Southern District of Florida; (b) consents to the jurisdiction of each such court in any such suit, action or proceeding; (c) waives any objection which it may have to the laying of venue of any such suit, action or proceeding in any of such court; and (d) agrees that service of any court paper may be effected on such party by mail, as provided in this Agreement, or in such other manner as may be provided under applicable laws or court rules in the State of Florida. SECTION X.9 AMENDMENTS The provisions of this Agreement may not be amended, supplemented, waived or changed orally, but only by a writing signed by the party as to whom enforcement of any such amendment, supplement, waiver or modification is sought and making specific reference to this Agreement. SECTION X.10 GOVERNING LAW; BENEFIT This Agreement and all rights hereunder shall be governed by the internal laws of the State of Florida without giving effect to the conflicts of laws principles thereof. This Agreement shall bind and inure to the benefit of, and the terms "Crocker" and the "Company," respectively, as used in this Agreement shall include, the respective parties and their respective heirs, personal representatives, participants, successors and assigns. However, Crocker and the Company may not assign their rights and obligations under this Agreement. [SIGNATURES APPEAR ON THE NEXT PAGE] 18 22 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. THE COMPANY: KOGER EQUITY, INC., A FLORIDA CORPORATION By: /s/ W. Lawrence Jenkins ----------------------------------- Its: Vice President ---------------------------------- Print Name: W. Lawrence Jenkins --------------------------- CROCKER: /s/ Thomas J. Crocker ------------------------------------------- Thomas J. Crocker 19 23 EXHIBIT "A" CERTIFICATE AND LOAN ADVANCE REQUEST DATE: ____________, 2000 Koger Equity, Inc. 8880 Freedom Crossing Trail Jacksonville, Florida 32256 Dear Sir: Pursuant to Section ___ of the Stock Purchase and Loan Agreement between Koger Equity, Inc. and the undersigned, dated as of February 17, 2000 (the "Stock Purchase and Loan Agreement"), the undersigned hereby applies for an advance of $ ____________ to be credited to the account of __________________, Account No. ________________________ . Capitalized terms used and not defined herein shall have the meanings set forth in the Stock Purchase and Loan Agreement. The undersigned hereby certifies that: 1. No Event of Default as defined in the Stock Purchase and Loan Agreement has occurred. 2. The amount to be advanced pursuant to this advance is _____________ of the purchase price of the Loan Stock proposed to be purchased [(plus Stock Purchase Expenses)]. 3. The number of shares of Loan Stock proposed to be purchased is ____________, which shall be purchased pursuant to [the Plan][an Open Market Purchase][a Direct Purchase] [a Subsequent Plan Purchase]. The per share purchase price of the Loan Stock is $___________. Thomas J. Crocker 20 EX-10.(A)(6) 7 ex10-a6.txt STOCK OPTION AGREEMENT, THOMAS J. CROCKER 1 EXHIBIT 10(a)(6) STOCK OPTION AGREEMENT THIS AGREEMENT ("Agreement") made as of the 17th day of February, 2000 by and between Koger Equity, Inc., a Florida corporation with its principal place of business in Jacksonville, Florida (the "Company"), and Thomas J. Crocker ("Executive"). W I T N E S S E T H: Effective February 17, 2000, (the "Grant Date"), Executive has been granted, subject to execution of this agreement, a non-qualified stock option (the "Option") to purchase the number of shares of the Company's common stock, par value $.01 per share (the "Shares") set forth below, pursuant to the terms of the Employment Agreement, dated as of February 17, 2000, by and between the Company and Executive (the "Employment Agreement"). Unless otherwise indicated, any capitalized term used herein, but not defined herein, shall have the meaning ascribed to such term in the Employment Agreement. References to the "Board" shall mean the Board of Directors of the Company and references to "Committee" shall mean the Compensation Committee of the Board. 1. Grant of Options (a) Subject to the terms and conditions set forth herein, the Executive is granted an Option to purchase 700,000 shares at a per Share exercise price of $16.0625. No part of the Option is intended to be an "Incentive Stock Option" within the meaning of section 422 of the Internal Revenue Code of 1986, as amended. (b) The term of the Option shall be ten (10) years from the Grant Date, subject to earlier termination as provided in Section 3 hereof. Upon expiration of the Option, the Option shall be canceled and no longer exercisable. (c) Subject to Section 3 hereof, the Option shall vest and become exercisable as to one third (1/3) of the Shares subject to the Option, on the first anniversary of the Effective Date and as to an additional one third (1/3) of the Shares subject to the Option on the next two succeeding anniversaries of the Effective Date (each such date hereinafter referred to as a "Vesting Date"); provided, that on each of such Vesting Dates, Executive has been continuously employed by the Company through such date. There shall be no proportionate or partial vesting in the periods prior to each Vesting Date and vesting shall occur only on the appropriate Vesting Date. To the extent the Option has become vested and exercisable, the Option may thereafter be exercised by Executive, in whole or in part, at anytime or from time to time prior to the expiration of the Option as provided herein. (d) (i) To the extent vested hereunder, the Option may be exercised by Executive by delivering notice to the Company's principal office, to the attention of its Corporate Secretary. Such notice shall be accompanied by this Agreement, shall specify the number of Shares with respect to which the Option is being exercised and the effective date of the 2 proposed exercise and shall be signed by Executive or other person then having the right to exercise the Option. Payment for Shares purchased upon the exercise of the Option shall be made on the effective date of such exercise by one or a combination of the following means: (i) in cash or by personal check, certified check, bank cashier's check or wire transfer; (ii) if the Shares are traded on a national securities exchange, the Nasdaq Stock Market, Inc. or quoted on a national quotation system sponsored by the National Association of Securities Dealers, through a "cashless exercise" procedure whereby Executive delivers irrevocable instructions to a broker to deliver promptly to the Company an amount equal to the purchase price; (iii) subject to the approval of the Committee, in Shares owned by Executive for at least six months prior to the date of exercise (or such shorter period approved by the Committee) and valued at their "fair market value" (within the meaning of the Company's 1998 Equity and Cash Incentive Plan (the "1998 Equity Plan")) on the effective date of such exercise; or (iv) subject to the approval of the Committee, by such other provisions as the Committee may from time to time authorize. (ii) Subject to the terms of this Agreement, certificates for Shares purchased upon the exercise of an Option shall be issued in the name of Executive or other person entitled to receive such Shares, and delivered to Executive or such other person as soon as practicable following the effective date on which the Option is exercised. 2. Shares; Adjustment Upon Certain Events (a) Shares to be issued under this Agreement shall be made available, at the discretion of the Board, from authorized but unissued Shares, issued Shares reacquired by the Company or Shares purchased by the Company on the open market specifically for these purposes. (b) In the event that any dividend or other distribution (whether in the form of cash, Shares or other property), recapitalization, stock split, reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event affects the Shares such that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of Executive under the Option, then the Committee shall make such equitable changes or adjustments as are appropriate to the Option's exercise price and the number and kind of Shares or other property (including cash) issued or issuable upon exercise of the Option. (c) Notwithstanding the foregoing, in the event that the Company shall declare any extraordinary dividend or other extraordinary distribution in favor of the Company's shareholders in connection with the sale of assets by the Company, the Company shall not make any equitable changes or adjustments to the Option as set forth above, but shall set aside in a segregated escrow account for the benefit of the Executive a cash amount equal to the value of the pro rata portion of such extraordinary dividend or other extraordinary distribution which would have been payable in respect of the shares of Common Stock issuable upon exercise of the Option had the Option been 100% vested and fully exercised immediately prior to the declaration of such extraordinary dividend or other extraordinary distribution. All such funds 2 3 shall be released from escrow and paid to the Executive on March 1, 2003, without setoff or deduction by the Company or the escrow agent, if the Closing Price (as defined below) of the Company's Common Stock shall be at least $16.0625 (as adjusted for (i) stock splits, combinations and the like and (ii) distributions of capital gains to the Company's shareholders) on at least sixty (60) days (in the aggregate) of the one hundred eighty (180) consecutive days immediately prior to March 1, 2003 (the "Closing Price Requirement"). If the Closing Price Requirement shall not be met, such funds shall be returned to the Company on such date and the Executive shall have no right to or claim against such funds. The "Closing Price" of the Company's Common Stock on any day shall mean (i) if the Common Stock is listed or admitted for trading on any United States national securities exchange, or if actual transactions are otherwise reported on a consolidated transaction reporting system, the last reported sale price of Common Stock on such exchange or reporting system, as reported in any newspaper of general circulation, (ii) if the Common Stock is quoted on the National Association of Securities Dealers Automated Quotations System ("NASDAQ"), or any similar system of automated dissemination of quotations of securities prices in common use, the mean between the closing high bid and low asked quotations for such day of Common Stock on such system or (iii) if neither clause (i) or (ii) is applicable, the fair market value of the Common Stock as determined by the Company's Board of Directors. 3. Effect of Termination of Employment; Change of Control (a) In the event of (i) Executive's termination of Employment either by (A) the Company without Cause or (B) the Executive for Good Reason, (ii) the Executive's death or Disability or (iii) a Change of Control of the Company, the Option will immediately vest and become exercisable as to all the Shares subject thereto. If, as part of, or in connection with, a Change of Control (and to the extent that the Option shall not have been exercised prior to or in connection with any such transaction), there occurs a merger or consolidation in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company's stock or assets by a person, entity or group of persons or entities acting in concert or there is a dissolution or liquidation of the Company, the Option shall, upon the effective date of such transaction, either be (i) cashed out, (ii) assumed by the surviving corporation or (iii) substituted with a new option of the surviving corporation which is substantially similar in nature and equivalent in terms and value for the Option then outstanding. (b) In the event of Executive's Termination for Cause or Termination without Good Reason, the unvested portion of the Option shall be immediately forfeited and canceled. (c) Upon Executive's termination of employment with the Company, the portion of the Option that is not vested in accordance with the terms hereof shall be immediately forfeited and the vested portion of the Option shall expire on the tenth (10th) anniversary of the Grant Date. 4. Nontransferability of Option 3 4 Neither the Option nor any other rights hereunder shall be transferable by Executive otherwise than by will or under applicable laws of descent and distribution. The Option shall be exercisable, during Executive's lifetime only by Executive. In addition, neither the Option nor any other rights hereunder shall, except as otherwise provided herein, be assigned, negotiated, pledged, or hypothecated in any way or be subject to execution, attachment or similar process. Upon any transfer, assignment, negotiation, pledge or hypothecation of the Option or any rights hereunder, or in the event of any levy upon the Option or any rights hereunder by reason of any execution, or similar process, contrary to the provisions hereof, such Option shall immediately become null and void. Notwithstanding the forgoing, Executive may, upon providing written notice to the Company, elect to transfer all or any portion of the Option to members of Executive's immediate family, including, but not limited to, children, grandchildren and spouse or to trusts for the benefit of such immediate family members or to partnerships in which such family members are the only partners; provided, however, that no such transfer by Executive may be made in exchange for consideration. 5. Rights as a Stockholder Executive (or a permitted transferee of the Option) shall have no rights as a stockholder with respect to any Shares subject to the Option until Executive (or permitted transferee) shall have become the holder of record of such Shares, and no adjustments shall be made for dividends in cash or other property or distributions or other rights in respect to any such Shares, except as otherwise specifically provided for herein. 6. Securities Representations If the Committee determines that the law so requires, the holder of the Option granted hereunder shall, upon any exercise or conversion thereof, execute and deliver to the Company a written statement, in a form satisfactory to the Company, representing and warranting that: (a) in the event that the holder of Shares received pursuant to exercise of the Option is permitted to sell, transfer, pledge, hypothecate, assign or otherwise dispose of such Shares, the holder may only do so pursuant to a registration statement under the Securities Act of 1933 (the "Act") and qualification under applicable state securities laws or pursuant to an opinion of counsel satisfactory to the Company that such registration and qualification are not required, and that the transaction (if it involves a sale in the over-the-counter market or on a securities exchange) does not violate the provisions of Rule 144 under the Act. A stop-transfer order will be placed on the books of the Company respecting the certificates evidencing the Shares, and such certificates shall bear any required legends until such time as the Shares evidenced by such certificates shall have been registered under the Act or shall have been transferred in accordance with an opinion of counsel for the Company that such registration is not required; and (b) holder understands that the resale of the Shares are subject to Rule 144 promulgated under the Act; that the exemption from registration under Rule 144 will not be available unless (i) a public trading market then exists for the Common Stock of the Company, (ii) adequate information concerning the Company is then available to the public, and (iii) other 4 5 terms and conditions of Rule 144 or any exemption therefrom are complied with; and that any sale of the Shares may be made only in limited amounts in accordance with such terms and conditions; and (c) holder has been advised that holder may be subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 (the "Securities Act") and that holder may be subject to insider trading restrictions and reporting requirements on the purchase and sale of securities of the Company imposed under the Securities Act. 7. Delay in Delivery of Shares Upon Exercise of Option The delivery of any certificate representing Shares hereunder may be postponed by the Company for such period as may be required for it to comply with any applicable federal or state securities law, or any national securities exchange listing requirements and the Company is not obligated to issue or deliver any securities if, in the opinion of counsel for the Company, the issuance of such Shares shall constitute a violation by Executive or the Company of any provisions of any law or of any regulations of any governmental authority or any national securities exchange. The Committee shall inform the Executive in writing of any decision to defer the delivery of Shares. During the period of such deferral, Executive may, by written notice, withdraw the portion of the Option exercise subject to the deferral and obtain the refund of any amount paid with respect thereto. Notwithstanding the preceding, the Company agrees to file and maintain a Form S-8 with regard to the Option and agrees to file a Form S-3 as reasonably requested by the Executive with regard to any Shares issued upon exercise of the Option. 8. Withholding Taxes Upon exercise of the Option, Executive will pay to the Company, or make arrangements satisfactory to the Company that are in compliance with applicable law regarding payment of, any U.S. federal, state or local taxes of any kind required by law to be withheld with respect of the exercise of the Option. The Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to Executive any U.S. federal, state or local taxes of any kind required by law to be withheld with respect to the exercise of the Option. 9. Miscellaneous (a) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, personal legal representatives, successors, trustees, administrators, distributees, devisees and legatees. The Company shall assign to, and require, any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, any subsidiary or any division of the Company or subsidiary by which Executive is employed to expressly assume and agree in writing to perform this Agreement. Notwithstanding the foregoing, this Agreement may not be assigned by the Executive. 5 6 (b) No modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the party against whom it is sought to be enforced. (c) This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one contract. (d) The failure of any party hereto at any time to require performance by another party of any provision of this Agreement shall not affect the right of such party to require performance of that provision, and any waiver by any party of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of the provision itself, or a waiver of any right under this Agreement. (e) The headings of the sections of this Agreement have been inserted for convenience of reference only and shall in no way restrict or modify any of the terms or provisions hereof. (f) The Company shall pay all fees and expenses necessarily incurred by the Company in connection with this Agreement and will from time to time use its reasonable efforts to comply with all laws and regulations which, in the opinion of counsel to the Company, are applicable thereto. (g) All notices, consents, requests, approvals, instructions and other communications provided for herein shall be in writing and validly given or made when delivered, or on the second succeeding business day after being mailed by registered or certified mail, whichever is earlier, to the persons entitled or required to receive the same, at the addresses set forth at the heading of this Agreement or to such other address as either party may designate by like notice. Notices to the Company shall be addressed to its principal office, attention of the Executive Vice President and General Counsel. (h) To the extent not in specific conflict with this Agreement or the Employment Agreement, the provisions of the 1998 Equity Plan shall apply to the Options granted herein as if the grant was under such 1998 Equity Plan and the Committee shall have the right to interpret and administer the grants made herein in the same manner as grants made under such plan. (i) This Agreement shall be governed and construed and the legal relationships of the parties determined in accordance with the laws of the state of Florida without reference to principles of conflict of laws. 6 7 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. KOGER EQUITY, INC. By: /s/ W. Lawrence Jenkins --------------------------------------- Name: W. Lawrence Jenkins Title: Vice President /s/ Thomas J. Crocker ------------------------------------------- Thomas J. Crocker 7 EX-10.(B)(1) 8 ex10-b1.txt EMPLOYMENT AGREEMENT, ROBERT ONISKO 1 EXHIBIT 10(b)(1) EMPLOYMENT AGREEMENT This is an agreement (the "Agreement") between Koger Equity, Inc. (the "Company"), a Florida corporation with its principal place of business at Jacksonville, Florida, and Robert Onisko (the "Executive"), effective as of February 17, 2000 (the "Effective Date"). WHEREAS, the operations of the Company require direction and leadership in a variety of areas; WHEREAS, the Executive has experience and expertise, as a senior executive, that qualify him to provide that direction and leadership, and the Company therefore wishes to employ him as its chief financial officer, and he wishes to accept such employment. NOW, THEREFORE, the parties agree as follows: 1. Employment; Term. The Company hereby agrees to employ the Executive, and the Executive hereby agrees to enter the employ of the Company in accordance with the terms and conditions set forth herein, for a term (the "Term of Employment"), commencing on March 1, 2000 and terminating, unless otherwise terminated earlier in accordance with Section 4 hereof, on the third anniversary of such date (the "Original Employment Term"), provided that the Employment Term shall automatically be extended, subject to earlier termination as provided in Section 4 hereof, for successive one year periods (each an "Additional Term") unless at least ninety (90) days prior to the end of the Original Employment Term or the then Additional Term, the Company or the Executive has notified the other in writing that the Term of Employment shall terminate at the end of the then current term. 2. Capacity and Performance. During the Term of Employment: (a) the Executive shall serve the Company on a substantially full-time basis as its chief financial officer at the Company's offices in Jacksonville and Boca Raton, Florida; (b) the Executive shall have such duties, authorities and responsibilities as commensurate with chief financial officers of public entities of similar size, and shall perform such other duties, authorities and responsibilities as may be designated from time to time by the Board of Directors of the Company (the "Board") commensurate with the position of chief financial officer; and (c) the Executive shall devote substantially all of his business time, attention and efforts to the performance of his duties hereunder, provided the foregoing will not prevent the Executive from participating in charitable, community or industry affairs, from managing his and his family's personal investments, and assisting with the liquidation of the Crocker Realty Trust, to the extent that the aforementioned activities do not materially interfere with the performance of the Executive's duties hereunder. 3. Compensation and Benefits. (a) Base Salary. During the Term of Employment, the Company shall pay the Executive base salary ("Base Salary") at the rate of $200,000 per year, prorated for any partial period. All Base Salary shall be payable in accordance with the payroll practices of the 2 Company for its senior executives and shall be subject to increase from time to time by the Board (or its Compensation Committee) in its sole discretion. (b) Bonus. The Executive shall be eligible for year-end annual bonuses in an amount of at least $125,000 (the "Target Bonus"). Payment of the Target Bonus to the Executive shall be within the total discretion of the Compensation Committee of the Board and shall be based upon the Company's performance. (c) Stock Purchase Loan. The Company shall provide the Executive a loan to purchase up to 150,000 shares of the Company's common stock, $.01 par value (the "Common Stock") subject in all respects to the terms and conditions of agreements, in the form and substance substantially similar to the agreements attached as Exhibit A hereto. (d) Option Grant. Executive will be entitled, pursuant to the grant made to Executive on February 17, 2000, to receive from the Company, a stock option (the "Stock Option") to purchase a total of 300,000 shares of Common Stock, with a per share exercise price equal to the fair market value of a share of the Company's Common Stock as of February 17, 2000. The Stock Option shall be for a term of ten years. In the case of (i) the termination of Executive's employment (A) by the Company without Cause or by Executive for Good Reason (as such terms are defined in Section 4 hereof) or (B) pursuant to a notice by either the Company or the Executive to the other of a non-renewal of the Term of Employment in accordance with Section 1 hereof, (ii) the Executive's death or Disability (as defined in Section 4 hereof) or (iii) a Change of Control of the Company (as defined in Section 7.2(b) of the Company's Equity and Cash Incentive Plan (the "1998 Plan"), the Stock Option and any other Company stock option then held by Executive shall become immediately 100% vested (provided, that in the case of a termination pursuant to clause (i)(B), such vesting shall be postponed until the last day of the then Term of Employment) and shall remain exercisable for the remainder of their respective terms. Subject to accelerated vesting as set forth in this Agreement, the Stock Option shall vest and become exercisable as to one-third of the shares originally subject to the Stock Option on each anniversary of the Effective Date, so as to be 100% vested on the third anniversary thereof, conditioned upon Executive's continued employment with the Company as of each vesting date. The Stock Option (and all other options for shares of Common Stock issued to Executive) shall be adjusted to reflect any corporate event or transaction with respect to the Company as specified in Section 2(b) of the stock option agreement attached as Exhibit A hereto (the "Option Agreement"). The Company shall file and maintain a Form S-8 with regard to the Option and shall file a form S-3 as reasonably requested by the Executive with respect to any shares of Common Stock issued upon exercise of the Option. Subject to the foregoing, the Stock Option shall in all respects be subject to the terms, definitions and provisions of the Option Agreement. (e) Vacations. During the Term of Employment the Executive shall be entitled to five weeks of vacation per year, prorated for partial calendar years, to be taken at such times and intervals as he wishes, subject to the reasonable business needs of the Company. The Executive shall be entitled to cash compensation for vacation time not taken only to the extent approved by the Board. 2 3 (f) Other Benefits. During the Term of Employment the Executive shall be entitled to participate in all employee benefit plans, programs and arrangements (including insurance plans) generally provided to comparable senior officers of the Company. The Executive's participation shall be subject to (i) the terms of the applicable plan documents and (ii) generally applicable Company policies. The Company may alter, modify, supplement or delete its employee benefit plans at any time as it sees fit, without recourse by the Executive. (g) Business Expenses. The Company shall pay or reimburse the Executive for all reasonable, customary business expenses incurred or paid by the Executive in the performance of the duties and responsibilities of his position, subject to any restrictions on such expenses set by the Board or in Company policies and to such reasonable substantiation and documentation as may be required by the Company. (h) Travel Between Company Offices. The Company agrees to (i) reimburse the Executive for the expenses, including, without limitation, travel and lodging costs, incurred by the Executive for travel between the Company's offices and (ii) gross-up the Executive for any taxes imposed on such reimbursements. 4. Termination of Employment. (a) Death. In the event of the Executive's death (i) the Stock Option and all other stock option or equity grants to Executive shall vest in full upon the date of death so as to become fully exercisable and (ii) the Company shall promptly pay and provide Executive's estate (A) any unpaid Base Salary and accrued vacation through the date of termination, (B) any unpaid bonus accrued with respect to the fiscal year ending on or preceding the date of termination, (C) reimbursement for any unreimbursed expenses incurred through the date of termination and (D) all other payments, benefits or fringe benefits to which Executive has earned at the time of termination in accordance with, the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant (collectively, items (A) through (D) hereinafter referred to as "Accrued Benefits") and (E) an amount equal to the Target Bonus amount for the year of termination, multiplied by a fraction, the numerator of which is the number of days in the bonus period prior to Executive's termination and the denominator of which is the number of days in the bonus period (the "Prorated Bonus"). (b) Disability. (i) If by reason of the same or related physical or mental illness or incapacity, the Executive is unable to carry out his material duties pursuant to this Agreement for more than one hundred eighty (180) consecutive days, the Company may terminate Executive's employment for Disability. A termination for Disability hereunder shall not be effective if Executive returns to the full time performance of his material duties within such thirty (30) day period. Such termination shall be upon thirty (30) days written notice at any time thereafter while Executive consecutively continues to be unable to carry out his duties as a result of the same or related physical or mental illness or incapacity. The Executive may, and at the request of the Company shall, submit to a medical examination by a physician selected by the Company, to whom the Executive or his duly appointed guardian has no reasonable objection, to determine whether the Executive is disabled. Such determination shall be conclusive. If the Executive fails 3 4 to submit to such medical examination, the Company's determination of the Executive's disability shall be conclusive. (ii) If Executive's employment is terminated by reason of Executive's Disability, Executive shall be entitled to receive the payments and benefits to which his representatives would be entitled under Section 4(a) hereof in the event of a termination of employment by reason of his death. (c) Termination by the Company for Cause. (i) The Company may terminate the Executive's employment hereunder for Cause at any time pursuant to a Notice of Termination for Cause (as defined below). For purposes of this Agreement, Cause shall mean (A) willful misconduct by Executive with regard to the Company that has a material adverse effect on the Company or (B) the Executive being convicted of a felony (other than a felony involving a traffic violation or as a result of vicarious liability). For purposes of this paragraph, no act, or failure to act, on Executive's part shall be considered "willful" unless done or omitted to be done, by him not in good faith and without reasonable belief that his action or omission was in the best interests of the Company. Upon termination of the Executive's employment for Cause, the Company shall have no further obligations under this Agreement other than to pay to the Executive the Accrued Benefits. (ii) For purposes of this Agreement, a "Notice of Termination for Cause" shall mean a notice that shall indicate the specific termination provision in Section 4(c) relied upon and shall set forth in reasonable detail the facts and circumstances which provide for a basis for termination for Cause. Further, a Notification of Termination for Cause shall be required to include a copy of a resolution duly adopted by at least two-thirds (_) of the entire membership of the Board at a meeting of the Board which was called for the purpose of considering such termination and which Executive and his representative had the right to attend and address the Board, finding that, in the good faith of the Board, Executive engaged in conduct set forth in the definition of Cause herein and specifying the particulars thereof in reasonable detail. The date of termination for a termination for Cause shall be the date indicated in the Notice of Termination for Cause. Any purported termination for Cause that is held by a court not to have been based on the grounds set forth in this Section 4(c) or not to have followed the procedures set forth in this Agreement shall be deemed a termination by the Company without Cause. (d) Termination by Company Without Cause or Termination by Executive for Good Reason. (i) The Company may terminate the Executive's employment other than for Cause at any time upon written notice. The Executive may terminate employment for Good Reason pursuant to clause (ii) below. In the event of either such termination of the Executive's employment, the Executive shall be entitled to payment of the Accrued Benefits and the following: (A) The Company shall pay the Executive as soon as practicable following the termination a lump sum cash payment equal to the product of (x) and 4 5 (y) where (x) equals 2, or if greater, the number of years (and parts thereof) remaining in the Term of Employment and where (y) equals the sum (i) of the Executive's annual Base Salary at the time of termination (ignoring any reduction in rate that constitutes Good Reason hereunder) and (ii) the Target Bonus for the year of termination; (B) The Company shall pay the Executive the Prorata Bonus as soon as practicable following the termination; (C) The Stock Option and all other stock option or equity grants to Executive shall vest in full so as to become fully exercisable effective as of the date of termination; and (D) Continued participation in the Company's medical and life insurance arrangements during the remainder of the Term of Employment (but for a period of no less than two (2) years) at no cost to the Executive; provided that to the extent continued participation in such plans are unavailable, the Company shall make a lump-sum payment to the Executive in the amount such that the Executive can purchase such benefits separately at no after-tax cost to Executive. (ii) For purposes of this Agreement, the Executive may terminate employment for Good Reason by written notice given within ninety (90) days after the occurrence of the event that constitutes Good Reason, unless such circumstances are fully corrected prior to the date of termination specified in the Notice of Termination for Good Reason (as defined below). For purposes of this Agreement, "Good Reason" shall mean the occurrence or failure to cause the occurrence, as the case may be, without Executive's express written consent, of any of the following circumstances: (i) any material diminution of Executive's positions, duties or responsibilities hereunder (except in each case in connection with the termination of Executive's employment for Cause or Disability or as a result of Executive's death, or temporarily as a result of Executive's illness or other absence), or, the assignment to Executive of duties or responsibilities that are inconsistent with Executive's then position; (ii) removal of the Executive from position of chief financial officer of the Company; (iii) a relocation of the Company's executive office in Boca Raton or Jacksonville to a location more than thirty-five (35) miles from its current location or more than thirty-five (35) miles further from the Executive's residence at the time of relocation; (iv) any material breach by the Company of any provision of this Agreement; (v) Executive's removal from or failure to be elected or reelected to the Board; or (vi) failure of any successor to the Company (whether direct or indirect and whether by merger, acquisition, consolidation or otherwise) to assume in a writing delivered to Executive upon the assignee becoming such, the obligations of the Company hereunder. For purposes of this Agreement, a "Notice of Termination for Good Reason" shall mean a notice that shall indicate the specific termination provision in Section 4(d)(ii) relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination for Good Reason. The failure by Executive to set forth in the Notice of Termination for Good Reason any facts or circumstances which contribute to the showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder. The Notice of Termination for Good Reason shall provide for a date of termination not less than ten (10) nor more than sixty (60) days after the date such Notice of Termination for Good Reason is given, provided that in the case of the 5 6 events set forth in Sections 4(d)(i) or (ii) or the date may be five (5) days after the giving of such notice. (f) Without Good Reason. Executive may terminate his employment at any time without Good Reason by written notice to the Company. In the event that Executive's employment with the Company is terminated during the Term of Employment by Executive without Good Reason, Executive shall not be entitled to any additional payments or benefits hereunder, other than Accrued Benefits; provided, however, that any then vested Stock Option and any other Company stock option, shall remain exercisable until the earlier of ten years from the employment termination date or the expiration of the option. (g) In the event of any termination of employment hereunder, Executive shall be under no obligation to seek other employment and there shall be no offset against any amounts due Executive under this Agreement on account of any remuneration attributable to any subsequent employment that Executive may obtain. The amounts payable hereunder shall not be subject to setoff, counterclaim, recoupment, defense or other right which the Company may have against the Executive or others, except upon obtaining by the Company of a final unappealable judgment against Executive. (h) Gross-up Payment. The payments and benefits called for by this agreement are not in any way conditioned on a change of ownership or control of the Company. The Company intends such payments and benefits to be reasonable compensation for services rendered by the Executive, and intends that the Executive receive the full economic benefit of such payments and benefits. Therefore, in the event that it is determined that any payment or benefit provided by the Company to or for the benefit of Executive, either under this Agreement or otherwise, will be subject to the excise tax imposed by section 4999 of the Internal Revenue Code or any successor provision ("section 4999"), the Company will, prior to the date on which any amount of the excise tax must be paid or withheld, make an additional lump-sum payment (the "gross-up payment") to Executive. The gross-up payment will be sufficient, after giving effect to all federal, state and other taxes and charges (including interest and penalties, if any) with respect to the gross-up payment, to make Executive whole for all taxes (including withholding taxes) and any associated interest and penalties, imposed under or as a result of section 4999. Determinations under this Section 4(h) will be made by the Company's independent auditors unless Executive has reasonable objections to the use of that firm, in which case the determinations will be made by a comparable firm chosen by Executive after consultation with the Company (the firm making the determinations to be referred to as the "Firm"). The determinations of the Firm will be binding upon the Company and Executive except as the determinations are established in resolution (including by settlement) of a controversy with the Internal Revenue Service to have been incorrect. All fees and expenses of the Firm will be paid by the Company. If the Internal Revenue Service asserts a claim that, if successful, would require the Company to make a gross-up payment or an additional gross-up payment, the Company and Executive will cooperate fully in resolving the controversy with the Internal Revenue Service. 6 7 The Company will make or advance such gross-up payments as are necessary to prevent Executive from having to bear the cost of payments made to the Internal Revenue Service in the course of, or as a result of, the controversy. The Firm will determine the amount of such gross-up payments or advances and will determine after resolution of the controversy whether any advances must be returned by Executive to the Company. The Company will bear all expenses of the controversy and will gross Executive up for any additional taxes that may be imposed upon Executive as a result of its payment of such expenses. 5. Nondisclosure. During the Term of Employment, the Executive may become aware of information which is nonpublic, confidential or proprietary in nature with respect to the Company or with respect to other companies, persons, entities, ventures or business opportunities in which the Company has, or, if it were disclosed to the Company, the Company might have, an interest ("Confidential Information"). All Confidential Information will be kept strictly confidential by the Executive and the Executive shall not: (a) copy, reproduce, distribute or disclose any Confidential Information to any third party except in the course of his employment by the Company; (b) use any Confidential Information for any purpose other than in connection with his employment by the Company; or (c) use any Confidential Information in any way that is detrimental to the Company. Confidential Information shall not include information which: (a) is or becomes generally available to the public other than by breach by the Executive of his agreement herein; (b) is disclosed by the Executive, pursuant to obligations under law, regulation or court order; or (c) was prior to the Effective Date, or thereafter becomes, known to the Executive on a nonconfidential basis. Upon termination of the Executive's employment, he shall immediately return or destroy all Confidential Information, including all notes, copies, reproductions, summaries, analyses, or extracts thereof, then in his possession. Such return or destruction shall not abrogate the continuing obligations of the Executive under this Agreement. In the event that the Executive is requested or required (by interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information, he shall provide the Company with prompt written notice so that it may seek a protective order or other appropriate remedy. In the event such protection or other remedy is not obtained, the Executive shall furnish only that portion of the Confidential Information which he is advised by counsel is legally required. The Executive hereby acknowledges that he is aware that the United States securities laws prohibit any person who has material, nonpublic information concerning the Company from purchasing or selling securities of the Company or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. The obligations of the Executive stated in this Section 5 shall, except where expressly limited as to time, continue without limit as to time and without regard to the employment status of the Executive. 6. Conflicting Agreements. The Executive hereby represents and warrants that the execution of this Agreement and the performance of his obligations hereunder will not breach or be in conflict with any other agreement to which he is a party or is bound and that he is 7 8 not now subject to any covenants against competition or similar covenants that would affect the performance of his obligations hereunder. The Executive will not disclose to or use on behalf of the Company any proprietary information of a third party without such party's consent. 7. Withholding. All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law. 8. Cost of Enforcement. The Company shall pay reasonable costs and expenses (including fees and expenses of counsel) associated with entering into this agreement and those incurred by the Executive in connection with an action to enforce his rights under this Agreement in which action the Executive prevails. 9. Indemnification. The Company shall, to the maximum extent permitted from time to time under the law of the State of Florida, indemnify and upon request shall advance expenses to the Executive in the event he is or was a party or is threatened to be made a party to any threatened, pending or completed action, suit, proceeding or claim, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was or has agreed to be a director, officer or employee of the Company or while a director, officer or employee is or was serving at the request of the Company as a director, officer, partner, trustee, employee or agent of any corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorney's fees and expenses), judgments, fines, penalties and amounts paid in settlement incurred in connection with the investigation, preparation to defend or defense of such action, suit, proceeding or claim; provided, however, that the foregoing shall not require the Company to indemnify or advance expenses to the Executive in connection with any action, suit, proceeding, claim or counterclaim initiated by or on behalf of the Executive. The Executive shall be deemed to have met the standard of conduct required for such indemnification unless the contrary shall be established. The provisions of this Section 9 shall be in addition to any right of indemnification to which the Executive may be entitled under the Company's charter or by-laws, pursuant to any other contract, or by operation of law. 10. Assignment. Except as provided in this Section 10, neither the Company nor the Executive may make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other. The Company may without the consent of the Executive assign its rights and obligations under this Agreement to any wholly-owned subsidiary of the Company or to any corporation or other business entity into which the Company has merged or with which it has consolidated or which has acquired substantially all of the Company's assets, provided that no such assignment shall relieve the Company of its obligations under this Agreement. This Agreement shall inure to the benefit of and be binding upon the Company and the Executive, their respective successors, executors, administrators, heirs and permitted assigns. 11. Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior communications, agreements and understandings, written or oral, with respect to the subject matter hereof. The Executive may have other rights 8 9 and obligations under other agreements, insurance policies and plans and employee benefit and welfare plans of the Company. 12. Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by an expressly authorized representative of the Company. 13. Governing Law. This is a Florida contract and shall be construed and enforced under and be governed in all respects by the laws of the State of Florida. IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Company, by its duly authorized representative, and by the Executive, as of the date first above written. KOGER EQUITY, INC. By /s/ W. Lawrence Jenkins ---------------------------------------- Name: W. Lawrence Jenkins Title: Vice President EXECUTIVE /s/ Bob Onisko ------------------------------------------- Robert Onisko 9 EX-10.(B)(2) 9 ex10-b2.txt PROMISSORY NOTE (NO RECOURSE), ROBERT ONISKO 1 EXHIBIT 10(b)(2) PROMISSORY NOTE (No Recourse Note) Dated as of February 17, 2000 Executed at: _______________________ FOR VALUE RECEIVED, ROBERT ONISKO ("Maker") hereby promises to pay to the order of KOGER EQUITY, INC., a Florida corporation ("Lender"), at its offices at 8880 Freedom Crossing Trial, Jacksonville, Florida 32256 (or at such other place or places as Lender or the holder hereof may designate in writing, from time to time), the principal sum advanced to Maker pursuant to the Loan Agreement (defined below) as such principal sum is outstanding as indicated on the Draw Schedule (defined below) upon Maker's purchase of Loan Stock pursuant to Plan Purchases or Subsequent Plan Purchases (as defined in the Loan Agreement), or such lesser sum as has been advanced and is outstanding at the time when payment is due hereunder, in lawful money of the United States of America, together with interest accruing thereon from the date of such advances at the rates and times hereinafter provided, calculated on the daily principal balances from time to time outstanding. This Promissory Note (this "Note") is given by Maker pursuant to the terms of that certain Stock Purchase and Loan Agreement dated the date hereof between Maker and Lender (the "Loan Agreement"). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Loan Agreement. Lender is hereby authorized to record on the Draw Schedule attached hereto as Exhibit "A" ("Draw Schedule") and incorporated herein the (a) date and amount of each advance by Lender, and (b) date and amount of each principal payment made by Maker with respect to the principal amount outstanding under this Note; provided, however, that the failure of Lender to make any such entry shall not limit or otherwise affect the obligations of Maker under this Note, or the right of Lender to enforce the terms of this Note against Maker. The aggregate unpaid principal amount advanced and Outstanding as set forth from time to time in the Draw Schedule, or any continuation thereof, shall be rebuttable presumptive evidence of the unpaid principal amount due under this Note. 1. Interest. Interest shall accrue on the unpaid principal balance of this Note from the date such principal is advanced as set forth in the Draw Schedule at the LIBOR Market Index Rate, plus one hundred fifty (150) basis points, as that rate may change on each Payment Date (defined below) in accordance with changes in the LIBOR Market Index Rate (the "Interest Rate"). "LIBOR Market Index Rate," for any day, is the rate for 1 month U.S. dollar deposits as reported on Telerate page 3750 as of 11:00 a.m., London time, on such day, or if such day is not a London business day, then the immediately preceding London business day (or if not so reported, then as determined by Lender from another recognized source of interbank quotation). Notwithstanding the foregoing, the Interest Rate hereunder shall be limited to a maximum of ten percent (10%) per annum. Page 1 of 7 2 2. Payments. The debt evidenced by this Note shall be repaid as follows: (i) Commencing on the last calendar day of June, and thereafter on the last calendar day of each of the months of September, December, March and June (each a "Payment Date") until the Maturity Date (defined below), monthly payments of interest only, in arrears, at the Interest Rate, shall be due and payable by Maker to Lender; (ii) Unless payable earlier pursuant to the terms hereof, the total unpaid principal amount disbursed by Lender to Maker under this Note, and then outstanding, plus all accrued but unpaid interest and any other sums owing by Maker to Lender under the terms of the Loan Documents, shall be due and payable on the last day of the earlier of: (i) ten (10) years from the date of this Note, to wit: February 17, 2010; or (ii) the second anniversary of Maker's termination of employment by Lender under the Employment Agreement with "Cause" pursuant to Section 4(c) of Maker's Employment Agreement with Lender, dated as of February 17, 2000 (such date is referred to herein as the "Maturity Date"); and 3. Prepayment. This Note may be prepaid in whole or in part at any time without penalty or premium. 4. Late Charge. In the event that Maker fails to pay any payment of principal and/or interest within thirty (30) days after such payment is due, a late charge equal to five percent (5%) of the amount of such payment shall be due and payable. From and after the date upon which any payment of principal or interest hereunder becomes due and payable (whether by acceleration or otherwise) if the same is not paid within thirty (30) days of such due date, interest shall be payable on all sums outstanding hereunder at the maximum rate permitted by applicable law, and shall be due and payable ON DEMAND. 5. Intent Not to Commit Usury. Nothing herein contained, nor any transaction related thereto, shall be construed or so operate as to require Maker to pay interest at a greater rate than is now lawful in such case to contract for, or to make any payment, or to do any act contrary to applicable law. Should any interest or other charges paid by Maker, or parties liable for the payment of this Note, in connection with the loan evidenced by this Note, Loan Agreement securing the payment of this Note, or any other document delivered in connection with the loan evidenced hereby, result in the computation or earning of interest in excess of the maximum rate of interest that is legally permitted under applicable law, then any and all such excess shall be and the same is hereby waived by Lender and holder hereof, and any and all such excess shall be automatically credited against and in reduction of the balance due under this indebtedness, and the portion of said excess which exceeds the balance due under this indebtedness shall be paid by Lender to Maker and parties liable for the payment of this Note. Page 2 of 7 3 6. Default. In addition to such other remedies as may be available to Lender, upon the occurrence of any Event of Default (as defined in the Loan Agreement or the Security Agreement) which remains uncured for a period of thirty (30) days, then Lender or the holder hereof may, elect to declare and may demand payment in full of the entire unpaid principal amount outstanding hereunder, together with interest accrued thereon. 7. NO RECOURSE AS TO PRINCIPAL. EXCEPT AS PROVIDED BELOW, THIS NOTE SHALL BE NON-RECOURSE TO MAKER SUCH THAT LENDER SHALL NOT SEEK TO ENFORCE AGAINST MAKER INDIVIDUALLY, ANY MONETARY JUDGEMENT WITH RESPECT TO THE SUMS DUE UNDER THIS NOTE EXCEPT THROUGH RECOURSE TO THE COLLATERAL GIVEN AS SECURITY FOR THIS NOTE AND SOLELY AGAINST SUCH COLLATERAL. THE NON-RECOURSE NATURE OF THIS NOTE IS A MATERIAL INDUCEMENT TO MAKER BORROWING FUNDS FROM LENDER UNDER THIS NOTE, ENTRY INTO THE LOAN AGREEMENT AND OTHER LOAN DOCUMENTS. NOTWITHSTANDING THE FOREGOING, MAKER SHALL BE INDIVIDUALLY LIABLE FOR ONE HUNDRED PERCENT (100%) OF THE INTEREST DUE UNDER THE NOTE INSOFAR AS THE COLLATERAL GIVEN AS SECURITY FOR REPAYMENT IS INSUFFICIENT TO PAY SUCH INTEREST. 8. Waivers; Attorneys' Fees; Venue. Maker and all endorsers and guarantors of this Note hereby waive demand, presentment, notice of non-payment (except as provided herein), dishonor and protest, and agree in case suit shall be brought for the collection hereof, or if it is necessary to place the same in the hands of an attorney for collection, to pay reasonable attorneys' fees for making such collection, including but not limited to, all fees and costs incident to any appellate, post-judgment, and bankruptcy proceedings that may result, whether the holder hereof is obligated therefor or not. Maker agrees that Palm Beach County, Florida is the proper venue for any and all legal proceedings arising out of this Note. 9. Governing Law. The provisions of this Note and the provisions of the Loan Agreement, and any other document or instrument evidencing or securing the loan evidenced by this Note, shall be construed according to the laws of the State of Florida, except if federal law would allow the payment of interest hereunder at a higher maximum rate than would applicable Florida law, such federal law shall apply to the determination of the highest applicable lawful rate of interest hereunder. 10. Amendment. This Note may not be amended or modified, nor shall any waiver of any provisions hereof be effective, except by an instrument in writing executed by the holder of this Note. 11. WAIVER OF JURY TRIAL. THE PARTIES HERETO MUTUALLY AND WILLINGLY WAIVE THE RIGHT TO A TRIAL BY JURY OF ANY AND ALL CLAIMS MADE BETWEEN THEM WHETHER NOW EXISTING OR ARISING IN THE FUTURE, INCLUDING WITHOUT LIMITATION, ANY AND ALL CLAIMS, DEFENSES, COUNTERCLAIMS, CROSSCLAIMS, THIRD PARTY CLAIMS AND INTERVENOR'S Page 3 of 7 4 CLAIMS WHETHER ARISING FROM OR RELATED TO THE NEGOTIATION, EXECUTION AND PERFORMANCE OF THE TRANSACTIONS TO WHICH THIS DOCUMENT RELATES. IN WITNESS WHEREOF, Maker has executed and delivered this Note to Lender as of the date and year first above written. MAKER: /s/ Bob Onisko ROBERT ONISKO, individually Page 4 of 7 5 EXHIBIT "A" DRAW SCHEDULE FOR DEMAND PROMISSORY NOTE DATED _______ __, 2000
Amount of Amount of Balance of Date of Principal Principal Principal Signature Transaction Advanced Repaid Outstanding of Maker - ------------ ----------- ---------- ----------- -------------- /s/ Bob Onisko - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- --------------
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Amount of Amount of Balance of Date of Principal Principal Principal Signature Transaction Advanced Repaid Outstanding of Maker - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- --------------
Page 7 of 7 EX-10.(B)(3) 10 ex10-b3.txt PROMISSORY NOTE (25% RECOURSE), ROBERT ONISKO 1 EXHIBIT 10(b)(3) PROMISSORY NOTE (25% Recourse Note) Dated as of February 17, 2000 Executed at: _______________________ FOR VALUE RECEIVED, ROBERT ONISKO ("Maker") hereby promises to pay to the order of KOGER EQUITY, INC., a Florida corporation ("Lender"), at its offices at 8880 Freedom Crossing Trial, Jacksonville, Florida 32256 (or at such other place or places as Lender or the holder hereof may designate in writing, from time to time), the principal sum advanced to Maker pursuant to the Loan Agreement (defined below) as such principal sum is outstanding as indicated on the Draw Schedule (defined below) upon Maker's purchase of Loan Stock pursuant to Plan Purchases or Subsequent Plan Purchases (as defined in the Loan Agreement), or such lesser sum as has been advanced and is outstanding at the time when payment is due hereunder, in lawful money of the United States of America, together with interest accruing thereon from the date of such advances at the rates and times hereinafter provided, calculated on the daily principal balances from time to time outstanding. This Promissory Note (this "Note") is given by Maker pursuant to the terms of that certain Stock Purchase and Loan Agreement dated the date hereof between Maker and Lender (the "Loan Agreement"). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Loan Agreement. Lender is hereby authorized to record on the Draw Schedule attached hereto as Exhibit "A" ("Draw Schedule") and incorporated herein the (a) date and amount of each advance by Lender, and (b) date and amount of each principal payment made by Maker with respect to the principal amount outstanding under this Note; provided, however, that the failure of Lender to make any such entry shall not limit or otherwise affect the obligations of Maker under this Note, or the right of Lender to enforce the terms of this Note against Maker. The aggregate unpaid principal amount advanced and Outstanding as set forth from time to time in the Draw Schedule, or any continuation thereof, shall be rebuttable presumptive evidence of the unpaid principal amount due under this Note. 1. Interest. Interest shall accrue on the unpaid principal balance of this Note from the date such principal is advanced as set forth in the Draw Schedule at the LIBOR Market Index Rate, plus one hundred fifty (150) basis points, as that rate may change on each Payment Date (defined below) in accordance with changes in the LIBOR Market Index Rate (the "Interest Rate"). "LIBOR Market Index Rate," for any day, is the rate for 1 month U.S. dollar deposits as reported on Telerate page 3750 as of 11:00 a.m., London time, on such day, or if such day is not a London business day, then the immediately preceding London business day (or if not so reported, then as determined by Lender from another recognized source of interbank quotation). Notwithstanding the foregoing, the Interest Rate hereunder shall be limited to a maximum of ten percent (10%) per annum. Page 1 of 7 2 2. Payments. The debt evidenced by this Note shall be repaid as follows: (i) Commencing on the last calendar day of June, and thereafter on the last calendar day of each of the months of September, December, March and June (each a "Payment Date") until the Maturity Date (defined below), monthly payments of interest only, in arrears, at the Interest Rate, shall be due and payable by Maker to Lender; (ii) Unless payable earlier pursuant to the terms hereof, the total unpaid principal amount disbursed by Lender to Maker under this Note, and then outstanding, plus all accrued but unpaid interest and any other sums owing by Maker to Lender under the terms of the Loan Documents, shall be due and payable on the last day of the earlier of: (i) ten (10) years from the date of this Note, to wit: February 17, 2010; or (ii) the second anniversary of Maker's termination of employment by Lender under the Employment Agreement with "Cause" pursuant to Section 4(c) of Maker's Employment Agreement with Lender, dated as of February 17, 2000 (such date is referred to herein as the "Maturity Date"); and 3. Prepayment. This Note may be prepaid in whole or in part at any time without penalty or premium. 4. Late Charge. In the event that Maker fails to pay any payment of principal and/or interest within thirty (30) days after such payment is due, a late charge equal to five percent (5%) of the amount of such payment shall be due and payable. From and after the date upon which any payment of principal or interest hereunder becomes due and payable (whether by acceleration or otherwise) if the same is not paid within thirty (30) days of such due date, interest shall be payable on all sums outstanding hereunder at the maximum rate permitted by applicable law, and shall be due and payable ON DEMAND. 5. Intent Not to Commit Usury. Nothing herein contained, nor any transaction related thereto, shall be construed or so operate as to require Maker to pay interest at a greater rate than is now lawful in such case to contract for, or to make any payment, or to do any act contrary to applicable law. Should any interest or other charges paid by Maker, or parties liable for the payment of this Note, in connection with the loan evidenced by this Note, Loan Agreement securing the payment of this Note, or any other document delivered in connection with the loan evidenced hereby, result in the computation or earning of interest in excess of the maximum rate of interest that is legally permitted under applicable law, then any and all such excess shall be and the same is hereby waived by Lender and holder hereof, and any and all such excess shall be automatically credited against and in reduction of the balance due under this indebtedness, and the portion of said excess which exceeds the balance due under this indebtedness shall be paid by Lender to Maker and parties liable for the payment of this Note. Page 2 of 7 3 6. Default. In addition to such other remedies as may be available to Lender, upon the occurrence of any Event of Default (as defined in the Loan Agreement or the Security Agreement) which remains uncured for a period of thirty (30) days, then Lender or the holder hereof may, elect to declare and may demand payment in full of the entire unpaid principal amount outstanding hereunder, together with interest accrued thereon. 7. 25% RECOURSE. EXCEPT AS PROVIDED BELOW, THIS NOTE SHALL BE NON-RECOURSE TO MAKER SUCH THAT LENDER SHALL NOT SEEK TO ENFORCE AGAINST MAKER INDIVIDUALLY, ANY MONETARY JUDGEMENT WITH RESPECT TO THE SUMS DUE UNDER THIS NOTE EXCEPT THROUGH RECOURSE TO THE COLLATERAL GIVEN AS SECURITY FOR THIS NOTE AND SOLELY AGAINST SUCH COLLATERAL. THE NON-RECOURSE NATURE OF THIS NOTE IS A MATERIAL INDUCEMENT TO MAKER BORROWING FUNDS FROM LENDER UNDER THIS NOTE, ENTRY INTO THE LOAN AGREEMENT AND OTHER LOAN DOCUMENTS. NOTWITHSTANDING THE FOREGOING, MAKER SHALL BE INDIVIDUALLY LIABLE FOR TWENTY FIVE PERCENT (25%) OF THE PRINCIPAL AMOUNT AND ONE HUNDRED PERCENT (100%) OF THE INTEREST DUE UNDER THE NOTE INSOFAR AS THE COLLATERAL GIVEN AS SECURITY FOR REPAYMENT IS INSUFFICIENT TO PAY THE SUMS DUE HEREUNDER. 8. Waivers; Attorneys' Fees; Venue. Maker and all endorsers and guarantors of this Note hereby waive demand, presentment, notice of non-payment (except as provided herein), dishonor and protest, and agree in case suit shall be brought for the collection hereof, or if it is necessary to place the same in the hands of an attorney for collection, to pay reasonable attorneys' fees for making such collection, including but not limited to, all fees and costs incident to any appellate, post-judgment, and bankruptcy proceedings that may result, whether the holder hereof is obligated therefor or not. Maker agrees that Palm Beach County, Florida is the proper venue for any and all legal proceedings arising out of this Note. 9. Governing Law. The provisions of this Note and the provisions of the Loan Agreement, and any other document or instrument evidencing or securing the loan evidenced by this Note, shall be construed according to the laws of the State of Florida, except if federal law would allow the payment of interest hereunder at a higher maximum rate than would applicable Florida law, such federal law shall apply to the determination of the highest applicable lawful rate of interest hereunder. 10. Amendment. This Note may not be amended or modified, nor shall any waiver of any provisions hereof be effective, except by an instrument in writing executed by the holder of this Note. 11. WAIVER OF JURY TRIAL. THE PARTIES HERETO MUTUALLY AND WILLINGLY WAIVE THE RIGHT TO A TRIAL BY JURY OF ANY AND ALL CLAIMS MADE BETWEEN THEM WHETHER NOW EXISTING OR ARISING IN THE FUTURE, INCLUDING WITHOUT LIMITATION, ANY AND ALL CLAIMS, DEFENSES, Page 3 of 7 4 COUNTERCLAIMS, CROSSCLAIMS, THIRD PARTY CLAIMS AND INTERVENOR'S CLAIMS WHETHER ARISING FROM OR RELATED TO THE NEGOTIATION, EXECUTION AND PERFORMANCE OF THE TRANSACTIONS TO WHICH THIS DOCUMENT RELATES. IN WITNESS WHEREOF, Maker has executed and delivered this Note to Lender as of the date and year first above written. MAKER: /s/ Bob Onisko ROBERT ONISKO, individually Page 4 of 7 5 EXHIBIT "A" DRAW SCHEDULE FOR DEMAND PROMISSORY NOTE DATED _______ __, 2000
Amount of Amount of Balance of Date of Principal Principal Principal Signature Transaction Advanced Repaid Outstanding of Maker - ------------ ----------- ---------- ----------- -------------- /s/ Bob Onisko - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- -------------- - ------------ ----------- ---------- ----------- --------------
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Page 7 of 7 EX-10.(B)(4) 11 ex10-b4.txt STOCK PLEDGE SECURITY AGREEMENT, ROBERT ONISKO 1 EXHIBIT 10(b)(4) STOCK PLEDGE SECURITY AGREEMENT (SECURITIES) AGREEMENT by and between KOGER EQUITY, INC., ("Lender") and ROBERT ONISKO ("Borrower") dated as set forth in subsection 1.5 below. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Loan Agreement (as defined below). 1. DEFINITIONS The terms set forth below shall be defined as follows: 1.1 "Account" means securities account number 040-21650 at Bear, Stearns Securities Corp. 1.2 "Borrower" means Robert Onisko, an individual. 1.3 "Borrower's Address" is: 1676 S.W. 19th Avenue, Boca Raton, Florida 33486. 1.4 "Borrower's Collateral" means (i) the Loan Stock; (ii) the Account, all funds, Financial Assets and Investment Property therein and all certificates and instruments from time to time representing or evidencing the Account or any funds, securities, investments, Financial Assets, Investment Property or other property deposited and held in the Account (including, without limitation, all Loan Stock deposited in the Account) and all other property or rights assigned or allocable to the Account; (iii) all notes, certificates of deposit, deposit amounts, checks and other investments from time to time hereafter delivered to or otherwise possessed by Borrower in substitution for any or all of the foregoing; (iv) all interest, cash, instruments and other property from time to time received, receivable, or distributed in respect of any or all of the foregoing; (v) all Security Entitlements of Borrower in or with respect to any and all of the foregoing; (vi) all rights of Borrower under the Control Agreement; and (vii) all proceeds of any and all of the foregoing. 1.5 "Collateral Account Control Agreement" means that certain Account Control Agreement among Lender, Bear, Stearns Securities Corp. and Borrower being executed contemporaneously herewith. 1.6 "Date of Agreement" is: dated as of February 17, 2000. 1.7 "Event of Default" means each and every event specified in Section 4 of this Agreement. 2 1.8 "Lender's Address" is: 8880 Freedom Crossing Trial, Jacksonville, Florida 32256. 1.9 "Loan" means that certain loan from Lender to Borrower as set forth in the Loan Agreement and as evidenced by the Notes. 1.10 "Loan Agreement" means the Stock Purchase and Loan Agreement between Borrower and Lender being executed herewith. 1.11 "Loan Amount" means the total amount of the loan from Lender to Borrower as set forth in the Notes which amount is sufficient to enable Borrower to purchase up to a maximum of 150,000 shares of Lender's common stock as provided in the Loan Agreement. 1.12 "Loan Stock" means the common stock of the Lender purchased by Borrower with proceeds from the Loan. 1.13 "Notes" means the 25% Recourse Note and the No Recourse Note both as described in the Loan Agreement. 1.14 "Obligations" means all indebtedness, obligations and liabilities of Borrower to Lender arising pursuant to the Loan Agreement and the Notes and all interest, taxes, fees, charges, expenses and reasonable attorneys' fees chargeable to Borrower or incurred by Lender under this Agreement, or any other document or instrument delivered in connection with the Loan Agreement. 1.15 "Uniform Commercial Code" means the Uniform Commercial Code as enacted in the State of Florida and in effect from time to time. To the extent not defined in Section 1 or the Loan Agreement, unless the context otherwise requires, all other terms contained in this Agreement shall have the meanings attributed to them by the Uniform Commercial Code in force in the State of Florida, as of the Date of Agreement, to the extent that same are used or defined therein. To the extent not defined in Section 1, unless the context otherwise requires, all other accounting terms contained in this Agreement shall have the meanings attributed to them by generally accepted accounting principals, as of the Date of Agreement, to the extent that same are used or defined therein. 3 2. GRANT OF SECURITY INTEREST To secure payment and performance of Borrower's obligations and duties under the terms of the Loan Agreement and the Notes, Borrower hereby pledges, assigns and transfers to Lender, and grants to Lender a continuing lien on and security interest in and to Borrower's Collateral. 3. SPECIFIC REPRESENTATIONS, WARRANTIES AND COVENANTS WITH RESPECT TO BORROWER'S COLLATERAL With respect to Borrower's Collateral, Borrower hereby represents and warrants and covenants with Lender, as follows: 3.1 Borrower agrees to reimburse Lender, on demand, for any amounts paid or advanced by Lender for the purpose of preserving Borrower's Collateral or any part thereof and/or any liabilities or expenses incurred by Lender as the transferee or holder of Borrower's Collateral. 3.2 Lender shall be under no duty to: 3.2.1 Collect or protect Borrower's Collateral or any proceeds thereof or give any notice with respect thereto. 3.2.2 Preserve the rights of Borrower with respect to Borrower's Collateral against prior parties. 3.2.3 Preserve rights against any parties to any instrument or chattel paper which may be a part of Borrower's Collateral. 3.2.4 Sell or otherwise realize upon Borrower's Collateral. 3.2.5 Seek payment from any particular source. Without limiting the generality of the foregoing, Lender shall not be obligated to take any action in connection with any conversion, call, redemption, retirement, or any other event relating to any of Borrower's Collateral. 3.3 Lender shall exercise reasonable care in the custody and preservation of Borrower's Collateral to the extent required by applicable statute and use its best efforts to take such action as the Borrower may reasonably request in writing but the failure to do any such act shall not be deemed a failure to exercise reasonable care. 3 4 3.4 Borrower will not withdraw any money or property from the Account, nor sell nor offer to sell nor otherwise transfer any portion of the Borrower's Collateral, except upon Onisko's payment to Lender of the "Per Share Release Price" from the proceeds derived from the sale of the Loan Stock as provided in Section 2.2(E) of the Loan Agreement. Such sums or securities may be withdrawn only upon notice to and the prior written consent of Lender which shall not be withheld provided that Onisko pays Lender the Per Share Release Price. Lender acknowledges that the total value of the Account may exceed the Loan Amount, but that Lender's right to recovery upon the Loan Agreement, the Notes and this Agreement shall be limited to the amounts specified in the Notes. If no Event of Default has occurred or is continuing, Borrower may make trades in such account. Borrower may exercise any voting or consensual rights with respect to the Borrower's Collateral. 3.5 If the Borrower's Collateral is in a securities account maintained by Borrower or on behalf of Borrower at a third party, Borrower will furnish or cause to be furnished to Lender a control agreement signed by Borrower and such third party pursuant to which such third party agrees, among other things, to take no instructions with respect to the Borrower's Collateral, except as provided in such agreement. 4. EVENTS OF DEFAULT AND ACCELERATION 4.1 The occurrence of any one or more of the following events shall constitute an Event of Default hereunder: 4.1.1 Failure to perform or observe any covenant, term or agreement herein set forth or set forth in the Notes beyond any applicable grace period; 4.1.2 Occurrence of any Event of Default beyond any applicable grace period provided for in the Loan Agreement; 4.1.3 Termination of the Account except as permitted by the Collateral Account Control Agreement; and 4.1.4 Termination of any Collateral Account Control Agreement except as provided in such agreement. 4.2 If any Event of Default shall occur and be continuing beyond any applicable grace period, then or at any time thereafter, while such Event of Default shall continue, Lender may declare all Obligations to be due and payable, without notice, protest, presentment or demand, all of which are hereby expressly waived by Borrower. 4 5 4.3 If any Event of Default shall occur hereunder or under the Loan Agreement, Borrower shall, if required by Lender, cease making trades in the Account. 5. RIGHTS AND REMEDIES Lender shall have the rights and remedies set forth in the Loan Agreement, together with: 5.1 The right to proceed at law or in equity against the Account and without demand or advertisement (which are hereby waived) but on ten (10) days prior written notice to Borrower, to sell, assign and deliver the whole or any of the Borrower's Collateral at any time or times, at such prices as it may deem best, either at any broker's board or at public or private sale in Florida or elsewhere; and at any sale at broker's board or at public auction, Lender may purchase and hold the whole or any part of the Borrower's Collateral sold, free from any claim or right of redemption of Borrower and the Borrower's Collateral sold may be retained by Lender until the selling price is paid by the purchaser; Lender shall incur no liability in the case of the failure of the purchaser to take up and pay for the Borrower's Collateral so sold, and in the event of such failure, the Borrower's Collateral may again be sold; and upon the sale of any Borrower's Collateral, the Lender shall apply the net proceeds thereof to the payment of expenses of such sale and the reduction in payment of the Loan Amount, accounting to Borrower for any surplus. 5.2 The right to file a copy (including a carbon, photographic or other reproduction) of this Security Agreement in lieu of a financing statement. 6. GENERAL PROVISIONS 6.1 This Agreement is a security agreement within the meaning of the Uniform Commercial Code in force in the State of Florida. 6.2 The terms and conditions set forth in the Loan Agreement shall be fully applicable and are incorporated herein as terms and conditions of this Agreement. 7. WAIVER OF JURY TRIAL BORROWER WAIVES TRIAL BY JURY AND CONSENTS TO AND CONFERS PERSONAL JURISDICTION ON COURTS OF THE STATE OF NEW JERSEY OR OF THE FEDERAL DISTRICT OF FLORIDA, AND EXPRESSLY WAIVES ANY OBJECTIONS AS TO VENUE IN ANY OF 5 6 SUCH COURTS AND AGREES THAT SERVICE OF PROCESS MAY BE MADE ON BORROWER BY MAILING A COPY OF THE SUMMONS TO BORROWER AT BORROWER'S ADDRESS. LENDER LIKEWISE WAIVES TRIAL BY JURY. 6 7 IN WITNESS WHEREOF, the undersigned has set his hand and seal as of the day and year first written above. LENDER: KOGER EQUITY, INC., a Florida corporation By: /s/ W. Lawrence Jenkins --------------------------------------- Name: W. Lawrence Jenkins ------------------------------------- Title: Vice President ------------------------------------ BORROWER: By: /s/ Bob Onisko --------------------------------------- Robert Onisko, individually 7 EX-10.(B)(5) 12 ex10-b5.txt STOCK PURCHASE & LOAN AGREEMENT, ROBERT ONISKO 1 EXHIBIT 10(b)(5) STOCK PURCHASE AND LOAN AGREEMENT BETWEEN ROBERT ONISKO ("ONISKO") AND KOGER EQUITIES, INC., A FLORIDA CORPORATION (THE "COMPANY") DATED AS OF FEBRUARY 17, 2000 2 TABLE OF CONTENTS
Page ARTICLE I DEFINITIONS..............................................................1 SECTION 1.1 DEFINITIONS. ...............................................1 SECTION 1.2 OTHER DEFINITIONAL PROVISIONS................................4 ARTICLE II PURCHASE OF LOAN STOCK AND AMOUNT AND TERMS OF THE STOCK PURCHASE LOAN............................................................5 SECTION 2.1 PURCHASE OF LOAN STOCK ......................................5 SECTION 2.2 THE STOCK PURCHASE LOAN......................................8 SECTION 2.3 INTENT NOT TO COMMIT USURY..................................10 SECTION 2.4 USE OF PROCEEDS.............................................10 ARTICLE III SECURITY FOR THE STOCK PURCHASE LOAN.........................10 SECTION 3.1 SECURITY INTEREST...........................................10 SECTION 3.2 SECURITY DOCUMENTS..........................................10 SECTION 3.3 FILING AND RECORDING........................................10 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................11 SECTION 4.1 DUE AUTHORIZATION; ENFORCEABILITY...........................11 SECTION 4.2 FEDERAL REGULATION..........................................11 ARTICLE V ONISKO'S COVENANTS.............................................11 SECTION 5.1 TAXES AND CLAIMS............................................11 SECTION 5.2 PAY INDEBTEDNESS TO THE COMPANY AND PERFORM OTHER COVENANTS................................12 ARTICLE VI COVENANTS OF THE COMPANY......................................12 SECTION 6.1 PLAN SHARES.................................................12 SECTION 6.2 REGISTRATION OF PLAN SHARES AND DIRECT PURCHASE SHARES......12 SECTION 6.3 SALE OF PLAN SHARES.........................................12 ARTICLE VII EVENTS OF DEFAULT............................................13 SECTION 7.1 EVENTS OF DEFAULT...........................................13 SECTION 7.2 WAIVER OF DEFAULT...........................................13 ARTICLE VIII REMEDIES FOR EVENTS OF DEFAULT..............................14 SECTION 8.1 REMEDIES FOR EVENTS OF DEFAULT..............................14
i 3 SECTION 8.2 ACTION FOR ENFORCEMENT......................................14 SECTION 8.3 SALE OF COLLATERAL .........................................14 SECTION 8.4 RIGHTS AND REMEDIES CUMULATIVE..............................14 ARTICLE IX FEES AND PAYMENTS.............................................15 SECTION 9.1 COSTS, TAXES AND ATTORNEYS' FEES............................15 ARTICLE X MISCELLANEOUS..................................................15 SECTION 10.1 NOTICES....................................................15 SECTION 10.2 ATTORNEYS' FEES............................................16 SECTION 10.3 SEVERABILITY...............................................16 SECTION 10.4 COUNTERPARTS...............................................17 SECTION 10.5 INTERPRETATION.............................................17 SECTION 10.6 CONFLICT...................................................17 SECTION 10.7 HEADINGS...................................................17 SECTION 10.8 JURISDICTION AND VENUE.....................................17 SECTION 10.9 AMENDMENTS.................................................18 SECTION 10.10 GOVERNING LAW; BENEFIT....................................18 EXHIBIT "A" CERTIFICATE AND LOAN ADVANCE REQUEST.........................20
ii 4 STOCK PURCHASE AND LOAN AGREEMENT THIS STOCK PURCHASE AND LOAN AGREEMENT (this "Agreement") is entered into as of this 17th day of February, 2000 (the "Effective Date") between KOGER EQUITY, INC., a Florida corporation, having a place of business at 8880 Freedom Crossing Trail, Jacksonville, Florida 32256 (the "Company") and ROBERT ONISKO, whose address is 1676 S.W. 19th Avenue, Boca Raton, Florida 33486 ("Onisko"). RECITALS: A. The Company and Onisko have entered into an Employment Agreement, dated as of February 17th, 2000 (the "Employment Agreement"), pursuant to which Onisko has been hired by the Company to serve as the Company's chief financial officer. B. Pursuant to Section 3(c) of the Employment Agreement, the Company has agreed to lend Onisko certain funds in connection with certain optional purchases by Onisko of up to a maximum of 150,000 shares of the Company's Common Stock (the "Loan Stock"). C. Pursuant to a repurchase plan adopted by resolution of the Board of Directors of the Company, the Company intends to repurchase approximately 2,650,000 shares of the Company's Common Stock (the "Repurchase Plan"). TERMS: NOW, THEREFORE, in consideration of the mutual promises, conditions, representations and warranties hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION I.1 DEFINITIONS. As used in this Agreement, the Exhibits and Schedules attached hereto, if any, and in any Loan Document executed in connection herewith, the following terms shall have the following meanings unless the context otherwise requires: "25% RECOURSE NOTE" means each 25% Recourse Note in the form of Exhibit B hereto. 5 "ACCOUNT" means securities account number 040-21650 at Bear, Stearns Securities Corp., where all Loan Stock shall be deposited and held subject to the terms hereof. "AGREEMENT" shall mean this Stock Purchase and Loan Agreement, as the same may be amended, supplemented or otherwise modified from time to time by an agreement in writing signed by Onisko and the Company. "BUSINESS DAY" shall mean a day other than Saturday, Sunday or other day on which commercial banks in Palm Beach County, Florida are authorized or required by law to close. "CLOSING" shall mean the execution and delivery of this Agreement by the parties hereto. "CLOSING DATE" shall mean the date on which the Closing takes place. "COLLATERAL" means (i) the Pledged Shares; (ii) the Account, all funds, Financial Assets and Investment Property therein and all certificates and instruments from time to time representing or evidencing the Account or any funds, securities, investments, Financial Assets, Investment Property or other property deposited and held in the Account (including, without limitation, all Pledged Shares deposited in the Account) and all other property or rights assigned or allocable to the Account; (iii) all notes, certificates of deposit, deposit amounts, checks and other investments from time to time hereafter delivered to or otherwise possessed by Onisko in substitution for any or all of the foregoing; (iv) all interest, cash, instruments and other property from time to time received, receivable, or distributed in respect of any or all of the foregoing; (v) all Security Entitlements of Onisko in or with respect to any and all of the foregoing; (vi) all rights of Onisko under the Control Agreement; and (vii) all proceeds of any and all of the foregoing. "COMMON STOCK" means the Company's Common Stock, $.01 par value. "COLLATERAL SECURITY AGREEMENT" means the Collateral Security Agreement, dated as of even date herewith, between Onisko and the Company. "CONTROL AGREEMENT" shall mean the Account Control Agreement, dated as of even date herewith, among Onisko, the Company and Bear, Stearns Securities Corp. "DIRECT PURCHASE" has the meaning set forth in Section 2.1(B)(ii) hereof. "DIRECT PURCHASE LIMIT" has the meaning set forth in Section 2.1(B)(ii) hereof. "DOLLARS" AND "$" shall mean dollars in lawful currency of the United States of America. "ENTITLEMENT ORDER" shall have the meaning set forth in Section 678.1021 of the Uniform Commercial Code. "EVENT OF DEFAULT" shall mean any of the events specified in Section 7.1 hereof. 2 6 "FAIR MARKET VALUE" of a share of Repurchased Common Stock on any date of reference shall mean the "Closing Price" (as defined below) of the Common Stock on the business day immediately preceding such date. For the purpose of determining Fair Market Value, the "Closing Price" of the Common Stock on any business day shall be (i) if the Common Stock is listed or admitted for trading on any United States national securities exchange, or if actual transactions are otherwise reported on a consolidated transaction reporting system, the last reported sale price of Common Stock on such exchange or reporting system, as reported in any newspaper of general circulation, (ii) if the Common Stock is quoted on the National Association of Securities Dealers Automated Quotations System ("NASDAQ"), or any similar system of automated dissemination of quotations of securities prices in common use, the mean between the closing high bid and low asked quotations for such day of Common Stock on such system, (iii) if neither clause (i) or (ii) is applicable, the mean between the high bid and low asked quotations for the Common Stock as reported by the National Quotation Bureau, Incorporated if at least two securities dealers have inserted both bid and asked quotations for Common Stock on at least five of the ten preceding days, or (iv) if neither clause (i), (ii) or (iii) are applicable, the fair market value of the Common Stock shall be determined by the Company's Board of Directors. "FINANCIAL ASSET" shall have the meaning set forth in Section 678.1021 of the Uniform Commercial Code. "INTERIM PURCHASE" shall have the meaning set forth in Section 2.1(B)(ii) hereof. "INVESTMENT PROPERTY" shall have the meaning set forth in Section 679.115 of the Uniform Commercial Code. "LOAN" means the Stock Purchase Loan. "LOAN ADVANCE REQUEST" means the Certificate and Loan Advance Request in the form of Exhibit A hereto. "LOAN DOCUMENTS" shall mean this Agreement, each Note, the Collateral Security Agreement, the Control Agreement and all other documents, agreements, instruments or certificates delivered to the Company in connection with the Loan (whether at, prior to or after the Closing). "LOAN STOCK" has the meaning set forth in the Recitals. "LOAN TO VALUE RATIO" has the meaning set forth in Section 2.1(B)(iv) hereof. "NO RECOURSE NOTE" means each No Recourse Note in the form of Exhibit C hereto. "NOTE" means each 25% Recourse Note and each No Recourse Note. "OPEN MARKET PURCHASES" has the meaning set forth in Section 2.1(B)(ii) hereof. 3 7 "PLAN" means the Koger Equity, Inc. 1998 Equity and Cash Incentive Plan. "PLAN PURCHASES" has the meaning set forth in Section 2.1(B)(i) hereof. "PLEDGED SHARES" shall mean all shares of Loan Stock purchased by Onisko the purchase of which is funded in whole or in part by the Company pursuant to the terms hereof. "RECONCILIATION DATE" has the meaning set forth in Section 2.1(B)(iv) hereof. "REPURCHASED COMMON STOCK" has the meaning set forth in Section 2.1(B)(ii) hereof. "SECURITY DOCUMENTS" shall have the meaning set forth in Section 3.3 hereof. "SECURITY ENTITLEMENT" shall have the meaning set forth in Section 678.1021 of the Uniform Commercial Code. "SHARE CAP" has the meaning set forth in Section 2.1(A) hereof. "STOCK PURCHASE EXPENSES" shall mean all costs and expenses incurred by Onisko, if any, in the acquisition of the Loan Stock, whether by Open Market Purchases or Direct Purchases, including with respect to Open Market Purchases all brokerage commissions and fees. "STOCK PURCHASE LOAN" shall mean the facility described in Section 2.1 hereof the proceeds of which shall be used by Onisko to purchase the Loan Stock and pay all Stock Purchase Expenses. "STOCK PURCHASE LOAN INTEREST RATE" means the interest rate set forth in the Notes. "SUBSEQUENT PLAN PURCHASES" has the meaning set forth in Section 2.1(B)(iii) hereof. "UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code as enacted in the State of Florida and in effect from time to time. SECTION I.2 OTHER DEFINITIONAL PROVISIONS 4 8 (a) All of the terms defined in this Agreement shall have such defined meanings when used in other documents issued under, or delivered pursuant to, this Agreement unless the context shall otherwise require; (b) all terms defined in this Agreement in the singular shall have comparable meanings when used in the plural, and vice versa; (c) accounting terms to the extent not otherwise defined shall have the respective meanings given them under, and shall be construed in accordance with, GAAP; (d) the words "hereby," "hereto," "hereof," "herein," "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and (e) whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the heirs, personal representatives, participants, successors and assigns of such parties unless the context shall expressly provide otherwise. ARTICLE II PURCHASE OF LOAN STOCK AND AMOUNT AND TERMS OF THE STOCK PURCHASE LOAN SECTION II.1 PURCHASE OF LOAN STOCK (A) Generally. Pursuant to the Employment Agreement, the Company has agreed to provide Onisko with the Stock Purchase Loan to enable Onisko to purchase the Loan Stock. The total maximum number of shares of Loan Stock that the Company will finance pursuant to the Stock Purchase Loan is 150,000 shares of Common Stock ("Share Cap"). If there shall occur any recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other distribution with respect to such shares, or any other change in the corporate structure affecting the quantity of such shares, the Share Cap shall be equitably adjusted to preserve Onisko's right to purchase the maximum number of shares originally contemplated by this Agreement. (B) Method of Purchases. Onisko shall have the right, in Onisko's sole and absolute discretion, to purchase any number of shares of Loan Stock (up to the Share Cap), in the following manner: (i) Plan Purchases. As of the date hereof, 198,700 shares of Common Stock are reserved for issuance pursuant to the Plan, up to 49,675 shares of which may be purchased by Onisko. In the event that Onisko elects to purchase all or any part of such Common Stock as Loan Stock pursuant to the Plan ("Plan Purchases"), the Company shall, upon the execution and delivery by Onisko of a Loan Advance Request, lend to Onisko, pursuant to the Plan, an amount equal to one hundred percent (100%) of the purchase price of such shares of Loan Stock, plus applicable Stock Purchase Expenses, if any. All Loan Stock so purchased shall be deposited in the Account and shall be subject to the terms of the Loan Documents and the other Security Documents. (ii) Interim Purchases. In the event that Onisko shall opt to purchase Loan Stock other than pursuant to the Plan or any successor plan thereto (each such purchase, an "Interim Purchase"), upon the execution and delivery by Onisko of a Loan Advance Request, the Company 5 9 shall lend to Onisko, an amount equal to fifty percent (50%) of the purchase price of such shares of Loan Stock, plus applicable Stock Purchase Expenses, if any. Interim Purchases may be effected by open market purchases via Onisko's own securities broker or through private negotiations between Onisko and a third-party (each such purchase being an "Open Market Purchase"). Interim Purchases may also be effected by direct purchases of Loan Stock from the Company (a "Direct Purchase") following any purchase by the Company of its Common Stock pursuant to the Repurchase Plan. The Company shall immediately notify Onisko of each repurchase of Common Stock under the Repurchase Plan or otherwise (a "Notification of Common Stock Repurchase"), which notification shall specify in writing the number of shares of Common Stock so repurchased ("Repurchased Common Stock"). Provided that Onisko shall provide notice to the Company of his intent to purchase a number of shares of such Repurchased Common Stock (which number shall not exceed twenty five percent (25%) of such Repurchased Common Stock (the "Direct Purchase Limit")) on the date of Onisko's receipt of such Notification of Common Stock Repurchase, the Company shall sell to Onisko on such date such number of shares of Repurchased Common Stock at the price per share paid by the Company for such shares of Repurchased Common Stock (excluding all of the Company's fees, costs and expenses associated with effecting such repurchase). In the event that Onisko fails for any reason to deliver such notice to the Company on the date of any such repurchase, Onisko may, within fifteen (15) Business Days after Onisko's receipt of a Notification of Common Stock Repurchase and by written notice to the Company, elect to purchase from the Company a number of shares of such Repurchased Common Stock (not to exceed the Direct Purchase Limit) at a price per share equal to the Fair Market Value per share on the date that Onisko delivers such notice to the Company. Any notice to be delivered by Onisko under this Section 2.1(B)(ii) shall specify the total number of shares Onisko elects to purchase up to the Direct Purchase Limit (which amount, together with any previously purchased Loan Stock, may not exceed the Share Cap), and shall provide such other information as is reasonably necessary for the Company to transfer such shares to Onisko. Upon receipt of such notice, the Company shall take all action necessary to properly transfer such Repurchased Common Stock purchased by Onisko to Onisko and to register Onisko as the owner of same. All Loan Stock so purchased by Onisko (including all shares of Loan Stock purchased in part with Onisko's own funds and whether purchased in an Open Market Purchase or as a Direct Purchase) shall be deposited in the Account and shall be subject to the terms of the Loan Documents and the other Security Documents. (iii) Subsequent Plan Purchases. A minimum of one million (1,000,000) additional shares of Common Stock will be reserved for issuance under the Plan (or a successor plan) upon the approval of the Company's shareholders. In the event that Onisko elects to purchase additional Loan Stock pursuant to the Plan (or a successor plan) ("Subsequent Plan Purchases"), the Company shall, upon the execution and delivery by Onisko of a Loan Advance Request, lend to Onisko, pursuant to the Plan (or such successor plan), an amount up to one hundred percent (100%) of the purchase price of such shares of Loan Stock, plus applicable Stock Purchase Expenses, if any. All Loan Stock so purchased shall be deposited in the Account and shall be subject to the terms of the Loan Documents and the other Security Documents. (iv) Reconciliation of Loan to Value. 6 10 (a) Payments by Onisko. In the event that the aggregate amount loaned by the Company to Onisko in connection with the purchase of Loan Stock (whether purchased as a Plan Purchase, an Interim Purchase or a Subsequent Plan Purchase) shall, on September 1, 2001 (the "Reconciliation Date"), exceed seventy-five percent (75%) of the aggregate purchase price of the Loan Stock purchased as of the Reconciliation Date (the "Loan to Value Ratio"), Onisko shall promptly pay to the Company such amounts in reduction of the principal amount of the Loan as shall cause the Loan to Value Ratio to be less than or equal to seventy-five percent (75%). (b) Payments by Company. In the event that the aggregate amount of Onisko's own funds paid by Onisko in connection with the purchase of Loan Stock hereunder (whether purchased as a Plan Purchase, an Interim Purchase or a Subsequent Plan Purchase) shall, on the Reconciliation Date, exceed twenty-five percent (25%) of the aggregate purchase price of the Loan Stock purchased as of the Reconciliation Date, the Company shall (i) forgive such portion of the aggregate principal amount of the 25% Recourse Note as shall cause the notional amount paid by Onisko toward the purchase of all Loan Stock to equal twenty-five percent (25%) of the aggregate purchase price thereof and (ii) promptly pay to Onisko such amounts as shall be necessary to compensate Onisko for any income taxes imposed upon Onisko as a result of such forgiveness of loan principal. (C) Method of Payment. Onisko shall pay for purchases of Loan Stock as follows: (i) Payment for Plan Purchases. Onisko shall pay for all Plan Purchases of Loan Stock from the Company within three (3) Business Days after Onisko receives written notice from Onisko's broker that the applicable number of shares of Loan Stock have been transferred by the Company to Onisko's brokerage account. Payment for Plan Purchases of Loan Stock will be made by Onisko's execution and delivery of a Loan Advance Request to the Company in a principal amount equal to the aggregate purchase price of the Loan Stock being purchased. The Company shall pay for any Stock Purchase Expenses. (ii) Payment for Open Market Purchases. Onisko shall pay for all Open Market Purchases of Loan Stock by: (i) wire transferring directly to Onisko's broker or a third-party, as the case may be, fifty percent (50%) of the aggregate purchase price for such shares of Loan Stock being purchased, (ii) the Company advancing to Onisko an amount equal to fifty percent (50%) of the aggregate purchase price of such shares, plus Stock Purchase Expenses (the "Draw Amount") and (iii) Onisko's execution and delivery of a Loan Advance Request to the Company in a principal amount equal to fifty percent (50%) of the aggregate purchase price of the Loan Stock being purchased (plus Stock Purchase Expenses). The Company shall wire transfer the Draw Amount to Onisko's broker or such third-party, as the case may be, within one (1) Business Day after receiving written notice from Onisko containing: (a) the total number of shares of Loan Stock being purchased; (b) the aggregate purchase price for all such shares of Loan Stock being purchased; (c) evidence confirming such purchase from Onisko's broker or third-party, as the case may be; and (d) wire transfer instructions to the broker or such third-party, as the case may be. The Company shall deliver all Draw Amounts directly to Onisko's securities 7 11 broker or such third-party, as the case may be, in accordance with such broker's or such third-party's requirements. (iii) Payment for Direct Purchases from Company. Onisko shall pay for all Direct Purchases of Loan Stock from the Company within three (3) Business Days after Onisko receives written notice from Onisko's broker that the applicable number of shares of Loan Stock have been transferred by the Company to the Account. Onisko shall pay for Direct Purchases of Loan Stock by: (i) wire transferring directly to the Company fifty percent (50%) of the aggregate purchase price of the shares of Loan Stock being purchased and (ii) executing and delivery a Loan Advance Request to the Company in a principal amount equal to fifty percent (50%) of the aggregate purchase price of the Loan Stock being purchased. Any Stock Purchase Expenses shall be paid by the Company. (iv) Payment for Subsequent Plan Purchases. Onisko shall pay for all Subsequent Plan Purchases of Loan Stock from the Company within three (3) Business Days after Onisko receives written notice from Onisko's broker that the applicable number of shares of Loan Stock have been transferred by the Company to Onisko's brokerage account. Payment for Subsequent Plan Purchases of Loan Stock will be made by (i) Onisko's execution and delivery of a Loan Advance Request to the Company in a principal amount equal to the Company funded portion of the of Loan Stock (plus Stock Purchase Expenses) being purchased and (ii) Onisko wire transferring directly to the Company the portion of the purchase price of the Loan Stock not being funded by the Company. Any Stock Purchase Expenses shall be paid by the Company. (D) Indemnification for Failure to Fund. The Company shall defend, indemnify, and hold harmless Onisko from and against all claims, defense costs (including reasonable attorneys' fees), judgments and other expenses arising out of or in connection with a breach by the Company of any of its obligations under Section 2.1(C) above, time being of the essence with respect to each such obligation. (E) Other Purchases. Notwithstanding anything herein to the contrary, the Share Cap set forth herein is only applicable to shares of Loan Stock purchased by Onisko, in whole or in part, with funds loaned to Onisko by the Company and Onisko may purchase such of the Companies securities with his own funds as he desires, without restriction by the Company, except as provided by law. SECTION II.2 THE STOCK PURCHASE LOAN (A) The Stock Purchase Loan. Subject to the Share Cap and each of the other terms, conditions and other requirements set forth in this Agreement and in the Loan Documents, the Company agrees to lend Onisko (the "Stock Purchase Loan") an amount equal to (i) one hundred percent (100%) of the total purchase price of the Loan Stock purchased by Onisko in a Plan Purchase, (ii) fifty percent (50%) of the total purchase price of the Loan Stock (plus any and all Stock Purchase Expenses) purchased by Onisko in an Open Market Purchase, in a Direct Purchase, or in a combination thereof and (iii) up to one hundred percent (100%) of the total 8 12 purchase price of the Loan Stock (plus any and all Stock Purchase Expenses) purchased by Onisko in a Subsequent Plan Purchase. At the Closing, Onisko shall execute and deliver to the Company the Collateral Security Agreement, the Control Agreement, the 25% Recourse Note and the No Recourse Note. Each advance under the Notes shall be funded following Onisko's execution and delivery to the Company of a Loan Advance Request. (B) Non-Recourse. Except as provided below, the Stock Purchase Loan shall be non-recourse to Onisko such that the Company shall not seek to enforce any monetary judgement with respect to the Stock Purchase Loan or any sums due under any Note or any of the Loan Documents against Onisko, individually, except through recourse to the Collateral and solely to the Collateral. The non-recourse nature of the Stock Purchase Loan is a material inducement to Onisko agreeing to accept employment under the Employment Agreement and Onisko would not have agreed to accept such employment nor borrow any funds from the Company under the Stock Purchase Loan, but for the non-recourse nature of the Stock Purchase Loan. Notwithstanding the foregoing, Onisko shall be individually liable for twenty five percent (25%) of the amounts due under the 25% Recourse Note insofar as such amounts are advanced in connection with a Plan Purchase or a Subsequent Plan Purchase. (C) Interest Rate. The Stock Purchase Loan shall accrue interest, at the Stock Purchase Loan Interest Rate, as provided in each Note. Interest under each Note shall commence to accrue as of the date of disbursal or wire transfer by the Company. When monies are disbursed by wire transfer, such monies shall be considered advanced at the time of receipt thereof by the receiving institution. (D) Repayment and Term. The Stock Purchase Loan shall be repaid as provided in each Note, which shall be generally as follows: quarterly payments of accrued interest only shall be due on June 30, September 30, December 31 and March 31 during each year during the term of the Loan and shall be paid within thirty (30) days after the due date thereof, and all accrued interest and outstanding principal shall be paid on the Maturity Date (as defined below). The Stock Purchase Loan shall mature at the earlier of (the "Maturity Date"): (i) ten (10) years from the date of this Agreement; or (ii) two (2) years following termination of Onisko's employment by the Company under the Employment Agreement with "Cause" pursuant to Section 4(C) of the Employment Agreement. (E) Prepayments and Sale of Loan Stock. The Stock Purchase Loan may be prepaid, in whole or in part, any time without any penalty or premium. Except for prepayments made by Onisko pursuant to Section 2.1(B)(iv) hereof, prepayments shall first be applied to accrued interest, then to principal. At any time Onisko shall have the right to sell all or any portion of the Loan Stock constituting the Collateral provided that Onisko pays the Company the "Per Share Release Price" from the proceeds derived from such sale. The "Per Share Release Price" shall be an amount calculated by dividing the outstanding principal amount of and accrued interest on the Stock Purchase Loan as of the date of such sale by the total number of shares of Loan Stock subject to the Collateral Security Agreement immediately prior to such sale. 9 13 (F) Security. The Stock Purchase Loan shall be secured by the Loan Stock pursuant to a Collateral Security Agreement, as more particularly provided for in Article III below. (G) Shareholder Rights. Onisko shall have all rights of a stockholder with respect to the Loan Stock, including without limitation, the right to vote such Loan Stock and the right to receive dividends; provided that Onisko may not sell, transfer, assign, or hypothecate the Loan Stock or take any action which would violate the terms of the Stock Pledge Agreement unless, in respect of each share of such Loan Stock, Onisko has paid the Company the Per Share Release Price described above. SECTION II.3 INTENT NOT TO COMMIT USURY Onisko does not intend or expect to pay, nor does the Company intend or expect to charge, accept or collect, any interest under this Agreement, any Note or any other Loan Document or other instrument executed in connection herewith greater than the maximum legal rate of interest which may be charged under applicable law. Should any event result in the computation or earning of interest in excess of such maximum legal rate, any and all such excess shall be refunded to Onisko. Notwithstanding anything to the contrary contained in this Agreement, any Note or other Loan Document or instrument delivered in connection herewith, the amount of interest due under the terms of this Agreement, each Note, each other Loan Document or any other instrument shall in no event exceed the maximum amount of interest permitted to be charged by law. SECTION II.4 USE OF PROCEEDS The proceeds of the Stock Purchase Loan shall be used by Onisko solely to purchase the Loan Stock as provided in this Agreement. ARTICLE III SECURITY FOR THE STOCK PURCHASE LOAN SECTION III.1 SECURITY INTEREST As security for the full and timely payment of the principal and interest under the Stock Purchase Loan, Onisko grants to the Company a first priority and continuing security interest in and lien upon the Collateral. SECTION III.2 SECURITY DOCUMENTS Onisko, in order to set forth the terms and conditions under which the Collateral described in Section 3.1 hereof will be held by the Company, shall execute and deliver to the Company, in form and substance reasonably satisfactory to the Company, any and all security agreements, hypothecation agreements, assignments, pledge agreements, financing statements, notices of lien, 10 14 guarantees and any other documents relating to any security as the Company shall reasonably require from time to time (all herein referred to collectively as the "Security Documents"). SECTION III.3 FILING AND RECORDING The Company shall bear the cost and expense of causing such of the Security Documents to be duly recorded and/or filed in all places necessary, in the reasonable opinion of the Company, to perfect and protect the interest of the Company in the Collateral covered thereby. Onisko hereby authorizes the Company to file any financing statement or notice of lien in respect of any security interest created pursuant to this Agreement which may at any time be required or which, in the reasonable opinion of the Company, may at any time be desirable, although the same may have been executed only by the Company, or, at the reasonable opinion of the Company, to sign such financing statement or notice of lien on behalf of Onisko and file the same. In the event that any rerecording or refilling thereof (or the filing of any statements of continuation or assignment of any financing statement) is required to protect and preserve security interests in favor of the Company, the Company shall bear the cost and expense of causing the same to be recorded and/or refiled at the time and in the manner reasonably required by the Company. The Company shall provide Onisko with written notice before recording or filing any documents pursuant to this provision. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY SECTION IV.1 DUE AUTHORIZATION; ENFORCEABILITY This Agreement, the Stock Pledge Agreement and the Control Agreement have been duly executed and delivered by the Company and each constitutes, the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, and other laws affecting the rights of creditors generally and by general principles of equity regardless of whether enforcement is pursuant to a proceeding in equity or at law. SECTION IV.2 FEDERAL REGULATION The Company represents and warrants to Onisko that the Stock Purchase Loan does not violate, and is not inconsistent with, the provisions of Regulation U of the Board of Governors of the Federal Reserve System or any other law. 11 15 ARTICLE V ONISKO'S COVENANTS SECTION V.1 TAXES AND CLAIMS Onisko shall properly pay and discharge: (a) all taxes, assessments and governmental charges upon the Collateral, prior to the date on which penalties attach thereto, unless and to the extent that such taxes are being diligently contested in good faith and by appropriate proceedings and appropriate reserves therefor have been established; and (b) all lawful claims, whether for labor, materials, supplies, services or anything else which might or could, if unpaid, become a lien or charge upon the Collateral unless and to the extent only that the same are transferred to bond, being diligently contested in good faith and by appropriate proceedings, and appropriate reserves therefor have been established. SECTION V.2 PAY INDEBTEDNESS TO THE COMPANY AND PERFORM OTHER COVENANTS Onisko shall: (a) make full and timely payments of the principal of and interest due under each Note; (b) duly comply with all the terms and covenants contained in each of the Loan Documents and all other instruments and documents given to the Company pursuant to this Agreement at the times and places and in the manner set forth herein; and (c) at all times maintain the liens and security interests provided for under or pursuant to this Agreement as valid and perfected liens and security interests on the property intended to be covered thereby. ARTICLE VI COVENANTS OF THE COMPANY SECTION VI.1 PLAN SHARES The Company shall use its best efforts and shall take all necessary corporate action to obtain, prior to June 1, 2000, shareholder approval for an increase in the number of shares of Common Stock reserved for issuance under the Plan (or a successor plan) to at least 700,000 shares, such that Onisko may, if he desires, elect to purchase 150,000 shares of Loan Stock under the Plan (or a successor plan). SECTION VI.2 REGISTRATION OF PLAN SHARES AND DIRECT PURCHASE SHARES The Company shall take all necessary action to ensure that all Loan Stock purchased by Onisko under the Plan (or any successor plan), pursuant to a Direct Purchase or otherwise (if not already registered under the Securities Act of 1933, as amended (the "Act") or if registration is terminated as a result of such acquisition or otherwise) is registered under the Act within thirty (30) days from the date that such Loan Stock is purchased by Onisko. 12 16 SECTION VI.3 SALE OF PLAN SHARES The Company will not sell any shares under the Plan (or any successor plan) to any person or entity (other than up to 500,000 shares to Thomas J. Crocker) unless Onisko shall consent thereto. Such consent right shall terminate thirty (30) days after Onisko shall be notified by the Company that a sufficient number of shares to permit purchase by Onisko of the Share Cap are reserved for issuance under the Plan (or any successor plan). ARTICLE VII EVENTS OF DEFAULT SECTION VII.1 EVENTS OF DEFAULT (A) Events of Default - Payment-In-Full Without Notice The occurrence of any one of more of the following events, whether or not notice is given by the Company, shall constitute an Event of Default: (1) Onisko: (a) shall file a voluntary petition under the United States Code for adjudication as a bankrupt; (b) shall file an answer seeking reorganization or an arrangement under any bankruptcy or similar statute of the United States of America or any subdivision thereof or of any foreign jurisdiction in response to an involuntary petition; (c) shall consent to the filing of a petition in any such bankruptcy or reorganization proceeding; (d) shall consent to the appointment of a receiver or trustee or officer performing similar functions with respect to any substantial part of its property; (e) shall make a general assignment for the benefit of its creditors; or (f) shall execute a consent to any other type of insolvency proceedings (under the Bankruptcy Act or otherwise); (B) Events of Default - Payment-In-Full With Notice The occurrence of any one or more of the following and giving of a written notice by the Company shall constitute an Event of Default: (1) Default by Onisko in the payment of any sum due under any Note or otherwise under the Loan Documents that is not made within thirty (30) days after the due date therefor; or 13 17 (2) Default in the performance of any other liability, obligation or covenant of Onisko to the Company hereunder or any of the Loan Documents that is not cured within thirty (30) days after Onisko's receipt of notice from the Company specifying such default. SECTION VII.2 WAIVER OF DEFAULT The Company may, at any time, waive any Event of Default which shall have occurred and any of its consequences, in which case the parties hereto shall be restored to their former positions and rights and obligations hereunder, respectively; but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereon, and no such waiver shall be effective unless it is in a written document executed by a duly authorized officer. ARTICLE VIII REMEDIES FOR EVENTS OF DEFAULT SECTION VIII.1 REMEDIES FOR EVENTS OF DEFAULT Upon the occurrence and continuation of an Event of Default provided in Section 7.1(A) of this Agreement without notice or an Event of Default provided in Section 7.1(B) of this Agreement after the giving of any applicable notice and expiration of any applicable cure or grace period, the Stock Purchase Loan hereby granted and all obligations to make loans or additional draws under the Stock Purchase Loan shall immediately terminate, and all principal and interest owing hereunder and under the Notes shall be accelerated and become due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived and the Company may sell any or all of the Collateral and apply the proceeds thereof to reduce the outstanding principal of the Stock Purchase Loan. SECTION VIII.2 ACTION FOR ENFORCEMENT The Company may proceed to protect and enforce its rights or remedies either by suit in equity or by action at law, or both, whether for the specific performance of any covenant, agreement or other provision contained herein, in any Note, the other Loan Documents or in any document or instrument delivered in connection with or pursuant to this Agreement, or to enforce the payment of any Note or any other legal or equitable right or remedy or sell the Collateral and apply the proceeds thereof in repayment of the Stock Purchase Loan; provided, however, the Company shall not seek to enforce any monetary judgement with respect to the Stock Purchase Loan or any sums due under any Note or any of the other Loan Documents against Onisko, individually, except as set forth in Section 2.2(B). 14 18 SECTION VIII.3 SALE OF COLLATERAL The Company shall have the right to sell any and all of the Collateral and apply the proceeds thereof to reduce the outstanding balance of the Loan upon an Event of Default under Section 7.1 of this Agreement and the expiration any applicable notice and cure period. SECTION VIII.4 RIGHTS AND REMEDIES CUMULATIVE No right or remedy herein conferred upon the Company is intended to be exclusive of any other right or remedy contained herein, in any Note, the other Security Documents or in any instrument or document delivered in connection with or pursuant to this Agreement, and every such right or remedy shall be cumulative and shall be in addition to every other such right or remedy contained herein and therein or now or hereafter existing at law or in equity or by statute or otherwise. In the event of any conflict among the Loan Documents as to the notice required before resort to any remedy, the shortest notice provision shall control. ARTICLE IX FEES AND PAYMENTS SECTION IX.1 COSTS, TAXES AND ATTORNEYS' FEES Whether or not the Closing is effectuated and the transactions contemplated hereby shall be consummated, the Company agrees: (a) to pay all out-of-pocket costs, expenses, disbursements and fees incurred by the Company in connection with the origination, preparation, execution and delivery of and any amendment, supplement or modification to, any of the Loan Documents and any other documents prepared in connection herewith, and the consummation of the transactions contemplated hereby and thereby (whether incurred before or after the Closing), including, without limitation, title search, examination and insurance charges, UCC searches, judgment and tax lien searches, recording fees, charges and taxes, documentary stamps, intangible taxes, disbursement fees, appraisal fees, reasonable fees and disbursements of counsel to the Company in connection with the origination and/or the Closing of the Stock Purchase Loan. The agreements contained in this Section shall survive repayment of the Notes and all other amounts payable hereunder or under the other Loan Documents. 15 19 ARTICLE X MISCELLANEOUS SECTION X.1 NOTICES All notices, requests, consents and other communications hereunder to any party, shall be deemed to be sufficient if in writing and: (i) delivered in person, (ii) sent by telex or telecopier, (iii) sent by first class, registered or certified mail return receipt requested and postage prepaid or (iv) sent by overnight delivery service, addressed to such party at the address set forth below (or at such other addresses as shall be specified by like notice): If to Onisko: Robert Onisko 1676 S.W. 19th Avenue Boca Raton, Florida 33486 with a required copy to: Proskauer Rose LLP One Boca Place, Suite 340 West 2255 Glades Road Boca Raton, Florida 33431 Telecopier: (407) 241-7145 Attn: Christopher C. Wheeler, Esq. If to the Company: Koger Equity, Inc. 8880 Freedom Crossing Trail Jacksonville, Florida 32256 with a copy to: Ropes and Gray One International Place Boston, Massachusetts 02110 Attn: Ron Groves with a copy to: Boling & McCart 1000 Riverside Avenue Suite 555 Jacksonville, Florida 32204 Attn: Harold F. McCart, Jr. All such notices and communications shall be deemed to have been received: (i) on the date delivered if by personal delivery, (ii) on the date telecommunicated if sent by telex, telecopier or 16 20 other telegraphic method, (iii) on the date sent if sent by first class, registered or certified mail, or (iv) on the following date if received by overnight delivery; provided, further, that rejection or other refusal to accept or inability to deliver because of changed address or telecopier number for which no notice has been received shall also constitute receipt. SECTION X.2 ATTORNEYS' FEES Any and all references to the payment of attorneys' fees and disbursements herein or in any of the other Loan Documents shall include those incurred before, during and after litigation, whether in negotiating, drafting, closing, attempting collection without litigation, investigating and litigating in all trial and appellate levels, as well as those incurred in any bankruptcy proceedings and post-judgment proceedings. Attorneys' fees includes fees of paraprofessionals such as paralegals and investigators. SECTION X.3 SEVERABILITY Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION X.4 COUNTERPARTS This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Confirmation of execution by telex or by telecopied facsimile signature page shall be binding upon any party so confirming or telecopying. A set of the copies of this Agreement signed by all the parties hereto shall be lodged with Onisko and the Company. SECTION X.5 INTERPRETATION Each of the parties hereto acknowledges that they have been represented by their own counsel throughout the negotiations and at the execution of this Agreement and all of the other Loan Documents and therefore none of the parties hereto shall, while this Agreement is effective or after its termination, claim or assert that any provisions of this Agreement or any of the other Loan Documents should be construed against the drafter of this Agreement or any of the other Loan Documents. 17 21 SECTION X.6 CONFLICT If the terms and provisions of any of the other Loan Documents should conflict with any of the terms and provisions of this Agreement, the terms and provisions of this Agreement shall be interpreted as being paramount, superior and controlling. SECTION X.7 HEADINGS The headings of the Articles, Sections, and Subsections of this Agreement are for convenience of reference only, and are not to be considered a part hereof, and do not limit or otherwise affect any of the terms hereof. SECTION X.8 JURISDICTION AND VENUE Each of the parties irrevocably and unconditionally: (a) agrees that any suit, action or other legal proceeding arising out of or relating to this Agreement may, and to the extent permitted by the courts of the State of Florida shall be brought in the courts of record of the State of Florida in Palm Beach County or the District Court of the United States, Southern District of Florida; (b) consents to the jurisdiction of each such court in any such suit, action or proceeding; (c) waives any objection which it may have to the laying of venue of any such suit, action or proceeding in any of such court; and (d) agrees that service of any court paper may be effected on such party by mail, as provided in this Agreement, or in such other manner as may be provided under applicable laws or court rules in the State of Florida. SECTION X.9 AMENDMENTS The provisions of this Agreement may not be amended, supplemented, waived or changed orally, but only by a writing signed by the party as to whom enforcement of any such amendment, supplement, waiver or modification is sought and making specific reference to this Agreement. SECTION X.10 GOVERNING LAW; BENEFIT This Agreement and all rights hereunder shall be governed by the internal laws of the State of Florida without giving effect to the conflicts of laws principles thereof. This Agreement shall bind and inure to the benefit of, and the terms "Onisko" and the "Company," respectively, as used in this Agreement shall include, the respective parties and their respective heirs, personal representatives, participants, successors and assigns. However, Onisko and the Company may not assign their rights and obligations under this Agreement. [SIGNATURES APPEAR ON THE NEXT PAGE] 18 22 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. THE COMPANY: KOGER EQUITY, INC., A FLORIDA CORPORATION By: /s/ W. Lawrence Jenkins ------------------------------- Its: Vice President ------------------------------- Print Name: W. Lawrence Jenkins ------------------------ ONISKO: /s/ Robert Onisko ---------------------------------- Robert Onisko 19 23 EXHIBIT "A" CERTIFICATE AND LOAN ADVANCE REQUEST DATE: ____________, 2000 Koger Equity, Inc. 8880 Freedom Crossing Trail Jacksonville, Florida 32256 Dear Sir: Pursuant to Section ___ of the Stock Purchase and Loan Agreement between Koger Equity, Inc. and the undersigned, dated as of February 17, 2000 (the "Stock Purchase and Loan Agreement"), the undersigned hereby applies for an advance of $ ____________ to be credited to the account of __________________, Account No. ________________________ . Capitalized terms used and not defined herein shall have the meanings set forth in the Stock Purchase and Loan Agreement. The undersigned hereby certifies that: 1. No Event of Default as defined in the Stock Purchase and Loan Agreement has occurred. 2. The amount to be advanced pursuant to this advance is _____________ of the purchase price of the Loan Stock proposed to be purchased [(plus Stock Purchase Expenses)]. 3. The number of shares of Loan Stock proposed to be purchased is ____________, which shall be purchased pursuant to [the Plan][an Open Market Purchase][a Direct Purchase] [a Subsequent Plan Purchase]. The per share purchase price of the Loan Stock is $___________. Robert Onisko 20 EX-10.(B)(6) 13 ex10-b6.txt STOCK OPTION AGREEMENT, ROBERT ONISKO 1 EXHIBIT 10(b)(6) STOCK OPTION AGREEMENT THIS AGREEMENT ("Agreement") made as of the 17th day of February, 2000 by and between Koger Equity, Inc., a Florida corporation with its principal place of business in Jacksonville, Florida (the "Company"), and Robert Onisko ("Executive"). W I T N E S S E T H: Effective February 17, 2000, (the "Grant Date"), Executive has been granted, subject to execution of this agreement, a non-qualified stock option (the "Option") to purchase the number of shares of the Company's common stock, par value $.01 per share (the "Shares") set forth below, pursuant to the terms of the Employment Agreement, dated as of February 17, 2000, by and between the Company and Executive (the "Employment Agreement"). Unless otherwise indicated, any capitalized term used herein, but not defined herein, shall have the meaning ascribed to such term in the Employment Agreement. References to the "Board" shall mean the Board of Directors of the Company and references to "Committee" shall mean the Compensation Committee of the Board. 1. Grant of Options (a) Subject to the terms and conditions set forth herein, the Executive is granted an Option to purchase 300,000 shares at a per Share exercise price of $16.0625. No part of the Option is intended to be an "Incentive Stock Option" within the meaning of section 422 of the Internal Revenue Code of 1986, as amended. (b) The term of the Option shall be ten (10) years from the Grant Date, subject to earlier termination as provided in Section 3 hereof. Upon expiration of the Option, the Option shall be canceled and no longer exercisable. (c) Subject to Section 3 hereof, the Option shall vest and become exercisable as to one third (1/3) of the Shares subject to the Option, on the first anniversary of the Effective Date and as to an additional one third (1/3) of the Shares subject to the Option on the next two succeeding anniversaries of the Effective Date (each such date hereinafter referred to as a "Vesting Date"); provided, that on each of such Vesting Dates, Executive has been continuously employed by the Company through such date. There shall be no proportionate or partial vesting in the periods prior to each Vesting Date and vesting shall occur only on the appropriate Vesting Date. To the extent the Option has become vested and exercisable, the Option may thereafter be exercised by Executive, in whole or in part, at anytime or from time to time prior to the expiration of the Option as provided herein. (d) (i) To the extent vested hereunder, the Option may be exercised by Executive by delivering notice to the Company's principal office, to the attention of its Corporate Secretary. Such notice shall be accompanied by this Agreement, shall specify the number of Shares with respect to which the Option is being exercised and the effective date of the 2 proposed exercise and shall be signed by Executive or other person then having the right to exercise the Option. Payment for Shares purchased upon the exercise of the Option shall be made on the effective date of such exercise by one or a combination of the following means: (i) in cash or by personal check, certified check, bank cashier's check or wire transfer; (ii) if the Shares are traded on a national securities exchange, the Nasdaq Stock Market, Inc. or quoted on a national quotation system sponsored by the National Association of Securities Dealers, through a "cashless exercise" procedure whereby Executive delivers irrevocable instructions to a broker to deliver promptly to the Company an amount equal to the purchase price; (iii) subject to the approval of the Committee, in Shares owned by Executive for at least six months prior to the date of exercise (or such shorter period approved by the Committee) and valued at their "fair market value" (within the meaning of the Company's 1998 Equity and Cash Incentive Plan (the "1998 Equity Plan")) on the effective date of such exercise; or (iv) subject to the approval of the Committee, by such other provisions as the Committee may from time to time authorize. (ii) Subject to the terms of this Agreement, certificates for Shares purchased upon the exercise of an Option shall be issued in the name of Executive or other person entitled to receive such Shares, and delivered to Executive or such other person as soon as practicable following the effective date on which the Option is exercised. 2. Shares; Adjustment Upon Certain Events (a) Shares to be issued under this Agreement shall be made available, at the discretion of the Board, from authorized but unissued Shares, issued Shares reacquired by the Company or Shares purchased by the Company on the open market specifically for these purposes. (b) In the event that any dividend or other distribution (whether in the form of cash, Shares or other property), recapitalization, stock split, reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event, affects the Shares such that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of Executive under the Option, then the Committee shall make such equitable changes or adjustments as are appropriate to the Option's exercise price and the number and kind of Shares or other property (including cash) issued or issuable upon exercise of the Option. (c) Notwithstanding the foregoing, in the event that the Company shall declare any extraordinary dividend or other extraordinary distribution in favor of the Company's shareholders in connection with the sale of assets by the Company, the Company shall not make any equitable changes or adjustments to the Option as set forth above, but shall set aside in a segregated escrow account for the benefit of the Executive a cash amount equal to the value of the pro rata portion of such extraordinary dividend or other extraordinary distribution which would have been payable in respect of the shares of Common Stock issuable upon exercise of the Option had the Option been 100% vested and fully exercised immediately prior to the declaration of such extraordinary dividend or other extraordinary distribution. All such funds 2 3 shall be released from escrow and paid to the Executive on March 1, 2003, without setoff or deduction by the Company or the escrow agent, if the Closing Price (as defined below) of the Company's Common Stock shall be at least $16.0625 (as adjusted for (i) stock splits, combinations and the like and (ii) distributions of capital gains to the Company's shareholders) on at least sixty (60) days (in the aggregate) of the one hundred eighty (180) consecutive days immediately prior to March 1, 2003 (the "Closing Price Requirement"). If the Closing Price Requirement shall not be met, such funds shall be returned to the Company on such date and the Executive shall have no right to or claim against such funds. The "Closing Price" of the Company's Common Stock on any day shall mean (i) if the Common Stock is listed or admitted for trading on any United States national securities exchange, or if actual transactions are otherwise reported on a consolidated transaction reporting system, the last reported sale price of Common Stock on such exchange or reporting system, as reported in any newspaper of general circulation, (ii) if the Common Stock is quoted on the National Association of Securities Dealers Automated Quotations System ("NASDAQ"), or any similar system of automated dissemination of quotations of securities prices in common use, the mean between the closing high bid and low asked quotations for such day of Common Stock on such system or (iii) if neither clause (i) or (ii) is applicable, the fair market value of the Common Stock as determined by the Company's Board of Directors. 3. Effect of Termination of Employment; Change of Control (a) In the event of (i) Executive's termination of Employment either by (A) the Company without Cause or (B) the Executive for Good Reason, (ii) the Executive's death or Disability or (iii) a Change of Control of the Company, the Option will immediately vest and become exercisable as to all the Shares subject thereto. If, as part of, or in connection with, a Change of Control (and to the extent that the Option shall not have been exercised prior to or in connection with any such transaction), there occurs a merger or consolidation in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company's stock or assets by a person, entity or group of persons or entities acting in concert or there is a dissolution or liquidation of the Company, the Option shall, upon the effective date of such transaction, either be (i) cashed out, (ii) assumed by the surviving corporation or (iii) substituted with a new option of the surviving corporation which is substantially similar in nature and equivalent in terms and value for the Option then outstanding. (b) In the event of Executive's Termination for Cause or Termination without Good Reason, the unvested portion of the Option shall be immediately forfeited and canceled. (c) Upon Executive's termination of employment with the Company, the portion of the Option that is not vested in accordance with the terms hereof shall be immediately forfeited and the vested portion of the Option shall expire on the tenth (10th) anniversary of the Grant Date. 3 4 4. Nontransferability of Option Neither the Option nor any other rights hereunder shall be transferable by Executive otherwise than by will or under applicable laws of descent and distribution. The Option shall be exercisable, during Executive's lifetime only by Executive. In addition, neither the Option nor any other rights hereunder shall, except as otherwise provided herein, be assigned, negotiated, pledged, or hypothecated in any way or be subject to execution, attachment or similar process. Upon any transfer, assignment, negotiation, pledge or hypothecation of the Option or any rights hereunder, or in the event of any levy upon the Option or any rights hereunder by reason of any execution, or similar process, contrary to the provisions hereof, such Option shall immediately become null and void. Notwithstanding the forgoing, Executive may, upon providing written notice to the Company, elect to transfer all or any portion of the Option to members of Executive's immediate family, including, but not limited to, children, grandchildren and spouse or to trusts for the benefit of such immediate family members or to partnerships in which such family members are the only partners; provided, however, that no such transfer by Executive may be made in exchange for consideration. 5. Rights as a Stockholder Executive (or a permitted transferee of the Option) shall have no rights as a stockholder with respect to any Shares subject to the Option until Executive (or permitted transferee) shall have become the holder of record of such Shares, and no adjustments shall be made for dividends in cash or other property or distributions or other rights in respect to any such Shares, except as otherwise specifically provided for herein. 6. Securities Representations If the Committee determines that the law so requires, the holder of the Option granted hereunder shall, upon any exercise or conversion thereof, execute and deliver to the Company a written statement, in a form satisfactory to the Company, representing and warranting that: (a) in the event that the holder of Shares received pursuant to exercise of the Option is permitted to sell, transfer, pledge, hypothecate, assign or otherwise dispose of such Shares, the holder may only do so pursuant to a registration statement under the Securities Act of 1933 (the "Act") and qualification under applicable state securities laws or pursuant to an opinion of counsel satisfactory to the Company that such registration and qualification are not required, and that the transaction (if it involves a sale in the over-the-counter market or on a securities exchange) does not violate the provisions of Rule 144 under the Act. A stop-transfer order will be placed on the books of the Company respecting the certificates evidencing the Shares, and such certificates shall bear any required legends until such time as the Shares evidenced by such certificates shall have been registered under the Act or shall have been transferred in accordance with an opinion of counsel for the Company that such registration is not required; and (b) holder understands that the resale of the Shares are subject to Rule 144 promulgated under the Act; that the exemption from registration under Rule 144 will not be available unless (i) a public trading market then exists for the Common Stock of the Company, 4 5 (ii) adequate information concerning the Company is then available to the public, and (iii) other terms and conditions of Rule 144 or any exemption therefrom are complied with; and that any sale of the Shares may be made only in limited amounts in accordance with such terms and conditions; and (c) holder has been advised that holder may be subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 (the "Securities Act") and that holder may be subject to insider trading restrictions and reporting requirements on the purchase and sale of securities of the Company imposed under the Securities Act. 7. Delay in Delivery of Shares Upon Exercise of Option The delivery of any certificate representing Shares hereunder may be postponed by the Company for such period as may be required for it to comply with any applicable federal or state securities law, or any national securities exchange listing requirements and the Company is not obligated to issue or deliver any securities if, in the opinion of counsel for the Company, the issuance of such Shares shall constitute a violation by Executive or the Company of any provisions of any law or of any regulations of any governmental authority or any national securities exchange. The Committee shall inform the Executive in writing of any decision to defer the delivery of Shares. During the period of such deferral, Executive may, by written notice, withdraw the portion of the Option exercise subject to the deferral and obtain the refund of any amount paid with respect thereto. Notwithstanding the preceding, the Company agrees to file and maintain a Form S-8 with regard to the Option and agrees to file a Form S-3 as reasonably requested by the Executive with regard to any Shares issued upon exercise of the Option. 8. Withholding Taxes Upon exercise of the Option, Executive will pay to the Company, or make arrangements satisfactory to the Company that are in compliance with applicable law regarding payment of, any U.S. federal, state or local taxes of any kind required by law to be withheld with respect of the exercise of the Option. The Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to Executive any U.S. federal, state or local taxes of any kind required by law to be withheld with respect to the exercise of the Option. 5 6 9. Miscellaneous (a) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, personal legal representatives, successors, trustees, administrators, distributees, devisees and legatees. The Company shall assign to, and require, any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, any subsidiary or any division of the Company or subsidiary by which Executive is employed to expressly assume and agree in writing to perform this Agreement. Notwithstanding the foregoing, this Agreement may not be assigned by the Executive. (b) No modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the party against whom it is sought to be enforced. (c) This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one contract. (d) The failure of any party hereto at any time to require performance by another party of any provision of this Agreement shall not affect the right of such party to require performance of that provision, and any waiver by any party of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of the provision itself, or a waiver of any right under this Agreement. (e) The headings of the sections of this Agreement have been inserted for convenience of reference only and shall in no way restrict or modify any of the terms or provisions hereof. (f) The Company shall pay all fees and expenses necessarily incurred by the Company in connection with this Agreement and will from time to time use its reasonable efforts to comply with all laws and regulations which, in the opinion of counsel to the Company, are applicable thereto. (g) All notices, consents, requests, approvals, instructions and other communications provided for herein shall be in writing and validly given or made when delivered, or on the second succeeding business day after being mailed by registered or certified mail, whichever is earlier, to the persons entitled or required to receive the same, at the addresses set forth at the heading of this Agreement or to such other address as either party may designate by like notice. Notices to the Company shall be addressed to its principal office, attention of the Executive Vice President and General Counsel. (h) To the extent not in specific conflict with this Agreement or the Employment Agreement, the provisions of the 1998 Equity Plan shall apply to the Options granted herein as if the grant was under such 1998 Equity Plan and the Committee shall have the right to interpret and administer the grants made herein in the same manner as grants made under such plan. 6 7 (i) This Agreement shall be governed and construed and the legal relationships of the parties determined in accordance with the laws of the state of Florida without reference to principles of conflict of laws. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. KOGER EQUITY, INC. By: /s/ W. Lawrence Jenkins --------------------------------------- Name: W. Lawrence Jenkins ------------------------------------- Title: Vice President ------------------------------------ /s/ Bob Onisko ----------------------------------------- Robert Onisko, individually 7 EX-11 14 ex11.txt EARNINGS PER SHARE COMPUTATIONS 1 EXHIBIT 11 EARNINGS PER SHARE COMPUTATIONS (IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTH PERIOD SIX MONTH PERIOD ENDED JUNE 30, ENDED JUNE 30, ---------------------- ---------------------- 2000 1999 2000 1999 ------- ------- ------- ------- EARNINGS PER COMMON AND DILUTIVE POTENTIAL SHARE: Net Income $ 5,840 $ 8,124 $11,195 $16,874 ======= ======= ======= ======= Shares: Weighted average number of common shares outstanding - Basic 26,615 26,683 26,705 26,632 Effect of dilutive securities (a): Stock options 344 337 322 321 ------- ------- ------- ------- Adjusted common shares - Diluted 26,959 27,020 27,027 26,953 ======= ======= ======= ======= EARNINGS PER SHARE - DILUTED $ 0.22 $ 0.30 $ 0.41 $ 0.63 ======= ======= ======= =======
(a) Shares issuable were derived using the "Treasury Stock Method" for all dilutive potential shares. EX-15 15 ex15.txt UNAUDITED INTERIM FINANCIAL INFORMATION LETTER 1 EXHIBIT 15 August 10, 2000 Koger Equity, Inc. 8880 Freedom Crossing Trail Jacksonville, Florida 32256 We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of Koger Equity, Inc. and subsidiaries for the periods ended June 30, 2000 and 1999, as indicated in our report dated July 25, 2000, because we did not perform an audit, we expressed no opinion on such financial information. We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended June 30, 2000, is incorporated by reference in Registration Statement No. 33-55179 of Koger Equity, Inc. on Form S-3, Registration Statement No. 33-54617 of Koger Equity, Inc. on Form S-8, Registration Statement No. 333-20975 of Koger Equity, Inc. on Form S-3, Registration Statement No. 333-23429 of Koger Equity, Inc. on Form S-8, Registration Statement No. 333-37919 of Koger Equity, Inc. on Form S-3, Registration Statement No. 333-33388 of Koger Equity, Inc. on Form S-8 and Registration Statement No. 333-38712 of Koger Equity, Inc. on Form S-8. We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statements prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. DELOITTE & TOUCHE LLP Certified Public Accountants Jacksonville, Florida EX-27 16 ex27.txt FINANCIAL DATA SCHEDULE
5 THIS COMPANY DOES NOT FILE A CLASSIFIED BALANCE SHEET, THEREFORE THESE ARE NOT PROVIDED. 5-02(9), 5-02(21) 1,000 U.S. DOLLARS 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 1 4,974 0 11,147 351 0 0 982,642 145,680 868,481 0 348,952 0 0 292 450,356 868,481 0 84,598 0 32,287 31,349 339 13,677 11,350 155 11,195 0 0 0 11,195 0.42 0.41
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