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Exhibit 2.2
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (the "Agreement"), entered into as of this
31st day of December, 1999, by and between BEACHSIDE HOLDING, LLC, a Georgia
limited liability company (the "Pledgor"), and Lahaina Acquisitions, Inc., a
Colorado corporation, and ACCENT MORTGAGE SERVICES, INC., a Georgia corporation
(collectively, the "Pledgee").
WITNESSETH
WHEREAS, NP Holding, LLC on even date herewith has delivered a
Non-Recourse Purchase Money Note payable to Pledgee in the original principal
amount of $3,000,000 (the "Note"); and
WHEREAS, to secure the payment and performance of all obligations of
NP Holding, LLC under the Note, the Pledgor wishes to pledge to the Pledgee all
of its right, title and interest in 660,000 shares of common stock of Lahaina
Acquisitions, Inc. currently owned by Pledgor (the "Stock");
NOW, THEREFORE, the parties hereby agree as follows:
1. WARRANTY. Pledgor hereby represents and warrants to the Pledgee
that except for the security interest created hereby, the Pledgor owns the
stock free and clear of all liens, charges and encumbrances, that the Stock is
duly issued, fully paid and nonassessable, and that Pledgor has the
unencumbered right to pledge its Stock.
2. SECURITY INTEREST. Pledgor hereby unconditionally grants and
assigns to the Pledgee, its successors and assigns, a continuing security
interest in and to the Stock. The Pledgor has delivered to and deposited with
the Pledgee herewith all of its right, title and interest in and to the Stock,
together with certificates representing the Stock and stock powers endorsed in
blank by Pledgor, as security for the payment and performance of all
obligations of Pledgor to the Pledgee under the Note, or any extension,
renewal, amendment or modification of the foregoing, however created, acquired,
arising or evidenced, whether direct or indirect, absolute or contingent, now
or hereafter existing, or due or to become due. Beneficial ownership of the
Stock, including, without limitation, all voting, consensual and dividend
rights, shall remain in the Pledgor until the occurrence of an Event of Default
(as defined below) and until the Pledgee shall notify Pledgor of the Pledgee's
exercise of voting rights to the Stock pursuant to Section 8 of this Agreement.
3. ADDITIONAL SHARES. In the event that, during the term of this
Agreement:
(a) any stock dividend, stock split, reclassification,
readjustment or other change is declared or made in the capital
structure of Pledgee, all new, substituted and additional shares, or
other securities, issued by reason of any such change and received by
Pledgor or to which Pledgor shall be entitled shall be immediately
delivered to the
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Pledgee, together with stock powers endorsed in blank by Pledgor, and
shall thereupon constitute Stock to be held by the Pledgee under the
terms of this Agreement; and
(b) subscriptions, warrants or any other rights or options
shall be issued in connection with the Stock, all new stock or other
securities acquired through such subscriptions, warrants, rights or
options by Pledgor shall be immediately delivered to the Pledgee and
shall thereupon constitute Stock to be held by the Pledgee under the
terms of this Agreement.
4. DEFAULT. In the event of a default under the terms of the Note
or a default under the terms of this Agreement (any of such occurrences being
referred to as an "Event of Default"), after ten (10) days' written notice to
Pledgor, Pledgee shall have the right to take title to the Stock and shall
deposit the Stock as treasury stock of Lahaina Acquisitions, Inc. The value of
such Stock shall be determined by the closing price of shares of common stock
of Lahaina Acquisitions, Inc. as quoted on the OTC Bulletin Board on the date
the title of such shares is transferred to Pledgee. In the event the value of
shares is not sufficient to pay such expenses, interest, principal, obligations
and damages, the Pledgor shall not be liable to the Pledgee for any such
deficiency.
5. EXPENSES. Each party shall be responsible for the payment of
their expenses incurred in connection with this Agreement.
6. RETURN OF STOCK TO PLEDGOR. Upon payment in full of all
principal and interest on the Note and full performance by the Pledgor of all
covenants, undertakings and obligations under the Note, the Pledgee shall
immediately return to the Pledgor all of the then remaining Stock and all
rights received by the Pledgee as agent for the Pledgor as a result of its
possessory interest in the Stock.
7. PLEDGOR'S OBLIGATIONS ABSOLUTE. The obligations of the Pledgor
under this Agreement shall be direct and immediate and not conditional or
contingent upon the pursuit of any remedies against any other person, nor
against other security or liens available to the Pledgee or its successors,
assigns or agents. The Pledgor hereby waives any right to require that an
action be brought against any other person or to require that resort be had to
any security or to any balance of any deposit account or credit on the books of
the Pledgee in favor of any other Person prior to any exercise of rights or
remedies hereunder, or to require resort to rights or remedies of the Pledgee
in connection with the Note.
8. VOTING RIGHTS.
(a) For so long as the Note remains unpaid, after an Event
of Default, (i) the Pledgee may, upon five (5) days' prior written
notice to the Pledgor of its intention to do so, exercise all voting
rights, and all other ownership or consensual rights of the Stock, but
under no circumstances is the Pledgee obligated by the terms of this
Agreement to exercise such rights, and (ii) Pledgor hereby appoints
the Pledgee, which appointment shall be effective on the fifth day
following the giving of notice by the Pledgee as provided in the
foregoing Section 8(a)(i), Pledgor's true and lawful attorney-in-fact
and IRREVOCABLE PROXY to vote the Stock in any manner the Pledgee
deems advisable
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for or against all matters submitted or which may be submitted to a
vote of shareholders. The power-of-attorney granted hereby is coupled
with an interest and shall be irrevocable.
(b) For so long as Pledgor shall have the right to vote the
Stock, Pledgor covenants and agrees that it will not, without the
prior written consent of the Pledgee vote or take any consensual
action with respect to the Stock which would constitute a default
under this Agreement.
9. DIVIDENDS. The Pledgor shall be entitled to receive and retain
any and all dividends and other payments in respect of the Stock provided,
however, that any and all:
(a) dividends paid or payable other than in cash, and
instruments and other property received or receivable in respect the
Stock;
(b) dividends and other distributions paid or payable in
cash in respect of any Stock in connection with a partial or total
liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and
(c) cash paid or payable in redemption of, or in exchange
for, any Stock,
shall be delivered to the Pledgee to hold as collateral and shall, if received
by the Pledgor, be received in trust for the benefit of the Pledgee and be
segregated from the other property or funds of the Pledgor (with any necessary
endorsement).
10. RELEASE OF STOCK.
(a) ESTABLISHMENT OF BROKERAGE ACCOUNT. Pledgor and Pledgee
shall on or before January ___, 2000 establish a joint account (the
"Escrow Fund") with Xxxxxx Xxxxxxx Xxxx Xxxxxx ("Xxxxxx Xxxxxxx") and
shall deposit the Stock in the Escrow Fund. Upon the opening of the
joint account, the parties agree to deliver joint written instructions
to Xxxxxx Xxxxxxx to dispose of the Stock in accordance with the terms
of this Agreement. On December 31, 2000, all Stock remaining in the
Escrow Fund shall be delivered to Pledgee unless any Disputes (as
defined below) remain unpaid, a number of shares of Stock equal to the
aggregate dollar amount of such Disputes (as shown in the Notice of
Dispute) shall be retained by Xxxxxx Xxxxxxx in the Escrow Fund (and
the balance paid to Pledgee in such proportions). Pledgor's authorized
representative and Pledgee's authorized representative shall be named
in the joint instructions delivered to Xxxxxx Xxxxxxx. Upon receipt of
written instructions from either Pledgor's authorized representative
or Pledgee's authorized representative that a condition under Section
10(b) has occurred, Xxxxxx Xxxxxxx shall at the end of such business
day sell that amount of shares from the Escrow Fund as indicated in
the written instructions and shall hold the proceeds received from
such sale for a period of at least five (5) business days. Upon joint
instructions of Pledgor and Pledgee, Xxxxxx Xxxxxxx shall be
instructed in writing to release the proceeds received from such sale
to the appropriate party.
(b) CONDITIONS FOR RELEASE OF ESCROW FUND. Pledgor or
Pledgee may deliver unilateral instructions for the sale or delivery
of stock as follows:
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(i) By the Pledgor provided the sale will generate net
proceeds, after the deduction of expenses and commissions, of $4.00
per share which proceeds shall reduce the outstanding principal of the
Note with the remainder of sales proceeds paid to Pledgor;
(ii) By the Pledgor in the event that the liabilities set
forth on Exhibit A attached hereto are not paid in accordance with
Section 6(d) of the Purchase Agreement, then Buyer may sell an amount
of shares of stock from the Escrow Fund which will generate net
proceeds, after the deduction of expenses and commissions, up to an
amount equal to the unpaid amount of such liabilities plus a fee to be
retained by Pledgor equal to 40% of such liabilities provided that the
net proceeds (other than the 40% fee) are used by Pledgor to pay in
full such unpaid liabilities; or
(iii) By the Pledgee if the value of the Stock (as measured
by the closing price of the shares of common stock of Lahaina
Acquisitions, Inc. as quoted on the OTC Bulletin Board) for thirty
(30) consecutive days is less than 102% of the principal amount of the
Note in accordance with and subject to the provisions of Section 2(a)
of the Note.
Notwithstanding the foregoing, the parties hereby agree that
shares of stock from the Escrow Fund may only be sold in increments of
1,000 shares. Notice of instructions to Xxxxxx Xxxxxxx by one party
shall be simultaneously provided to the other party.
(c) PAYMENT OF LIABILITIES. In the event that shares of stock
from the Escrow Fund are sold pursuant to Section 10(b)(ii), Pledgor shall use
the proceeds received from the sale of such stock to pay for the liabilities
which were not paid by Pledgee in accordance with Section 6(d) of the Purchase
Agreement and for the payment of expenses and commissions associated with such
sale of stock and the 40% fee to which Pledgor is entitled to receive under
Section 10(b)(ii) above. Pledgor shall furnish Pledgee within five (5) days
from the receipt of such proceeds with sufficient evidence of the payment in
full of such liabilities. Pledgor hereby agrees to indemnify, defend and hold
Pledgee harmless from and against any and all claims, losses, liabilities,
costs and expenses (including attorneys' fees and expenses) arising out a
breach of Pledgor of this Section 10(c).
(d) CLAIMS. If either party dispute the occurrence of any of the
conditions set forth in Section 10(b) of this Agreement (a "Dispute"), the
disputing party shall deliver a written notice of a Dispute (a "Notice of
Dispute") to the other party within twenty-four (24) hours from the receipt of
notice from the other party that a condition for the release of the shares of
stock from the Escrow Fund has occurred. Such Notice of Dispute shall specify
the nature of any Dispute, the claims of each party to the Dispute and shall
specify the amount and nature of any damages, if any, sought to be recovered as
a result of any alleged claim. The parties hereby agree and acknowledge that
all Disputes shall be resolved between the parties. If the parties are unable
to resolve such Dispute within one (1) business day from the receipt of a
Notice of Dispute then the parties hereby agree
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that the Dispute shall be resolved by the decision of an independent third
party selected by the parties (the "Arbitrator") in the Arbitrator's sole
discretion within five (5) business days from the date of the Notice of
Dispute. In the event that the parties are unable to agree upon an Arbitrator,
Pledgor and Pledgee hereby agree that Xxxx XxXxxxx, Esq. shall resolve the
Dispute as the Arbitrator. The parties hereby agree that the decision by the
Arbitrator shall final and binding on all parties hereto. Pledgor and the
Pledgee may enforce any final determination in any state or federal court
located in Atlanta, Georgia. The parties hereby agree to issue joint written
instructions to Xxxxxx Xxxxxxx for the release of the proceeds of the sale of
stock from the Escrow Fund promptly upon the resolution of any Dispute by the
Arbitrator hereunder. If a Dispute has not arisen between the parties under
this Agreement, the parties hereby agree to issue joint written instructions to
Xxxxxx Xxxxxxx for the release of the proceeds of the sale of the stock from
the Escrow Fund no later than the clearance of such sale of stock by Xxxxxx
Xxxxxxx.
11. NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be deemed given when (a) delivered
personally, (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested,
(c) one (1) business day after delivery by a recognized express overnight
courier service or (d) three (3) days after being mailed by certified mail,
return receipt requested, to the parties at the following addresses:
If to the Pledgor: Xx. Xxxxxx X. Xxxxxxxx
Beachside Holding, LLC
0000 Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Facsimile Number:
with a copy to: Xxxxxx X. Xxxxxxx, Esquire
Xxxxxxx, Xxxxxx & Green
The Lenox Building, Suite 1400
0000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
If to the Pledgee: L. Xxxxx Xxxxxxx
Lahaina Acquisitions, Inc.
Suite 220
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Facsimile Number:
with a copy to: Xxxxxx X. Xxxxxxxxx, Esquire
Xxxxx Xxxx LLP
Suite 2100
Peachtree Center South Tower
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Facsimile Number: (000) 000-0000
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12. BINDING AGREEMENT. The provisions of this Agreement shall be
construed and interpreted, and all rights and obligations of the parties hereto
determined, in accordance with the laws of the State of Georgia. This
Agreement, together with all documents referred to herein including the Escrow
Agreement, constitutes the entire Agreement between the Pledgor and the Pledgee
with respect to the matters addressed herein and may not be modified except by
a writing executed by the Pledgee and delivered by the Pledgee to the Pledgor.
This Agreement may be executed in multiple counterparts, each of which shall be
deemed an original but all of which, taken together, shall constitute one and
the same instrument.
13. SEVERABILITY. If any paragraph or part thereof shall for any
reason be held or adjudged to be invalid, illegal or unenforceable by any court
of competent jurisdiction, such paragraph or part thereof so adjudicated
invalid, illegal or unenforceable shall be deemed separate, distinct and
independent, and the remainder of this Agreement shall remain in full force and
effect and shall not be affected by such holding or adjudication.
14. ASSIGNMENT, BINDING EFFECT. Except with the prior written
consent of the Pledgee, no assignment or transfer by the Pledgor of the
Pledgor's rights and obligations under this Agreement may be made. In addition,
Pledgee may not assign its rights under this Agreement to a third party except
with the prior written consent of the Pledgor, which shall not be unreasonably
withheld. This Agreement shall be binding upon the parties to this Agreement
and their respective successors and assigns, shall inure to the benefit of the
parties to this Agreement and their respective permitted successors and assigns
and any reference to a party to this Agreement shall also be a reference to a
successor or assign.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original.
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IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
affixed their seals, by and through their duly authorized officers, as of the
day and year first above written.
PLEDGOR:
BEACHSIDE HOLDING, LLC
By /s/
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Name Xxxxxx X. Xxxxxxxx
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Title Manager
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PLEDGEE:
LAHAINA ACQUISITIONS, INC.
By /s/
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Name L. Xxxxx Xxxxxxx
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Title President
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