Exhibit 1.1.3.
STOCK PLEDGE AND ESCROW AGREEMENT
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THIS AGREEMENT, made this 23 day of November, 2004, by and between
XXXXXX BEAUMONT, INC., a Nevada corporation ("MBI") on behalf of itself and its
shareholders; XXXX XXXXXXXX ("Xxxxxxxx"); and WILLIAMS, PARKER, XXXXXXXX, XXXXX
& XXXXXX (hereinafter the "Escrow Agent").
WITNESSETH:
WHEREAS, Xxxxxxxx is a representative of an alliance of shareholders of
Pan American Energy Corporation (PEA), a publicly held corporation; and
WHEREAS, PEA entered into merger negotiations with MBI; and
WHEREAS, a part of the consideration to the then shareholders of MBI
(the Original Shareholders) to consent to the merger of MBI and PEA, Xxxxxxxx
agreed to pay $3,000,000 to MBI to capitalize MBI; and
WHEREAS, based upon Xxxxxxxx'x entrance into a Promissory Note with a
principal balance of $3,000,000, the Original Shareholders consented to the
merger of MBI and PEA, with MBI the surviving corporation and with the Original
Shareholders receiving 13,000,000 shares of MBI common stock and the Xxxxxxxx
controlled shareholders of PEA receiving 27,000,000 shares of MBI common stock;
and
WHEREAS, Xxxxxxxx has paid principal in the amount of $1,800,000 on the
Promissory Note but is delinquent in payments on the Promissory Note to the
extent of default; and
WHEREAS, MBI has delivered to Xxxxxxxx notice of such delinquency under
the Promissory Note; and
WHEREAS, the relative value of the Original Shareholders' shares of MBI
has suffered because of the delinquent payments of the Promissory Note; and
WHEREAS, MBI and Xxxxxxxx have agreed to modify the Promissory Note
(such modified Promissory Note shall be referred to herein as the "Note") to
provide for extended payment terms on the remaining principal balance of the
Note; and
WHEREAS, in consideration of and exchange for the Note and the waiver
of past penalties and default interest, Xxxxxxxx has agreed to pledge 2,400,000
shares of common stock of MBI to be used at the discretion of Xxxxxx Beaumont,
Inc., subject to board approval, (the "Pledge Shares") as security for the
performance of Xxxxxxxx'x obligation under the Note; and
WHEREAS, in exchange for the Note and the other terms set forth above,
including the Pledge Shares, MBI and the Original Shareholders have waived the
right to enforce the terms of the original Promissory Note; and
WHEREAS, the parties hereto intend to perfect the security interest
established herein by placing the Pledged Shares in escrow with Escrow Agent.
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IT IS THEREFORE AGREED:
1. PLEDGE. In consideration of the agreement referred to, and other
valuable considerations, and for valid business reasons acknowledged by the
parties hereto, Xxxxxxxx hereby grants a security interest to Xxxxxx Beaumont,
Inc. in instruments of the following description:
Certificate(s) representing 2,400,000 shares of common stock
of MBI.
Williams, Parker, Xxxxxxxx, Xxxxx & Xxxxxx ("Escrow Agent"), shall hold
the Pledged Shares as security for the performance of Xxxxxxxx'x obligations
under the Note between Xxxxxxxx, as maker, and MBI, as lender, in the original
principal amount of $3,000,000 (the "Note").
2. DIVIDENDS, DISTRIBUTIONS AND SALE. During the term of this pledge,
all dividends or other amounts payable arising from, payable on, or distributed
with respect to the record ownership of Xxxxxxxx to the Pledged Shares shall be
paid to or received by Xxxxxxxx, whether in cash, property, stock or otherwise.
At any time Xxxxxxxx fails to timely pay a payment on the Note and Escrow Agent
receives written notice thereof from MBI, Xxxxxxxx shall be in default hereunder
and all dividends or other amounts payable arising from, payable on, or
distributed with respect to the record ownership of Xxxxxxxx to the Pledged
Shares shall be paid to be used at the discretion of Xxxxxx Beaumont, Inc.,
subject to Board approval, whether in cash, property, stock or otherwise.
3. VOTING RIGHTS. During the term of this pledge, and so long as
Xxxxxxxx is not in default in the performance of any of the terms of this
Agreement and the Note, Xxxxxxxx shall have the right to vote the Pledged Shares
on all corporate questions. At any time prior to delivery of the Pledged Shares
to the Original Shareholders, in the event of a default by Xxxxxxxx under the
Note or any period of delinquency thereon, Xxxxxxxx shall not be entitled to
vote the Pledged Shares or exercise all other rights associated therewith,
including the right to be given notice of, and to participate in all meetings of
the shareholders of the Corporation.
4. REPRESENTATIONS. Xxxxxxxx warrants and represents there are no
restrictions upon the transfer of any of the Pledged Shares, that the Pledged
Shares are free trading, and that Xxxxxxxx has the right to transfer the Pledged
Shares to the MBI free of any other encumbrances. Xxxxxxxx will defend the
Pledged Shares against all claims and demands of all persons at any time
claiming an interest therein, except those referred to herein.
5. RELEASE. The Pledged Shares shall be released to Xxxxxxxx by the
Escrow Agent upon written notice from MBI that Xxxxxxxx has paid an installment
payment on the Note entitling Xxxxxxxx to a release of some of the Pledged
Shares in accordance with the schedule set forth on Exhibit A hereto. Such
notice shall state the amount of any loan payment and the amount of any Pledged
Shares to be released to Xxxxxxxx. At such time as the obligations of Xxxxxxxx
secured hereby have been fully performed, MBI shall deliver all remaining
certificates representing the Pledged Shares then held in pledge by Escrow Agent
to Xxxxxxxx. In the event that Xxxxxxxx has not timely performed the obligations
set forth under the Note and hereunder, the certificates representing the
remaining Pledged Shares shall be released by Escrow Agent to MBI. In no event
shall the Pledged Shares be subject to this Agreement after December 31, 2005.
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6. WARRANTIES OF XXXXXXXX. Xxxxxxxx hereby represents and warrants the
following:
a. The Pledged Shares are legally issued and outstanding;
b. The Pledged Shares are not subject to return to MBI because
of death of the holder, failure of the holder to continue employment or any
other similar restriction; and
c. The Pledged Shares represent less than 50% of the
outstanding shares of MBI.
7. DEFAULT. In the event that Xxxxxxxx defaults in the performance of
any of the terms of this Agreement, or in the performance of the Note, MBI shall
be entitled to declare all obligations secured hereby immediately due and
payable without notice and may thereupon direct the Escrow Agent to deliver
possession of the Pledged Shares to MBI for distribution to the secured parties
in the manner set forth herein and MBI shall have the rights and remedies
provided in the Uniform Commercial Code in the State of Florida at the date of
this Agreement. If an event described above occurs, MBI shall give written
notice by certified mail of such breach to Xxxxxxxx. All expenses of recovering
and disposing of the collateral shall be borne by Xxxxxxxx. The requirement of
the reasonable notice shall be met if such notice is mailed postage prepaid to
Xxxxxxxx at the address shown at the beginning of this Agreement, or at any
other address shown on the records of MBI, at least five (5) days before the
time MBI notifies the Escrow Agent in writing to deliver possession of the
Pledged Shares to the MBI on behalf of the secured parties. MBI may elect, at
its option, to have Escrow Agent hold any of the Pledged Shares subject to the
Default for the account of the secured parties until the expiration of the Note
in order to facilitate delivery of the Pledged Shares to the secured parties. At
MBI's option, MBI may cure any default existing under this Security Agreement
and may charge Xxxxxxxx for any expense or costs thereby sustained.
8. NOTICE. Notices from either party to the other, or to the Escrow
Agent, shall be mailed postage prepaid in a sealed envelope via certified mail
addressed as follows:
If to Xxxxxxxx: Mr. Xxxx Xxxxxxxx
1 West 0000 Xxx Xxxxx Xxxx
Xxxxx Xxxxx, XX 00000
If to MBI: Xxxxxx Beaumont, Inc.
0000 Xxxxxxxxx Xx., Xxxxx 000
Xxxxxxxx, XX 00000
If to Escrow Agent:
Williams, Parker, Xxxxxxxx, Xxxxx & Xxxxxx
c/o Xxxx X. Xxxxx
000 X. Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
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9. ASSIGNMENT. This Agreement shall be binding on, and shall inure to
the benefit of, the parties to it and their respective heirs, legal
representatives, successors and assigns. Any assignment by Xxxxxxxx shall not
relieve Xxxxxxxx of any of Xxxxxxxx'x obligations or duties under this
Agreement.
10. XXXXXXXX'X COVENANTS. Xxxxxxxx agrees that as long as the Pledged
Shares are held under this Agreement, Xxxxxxxx will promptly pay when due all
taxes and assessments upon the Pledged Shares, upon dividends or distributions
with respect to the Pledged Shares or upon the Note or any other note or notes
evidencing the obligation secured hereby.
11. FINANCING STATEMENT. Xxxxxxxx authorizes the MBI to file, on behalf
of the secured parties, in Florida financing statements signed only by MBI
describing the Pledged Shares, and to amend the financing statement from time to
time to cover the changes in the Pledged Shares, and to do all other acts and
things that the MBI may request to establish and maintain any valid security
interest in the Pledged Shares free of all other liens and claims whatsoever to
secure the payment of the Note.
12. WAIVER. No waiver by MBI or the Original Shareholders of any
default shall operate as a waiver of any other default or of the same default on
a future occasion. No delay or omission on the part of the MBI in exercising any
right of remedy shall operate as a waiver hereof and no single or partial
exercise by MBI of any right or remedy shall preclude any other or further
exercise thereof or the exercise of any other right or remedy. Time is of the
essence of this Agreement. The provisions of this Agreement are cumulative and
in addition to the provisions of any liability on the Note or any other note or
other writing evidencing any liability secured by this Agreement or otherwise,
and MBI shall have all of the benefits, rights and remedies of and under any
liability and the Note or any other note or other writing evidencing any
liability secured hereby. Any renewal, extension or modification which the MBI
may grant with respect to the indebtedness under the Note, and any surrender,
compromise, release, renewal, extension, exchange, or substitution which the MBI
may grant or consent to in respect of any of the Pledged Shares given as
security for the Note, shall not in any manner affect or impair any of the
rights and powers given to MBI.
13. CONSTRUCTION. All of the terms used herein which are defined in the
Uniform Commercial Code of Florida have, except where the context indicates
otherwise, the same meaning herein as in said Code, and this Agreement and the
obligations hereunder, including matters of construction, validity and
performance, shall be governed by the laws of Florida. Wherever used herein, the
singular shall include the plural, the plural the singular, and the use of any
gender shall include all genders. Paragraph titles are used for convenience and
are not to be considered in construing the provisions of the Agreement.
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14. DUTIES OF ESCROW AGENT. Xxxxxxxx and MBI designate Williams,
Parker, Xxxxxxxx, Xxxxx & Xxxxxx, Professional Association, as Escrow Agent, to
hold the Pledged Shares, and Escrow Agent is authorized to deliver the Pledged
Shares to the Original Shareholders in the event of the exercise of the MBI's
rights under paragraph 6 of this Stock Pledge Agreement, or to redeliver the
Pledged Shares to Xxxxxxxx in the event of termination of this Stock Pledge
Agreement pursuant to paragraph 5. Escrow Agent shall not be responsible for
determining entitlement to the Pledged Shares between Xxxxxxxx and MBI. If any
dispute or difference arises between Xxxxxxxx and MBI, or if any conflicting
demand shall be made upon Escrow Agent, Escrow Agent shall not be required to
determine the same or take any action in the matter, but Escrow Agent may await
settlement of the controversy by final, appropriate legal proceedings, or
otherwise, as it may require, or Escrow Agent may file a suit in interpleader in
Circuit Court in and for Sarasota County, Florida, for the purpose of having the
respective rights of the parties adjudicated, and may deposit with the court the
Pledged Shares. Upon institution of such interpleader suit, depositing the
Pledged Shares with the court, and notice to the parties by personal service, or
in accordance with the order of the court, Escrow Agent shall be fully released
and discharged from all further obligations with respect to the Pledged Shares
so deposited. Xxxxxxxx and MBI agree to pay to Escrow Agent, equally, on demand,
any and all costs and reasonable attorneys' fees incurred by Escrow Agent in
connections with such interpleader, and hold Escrow Agent harmless from any
obligation under this Agreement.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the day and year first above written.
XXXXXX BEAUMONT, INC. ("MBI")
By:
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As Its: CHIEF EXECUTIVE OFFICER
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XXXX XXXXXXXX ("XXXXXXXX")
WILLIAMS, PARKER, XXXXXXXX, XXXXX &
GETZEN
By:
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"ESCROW AGENT"
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EXHIBIT A
SCHEDULE OF ESCROW RELEASE
MBI shall direct Escrow Agent to release to Xxxxxxxx the Pledged Shares on the
following schedule:
NOVEMBER 30, 2004. For the payment of $300,000 due on November 30, 2004, 2
shares for each dollar paid if the payment is made in full. If the payment is
not made in full, then, provided the payment exceeds $150,000, 1.8 shares for
each dollar of payment (except that shares will be released in 10,000 share
blocks and partial blocks shall be rounded downward to the nearest 10,000
shares). In the event the minimum payment of $150,000 is paid by Xxxxxxxx on or
before the due date, then Xxxxxxxx shall be entitled to 1.8 shares for each
dollar of payment prior to January 31, 2005 (except that shares will be released
in 10,000 share blocks and partial blocks shall be rounded downward to the
nearest 10,000 shares), not to exceed 540,000 shares with the remainder of the
600,000 Pledged Shares allocated to the November 30, 2004 payment to be released
to the secured parties. In the event the minimum payment of $150,000 is not
paid, MBI shall direct Escrow Agent to release to the secured parties, as
determined by MBI, the entire 600,000 Pledged Shares allocated to the November
30, 2004 payment.
DECEMBER 31, 2004. For the payment of $300,000 due on December 31, 2004, 2
shares for each dollar paid if the payment is made in full. If the payment is
not made in full, then, provided the payment exceeds $150,000, 1.8 shares for
each dollar of payment (except that shares will be released in 10,000 share
blocks and partial blocks shall be rounded downward to the nearest 10,000
shares). In the event the minimum payment of $150,000 is paid by Xxxxxxxx on or
before the due date, then Xxxxxxxx shall be entitled to 1.8 shares for each
dollar of payment prior to February 28, 2005 (except that shares will be
released in 10,000 share blocks and partial blocks shall be rounded downward to
the nearest 10,000 shares), not to exceed 540,000 shares with the remainder of
the 600,000 Pledged Shares allocated to the December 31, 2004 payment to be
released to the secured parties. In the event the minimum payment of $150,000 is
not paid, MBI shall direct Escrow Agent to release to the secured parties, as
determined by MBI, the entire 600,000 Pledged Shares allocated to the December
31, 2004 payment.
JANUARY 31, 2005. For the payment of $300,000 due on January 31, 2005, 2 shares
for each dollar paid if the payment is made in full. If the payment is not made
in full, then, provided the payment exceeds $150,000, 1.8 shares for each dollar
of payment (except that shares will be released in 10,000 share blocks and
partial blocks shall be rounded downward to the nearest 10,000 shares). In the
event the minimum payment of $150,000 is paid by Xxxxxxxx on or before the due
date, then Xxxxxxxx shall be entitled to 1.8 shares for each dollar of payment
prior to March 31, 2005 (except that shares will be released in 10,000 share
blocks and partial blocks shall be rounded downward to the nearest 10,000
shares), not to exceed 540,000 shares with the remainder of the 600,000 Pledged
Shares allocated to the January 31, 2005 payment to be released to the secured
parties. In the event the minimum payment of $150,000 is not paid, MBI shall
direct Escrow Agent to release to the secured parties, as determined by MBI, the
entire 600,000 Pledged Shares allocated to the January 31, 2005 payment.
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FEBRUARY 28, 2005. For the payment of $300,000 due on February 28, 2005, 2
shares for each dollar paid if the payment is made in full. If the payment is
not made in full, then, provided the payment exceeds $150,000, 1.8 shares for
each dollar of payment (except that shares will be released in 10,000 share
blocks and partial blocks shall be rounded downward to the nearest 10,000
shares). In the event the minimum payment of $150,000 is paid by Xxxxxxxx on or
before the due date, then Xxxxxxxx shall be entitled to 1.8 shares for each
dollar of payment prior to March 31, 2005 (except that shares will be released
in 10,000 share blocks and partial blocks shall be rounded downward to the
nearest 10,000 shares), not to exceed 540,000 shares with the remainder of the
600,000 Pledged Shares allocated to the February 28, 2005 payment to be released
to the secured parties. In the event the minimum payment of $150,000 is not
paid, MBI shall direct Escrow Agent to release to the secured parties, as
determined by MBI, the entire 600,000 Pledged Shares allocated to the February
28, 2005 payment.
MARCH 31, 2005. For the balance payment due on March 31, 2005, 2 shares for each
dollar paid if the payment is made in full. If the payment is not made in full,
MBI shall direct Escrow Agent to release to the secured parties, as determined
by MBI, the entire amount of Pledged Shares allocated to the March 31, 2005
payment. Delinquent payments from prior due dates will not be considered a
portion of the balance payment entitling Xxxxxxxx to receive a release of the
Pledged Shares.
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