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STOCK PLEDGE AGREEMENT
THIS IS A STOCK PLEDGE AGREEMENT (this "Agreement") by and between
Mongoose Investments, LLC (the "Pledgor") and GCA Strategic Investment Fund
Limited (the "Pledgee"), and dated effective as of December 7, 1998, and by
which the parties to this Agreement, for good and valuable consideration, hereby
agree as follows:
1. Background Information. The Pledgor is the owner of the shares of
stock described in Schedule I attached hereto and incorporated herein by
reference (the "Pledged Shares"). The Pledgor is the majority shareholder of
Lahaina Acquisitions, Inc. ("Lahaina") which has delivered Pledgee a convertible
note of even date herewith in the principal amount of $750,000.00 (the "Note").
Pledgor will benefit from the pledge of the Pledged Collected (as defined below)
in order to induce Pledgor to purchase the Note from Lahaina.
2. Pledge. The Pledgor hereby pledges to the Pledgee, and grants to the
Pledgee a security interest in, the Pledged Shares and the certificates
representing the Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledge Shares and all proceeds
of any of the foregoing (collectively, the "Pledged Collateral").
3. Security for Obligations. The Pledgor's security interest in the
Pledged Collateral secures the payment and performance of all obligations of
Lahaina now or hereafter existing under the Note, whether for principal,
interest, fees, expenses or otherwise, and all obligations of the Pledgor now or
hereafter existing under this Agreement and any and all extensions or renewals
of the foregoing in whole or in part, whether direct or indirect, absolute or
contingent, individual, joint or several, now due or to become due, and whether
owed under the foregoing as a drawer, maker, endorser, guarantor, surety or
otherwise to the Pledgee by the Pledgor (all such obligations being the
"Obligations").
4. Delivery of Pledged Collateral; Further Assurances. All certificates
or instruments representing or evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of the Pledgee pursuant hereto and shall
be in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Pledgee. The Pledgee shall have the right, at any
time in its discretion and without notice to the Pledgor, to transfer to or to
register in the name of the Pledgee or any of its nominees any or all of the
Pledged Collateral, subject only to the revocable rights specified in section
5(a) of this Agreement. In addition, the Pledgee shall have the right at any
time to exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger denominations.
The Pledgor agrees that at any time and from time to time, at the expense of the
Pledgor, the Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that the Pledgee may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable the Pledgee to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral.
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5. Voting Rights; Dividends; Etc.
(a) General. So long as no Event of Default (as defined below)
or event which, with the giving of notice or the lapse of time, or both, would
become an Event of Default shall have occurred and be continuing:
(i) Voting Rights. The Pledgor shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Pledged Collateral or any part thereof for any purpose not inconsistent
with the terms of this Agreement or the Note; provided, however, that the
Pledgor shall not exercise or refrain from exercising any such right if, in the
Pledgee's judgment, such action would have a material adverse effect on the
value of the Pledged Collateral or any part thereof, and provided, further, that
the Pledgor shall give the Pledgee at least five (5) days' written notice of the
manner in which the Pledgor intends to exercise, or the reasons for refraining
from exercising, any such right.
(ii) Dividends. The Pledgor shall be entitled to
receive and retain any and all dividends and other payments in respect of the
Pledged Collateral; 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 of
any Pledged Collateral,
(B) dividends and other distributions paid
or payable in cash in respect of any Pledged Collateral 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 Pledged Collateral, shall be, and shall be forthwith
delivered to the Pledgee to hold as, Pledged 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).
(iii) Proxies and Other Instruments. The Pledgee
shall execute and deliver (or cause to be executed and delivered) to the Pledgor
all such proxies and other instruments as the Pledgor may reasonably request for
the purposes of enabling the Pledgor to exercise the voting and other rights
which it is entitled to exercise pursuant to section 5(a)(i) of this Agreement
and to receive the dividends or other payments which it is authorized to receive
and retain pursuant to section 5(a)(ii) of this Agreement.
(b) Upon Default. Upon the occurrence and during the
continuance of an Event of Default or an event which, with the giving of notice
or the lapse of time, or both, would become an Event of Default, all rights of
the Pledgor to exercise the voting and other consensual rights which the Pledgor
would otherwise be entitled to exercise pursuant to section 5(a)(i) of this
Agreement and to receive the dividends and interest payments which the Pledgor
would otherwise be authorized to receive and retain pursuant to section 5(a)(ii)
of this Agreement shall cease, and all such rights shall thereupon become vested
in the Pledgee who shall thereupon have the sole right to exercise such voting
and other consensual rights and to receive and hold as Pledged Collateral such
dividends and interest payments.
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6. No Transfers or Liens; Substitute Shares.
(a) No Transfer or Liens. The Pledgor agrees that the Pledgor
will not sell or otherwise dispose of, or grant any option with respect to, any
of the Pledged Collateral, or create or permit to exist any lien, security
interest, or other charge or encumbrance upon or with respect to any of the
Pledged Collateral, except for the security interest under this Agreement.
(b) Substitute Shares. The Pledgor agrees that it will (i)
cause the issuer of the Pledged Shares not to issue any stock or other
securities in substitution for the Pledged Shares issued by such issuer, except
to the Pledgor, and (ii) pledge hereunder, immediately upon its acquisition
(directly or indirectly) thereof, any such substitute shares of stock or other
securities of the issuer of the Pledged Shares.
7. Pledgee May Perform; Pledgee Appointed Attorney-in-Fact. The
Pledgor hereby appoints the Pledgee as the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Pledgee's discretion to take any action
and to execute any instrument which the Pledgee deems necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation, to
receive, endorse and collect all instruments made payable to the Pledgor
representing any dividend, interest payment or other distribution in respect of
the Pledged Collateral or any part thereof and to give full discharge for the
same. If the Pledgor fails to perform any agreement contained herein, the
Pledgee may itself perform, or cause performance of, such agreement.
8. Reasonable Care. The Pledgee shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which the Pledgee accords its own property, it being understood that the
Pledgee shall not have any responsibility for ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Collateral, whether or not the Pledgee has or is deemed
to have knowledge of such matters, or taking any necessary steps to preserve
rights against any parties with respect to any Pledged Collateral.
9. Events of Default; Remedies upon Default.
(a) Events of Default. The occurrence of any one or more of
the following events shall constitute a default (an "Event of Default") by the
Pledgor:
(i) the Pledgor fails to pay any Obligation when
due and payable or declared due and payable and such failure shall continue for
five (5) business days; or
(ii) the Pledgor fails or neglects to perform,
keep or observe any term, provision, condition, covenant or agreement contained
in this Agreement (other than those referred to in section 9(a)(i) of this
Agreement) or in any other instrument or document delivered pursuant hereto or
in connection herewith, including without limitation the Note of even date
herewith from Pledgor to Pledgee, and such failure or neglect shall have
continued for a period of ten (10) business days after receipt of written notice
from the Pledgee of such failure or neglect; or
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(iii) the Pledgor makes or submits any false,
untrue, incomplete or misleading representation, warranty, schedule, report or
other communication to the Pledgee in connection with this Agreement or the Note
or any transaction relating hereto or thereto; or
(iv) the Pledgor becomes insolvent or generally
fails to pay, or admits in writing the Pledgor's inability to pay, the Pledgor's
debts as they mature; or
(v) there occurs an Event of Default under the
Note; or
(vi) the Pledgor makes a general assignment for
the benefit of creditors, convenes or causes to be convened a meeting of the
Pledgor's creditors or the Pledgor's principal creditors, or takes advantage of
the insolvency laws of any state, or a petition in bankruptcy or an arrangement
or reorganization under the Federal Bankruptcy Code is filed by or against the
Pledgor.
(b) Remedies Upon Default. If any Event of Default shall have
occurred and be continuing:
(i) Sale. The Pledgee may exercise in respect
of the Pledged Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a secured
party on default under the applicable Uniform Commercial Code in effect at that
time, and the Pledgee may also, without notice except as specified below, sell
the Pledged Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange, broker's board or at any of the Pledgee's offices
or elsewhere, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as the Pledgee may deem commercially
reasonable. The Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten (10) days' notice to the Pledgor of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Pledgee shall not be obligated to
make any sale of Pledged Collateral regardless of notice of sale having been
given. The Pledgee may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(ii) Proceeds. Any cash held by the Pledgee as
Pledged Collateral and all cash proceeds received by the Pledgee in respect of
any sale of, collection from, or other realization upon all or any part of the
Pledged Collateral may, in the discretion of the Pledgee, be held by the Pledgee
as collateral for, or then or at any time thereafter applied (after payment of
any amounts payable to the Pledgee pursuant to section 10 of this Agreement) in
whole or in part by the Pledgee against, all or any part of the Obligations in
such order as the Pledgee shall elect. Any surplus of such cash or cash proceeds
held by the Pledgee and remaining after payment in full of all the Obligations
shall be paid over to the Pledgor or to whomsoever may be lawfully entitled to
receive such surplus.
10. Expenses. The Pledgor will upon demand pay to the Pledgee the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Pledgee may
incur after the date hereof in connection with the administration of this
Agreement, the custody or preservation of, or the sale of, collection from, or
other realization upon, any of the Pledged Collateral, the exercise or
enforcement of any of the rights of the Pledgee hereunder, or the failure by the
Pledgor to perform or observe any of the provisions hereof.
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11. Continuing Security Interest; Transfer of Note. This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
remain in full force and effect until payment in full of the Obligations, be
binding upon the Pledgor, and the Pledgor's successors and assigns, and inure to
the benefit of the Pledgee and the Pledgee's successors, transferees and
assigns. Without limiting the generality of the foregoing, the Pledgee may
assign or otherwise transfer the Note to any other person or entity, and such
other person or entity shall thereupon become vested with all the benefits in
respect thereof granted to the Pledgee herein or otherwise. Upon the payment in
full of the Obligations, the Pledgor shall be entitled to the return, upon the
Pledgor's request and at the Pledgor's expense, of such of the Pledged
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.
12. Indemnification. The Pledgor hereby agrees that the Pledgor shall
indemnify and hold the Pledgee harmless from and against any and all costs,
expenses, claims, causes of action, damages, injury, or harm suffered by the
Pledgee or asserted against the Pledgee relating to Pledgee's performance under
this Agreement. In addition, the Pledgor hereby acknowledges and affirms that
the Pledgee shall not be obligated to incur any costs or expenses whatsoever in
connection with or arising out of or relating to the Pledgee's performance under
this Agreement, and the Pledgee, so long as it acts diligently in good faith,
shall not have any liability whatsoever to the Pledgor for any act, failure,
refusal or omission to act under this Agreement.
13. Termination. Upon the final payment of all Obligations, this
Agreement shall terminate and the Pledgee shall transfer and deliver the Pledged
Collateral and the accompanying stock transfer powers to the Pledgor or to
whosoever shall be lawfully entitled to the same marked "Terminated--Underlying
Obligations Satisfied" and dated and signed by the Pledgee.
14. Miscellaneous.
(a) Survival. All representations, warranties, covenants and
agreements herein contained shall survive the execution and delivery of this
Agreement. The remedies of a party for breaches of representations, warranties,
covenants or agreements shall not be affected by any investigation by, or
knowledge of, the non-breaching party prior to the date of this Agreement. Each
party agrees to indemnify, defend and hold the other harmless for all losses,
costs and expenses (including without limitation reasonable attorney's fees)
arising out of its breach of any representation, warranty, covenant or agreement
made by him or it in this Agreement.
(b) Notices. All notices and other communications under this
Agreement shall be made in writing signed by the party making the same, and
shall be deemed given on the date of personal delivery or if mailed by certified
or registered United States mail, postage prepaid, on the date mailed (and shall
be deemed received on the date of personal delivery or, if so mailed, on the
third business day after so mailed), to:
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If to the Pledgor, to:
Lahaina Acquisitions, Inc.
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ATTN:
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Telecopy:
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With a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx, LLP
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
ATTN: Xxxxx Xxxxxxxxxx, Esq.
Telecopy: (000) 000-0000
If to the Pledgee, to:
GCA Strategic Investment Fund Limited
000 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
ATTN: Global Capital Advisors, Ltd.
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
ATTN: Xxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
or to such other person or at such other address as either party may specify by
written notice to the other party in accordance with this section 14(b).
(c) Further Assurances. Each party agrees to do such further
acts, and to execute and deliver such additional conveyances, assignments,
agreements and instruments as the other may at any time request in connection
with the administration and enforcement of this Agreement or relative to the
Pledged Collateral or any part thereof, or in order better to assure and confirm
to the requesting party his or its rights, powers and remedies under this
Agreement.
(d) Severability. If any provision of this Agreement shall be
invalid or unenforce able under applicable law, such provision shall be
ineffective to the extent of such invalidity or unenforceability only, without
in any way affecting the remaining provisions.
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(e) Time of the Essence. Time is of the essence of each and
every provision of this Agreement.
(f) Assignment; Successors in Interest.
(i) Assignment. 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.
(ii) Binding Nature. 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.
(g) Number; Gender. Whenever the context so requires, the
singular number shall include the plural and the plural shall include the
singular, and the gender of any pronoun shall include the other genders.
(h) Captions; Certain Definitions. Titles and captions of
or in this Agreement are inserted only as a matter of convenience and for
reference and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provision of this Agreement.
(i) Controlling Law; Integration; Amendment; Waiver. This
Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of Georgia without regard to those relating to
conflicts of laws. This Agreement supersedes all prior negotiations, agreements
and understandings between the parties with respect to the subject matter
hereof, constitutes the entire agreement between the parties with respect to the
subject matter hereof, and may not be altered or amended except in writing
signed by the Pledgor and the Pledgee. The failure of either party to this
Agreement at any time or times to require performance of any provisions of this
Agreement shall in no manner affect the right to enforce the same. No waiver by
either party to this Agreement of any condition, or of the breach of any term,
provision, warranty, representation, agreement or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances shall
be deemed or construed as a further or continuing waiver of any such condition
or breach or a waiver of any other condition or of the breach of any other term,
provision, warranty, representation, agreement or covenant contained in this
Agreement.
(j) Counterparts. This Agreement may be executed by each
party upon a separate copy, and in such case one counterpart of this Agreement
shall consist of enough of such copies to reflect the signatures of all of the
parties to this Agreement. This Agreement shall become effective when one or
more counterparts have been signed by each of the parties to this Agreement and
delivered to the other party to this Agreement. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement or the terms of this
Agreement to provide or account for more than one of such counterparts.
[EXECUTION PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed by their respective authorized officers, as of the
date first above written.
MONGOOSE INVESTMENTS, LLC
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
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Title: Managing Member
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Address:
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Fax:
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Tel.:
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GCA STRATEGIC INVESTMENT FUND LIMITED
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Director
Address: 000 Xxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Fax: 000 000-0000
Tel.: 000 000-0000
Pledge Agreement
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SCHEDULE I
Seven Hundred and Fifty Thousand (750,000) shares of common stock, no par
value, of Lahaina Acquisitions, Inc., represented as of the date hereof by
Certificate No. 490.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed by their respective authorized officers, as of the date first
above written.
LAHAINA ACQUISITIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: XXXXXX X. XXXXXX
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Title: PRESIDENT
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Address: P.O. Box N 8160
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NASSAU
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BAHAMAS
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Fax: (000) 000-0000
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Tel: (000) 000-0000
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GCA STRATEGIC INVESTMENT FUND LIMITED
By:
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Name: Xxxxx X. Xxxxxx
Title: Director
Address: 000 Xxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Fax: 000 000-0000
Tel: 000 000-0000
Pledge Agreement
00
[XXXXXXX, XXXXXXX, XXXXXX-XXXXX & XXXXXXX, P.A. LETTERHEAD]
December 4, 1998
VIA FEDERAL EXPRESS
Xx. Xxxxx Xxxxxxxxxx, Esq.
Paul, Hastings, Xxxxxxxx & Xxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Dear Xxxxx:
Enclosed please find Lahaina Acquisitions, Inc. stock certificate number 490
representing 750,000 shares currently held by Paxford Investments, S.A. to be
held in escrow by you until you receive facsimile instructions signed by me
authorizing its release.
Also enclosed is a stock power executed by Xxxxxx Xxxxxx which should be
held in trust until you receive written facsimile instructions from me
authorizing its release.
Sincerely,
/s/ Xxxxxxx X. Xxxxx, III
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Xxxxxxx X. Xxxxx, III
CJD/maa
Enclosures
cc: Xxxxxxx X. Xxxxxxx
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LAHAINA ACQUISITIONS, INC.
NUMBER Incorporated under the laws of the State of Colorado SHARES
No. 490 (3) 750,000
Authorized Capital: 800,000,000
No par value Common Shares
This Certifies That SEE REVERSE FOR
CERTAIN DEFINITIONS
-PAXFORD INVESTMENTS, S.A.-
is the owner of ***SEVEN HUNDRED FIFTY THOUSAND***
fully paid and nonassessable Common Shares, no par value per share of
LAHAINA ACQUISITIONS, INC.
transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be subject to the Articles of Incorporation, to all of which the holder by
acceptance hereby assents.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed in
facsimile by its duly authorized officers and the facsimile seal of the
Corporation to be duly affixed hereto.
This Certificate is not valid until duly countersigned by the Transfer Agent and
Registrar.
Dated: 5/28/97 [LAHAINA ACQUISITIONS, INC.
/s/ XXXXXX X. XXXXX CORPORATE SEAL /s/ XXXX X. AGRON
Xxxxxx X. Xxxxx, COLORADO] Xxxx X. Agron,
Secretary President
Countersigned and Registered:
Corporate Stock Transfer, Inc.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
By:
/s/ B.A.
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Authorized Signature
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IRREVOCABLE STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer
to ________________, Seven Hundred Fifty Thousand (750,000) shares of the
common stock of Lahaina Acquisitions, Inc., a Colorado corporation (the
"Corporation"), standing in the name of the undersigned on the books of the
Corporation represented by certificate number 490.
The undersigned does hereby irrevocably constitute and appoint Gunster,
Yoakley, Xxxxxx-Xxxxx & Xxxxxxx, P.A., their attorney-in-fact, to transfer
the said stock on the books of the Corporation, with full power of the
substitution in the premises.
DATED: December 4, 1998
PAXFORD INDUSTRIES, S.A.
/s/ Ivy Xxxx Xxxxxx
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By: Ivy Xxxx Xxxxxx
Its: Director, Secretary
