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EXHIBIT 10.11
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into on
the 16th day of August, 1999, by and among LAHAINA ACQUISITIONS, INC., a
Colorado corporation ("Lahaina"), XXXX No. 1, Inc., a Georgia corporation
("XXXX 1"), MONGOOSE INVESTMENTS, LLC, a Georgia limited liability company
("Mongoose"), THE ACCENT GROUP, INC., a Georgia corporation ("Accent"), ACCENT
MORTGAGE SERVICES, INC., a Georgia corporation ("AMSI") and XXXXXX, XXXXXXX &
XXXXXX, P.C., a Georgia professional corporation ("Escrow Agent").
WITNESSETH:
WHEREAS, XXXX 1, a wholly-owned subsidiary of Lahaina, and Accent have
agreed to merge, with Accent surviving the merger, pursuant to the terms and
conditions of that certain Agreement and Plan of Merger among Lahaina, XXXX 1,
Mongoose, Accent and AMSI, to be dated July 21, 1999 (the "Merger"), and
delivered to Escrow Agent pursuant hereto (the "Merger Agreement");
WHEREAS, the parties have agreed to place all of the closing documents
with Escrow Agent for delivery (i) upon receipt of that certain consent to the
Merger by and between Lahaina and GCA Strategic Investment Fund, Ltd., a
Bermuda corporation ("GCA") to be attached to the Merger Agreement as Exhibit K
(the "GCA Consent") and (ii) payment of the Lahaina payables, as set forth on
Schedule 10.1 to the Merger Agreement (the "Delivery Date");
WHEREAS, in an effort to expedite the Closing, Lahaina has agreed to
temporarily waive receipt of the estoppel certificates as a closing condition
(the "Estoppel Certificates"), as set forth in Section 10.3 of the Merger
Agreement, for a period of 45 calendar days from the date hereof;
WHEREAS, in an effort to expedite the Closing, Lahaina has agreed to
temporarily waive receipt of the documents to be provided at or prior to the
Closing pursuant to Section 10.3(d)-(g) (the "Real Estate Documents") until
such time as such documents are required to release the Merger Shares pursuant
to Schedule 4.1 to the Merger Agreement; and
WHEREAS, the parties set forth above have agreed to require the letter
of the Shareholders and the Beneficial Owners setting forth their respective
representations, warranties and covenants, attached as Exhibit A hereto, be
signed by all Shareholders and Beneficial Owners as a condition to closing.
1. Deferral of Certain Closing Conditions.
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A. Unless otherwise altered or waived by the then
current Board of Lahaina, failure to provide the Estoppel Certificates within
45 days of the date hereof will constitute a breach under the Merger Agreement.
B. Unless otherwise altered or waived by the then
current Board of Lahaina, the Conditions of Release, as set forth on Schedule
4.1 to the Merger Agreement, for any property listed on such schedule will not
be deemed satisfied until the Real Estate Documents corresponding with such
property have been provided to Lahaina, as set forth more fully in the Merger
Agreement.
2. Additional Conditions to Closing. The obligations of Lahaina
and XXXX 1 to effect the Merger shall be subject to (i) the execution of the
letter attached as Exhibit A hereto by the Shareholders and Beneficial Owners
at or prior to the Closing (ii) the execution of an Amendment to the Agreement
and Plan of Merger in a form mutually acceptable to the parties to the Merger
Agreement, and (iii) the execution of a mutually acceptable agreement with GCA
LNB.
3. Deliveries. Contemporaneously with the execution of this
Escrow Agreement, the parties have delivered to Escrow Agent, and Escrow Agent
acknowledges the receipt of, the following original documents, each dated July
21, 1999, August 16, 1999 or undated, and properly executed on behalf of the
applicable parties (collectively, the "Closing Documents"):
A. The Merger Agreement, together with the Schedules and
Exhibits thereto;
B. The Amended Agreement and Plan of Merger, dated
August 16, 1999, by and among the parties listed in
the Preamble above;
C. Resignations as directors of the Lahaina of Xxxxxxx
X. Xxxxx, Xxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxx and D.
Xxxxxx Xxxxxx;
D. Resolutions of directors of Lahaina electing new
directors;
E. Opinions of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP,
of Holland & Xxxx LLP and of Xxxxxx, Xxxxxxx &
Xxxxxx, P.C.;
F. Officer's Certificates of each of Lahaina and Accent;
G. Secretary's Certificates of each of Lahaina and
Accent;
H. Certificate of Merger of XXXX 1 with and into Accent;
I. Articles of Merger of XXXX 1 into Accent.
4. Closing Instructions. Escrow Agent agrees to hold all of the
Closing Documents until the Delivery Date.
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Prior to delivery on the Delivery Date, Lahaina shall pay the
payables set forth on Schedule 10.1, including but not limited to, payment of
$225,000 to Paul, Hastings, Xxxxxxxx & Xxxxxx LLP.
On the Delivery Date, Escrow Agent will (with the
cooperation of counsel to Lahaina) distribute the Closing Documents as
appropriate among the parties and file the Articles of Merger with the
Secretary of State of the State of Georgia.
Upon payment of such payables, filing of the
Articles of Merger and distribution of the Closing Documents, the
"Closing" contemplated by the Merger Agreement shall have occurred.
5. Liability of Escrow Agent.
A. In performing any of its duties hereunder, Escrow Agent shall
not incur any liability to anyone for any damages, losses or
expenses, except for any negligence, willful misconduct or
breach of trust by Escrow Agent under this Agreement, and,
accordingly, Escrow Agent shall not incur any such liability
with respect to the following:
(1) any action taken or omitted in good faith upon
advice of its legal counsel given with respect to
any questions relating to the duties and
responsibilities of Escrow Agent under this
Agreement; or
(2) any action taken or omitted in reliance on any
instrument, including any notice or instruction
provided for in this Agreement, not only as to its
due execution and the validity and effectiveness of
its provisions but also as to the truth and accuracy
of any information contained therein, which Escrow
Agent shall in good faith believe to be genuine, to
have been signed or presented by a person or persons
having authority to sign or present such instrument,
and to conform with the provisions of this
Agreement.
B. Notwithstanding anything in this Agreement to the contrary,
upon a dispute between Sellers and Buyer sufficient in the
sole discretion of Escrow Agent to justify its doing so, then
Escrow Agent shall be entitled to tender the Closing
Documents into the registry or custody of any court of
competent jurisdiction in Xxxxxx County, Georgia, together
with such pleadings as it may deem appropriate, and thereupon
be discharged from all further duties and liabilities under
this Agreement (other than with respect to any liabilities
for negligence, willful misconduct or breach of trust by
Escrow Agent).
X. Xxxxxxx and Buyer indemnify Escrow Agent against, and hold
Escrow Agent harmless from, any and all claims, actions
demands, losses, damages, expenses
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(including, without limitation, court costs, attorney's fees
and accountant's fees) and liabilities that may be imposed
upon performance of its duties under this Escrow Agreement,
including, without limitation, any litigation arising from
this Agreement or involving the subject matter of this
Agreement, but excluding any such claims, actions, demands,
losses, damages, expenses and liabilities resulting from or
arising out of any negligence, willful misconduct or breach
of trust by Escrow Agent under this Agreement. If there is
litigation arising from this Agreement or involving the
subject matter hereof, and if Sellers and Buyer are opposing
parties in such litigation, then the party prevailing in such
litigation shall be reimbursed promptly upon demand by the
other party in an amount equal to that amount which the
prevailing party shall have paid Escrow Agent with respect to
such litigation and its subject matter pursuant to the
indemnification agreement contained in this Escrow Agreement.
The provisions of this Section 3 shall survive the closing of
the purchase of the Companies or any termination,
cancellation or rescission of this Agreement.
D. Any notice to be given by Escrow Agent to Sellers or Buyer
shall be given in writing in accordance with the provisions
of the Merger Agreement.
6. Governing Law. This Escrow Agreement is to be performed in the
State of Georgia and shall be binding upon and inure to the benefit of the
successors and assigns of the parties hereto, provided that Escrow Agent shall
not assign its rights, duties or obligations hereunder in whole or in part
without the prior written consent of the other parties hereto and any such
assignment without said consent shall be void.
7. Severability. If any clause, provision or section of this
Agreement be ruled invalid or unenforceable by any court of competent
jurisdiction, the invalidity of such clause, provision or section shall not
affect any of the remaining clauses, provisions or sections hereof.
8. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement and the signatures of any party to any counterpart
shall be deemed to be a signature to, and may be appended to, any other
counterpart.
9. Waiver. Each party waives any claim such party may have
arising from Xxxxxx, Xxxxxxx & Xxxxxx, P.C.'s acting as Escrow Agent hereunder
and as counsel to Accent and AMSI in connection with the Merger Agreement.
[SIGNATURES FOLLOW ON NEXT PAGE]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on
August 16, 1999.
LAHAINA ACQUISITIONS, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Chief Executive Officer
XXXX NO. 1, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
President and Chief Executive Officer
MONGOOSE INVESTMENTS, LLC
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Managing Member
THE ACCENT GROUP, INC.
By: /s/ L Xxxxx Xxxxxxx
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Name: L Xxxxx Xxxxxxx
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Title: President
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ACCENT MORTGAGE SERVICES, INC.
By: /s/ L Xxxxx Xxxxxxx
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Name: L Xxxxx Xxxxxxx
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Title: President
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XXXXXX, XXXXXXX & XXXXXX, P.C.
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx
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Shareholder
