SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 30, 2001
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Intrepid Capital Corporation
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(Exact name of registrant as specified in its charter)
Delaware 333-66859 59-3546446
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
3652 South Third Street, Suite 200, Jacksonville Beach, Florida 32250
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (904) 246-3433
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Item 2. Acquisition or Disposition of Assets.
On October 30, 2001 (the "Closing"), Enviroq Corporation ("Enviroq"), a
Delaware corporation and a wholly-owned subsidiary of Intrepid Capital
Corporation, a Delaware corporation ("Intrepid"), sold to Sprayroq of Ohio,
Inc., an unaffiliated Ohio corporation ("Sprayroq Ohio"), 100 shares of the
issued and outstanding common stock of Sprayroq, Inc., a Florida corporation
("Sprayroq"), which shares represent fifty percent (50%) of all the issued and
outstanding capital stock of Sprayroq, pursuant to that certain Stock Purchase
Agreement (the "Stock Purchase Agreement") dated September 19, 2001, by and
among Enviroq, Sprayroq Ohio and Replico Development Company, Inc., a
Pennsylvania corporation ("Replico" and, together with Enviroq, the "Sellers").
Pursuant to the terms of the Stock Purchase Agreement, Sprayroq Ohio
purchased all the issued and outstanding capital stock of Sprayroq from Sellers
for an aggregate purchase price of up to $1,782,804, with $1,582,804 of such
amount paid at Closing as follows: (a) by issuance to each Seller of a
subordinated promissory note executed by Sprayroq Ohio in the principal amount
of $150,000 (the "Promissory Notes"); (b) by payment to Sellers of an aggregate
of $1.2 million in immediately available funds; and (c) pursuant to that certain
Non-Competition and Confidentiality Agreement dated as of October 30, 2001, by
and among Enviroq, Replico, Sprayroq and Sprayroq Ohio (the "Enviroq
Non-Competition and Confidentiality Agreement"), by payment to Sellers of an
aggregate of $200,000 in exchange for Sellers' covenants contained therein. In
addition to the amounts paid at Closing, Sprayroq Ohio may pay Sellers up to an
additional $200,000, in the aggregate, based upon a percentage of the increment
of annual collected net sales of Sprayroq in excess of $2.0 million for each
year during the five-year period after the Closing, all as set forth in the
Stock Purchase Agreement. In addition to the foregoing, Sprayroq Ohio has
executed a subordinated promissory note in favor of Enviroq in the principal
amount of $173,918.90 (the "Enviroq Note"), such note representing the balance
of intercompany payables from Sprayroq to Enviroq as of the Closing.
At the Closing, Intrepid entered into a Non-Competition and
Confidentiality Agreement (the "Intrepid Non-Competition and Confidentiality
Agreement") dated October 30, 2001, by and among Intrepid, Sprayroq and Sprayroq
Ohio, pursuant to which Intrepid agreed to refrain (i) for a period of ten
years, from competing with Sprayroq Ohio or Sprayroq in the operation of
Sprayroq's business or interfering with Sprayroq's relationships with Sprayroq's
employees and affiliates, and (ii) from disclosing or using any confidential and
proprietary information directly related to Sprayroq's business.
The principal amounts of the Promissory Notes and the Enviroq Note are
payable in one lump sum on November 1, 2006, with interest at seven percent (7%)
per annum payable annually in arrears, commencing on November 1, 2002. The
Promissory Notes and the Enviroq Note are secured by all the assets of Sprayroq;
provided, however, that such security is subordinate to certain financing
obtained by Sprayroq Ohio pursuant to the Purchase Agreement, and the Enviroq
Note is also subordinate to the Promissory Notes.
The descriptions contained herein of the Purchase Agreement, the
Promissory Notes, the Enviroq Note, the Intrepid Non-Competition and
Confidentiality Agreement and the Enviroq Non-Competition and Confidentiality
Agreement are qualified in their entirety by reference to such documents, which
are attached hereto and incorporated herein by reference as Exhibits 2.1, 10.1,
10.2, 10.3, 10.4 and 10.5, respectively.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a)-(b) Financial Statements of Businesses Acquired and Pro
Forma Financial Information.
Pursuant to Item 7(a) of Form 8-K, historical
audited financial statements of Sprayroq are not
required to be filed with this Report. Furthermore,
Intrepid's disposition of Sprayroq is fully reflected in
Intrepid's financial statements set forth in Part I,
Item 1 of Intrepid's Quarterly Report on Form 10-QSB for
the quarter ended September 30, 2001, filed with the
Securities and Exchange Commission on November 14, 2001,
and, therefore, pursuant to Rule 11-01(a)(4) of
Regulation S-X, pro forma financial information is not
required to be filed with this Report. Part I, Item 1 of
Intrepid's Quarterly Report on Form 10-QSB for the
quarter ended September 30, 2001, is incorporated herein
by reference and attached hereto as Exhibit 99.1.
(c) Exhibits.
2.1 The Stock Purchase Agreement by and among
Enviroq, Sprayroq Ohio and Replico dated
September 19, 2001. (Certain of the schedules to
the Stock Purchase Agreement have been omitted
from this Report pursuant to Item 601(b)(2) of
Regulation S-K, and Intrepid agrees to furnish
copies of such omitted exhibits and schedules
supplementally to the Securities and Exchange
Commission upon request.)
10.1 Subordinated Promissory Note made by Sprayroq
Ohio in favor of Replico dated October 30, 2001.
(Filed herewith as Schedule 2.1(a) to the Stock
Purchase Agreement.)
10.2 Subordinated Promissory Note made by Sprayroq
Ohio in favor of Enviroq dated October 30, 2001.
(Filed herewith as Schedule 2.1(b) to the Stock
Purchase Agreement.)
10.3 Subordinated Promissory Note made by Sprayroq
Ohio in favor of Enviroq dated October 30, 2001.
(Filed herewith as Schedule 5.4 to the Stock
Purchase Agreement.)
10.4 Non-Competition and Confidentiality Agreement
dated October 30, 2001, by and among Intrepid,
Sprayroq and Sprayroq Ohio.
10.5 Non-Competition and Confidentiality Agreement
dated as of October 30, 2001, by and among
Enviroq, Replico, Sprayroq and Sprayroq Ohio.
99.1 Part I, Item 1 of Intrepid's Quarterly Report on
Form 10-QSB for the quarter ended September 30,
2001.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Intrepid Capital Corporation has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
INTREPID CAPITAL CORPORATION
By: /s/ Forrest Travis
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Forrest Travis, President and
Chief Executive Officer
Dated: November 14, 2001
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EXHIBIT INDEX
Exhibits.
2.1 The Stock Purchase Agreement by and among Enviroq, Replico and Sprayroq
Ohio dated September 19, 2001. (Certain of the schedules to the Stock
Purchase Agreement have been omitted from this Report pursuant to Item
601(b)(2) of Regulation S-K, and Intrepid agrees to furnish copies of
such omitted exhibits and schedules supplementally to the Securities and
Exchange Commission upon request.)
10.1 Subordinated Promissory Note made by Sprayroq Ohio in favor of Replico
dated October 30, 2001. (Filed herewith as Schedule 2.1(a) to the Stock
Purchase Agreement.)
10.2 Subordinated Promissory Note made by Sprayroq Ohio in favor of Enviroq
dated October 30, 2001. (Filed herewith as Schedule 2.1(b) to the Stock
Purchase Agreement.)
10.3 Subordinated Promissory Note made by Sprayroq Ohio in favor of Enviroq
dated October 30, 2001. (Filed herewith as Schedule 5.4 to the Stock
Purchase Agreement.)
10.4 Non-Competition and Confidentiality Agreement dated October 30, 2001, by
and among Intrepid, Sprayroq and Sprayroq Ohio.
10.5 Non-Competition and Confidentiality Agreement dated as of October 30,
2001, by and among Enviroq, Replico, Sprayroq and Sprayroq Ohio.
99.1 Part I, Item 1 of Intrepid's Quarterly Report on Form 10-QSB for the
quarter ended September 30, 2001.