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CUSIP No. 141834 10 1 Page 9 of 17
EXHIBIT B
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement") is made this 31st day of
March, 1998, by XXXXXX X. XXXXXXX, a Georgia resident (the "Pledgor"), in favor
of CARIBBEAN CIGAR COMPANY, a Florida corporation (the "Secured Party").
W I T N E S S E T H:
WHEREAS, Pledgor has borrowed $500,000.00 from Secured Party (the "Loan"),
evidenced by that certain Promissory Note of even date herewith (the "Note");
and
WHEREAS, the proceeds of the Loan have been used by Pledgor to acquire
1,250,000 shares of the common stock of Secured Party (the "Shares");
NOW, THEREFORE, in consideration of the making of the Loan and for other
good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged, the parties agree as follows:
8. Grant of Security Interest. To secure the Indebtedness (as defined
below), the Pledgor hereby pledges, hypothecates, assigns, transfers, sets over
and delivers to the Secured Party, and grants to the Secured Party a first
priority security interest in the Shares and all proceeds thereof (all such
securities being hereinafter collectively referred to as the "Pledged
Securities").
9. Delivery of Pledged Securities. Simultaneously with the execution of
this Agreement, the Pledgor shall deliver the certificate or certificates
evidencing the Pledged Securities to the Secured Party, accompanied by stock
powers duly executed in blank.
10. Indebtedness Secured. The security interest granted herein shall
secure the following (all such obligations being hereinafter referred to as the
"Indebtedness"): (a) the indebtedness evidenced by the Note, including all
interest and any other money due or which may become due thereon and (b) any
renewals of the indebtedness evidenced by the Note, and any extensions or
modifications of payments due under the terms of the Note.
11. Exercise of Voting and Other Rights. Until the occurrence of an Event
of Default (as defined below), the Pledgor shall be entitled to exercise all
voting and other corporate rights pertaining to the Pledged Securities. After
the occurrence of any Event of Default, the Secured Party shall have the right
and be entitled to exercise all voting rights of the Pledged Securities.
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12. Dividends. Unless an Event of Default (as defined below) shall have
occurred and have been declared, Pledgor shall be entitled to collect and
receive for his own use all dividends paid on or with respect to the Pledged
Securities. Upon the occurrence and during the continuance of an Event of
Default hereunder, all rights of the Pledgor to receive the dividends which
Pledgor is authorized to receive and retain pursuant to this Section shall
cease, and all such rights thereupon shall become vested in the Secured Party,
which shall have the sole and exclusive right and authority to receive and
retain the dividends which the Pledgor shall otherwise be authorized to retain
pursuant to this Section.
13. Event of Default. The following shall constitute an Event of Default
hereunder (unless the conditions which resulted in the Event of Default are
corrected within 10 days after receipt of the Secured Party's notice of
default): (a) the failure to pay when due any portion of the Indebtedness, or
(b) the default by Pledgor in the performance of any of Pledgor's covenants
herein.
14. Remedies.
(a) Upon the occurrence of an Event of Default, Secured Party may
pursue any and all remedies which may be available by agreement, under law, or
otherwise, including, without limitation, the right to foreclose and take
ownership and possession of the Pledged Securities.
(b) NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE
OBLIGATIONS OF THE PLEDGOR WHICH ARE EVIDENCED BY THIS AGREEMENT (INCLUDING,
WITHOUT LIMITATION, ATTORNEYS' FEES AND LIABILITY FOR BREACH OF ANY AGREEMENT,
WARRANTY OR COVENANT HEREUNDER) ARE ABSOLUTELY NON-RECOURSE AS TO THE PLEDGOR,
SUBJECT ONLY TO THE RIGHTS WHICH THE SECURED PARTY HAS PURSUANT TO THIS
AGREEMENT IN THE PLEDGED SECURITIES, AND THE PLEDGOR SHALL NOT OTHERWISE BE
LIABLE FOR THE INDEBTEDNESS UPON THE OCCURRENCE OF AN EVENT OF DEFAULT
HEREUNDER. THE SECURED PARTY AGREES TO LOOK SOLELY TO THE PLEDGED SECURITIES, OR
THE PROCEEDS THEREOF, FOR THE PAYMENT OF THE OBLIGATIONS OF THE PLEDGOR
HEREUNDER. THE PLEDGOR SHALL NOT BE LIABLE FOR ANY DEFICIENCY JUDGMENT.
15. Further Assurances. The Pledgor agrees that at any time, and from time
to time, upon written request of the Secured Party, the Pledgor will execute and
deliver such further documents and do such further acts and things as Secured
Party may reasonably request to effect the purposes of this Agreement.
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16. Remedies Cumulative. The Pledgor agrees that the rights, powers and
remedies given to the Secured Party by this Agreement are cumulative and not
exclusive of any other rights, powers or remedies available to Secured Party.
17. Payment and Discharge of Indebtedness; Return of Pledged Securities.
Pledgor and Secured Party acknowledge that the terms of the Note permit the
Predgor to prepay the Note in full or in part at any time without notice,
penalty, prepayment fee, or payment of unearned interest. Accordingly, for each
$0.40 in principal of the Note prepaid by the Pledgor from time to time, the
Secured Party shall return to Pledgor one Share of the Pledged Securities.
Following any such prepayment of the Note by Pledgor, such Shares shall no
longer be deemed "Pledged Securities" for the purposes of this Agreement. Upon
full payment and discharge of the Indebtedness, the Secured Party shall return
all such Pledged Securities that then may be in its custody hereunder to the
Pledgor or to whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction shall direct.
18. Miscellaneous. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Georgia, shall be
binding upon the Pledgor, and its successors and assigns, and may not be
terminated or modified orally but only in writing making specific reference
hereto and signed by all the parties hereto. Headings in this Agreement are for
reference purposes only and shall not limit or otherwise affect the meaning
thereof. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
agreement.
IN WITNESS WHEREOF, the parties hereto have each duly executed and
delivered this Agreement as of the date first above written.
PLEDGOR:
/s/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX
SECURED PARTY:
CARIBBEAN CIGAR COMPANY
By:/s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: CFO
