1
EXHIBIT 2.2
AMENDMENTS TO AGREEMENT
AND PLAN OF MERGER
Pursuant to Section 12.3 of the Agreement and Plan of Merger dated July
21, 1999 (the "Merger Agreement") by and among LAHAINA ACQUISITIONS, INC., a
Colorado corporation ("Lahaina"), ▇▇▇▇ NO. 1, INC., a Georgia corporation ("▇▇▇▇
1"), THE ACCENT GROUP, INC., a Georgia corporation ("Accent"), MONGOOSE
INVESTMENTS, LLC, a Georgia limited liability company ("Mongoose") and ACCENT
MORTGAGE SERVICES, INC., a Georgia corporation ("AMSI"), is hereby amended and
restated in the following respects:
1. ARTICLE I - DEFINITIONS - The definitions for "Beneficial Owners"
and "Shareholders Agreement" are hereby deleted in their entirety and the
definitions set forth below are hereby inserted in their place:
"BENEFICIAL OWNERS" means those Persons set forth on Schedule
6.2(b)(i) and 6.2(b)(ii) hereto.
"SHAREHOLDERS AGREEMENT" means that certain agreement entered into
between Accent and the Shareholders dated as of July 9, 1999 and the
First Amendment to such Agreement, attached as Exhibit C hereto.
2. ARTICLE II - The second and third sentences of Section 2.5 of the
Merger Agreement are hereby deleted in their entirety and amended and restated
to provide as follows:
"Following the Merger, the directors of Lahaina shall number five,
four of whom shall be Demerau, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇▇. The remaining director shall be an independent director and
shall be appointed within 60 days of the Closing by mutual consent of
Demerau and ▇▇▇▇▇."
3. ARTICLE IV - Paragraph 2 of Section 4.1(a) of the Merger Agreement
is hereby deleted in its entirety and amended and restated to provide as
follows:
"As and when Conditions of Release are fully satisfied for a
particular Shareholder (or the Lahaina Board waives and modifies said
Conditions of Release and, in the case of modifications, deems said
Conditions of Release, as modified, satisfied; provided, however, that
any such waiver or modification be in
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accordance with commercially reasonable practices and deemed by the
Lahaina Board to be in the best interests of Lahaina and/or Accent, as
may be applicable), the Lahaina Board shall cause Lahaina to release to
such Shareholder the Retained Shares."
4. ARTICLE V -
(a) Section 5.6 of the Merger Agreement is hereby deleted in
its entirety and amended and restated to provide as follows:
"Except as set forth on Schedule 5.6, Accent has (a) good and
marketable title free from liens, to all real property in which it has
an ownership interest, as set forth together with the legal description
of each such property on Schedule 5.6(a), and (b) a valid option to
purchase or is in discussions concerning a proposed joint venture (of
which Accent or Lahaina, as the case may be, would own not less than
50%) to invest in and develop the real property set forth, together
with the legal description of each such property, on Schedule 5.6(b)
hereto (collectively, the "Accent Real Property"). The properties known
as the "Exit 17 Properties" have been acquired by Accent's proposed
joint venture partner and said joint venture partner has indicated a
willingness to have Accent become a 50-50 joint venture partner with it
and participate in the investment into and development of said
properties.
Accent believes the approximate fair market value of each
property, net of debt, described on Schedule 5.6(a) and 5.6(b) to be
not less than the value set forth for such property on Schedule 5.6(c).
All parties acknowledge that Accent does not guarantee the value of any
property, that actual values could differ from those estimated, and
that such differences could be material. Additionally, all parties
acknowledge that there is and can be no assurance that the properties
described on Schedule 5.6(b) hereto or any interest therein (by way of
joint venture or otherwise) will in fact be acquired by Accent or
Lahaina or acquired on the terms and conditions proposed. By the
Effective Time, Accent will have delivered to Lahaina correct and
complete copies of the conveyance documents relating to the Accent Real
Property. Exhibit L to this Agreement set forth the valuation of each
parcel of Real Property."
(b) Section 5.19 of the Merger Agreement is hereby deleted in
its entirety and amended and restated to provide as follows:
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"Accent Consolidation Documents. Those certain agreements and
documents attached as Exhibit E hereto are the true, correct and
complete documents relating to the formation and capitalization of
Accent (the "Accent Consolidation Documents").
"The 1999 Accent Stock Option Plan, attached as part of
Exhibit E hereto, is being reviewed by the auditors of Accent, and will
be modified, as needed, based upon the recommendations of the auditors
of Lahaina, so as to avoid any material adverse effect as Lahaina's
future earnings."
5. ARTICLE X
(a) Section 10.2(a) of the Merger Agreement is hereby deleted
in its entirety and amended and restated to provide as follows:
"Each of Lahaina and ▇▇▇▇ 1 shall have performed in all
material respects its obligations under this Agreement required to be
performed by it at or prior to the Closing; the representations and
warranties of Lahaina and ▇▇▇▇ 1 contained in this Agreement which are
qualified with respect to materiality shall be true and correct in all
material respects, and such representations and warranties that are not
so qualified shall be true and correct in all respects, in each case as
of the date of this Agreement and at and as of the Closing as if made
at and as of such time, except as contemplated by this Agreement.
Accent shall have received a certificate of the Chairman of the Board
or the Treasurer of Lahaina as to the satisfaction of this condition."
(b) Section 10.2(b) of the Merger Agreement is hereby deleted
in its entirety and amended and restated to provide as follows:
"Mongoose shall assume the responsibility for certain notes
payable as listed on Schedule 7.4 attached hereto."
(c) Section 10.3(a) of the Merger Agreement is hereby deleted
in its entirety and amended and restated to provide as follows:
"Accent shall have performed in all material respects its
obligations under this Agreement required to be performed by it at or
prior to the Closing; the representations and warranties of Accent
contained in this Agreement which are qualified with respect to
materiality shall be true and correct in all material
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respects, and such representations and warranties that are not so
qualified shall be true and correct in all respects, in each case as of
the date of this Agreement and at and as of the Closing as if made at
and as of such time, except as contemplated by this Agreement. Lahaina
and ▇▇▇▇ 1 shall have received a certificate of the Chairman of the
Board, the President or the Treasurer of Accent as to the satisfaction
of this condition."
6. SCHEDULES
(a) Schedule 4.1 shall be deleted in its entirety and replaced
with Schedule 4.1 as attached hereto.
(b) Schedule 5.16 shall be deleted in its entirety and
replaced with Schedule 5.16 as attached hereto.
(c) Schedule 6.2 shall be deleted in its entirety and replaced
with Schedule 6.2 as attached hereto.
(d) Schedule 6.15 shall be deleted in its entirety and
replaced with Schedule 6.15 as attached hereto.
(e) Schedule 10.1 is attached hereto.
7. Exhibit L shall be deleted in its entirety and replaced with
Exhibit L as attached hereto.
8. OTHER PROVISIONS -- All other provisions of the Merger
Agreement shall remain unchanged and in full force and effect as therein stated.
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IN WITNESS WHEREOF, each of the parties has caused these Amendments to
the Merger Agreement to be executed on its behalf by its duly authorized
representatives hereunto duly authorized, all as of August __, 1999.
LAHAINA:
LAHAINA ACQUISITIONS, INC., a Colorado
corporation
By:
----------------------------------------
Name:
Title:
▇▇▇▇ 1:
▇▇▇▇ NO. 1, INC., a Georgia corporation
By:
----------------------------------------
Name:
Title:
(Signatures continued on following page)
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ACCENT
THE ACCENT GROUP, INC., a Georgia
corporation
By:
----------------------------------------
Name:
Title:
ACCENT MORTGAGE
ACCENT MORTGAGE SERVICES, INC., a
Georgia corporation
By:
----------------------------------------
Name:
Title:
MONGOOSE, signing for the purposes of
Sections 7.4, 8.4 and 10.2 of the Merger
Agreement only.
MONGOOSE INVESTMENTS, LLC, a Georgia
limited liability company
By:
----------------------------------------
Name:
Title:
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SCHEDULE 4.1
TO THE AGREEMENT AND PLAN OF MERGER
SCHEDULE OF PROPERTIES, SERVICES & BUSINESS ASSETS
EXCHANGE OF CERTIFICATES REPRESENTING SHARES
(a) Initial Allocation
NAME TOTAL SHARES RETAINED SHARES FREE SHARES
---- ------------ --------------- -----------
L. ▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,559,500 2,000,000 (1,400,000 Swiss 559,500
Air/Bethel; 600,000 Putt Putt)
▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,537,500 2,000,000 (1,400,000 Swiss Air; 537,500
600,000 Putt Putt)
Eutopean Enterprises, Inc. 1,200,000 1,000,000 (All Swiss Air/Bethel) 200,000
Accent Associates, LLC 1,400,000 800,000 600,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 100,000 100,000 0
Kingdom Generals, LLC 850,000 600,000 250,000
▇▇▇▇ Associates, Ltd. 618,000 300,000 318,000
Destiny Holdings, LLC 600,000 300,000 300,000
Accent Holdings, Inc. 700,000 300,000 400,000
Bach Consulting, Inc. 600,000 0 600,000
International Boulevard Property, LP 400,000 400,000 0
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 833,330 766,666 66,664
▇▇▇ ▇▇▇▇▇▇▇▇ 416,670 383,334 33,336
▇▇▇▇▇▇▇ ▇▇▇ 350,000 0 350,000
▇▇▇▇ Margheson 40,000 0 40,000
▇▇▇▇▇▇▇ McBraer 30,000 0 30,000
▇▇▇ ▇▇▇▇▇▇ 16,000 0 16,000
TOTAL 13,251,000 8,950,000 4,301,000
8
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
Demeraus/Eutopean 800,000 a. General Warranty Deed in favor of Accent executed by L.
Enterprises/Bethel ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Road Property
b. Quitclaim Deed in Favor of Accent executed by L. ▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ with legal description of property from
most recent survey
c. Title insurance policy by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
d. An ALTA survey of the Property certified to Accent.
e. A zoning letter issued by the appropriate governmental entity
confirming the zoning of the Property.
f. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
g. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
h. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
9
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
Demeraus/Eutopean 3,800,000 a. General Warranty Deed in favor of Accent, executed by L. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
Enterprises/Kingdom ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
Generals Swissaire Real
Property (including the b. General Warranty Deed in favor of Accent executed by Kingdom General, LLC.
"Rambo" tract)
c. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
d. An ALTA survey of the Property certified to Accent.
e. A zoning letter issued by the appropriate governmental entity
evidencing the zoning of the Property.
f. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
g. Consents to the conveyance of the Property to Accent and the assumption
of the associated loans executed by (i) Gainesville Bank and Trust, (ii)
Regions Bank, (iii) SunTrust Bank and (iv) Kingdom Generals, LLC.
10
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
Demeraus/Sutopean 3,800,000 Release of Lot Nos. 3 and 8 from the Deed to Secure Debt held by ▇▇▇▇▇▇▇
Enterprises/Kingdom ▇▇▇▇▇ Credit Corporation.
Generals Swissaire Real
Property (including the h. Amendments to all outstanding Deeds to Secure Debt (as necessary)
"Rambo" tract) prohibiting the increase of any principal indebtedness secured
thereby.
i. General Warranty Deed to all common areas in favor of Accent or an
established homeowners association for Swissaire Estates executed by
L. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
j. Easement Agreement executed by L. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in
favor of Accent and all Lots on the Property providing for (i) suitable
ingress and egress, (ii) access to utilities, (iii) drainage, (iv)
access to and use of common areas, and (v) access to boat dock area.
k. Permit or letter of approval or authorization from the U.S. Army
Corps of Engineers for the construction of a 14 slip boat dock
on Lake ▇▇▇▇▇▇ in the vicinity of the Property.
l. An assignment executed in recordable form by L. ▇▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ assigning their respective rights as "Declarants"
under that certain Declaration of Covenants, Conditions and
Restrictions for Swissaire Estate to Accent.
m. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
11
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
Accent Associates 800,000 a. Assignment of Contract to purchase Bethel Road (2) - approximately 14 acres
b. Execution of Purchase Contract on Lakeside Trail property.
c. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
d. An ALTA survey of the Property certified to Accent.
e. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
f. Confirmation of proper zoning for Accent's planned development of the
Property.
g. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
h. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
i. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
12
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
▇▇▇▇▇▇▇/Exit 17 Property N/A (Cash a. General Warranty Deed in favor of Accent, executed by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
Purchase)
b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property certified to Accent. Report of a
registered professional engineer certified to Accent confirming that
the soil conditions of the Property will allow the feasible development
of the Property.
d. Confirmation of proper zoning for Accent's planned development of the
Property.
e. Written approval by all necessary municipal or other governmental
agencies for the construction of a north/south road providing access to
the Property.
f. Written approval by all necessary governmental agencies for the
extension of adequate sewer capacity to the Property.
g. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
h. Consent to the conveyance of the Property to Accent and the assumption
of the associated loan executed by Union County Bank.
i. Amendment to the Deed to Secure Debt in favor of Union County Bank
(if necessary) providing that the principal indebtedness secured
thereby may not be increased.
j. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
13
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
Millwood/Exit 17 N/A (Cash a. General Warranty Deed in favor of Accent, executed by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
Purchase)
b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property certified to Accent.
d. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
e. Confirmation of proper zoning for Accent's planned development of the
Property.
f. Written approval by all necessary municipal or other governmental
agencies for the construction of a north/south road providing access to
the Property.
g. Written approval by all necessary governmental agencies for the
extension of adequate sewer capacity to the Property.
h. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
i. Consent to the conveyance of the Property to Accent and the assumption
of the associated loan executed by Union County Bank.
j. Amendment to the Deed to Secure Debt in favor of Union County Bank
(if necessary) providing that the principal indebtedness secured thereby may
not be increased.
k. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
14
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
▇▇▇▇▇▇▇▇▇▇/Exit 17 N/A (Cash a. General Warranty Deed in favor of Accent, executed by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
Purchase)
b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property certified to Accent.
d. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
e. Confirmation of proper zoning for Accent's planned development of the
Property.
f. Written approval by all necessary municipal or other governmental
agencies for the construction of a north/south road providing access to
the Property.
g. Written approval by all necessary governmental agencies for the
extension of adequate sewer capacity to the Property.
h. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
i. Consent to the conveyance of the Property to Accent and the assumption
of the associated loan executed by Union County Bank.
j. Amendment to the Deed to Secure Debt in favor of Union County Bank
(if necessary) providing that the principal indebtedness secured
thereby may not be increased.
k. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
15
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
▇▇▇▇▇▇/Exit 17 N/A (Cash a. General Warranty Deed in favor of Accent, executed by ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇.
Purchase)
b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property certified to Accent.
d. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
e. Confirmation of proper zoning for Accent's planned development of the
Property.
f. Written approval by all necessary municipal or other governmental
agencies for the construction of a north/south road providing access to
the Property.
g. Written approval by all necessary governmental agencies for the
extension of adequate sewer capacity to the Property.
h. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
i. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
16
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
▇▇▇▇▇/Exit 17 N/A (Cash a. General Warranty Deed in favor of Accent, executed by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as
Purchase) executor of the estate of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property certified to Accent.
d. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
e. Confirmation of proper zoning for Accent's planned development of the
Property.
f. Written approval by all necessary municipal or other governmental
agencies for the construction of a north/south road providing access to
the Property. g. Written approval by all necessary governmental agencies
for the extension of adequate sewer capacity to the Property.
h. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
i. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
17
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
▇▇▇▇▇▇▇/Exit 17 N/A (Cash a. General Warranty Deed in favor of Accent, executed by
Purchase) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as holder of a life estate, and ▇▇▇ ▇. ▇▇▇▇▇
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as to the remainder.
b. Title insurance policy issued by a national title insurance
company in favor of Accent, insuring title to (i) the Property
and (ii) all necessary and appropriate appurtenant easements related
thereto, subject only to those exceptions and encumbrances agreed to
by Lahaina. Such policy shall have all endorsements that may be
obtained for no additional cost.
c. An ALTA survey of the Property certified to Accent.
d. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
e. Confirmation of proper zoning for Accent's planned development of
the Property.
f. Written approval by all necessary municipal or other governmental
agencies for the construction of a north/south road providing access to
the Property.
g. Written approval by all necessary governmental agencies for the
extension of adequate sewer capacity to the Property.
h. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
i. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
18
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
▇▇▇▇▇▇▇/Exit 17 N/A (Cash a. General Warranty Deed in favor of Accent, executed by
Purchase) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇.
b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property certified to Accent.
d. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
e. Confirmation of proper zoning for Accent's planned development of the
Property.
f. Written approval by all necessary municipal or other governmental
agencies for the construction of a north/south road providing access to
the Property.
g. Written approval by all necessary governmental agencies for the
extension of adequate sewer capacity to the Property.
h. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
i. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
19
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
Taste of Country/Exit N/A (Cash a. General Warranty Deed in favor of Accent, executed by
17 Purchase) ▇▇▇ ▇▇▇▇▇▇ and LouinWagoner.
b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property certified to Accent.
d. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
e. Confirmation of proper zoning for Accent's planned development of the
Property.
f. Written approval by all necessary municipal or other governmental
agencies for the construction of a north/south road providing access to
the Property.
g. Written approval by all necessary governmental agencies for the
extension of adequate sewer capacity to the Property.
h. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
i. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
20
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
Pilgrim/Exit 17 N/A (Cash a. General Warranty Deed in favor of Accent, executed by
Purchase) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
b. Title insurance policy issued by a title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto,
subject only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property certified to Accent.
d. Copy of Promissory Note executed in favor of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ for the
purchase price less $250,000. The Promissory Note shall bear interest
at 8% interest and shall mature thirty-five (35) months from the date
of the Promissory Note. Report of a registered professional engineer
certified to Accent confirming that the soil conditions of the Property
will allow the feasible development of the Property.
e. Confirmation of proper zoning for Accent's planned development of the
Property.
f. Written approval by all necessary municipal or other governmental
agencies for the construction of a north/south road providing access to
the Property.
g. Written approval by all necessary governmental agencies for the
extension of adequate sewer capacity to the Property.
h. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
i. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
21
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
▇▇▇▇▇/Exit 17 N/A (Cash a. General Warranty Deed in favor of Accent, executed by E. ▇▇▇▇▇ ▇▇▇▇▇.
Purchase)
b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property to Accent.
d. A zoning letter issued by the appropriate governmental entity
evidencing the zoning of the Property.
e. Report of a registered professional engineer certified to Accent confirming
that the soil conditions of the Property will allow the feasible development of
the Property.
f. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
g. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
22
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
▇▇▇▇▇ Estate/Exit 17 N/A (Cash a. General Warranty Deed in favor of Accent, executed
Purchase) by ▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ as Co-Executors
of the Last Will and Testament of ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇.
b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property to Accent.
d. A zoning letter issued by the appropriate governmental entity
evidencing the zoning of the Property.
e. Report of a registered professional engineer certified to Accent confirming
that the soil conditions of the Property will allow the feasible development of
the Property.
f. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
g. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
23
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
▇▇▇▇▇▇▇▇▇▇▇/Exit 17 N/A (Cash a. General Warranty Deed in favor of Accent, executed by ▇▇▇▇▇▇▇ ▇▇▇▇
Purchase) ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. Desman.
b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property certified to Accent.
d. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
e. Confirmation of proper zoning for Accent's planned development of the
Property.
f. Written approval by all necessary municipal or other governmental
agencies for the construction of a north/south road providing access to
the Property.
g. Written approval by all necessary governmental agencies for the
extension of adequate sewer capacity to the Property.
h. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
i. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
24
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
▇▇▇▇▇▇▇▇▇▇▇/ a. General Warranty Deed in favor of Accent, executed by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
Cumming
b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property to Accent.
d. Consent to the transfer of the Property to Accent and the assumption
of the associated loan executed by Premier Bank.
e. Amendment to the Deed to Secure Debt in favor of Premier Bank
prohibiting the increase of the principal indebtedness secured
thereby.
f. A zoning letter issued by the appropriate governmental entity
evidencing the zoning of the Property.
g. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
h. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
i. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
25
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
▇▇▇▇▇ ▇▇▇▇▇▇▇/Athens, 100,000 See Section 4(b) of the Shareholders' Agreement, as amended, attached as
Tennessee Exhibit C to the Merger Agreement (the "Shareholders' Agreement"). In
addition, the following conditions must be met:
a. General Warranty Deed in favor of Accent, executed by ▇▇▇▇ ▇▇▇▇▇▇▇▇ and
▇▇▇ ▇▇▇▇▇▇▇▇.
b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property to Accent.
d. Copy of Promissory Note executed in favor of ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇
▇▇▇▇▇▇▇▇ in the amount of $200,000 at 8% interest.
e. A zoning letter issued by the appropriate governmental entity
evidencing the zoning of the Property.
f. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
g. Executed easements in favor of Accent providing for access to
utilities and drainage (if necessary).
26
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
International Boulevard 400,000 See Section 4(e) of the Shareholders' Agreement. In addition the following
Partners/Peachtree conditions must be satisfied:
Industrial Road
a. General Warranty Deed in favor of Accent, executed by the previous
owner of the Property.
b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property to Accent.
d. A zoning letter issued by the appropriate governmental entity
evidencing the zoning of the Property.
e. Report of a registered professional engineer certified to
Accent confirming that the soil conditions of the Property will allow
the feasible development of the Property.
f. Executed easements in favor of Accent providing for access to
utilities and drainage.
g. Consent to the conveyance of the Property to Accent and the assumption
of the associated loan executed by any Lender having made a loan
affecting the Property.
h. Amendment to all outstanding deeds to secure debt (as necessary)
prohibiting any increase in the principal indebtedness secured
thereby.
i. Phase I Environmental Study of the Property prepared by a registered
professional engineer with such study being certified to Lahaina.
27
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
Demeraus/Family 600,000 See Section ____ of the Shareholders' Agreement. In addition the following
Entertainment Centers conditions must be satisfied:
(no intention to
operate the a. General Warranty Deed in favor of Accent, for the Roswell, Georgia and
entertainment Cocoa Beach, Florida facilities and an assignment of the lease for the
facilities long-term, Pensacola, Florida facility.
but rather to sell for
land value) b. Title insurance policy issued by a national title insurance company in
favor of Accent, insuring title to (i) the Property and (ii) all
necessary and appropriate appurtenant easements related thereto, subject
only to those exceptions and encumbrances agreed to by Lahaina.
Such policy shall have all endorsements that may be obtained for
no additional cost.
c. An ALTA survey of the Property to Accent.
d. A zoning letter issued by the appropriate governmental entity
evidencing the zoning of the Property.
e. Phase I Environmental Study of the Property prepared by a
registered professional engineer with such study being certified
to Lahaina.
▇▇▇▇/Financial and 300,000 See Section 4(c) of the Shareholders' Agreement.
Business Consulting
28
Shareholder or
Seller/Property or Retained Supporting
Services Shares Condition of Release Documents
-------- ------ -------------------- ---------
Destiny/Financial and 300,000 See Section 4(c) of the Shareholders' Agreement
Business Consulting
Accent Holdings 300,000 See Section 4(b) of the First Amendment and Joinder to the Shareholders'
Agreement (the "First Amendment")
Sagemiller and ▇▇▇▇▇▇▇▇ 1,150,000 See Sections 3 and 4(a) of the First Amendment
TOTAL 8,950,000
29
Lahaina Acquisitions, Inc./The Accent Group, Inc. Merger
90 Day Cash Flow Statement-Post Closing
Aug. 15, 1999- Sept. 1, 1999 Sept. 16, 1999 Oct. 1, 1999
Aug. 13 1999- Sept. 15, 1999 Sept. 30, 1999 Oct. 15, 1999
Cash sources:
Cash at beginning of Period -- (874,755) (1,399,168) (1,120,486)
Income from Financial Operations 28,775 44,712 44,712 61,775
Income from Real Estate Development -- -- 605,000 --
Peachtree Refinancing -- -- 200,000 --
----------- ---------- ------------ ------------
Total Cash 28,775 (830,043) (549,456) (1,058,711)
Cash Uses:
Closing Expenses-The Accent Group, Inc. 250,000 -- -- --
Accent Mortgage Services, Inc. Payables 150,000 -- -- --
Operating Expenses 66,125 66,125 66,125 66,125
Payroll 83,000 83,000 83,000 83,000
Athens Modular Development 50,000 100,000 -- 50,000
Bethel Road -- -- -- 15,000
Cumming Townhomes 50,000 75,000 -- 150,000
▇▇▇▇▇▇ Springs -- 25,000 -- --
Lakeside 5,000 5,000 -- --
Peachtree Industrial -- 15,000 -- 40,000
Swiss Air -- 200,000 100,000 --
Debt Service:
Interest 249,405 -- 66,905 --
Principal -- -- 255,000 --
Total Uses 903,530 569,125 571,030 404,125
----------- ---------- ------------ ------------
Cash at end of period (874,755) (1,399,168) (1,120,486) (1,462,836)
Oct. 16, 1999 Nov. 1, 1999 Nov. 16, 1999
Oct. 31, 1999 Nov. 15 1999 Nov. 30, 1999
Cash sources:
Cash at beginning of Period (1,462,836) (1,704,329) (2,012,117)
Income from Financial Operations 61,775 91,337 91,337
Income from Real Estate Development 30,000 -- 630,000
Peachtree Refinancing -- -- --
----------- ---------- ------------
Total Cash (1,371,061) (1,612,992) (1,290,780)
Cash Uses:
Closing Expenses-The Accent Group, Inc. -- -- --
Accent Mortgage Services, Inc. Payables -- -- --
Operating Expenses 66,125 66,125 66,125
Payroll 83,000 83,000 83,000
Athens Modular Development -- -- --
Bethel Road -- -- --
Cumming Townhomes -- 250,000 --
▇▇▇▇▇▇ Springs -- -- --
Lakeside -- -- --
Peachtree Industrial -- -- --
Swiss Air 100,000 -- --
Debt Service:
Interest 84,143 -- 84,143
Principal -- -- 480,000
Total Uses 333,268 399,125 713,268
----------- ---------- ------------
Cash at end of period (1,704,329) (2,012,117) (2,004,048)
30
The Accent Group
Consolidated Income Statement
For the Period July 1, 1999 - June 30, 2000
Pro Forma - For Purposes of the Lahaina Acquisitions, Inc./
The Accent Group, Inc. Merger Only
Not To Be Relied Upon For Investment Purposes
Revenues: July August September October November December January February
--------- -------- --------- ------- -------- -------- ------- --------
Net Mortgage 2,000 4,000 25,500 56,500 99,000 153,000 207,000 249,000
Accent Mortgage 16,175 22,425 22,425 25,550 31,800 31,800 31,800 31,800
Staged Financing 21,250 31,125 41,500 41,500 51,875 51,875 61,750 61,750
Recreation Sites -- -- 15,000 15,000 15,000 15,000 2,179,500 4,500
Modular Homes -- -- -- -- 234,000 234,000 234,000 234,000
Swiss Air -- 575,000 -- -- 600,000 700,000 -- --
Cumming Townhomes -- -- -- -- -- -- -- 690,000
Beachside Commons -- -- 2,360,000 -- -- -- -- --
Bethel Road 2 -- -- -- -- -- -- -- --
Lakeside Trail -- -- -- -- -- -- -- --
Cumming M1 Property -- -- -- -- -- -- -- --
International Boulevard -- -- -- 214,000 -- 386,000 250,000 --
--------- ------- --------- ------- --------- --------- --------- ---------
Total Revenues 39,425 632,550 2,464,425 352,550 1,031,675 1,571,675 2,964,050 1,281,050
Expenses:
Recreation Sites -- -- 4,000 4,000 4,000 4,000 701,200 1,200
Modular Homes -- -- -- -- 182,538 182,538 182,538 182,538
Swiss Air -- 74,750 -- -- 78,000 91,000 -- --
Cumming Townhomes -- -- -- -- -- -- -- 540,000
Beachside Commons -- -- 1,500,000 -- -- -- -- --
Bethel Road 2 -- -- -- -- -- -- -- --
Lakeside Trail -- -- -- -- -- -- -- --
Cumming M1 Property -- -- -- -- -- -- -- --
International Boulevard -- -- -- 132,680 -- 239,320 155,000 --
Lahaina Operating Expenses 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000
Accent Group Operating
Expenses 268,542 268,542 268,542 268,542 268,542 268,542 268,542 268,542
-------- ------- --------- ------- --------- --------- --------- ---------
Total Expenses 298,542 373,292 1,802,542 435,222 563,080 815,400 1,337,280 1,022,280
-------- ------- --------- ------- --------- --------- --------- ---------
Earnings Before Interest
and Taxes (259,117) 259,258 661,883 (82,672) 468,595 756,275 1,626,770 258,770
Interest Expense 66,905 66,905 84,143 54,231 87,766 85,663 83,601 73,517
-------- ------- --------- ------- --------- --------- --------- ---------
Net Income Before Tax (326,022) 192,353 577,740 (136,903) 380,829 670,612 1,543,169 185,253
Income Tax (130,409) 76,941 231,096 (54,761) 152,332 268,245 617,268 74,101
-------- ------- --------- ------- --------- --------- --------- ---------
Net Income (195,613) 115,412 346,644 (82,142) 228,498 402,367 925,902 111,152
Quarter Net Income 266,443 548,723
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇: March April May June Total
--------- --------- --------- --------- ----------
Net Mortgage 304,500 345,500 399,500 431,000 2,286,500
Accent Mortgage 31,800 31,800 31,800 36,050 345,225
Staged Financing 71,625 81,500 91,375 91,735 698,860
Recreation Sites 4,500 3,375 3,375 3,375 2,258,625
Modular Homes 234,000 234,000 234,000 234,000 1,872,000
Swiss Air -- 800,000 -- -- 2,675,000
Cumming Townhomes 920,000 920,000 1,150,000 1,150,000 4,830,000
Beachside Commons -- -- -- -- 2,360,000
Bethel Road 2 -- -- -- 230,000 230,000
Lakeside Trail -- -- 259,000 -- 259,000
Cumming M1 Property -- 2,550,000 -- -- 2,550,000
International Boulevard 350,000 -- -- -- 1,200,000
--------- --------- --------- --------- ----------
Total Revenues 1,916,425 4,966,175 2,169,050 2,176,160 21,565,210
Expenses:
Recreation Sites 1,200 900 900 900 722,300
Modular Homes 182,538 182,538 182,538 182,538 1,460,304
Swiss Air -- 104,000 -- -- 347,750
Cumming Townhomes 720,000 720,000 900,000 900,000 3,780,000
Beachside Commons -- -- -- -- 1,500,000
Bethel Road 2 -- -- -- 157,000 157,000
Lakeside Trail -- -- 156,000 -- 156,000
Cumming M1 Property -- 1,550,000 -- -- 1,550,000
International Boulevard 217,000 -- -- -- 744,000
Lahaina Operating Expense 30,000 30,000 30,000 30,000 360,000
Accent Group Operating
Expenses 268,542 283,542 283,542 283,542 3,267,504
--------- --------- --------- --------- ----------
Total Expenses 1,419,280 2,870,980 1,552,980 1,553,980 14,044,858
Earnings Before Interest
and Taxes 497,145 2,095,195 616,070 622,180 7,520,352
Interest Expense 67,511 57,869 50,749 70,954 849,813
--------- --------- --------- --------- ----------
Net Income Before Tax 429,634 2,037,326 565,321 551,226 6,670,539
Income Tax 171,854 814,930 226,128 220,490 2,668,216
--------- --------- --------- --------- ----------
Net Income 257,781 1,222,396 339,193 330,736 4,002,324
Quarter Net Income 1,294,834 1,892,324
3rd Quarter 4th Quarter
31
The Accent Group
Consolidated Income Statement
For The Period July 1, 2000-June 30, 2001
Pro Forma-For Purposes Of The Lahaina Acquisitions, Inc./The Accent Group, Inc.
Merger Only
Not To Be Relied Upon For Investment Purposes
JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
REVENUES: --------- --------- ----------- --------- --------- -----------
Net Mortgage.................................. 449,000 480,000 507,000 534,000 561,000 587,000
Staged Financing.............................. 76,050 76,050 76,050 76,050 76,050 76,050
Recreation Sites.............................. 3,375 3,375 278,375 -- -- 1,000,000
Modular Homes................................. 234,000 234,000 234,000 234,000 234,000 234,000
Swiss Air..................................... 650,000 -- 800,000 -- 1,300,000 --
Cumming Townhomes............................. 920,000 920,000 920,000 920,000 920,000 920,000
Bethel Road................................... -- 125,000 -- -- 125,000 --
Bethel Road 2................................. 170,000 170,000 170,000 170,000 170,000 170,000
Beachside Condo............................... -- -- -- -- -- --
International Boulevard....................... 250,000 300,000 400,000 400,000 -- --
--------- --------- --------- --------- --------- ---------
Total Revenues................................ 2,812,425 2,368,425 3,445,425 2,397,425 3,446,050 3,047,050
Expenses:
Recreation Sites.............................. 900 900 92,400 900 -- 285,000
Modular Homes................................. 182,538 182,538 182,538 182,538 182,538 182,538
Swiss Air..................................... 84,500 -- 104,000 -- 169,000 --
Cumming Townhomes............................. 720,000 720,000 720,000 720,000 720,000 720,000
Bethel Road................................... -- 65,000 -- -- 65,000 --
Bethel Road 2................................. 230,000 230,000 230,000 230,000 230,000 230,000
Beachside Condo............................... -- -- -- -- -- --
International Boulevard....................... 115,000 186,000 248,000 248,000 -- --
Accent Group Operating Expenses............... 408,542 283,542 283,542 283,542 283,542 283,542
--------- --------- --------- --------- --------- ---------
Total Expenses................................ 1,723,480 1,609,980 1,802,480 1,606,980 1,592,080 1,643,080
--------- --------- --------- --------- --------- ---------
Earnings Before Interest and Taxes............ 1,088,945 758,445 1,642,945 790,445 1,853,970 1,403,970
Interest Expense.............................. 47,823 33,199 29,530 24,515 22,372 22,230
--------- --------- --------- --------- --------- ---------
Net Income Before Tax......................... 1,041,122 725,246 1,613,415 765,930 1,831,598 1,381,740
Income Tax.................................... 416,449 290,098 645,366 306,372 732,639 552,696
--------- --------- --------- --------- --------- ---------
Net Income.................................... 624,673 435,148 968,049 459,558 1,098,959 829,044
Quarter Net Income............................ 2,027,869 2,387,561
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
JANUARY FEBRUARY MARCH APRIL MAY JUNE
REVENUES: --------- --------- ----------- --------- --------- -----------
Net Mortgage.................................. 609,750 634,500 652,500 670,500 688,500 698,500
Staged Financing.............................. 82,300 82,300 82,300 82,300 82,300 82,300
Recreation Sites.............................. -- -- -- -- -- --
Modular Homes................................. 234,000 234,000 390,000 390,000 390,000 390,000
Swiss Air..................................... 850,000 -- -- -- 300,000 --
Cumming Townhomes............................. 920,000 1,150,000 920,000 1,200,000 1,200,000 1,200,000
Bethel Road................................... 125,000 125,000 125,000 250,000 250,000 ▇▇▇,▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ 2................................. 230,000 230,000 230,000 230,000 460,000 230,000
Beachside Condo............................... 395,000 790,000 790,000 790,000 790,000 790,000
International Boulevard....................... 300,000 250,000 500,000 500,000 -- 500,000
--------- --------- --------- --------- --------- ---------
Total Revenues................................ 3,495,800 3,689,800 4,112,800 4,160,800 4,140,800 4,140,800
Expenses:
Recreation Sites.............................. -- -- -- -- -- --
Modular Homes................................. 182,538 182,538 304,230 304,230 304,230 304,230
Swiss Air..................................... 110,500 -- -- -- 39,000 --
Cumming Townhomes............................. 720,000 900,000 720,000 949,130 939,130 939,130
Bethel Road................................... 65,000 65,000 65,000 130,000 130,000 ▇▇▇,▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ 2................................. 172,000 172,000 172,000 172,000 344,000 172,000
Beachside Condo............................... 298,600 597,200 597,200 597,200 597,200 597,200
International Boulevard....................... 186,000 155,000 310,000 310,000 -- 310,000
Accent Group Operating Expenses............... 283,542 283,542 283,542 283,542 283,542 283,542
--------- --------- --------- --------- ---------
Total Expenses................................ 2,018,180 2,355,280 2,451,972 2,736,102 2,637,102 2,736,102
--------- --------- --------- --------- ---------
Earnings Before Interest and Taxes............ 1,727,870 1,140,520 1,237,828 1,376,698 1,376,698 1,404,698
Interest Expense.............................. 12,422 12,280 10,076 9,934 9,934 9,934
--------- --------- --------- --------- ---------
Net Income Before Tax......................... 1,715,448 1,128,240 1,227,752 1,366,763 1,513,763 1,394,763
Income Tax.................................... 686,179 451,296 491,101 546,705 605,505 557,905
--------- --------- --------- --------- ---------
Net Income.................................... 1,029,269 676,944 736,651 820,058 908,258 836,858
Quarter Net Income............................ 2,442,864 2,565,174
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
TOTAL
REVENUES: ----------
Net Mortgage.................................. 7,072,250
Staged Financing.............................. 950,100
Recreation Sites.............................. 1,288,500
Modular Homes................................. 3,342,000
Swiss Air..................................... 3,900,000
Cumming Townhomes............................. 12,110,000
Bethel Road................................... 1,375,000
Bethel Road 2................................. 2,990,000
Beachside Condo............................... 4,345,000
International Boulevard....................... 3,400,000
----------
Total Revenues................................ 40,862,850
Expenses:
Recreation Sites.............................. 380,100
Modular Homes................................. 2,677,224
Swiss Air..................................... 507,000
Cumming Townhomes............................. 9,477,391
Bethel Road................................... 715,000
Bethel Road 2................................. 2,236,000
Beachside Condo............................... 3,284,600
International Boulevard....................... 2,108,000
Accent Group Operating Expenses............... 3,527,504
Total Expenses................................ 24,912,819
Earnings Before Interest and Taxes............ 15,950,031
Interest Expense.............................. 244,251
Net Income Before Tax......................... 15,705,780
Income Tax.................................... 6,282,312
Net Income.................................... 9,423,468
Quarter Net Income............................
32
SCHEDULE 6.2
TO AGREEMENT AND PLAN OF MERGER
CAPITALIZATION - LAHAINA
(a) (i) Terms of Warrants
1. Number of Shares: 60,000
Strike Price: $0.91875
Expiration Date: December 20, 2003
Holder: LKB Financial, LLC
*The above-described warrant has been converted into
48,990 shares of Lahaina Common Stock subsequent to the July
21, 1999 signing of the Merger Agreement. The shares have
been registered pursuant to Lahaina's Registration Statement
on Form S-1, Registration No. 333-74607, and will be
registered in the First Post-Effective Amendment to such
Registration Statement.
2. Number of Shares: 100,000
Strike Price: $2.60
Expiration Date: January 19, 2004
Holder: GCA Strategic Investment Fund,
Ltd.
3. Number of Shares: 15,000
Strike Price: $2.16
Expiration Date: January 19, 2004
Holder: LKB Financial, LLC
*The above-described warrant has been converted into
8,520 shares of Lahaina Common Stock subsequent to the July
21, 1999 signing of the Merger Agreement. The shares have
been registered pursuant to Lahaina's Registration Statement
on Form S-1, Registration No. 333-74607, and will be
registered in the First Post-Effective Amendment to such
Registration Statement.
4. Number of Shares: 100,000
Strike Price: $2.19
Expiration Date: January 19, 2004
Holder: GCA Strategic Investment Fund,
Ltd.
33
(ii) Equity Formation of Lahaina
Lahaina Shares
Common Stock Issued and Outstanding
Calculation.............................................. 2,906,343
Gives effect to:
1) Cancellation of 60,000 shares of LahainaCommon Stock in
connection with the sale of JP Concepts
2) Conversion of 1,910,000 shares of Lahaina Preferred
Stock at approximately $4.60 per share
Shares underlying of other instruments as reported in Lahaina's S-1
Registration Statement, Registration No. 333-74607 dated March 26,
1999.... 2,042,490*
*Gives effect to the 2,100,000 shares of Lahaina
Common Stock registered pursuant to the above S-1 Registration
Statement minus the 48,990 shares of Lahaina Common Stock and
8,520 shares of Lahaina Common Stock issued and outstanding
pursuant to the conversion of the warrants described in (a)
(i)(1) and (a)(i)(3) above.
Fully Diluted............................................ 4,948,833
(b) Beneficial Owners
(i) of Lahaina
The following table sets forth certain information regarding the
beneficial ownership of the common stock of Lahaina immediately following
consummation of the Merger by each person known to Lahaina to own beneficially
more than 5% of the outstanding shares of the common stock of Lahaina.
34
Name Shares Beneficially Owned(1)
---- ----------------------------
Number Percent
------ -------
L. ▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,559,500 16.3%
▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,537,500 16.2%
Mongoose Investments, LLC 1,715,000 15%
Name Shares Beneficially Owned
---- -------------------------
Number Percent
------ -------
Accent Associates, LLC 1,400,000 8.9%
Eutopean Enterprises, LLC 1,200,000 7.7%
Kingdom Generals, LLC 850,000 5.4%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 833,330 5.3%
(ii) of an Entity which Beneficially Owns Lahaina
The following table sets forth the Persons who hold a beneficial
ownership in the entities included in the table on Schedule 6.2(b)(i).
Entity Beneficial or Indirectly Beneficial Owner(s)
------ --------------------------------------------
Eutopean Enterprises, LLC L. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ (as owners)
Mongoose Investments, LLC ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (as Managing Member)
Accent Associates, LLC ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (as owners)
Kingdom Generals, LLC ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (as Managing Member)
-------------
(1)Does not take into account shares of Lahaina Common Stock resulting
from the redemption of the Lahaina Preferred Stock or any exercises of warrants,
options or other instruments.
35
SCHEDULE 6.15
TO AGREEMENT AND PLAN OF MERGER
ABSENCE OF CERTAIN CHANGES - LAHAINA
a. At the request of Accent, Lahaina has entered into an agreement with
GCA Strategic Investment Fund, Ltd. ("GCA") dated as of June 1, 1999
pursuant to which GCA agreed to convert the $300,000 working capital
line dated January 1, 1999 into 146,667 shares of Lahaina Common
Stock; and
Lahaina has negotiated an agreement with GCA pursuant to which (i)
GCA's buy-back rights and Lahaina's stand-still obligations with
respect to the $775,000 convertible note, as amended, will be amended,
(ii) the second mortgage on the Beachside property attached as
Schedule 6.6(a)(ii) hereto will be amended to include all amounts to
be owed to GCA and LKB Financial, LLC and (iii) GCA grants its consent
to this Agreement. (Form of Consent attached as Exhibit K hereto.)
b. None
c. None
36
SCHEDULE 10.1
TO AGREEMENT AND PLAN OF MERGER
LAHAINA PAYABLES
--------------------------------------------------------------------------------------
Pre-Merger Merger Related
--------------------------------------------------------------------------------------
AAA Advertising Agency (▇▇▇ $ 2,975 0
--------------------------------------------------------------------------------------
Allsafe $ 64 0
--------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ $ 1,200 0
--------------------------------------------------------------------------------------
▇▇▇▇▇▇ Islander Magazine $ 8,649 0
--------------------------------------------------------------------------------------
Arm & Associates 0 10,000
--------------------------------------------------------------------------------------
AT&T (Long Distance) $ 1,222 0
--------------------------------------------------------------------------------------
Boree Canvas $ 2,778 0
--------------------------------------------------------------------------------------
Brad's Glass $ 4,426 0
--------------------------------------------------------------------------------------
▇▇▇▇▇▇ $ 22,342 0
--------------------------------------------------------------------------------------
FPU (Shop's) $ 600 0
--------------------------------------------------------------------------------------
FPU (In dispute) $ 4,200* 0
--------------------------------------------------------------------------------------
Harbor Sound $ 1,049 0
--------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $ 12,000 8,000
--------------------------------------------------------------------------------------
Masons Refrigeration $ 402 0
--------------------------------------------------------------------------------------
Pacific Coast (August) $ 20,000 0
--------------------------------------------------------------------------------------
Nationwide Ins. $ 2,966 0
--------------------------------------------------------------------------------------
NewsLeader $ 1,578 0
--------------------------------------------------------------------------------------
The Chamber $ 235 0
--------------------------------------------------------------------------------------
Tribune-Georgian $ 957 0
--------------------------------------------------------------------------------------
Waycross Journal-Herald $ 3,784 0
--------------------------------------------------------------------------------------
WWRR-FM 100.7 $ 579 0
--------------------------------------------------------------------------------------
Kres Real Estate (expenses) $ 2,116 0
--------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ (termination costs) $ 0 30,000
--------------------------------------------------------------------------------------
37
--------------------------------------------------------------------------------------
Signs & Frames $ 246 0
--------------------------------------------------------------------------------------
AT&T $ 200 0
--------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇ $ 2,645 0
--------------------------------------------------------------------------------------
BellSouth $ 894 0
--------------------------------------------------------------------------------------
▇▇▇▇▇ $ 10,000 5,000
--------------------------------------------------------------------------------------
Boy Scouts of America $ 1,000 0
--------------------------------------------------------------------------------------
Florida Times Union $ 49 0
--------------------------------------------------------------------------------------
Georgia Secretary of State $ 50 0
--------------------------------------------------------------------------------------
Milt's of ▇▇▇▇▇▇ $ 285 0
--------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ & Co. $ 2,061 0
--------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ $ 140,000 85,000*
--------------------------------------------------------------------------------------
PR Newswire $ 4,200 0
--------------------------------------------------------------------------------------
Internet Stock Market $ 3,325 0
--------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ $ 7,000 0
--------------------------------------------------------------------------------------
Corporate Stock Transfer $ 9,100 0
--------------------------------------------------------------------------------------
▇▇▇▇▇ (Consulting) $ 0 60,000
--------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ (Consulting) $ 0 50,000
--------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇ $ 18,500 0
--------------------------------------------------------------------------------------
▇. ▇▇▇▇ (CFO Recruitment) $ 12,500 0
--------------------------------------------------------------------------------------
Fernandina Bch Newsleader $ 1,500 0
--------------------------------------------------------------------------------------
TOTAL 285,335 238,000
--------------------------------------------------------------------------------------
(1) water and sewer
dispute
(2)
includes 25,000 for
costs going forward
38
CONSENT TO AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT (the "Agreement") is made and entered into this 1st day of
August, 1999, by and among Lahaina Acquisitions, Inc. a Colorado corporation
("Lahaina"), ▇▇▇▇ NO. 1, INC, a Georgia corporation ("▇▇▇▇ 1"), Mongoose
Investments, LLC, a Georgia limited liability company ("Mongoose"), Beachside
Commons L. Inc, a Florida corporation ("Beachside"), L. ▇▇▇▇▇ ▇▇▇▇▇▇▇
("Demerau"), The Accent Group, Inc. a Georgia corporation ("Accent"), and GCA
Stratagic Investment Fund, Limited, a Beachside corporation ("GCA").
Capitalized terms not defined herein shall have the meaning set forth in the
Securities Agreement, as defined below, unless otherwise specified.
WITNESSETH:
WHEREAS, Lahaina and GCA have entered into a Securities Purchase Agreement
dated as of December 7, 1998 (the "Securities Agreement");
WHEREAS, Section 8.4 of the Securities Agreement states that neither
Lahaina nor any Subsidiary will consummate an Asset Sale of material assets of
Lahaina or any Subsidiary, including but not limited to any disposition of
capital stock of a Subsidiary, property or other assets by means of a merger,
without the prior written consent of GCA, which consent shall not be
unreasonably withheld;
WHEREAS, Lahaina contemplates the merger of its wholly-owned Subsidiary,
▇▇▇▇ 1, with and into Accent pursuant to that certain Agreement and Plan of
Merger by and among Lahaina, ▇▇▇▇ 1, Accent, Mongoose and Accent Mortgage
Services, Inc. dated as of July 21, 1999 (the "Merger Agreement"); and
as amended as on August 19, 1999;
WHEREAS, Lahaina and GCA wish to amend certain provisions of the
Securities Agreement and related Transaction Agreements prior to closing of the
Merger Agreement;
NOW THEREFORE, for and in consideration of the premises, the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
A. GCA Consent to Merger. GCA consents to the merger of ▇▇▇▇ 1 with and
into Accent pursuant to the terms of the Merger Agreement, subject to the
conditions precedent set forth in Section P below.
B. Forbearance of Redemption Rights under Convertible Notes. Lahaina
agrees to forbear from redeeming in whole or in part, the remaining unpaid
principal amount of the Convertible Notes for a period of 180 Trading Days from
the date hereof, subject to the Repurchase Option as set forth in the
Convertible Note No. 1 (defined below), as amended substantially in the
1
39
form of Exhibit B attached hereto.
C. Moratorium on Issuance of Convertible Securities. Lahaina agrees not to
issue any additional convertible securities issuable or convertible at a
discount to the then current market price of Lahaina common stock until all of
the convertible notes and warrants held by GCA and LKB Financial, LLC ("LKB"),
as set forth more particularly in Schedule F(5)(d) attached hereto, are fully
converted.
D. Securities Filings. Lahaina, Accent and Demerau covenant to:
1. file all disclosure documents and amendments to the then current
Form S-1 Registration Statement of Lahaina within three (3) business
days of closing of the Merger Agreement, and subject to the liquidated
damages provisions set forth in Subsections 10.4(d) and (3) of the
Securities Agreement;
2. remove all restrictive legends from all shares of Common Stock of
Lahaina currently held by GCA and LKB; and
3. deliver such unlegended shares of Common Stock of Lahaina to GCA
and LKB, within five (5) business days after closing of the Merger
Agreement, subject to the liquidated damages provisions set forth in
Section 10.1 of the Securities Agreement.
E. Beachside Mortgage. Lahaina, Beachside, Accent and Demerau covenant
that GCA shall retain either a second mortgage and title insurance commitment on
the Beachside Property, or in the event of the sale of the Beachside Property, a
first or second mortgage and title insurance commitment on other comparable real
property satisfactory in form and substance to GCA in its sole discretion until
all of the convertible notes and warrants held by GCA and LKB, as set forth more
particularly in Schedule F(5)(d), are fully converted.
F. Conditions Precedent to GCA Consent to Merger. The consent of GCA to
the merger of ▇▇▇▇ 1 with and into Accent pursuant to the terms of the Merger
Agreement is subject to the fulfillment prior to or at the closing of the Merger
Agreement of the following conditions:
1. An amendment to the certain Guaranty, dated as of the 7th day of
December, 1998 made by Beachside Commons I, Inc. in its capacity as a
guarantor of Lahaina for the benefit of GCA ("Beachside Guaranty"),
substantially in the form of Exhibit A attached hereto, is properly
executed by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and authorized officers of Mongoose,
Lahaina and Beachside Commons I, Inc. ("Beachside").
2. An amendment to the certain 9% Convertible Note No. 1 of Lahaina in
the principal amount of $775,000, as amended to date (the "Convertible
Note No. 1"), substantially in the form of Exhibit B attached hereto,
properly executed by an
2
40
authorized officer of Lahaina.
3. An amendment to the Securities Agreement, substantially in the
form of Exhibit C attached hereto, is properly executed by an
authorized officer of Lahaina.
4. An Escrow Agreement, substantially in the form of Exhibit D
attached hereto, is properly executed by an authorized officer of
Lahaina.
5. The board of directors of Lahaina each properly resolve:
a. to exclusively retain the law firm of Paul, Hastings,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP as its legal counsel for all
securities-related matters of Lahaina and its subsidiaries until
or after February 14, 2000;
b. to: (i) file all disclosure documents and amendments to
the then current Form S-1 Registration Statement of Lahaina, (ii)
remove all restrictive legends from the Conversion Shares, and
(iii) deliver such newly unlegended Conversion Shares to GCA,
within five (5) business days of closing of the Merger Agreement,
subject to the liquidated damages provisions set forth in
Subsections 10.4(d) and (e) of the Securities Agreement.
c. to forbear from redeeming, in whole or in part, the
remaining unpaid principal amount of the Convertible Notes for a
period of 180 Trading Days from the closing date of the Merger
Agreement;
d. not to issue any additional convertible securities
issuable or convertible at a discount to the then current market
price of Lahaina common stock until all of the convertible notes
and warrants held by GCA and LKB Financial, LLC, as set forth more
particularly in Schedule F(5)(d), are fully converted; and
e. that GCA shall retain either a second mortgage and title
insurance commitment on the Beachside Property, or in the event of
the sale the Beachside Property, a mortgage and title insurance
commitment on other comparable real property satisfactory in form
and substance to GCA in its sole discretion until all of the
convertible notes and warrants held by GCA and LKB Financial LLC,
as set forth more particularly in Schedule F(5)(d), are fully
converted.
6. Lahaina delivers to GCA all Conversion Shares, subject to the
liquidated damages provisions set forth in Section 10.1 of the
Securities Agreement.
3
41
7. Lahaina, Accent and Demerau covenant, by executing this
Agreement, to (a) file all disclosure documents and amendments to the
then current Form S-1 Registration Statement of Lahaina, (b) remove all
restrictive legends from the Conversion Shares, and (c) deliver such
newly legended Conversion Shares to GCA within five (5) days of closing
of the Merger Agreement.
G. Indemnification. Each of Lahaina, ▇▇▇▇ 1, Beachside and Accent will and
hereby agrees, in the event of any registration of any securities of Lahaina
under the Securities Act, to indemnify and hold harmless GCA, LKB, and any
other holder of any Registrable Securities covered by such registration
statement, its directors, employees and officers, each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls such holder or any such underwriter
within the meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several, to which such holder or any such director or
officer or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse such holder and each such director, officer, underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding, provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability,
(or action or proceeding in respect thereof) or expense arises out of or is
based upon an untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such holder or underwriter
stating that it is for use in the preparation thereof and, provided further
that the Company shall not be liable to any Person who participates as an
underwriter in the offering or sale of Registrable Securities or to any other
Person, if any, who controls such underwriter within the meaning of the
Securities Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense
arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, within the time
required by the Securities Act to the Person assuming the existence of an
untrue statement or alleged untrue statement or omission or alleged omission at
or prior to the written confirmation of the sale of the Registrable Securities
to such Person if such statement or omission was corrected in such final
prospectus or an amendment or supplement thereto. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf
of such holder or any such director, officer, underwriter or controlling person
and shall survive the transfer of such securities by such holder. Capitalized
terms not otherwise defined in this Agreement shall have the meaning set forth
in the Registration Rights Agreement.
4
42
H. Successors and Assigns. The provisions hereof shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns.
I. Governing Laws. This Agreement shall be executed, construed and
enforced in accordance with the laws of the State of Georgia.
J. Amendments. No amendment of this Agreement shall be effective unless
it shall be in writing and signed on behalf of each of the parties hereto.
K. Notices.
If to Lahaina, Mongoose or Beachside:
c/o Lahaina Acquisitions, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
If to GCA:
GCA Strategic Investment Fund, Ltd
Mechanic ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇: ▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
[signature page follows]
5
43
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on their behalf by their duly authorized representatives as of the day and year
first above written.
LAHAINA ACQUISITIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
▇▇▇▇ NO. 1, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
MONGOOSE INVESTMENTS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
BEACHSIDE COMMONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
(signature page follows)
6
44
THE ACCENT GROUP, INC.
By: /s/
---------------------------
Name: /s/
-------------------------
Title: President
------------------------
GCA STRATEGIC INVESTMENT FUND, LTD.
By: /s/
---------------------------
Name: /s/
-------------------------
Title: Director
------------------------
****
7
45
Schedule F(5)(d)
GCA Strategic Investment Fund, Ltd.
25,000 Common Shares registered under current S-1.
20,666 Common Shares registered under current S-1.
775,000-9% Convertible Note--currently convertible into 885,714 Common Shares
registered under current S-1.
146,667 Common Shares, owed but not yet delivered, registered under current
S-1.
Warrants
100,000 Warrants @ Strike Price of $2.19--Expiration Date--January 19, 2004,
issued in connection with 1st drawdown on $300,000 credit line.
50,000 Warrants @ Strike Price of $2.16, owed but not yet delivered, issued in
connection with 2nd drawdown on $300,000 credit line.
50,000 Warrants @ Strike Price of $2.16, owed but not yet delivered, issued in
connection with 3rd drawdown on $300,000 credit line.
LKB Financial, LLC
8,520 Common Shares issued from Conversion of 15,000 Warrants issued in
connection with $300,000 Credit Line, registered under current S-1.
48,990 Common Shares issued from Conversion of 60,000 Warrants issued in
connection with $750,000 Convertible Debenture, registered under current S-1.
46
EXHIBIT A
AMENDMENT TO GUARANTY
This Amendment is dated as of August 18, 1999 among Beachside Commons I,
Inc. ("Beachside"), Lahaina Acquisitions, Inc. ("Lahaina"), GCA Strategic
Investment Fund, Limited ("GCA"), Mongoose Investments, LLC ("Mongoose") and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇").
PRELIMINARY STATEMENT
WHEREAS, Beachside ("Beachside") made and executed that certain Guaranty
dated December 7, 1998 (the "Guaranty"; capitalized terms used but not defined
herein have the meanings assigned to such terms in the Guaranty), in favor of
GCA with respect to the payment and performance of the $775,000 indebtedness
and obligations of Lahaina to GCA under the Securities Purchase Agreement as
evidenced by the 9% Convertible Note No. 1 dated December 29, 1998 and amended
to date;
WHEREAS, GCA, Lahaina, Beachside, Mongoose and ▇▇▇▇▇ have agreed to
replace Beachside with Mongoose and ▇▇▇▇▇ as Guarantor under the Guaranty.
NOW, THEREFORE, for good and valuable consideration, the parties hereto
agree as follows:
1. Amendment to Guaranty
Effective as of the date of this Amendment, the Guaranty is amended in
accordance with this Amendment. Except as specifically amended by this
Amendment, all of the original terms and provisions of the Guaranty shall
continue in full force and effect.
The Guaranty is hereby amended by replacing Beachside with Mongoose and
▇▇▇▇▇, jointly and severally, as the Guarantor under the Guaranty.
2. Miscellaneous
2.1 Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Georgia.
2.2 Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective legal
representatives, successors and assigns.
2.3 Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which
taken together shall be one and the same instrument.
47
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers hereunder duly authorized as of the day
and year first written above.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
MONGOOSE INVESTMENTS LLC
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Member
LAHAINA ACQUISITIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman
BEACHSIDE COMMONS I, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
CGA STRATEGIC INVESTMENT FUND,
LIMITED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
48
EXHIBIT B
AMENDMENT NO. 1
TO
9% CONVERTIBLE NOTE NO. 1
PRINCIPLE AMOUNT $775,000
This is AMENDMENT NO. 1 (the "Amendment") to 9% Convertible Note No. 1
Principal Amount $775,000, dated as of December 7, 1998 and as amended to date
(the "Note"), dated August 18, 1999. by and between Lahaina Acquisitions, Inc.
("Lahaina") and GCA Strategic Investment Fund, Limited ("CGA").
Background Statement
--------------------
WHEREAS, Lahaina delivered to GCA, the Note, and
WHEREAS, Lahaina and GCA wish to amend by this Amendment certain provisions
of the Note (the "Amended Note"):
NOW THEREFORE, in consideration of the promises and other good and valuable
consideration, the parties hereby agree as follows:
1. The first two sentences of Section 4.2 of the Note shall be deleted in
its entirety and replaced with the following language:
"100% of the outstanding principal amount of this Convertible Note
shall be converted into a number of shares of Common Stock at a
conversion price (the "Conversion Price") equal to the lesser of
(i) $0.875, and (ii) based on a formula F/P, where F = the
principal amount of Convertible Note being converted plus accrued
and unpaid interest thereon through the date of conversion plus
Default Interest, if any, on such interest, and P = the product of
85% multiplied by the average of the ten (10) consecutive DWASP
for the Common Stock for the ten (10) Trading Days ending on the
day prior to the Conversion Date ("Floating Conversion Price")
(subject, in each case, to equitable adjustments for stock splits,
stock dividends or rights offerings by the Company relating to the
Company's securities or the securities of any subsidiary of the
Company, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events as contemplated by
Article XI of the Agreement)."
49
2. SUBSECTION 5.1 of the Note shall be deleted in its entirety and
replaced with the following:
5.1 Redemption Rights and Repurchase Option of Company. The Company
may elect, or be required, upon receipt of a Notice of Conversion
at any time after, but not prior to, the Option Expiration Date
(as defined below), to redeem in whole or in part the unpaid
principal amount of the Convertible Note, for each at a
redemption price (the "Redemption Price") equal to the product
of (x) the number of shares of Common Stock which are then
issuable upon conversion of the Convertible Note pursuant to
SECTION 4.1 (the "Conversion Shares"). multiplied by (y) the
average of the five (5) consecutive DWASP for the Common Stock
for the five (5) consecutive Trading Days ending on the day prior
to the date of redemption by the Company, plus accrued and unpaid
interest: provided that, GCA will grant the Company, or its
assignees, an option (the "Repurchase Option") to purchase the
Conversion Shares held by GCA, to be exercised under the
following terms:
(a) The Repurchase Option price per share is as follows:
(i) Beginning on the closing date of a certain Merger
Agreement dated as of July 21, 1999 and as amended on August 19,
1999, by and among the Company, ▇▇▇▇ NO. I, Inc., The Accent
Group, Inc., Accent Mortgage Services, Inc. and Mongoose
Investments, LLC, and closing on August 19, 1999, (the "Merger
Closing Date") and extending until five (5) business days
following the Merger Closing Date, the Conversion Shares may be
purchased for $3.25 per share, plus accrued and unpaid interest;
(ii) Beginning on the sixth (6th) business day
following the Merger Closing Date and extending until the tenth
(10th) business day following the Merger Closing Date, the
Conversion Shares may be purchased for $3.50 per share, plus and
accrued and unpaid interest; or
(iii) Beginning on the eleventh (11th) business day
following the Merger Closing Date and expiring on September 30,
1999 (the "Option Expiration Date"), the Conversion Shares may be
purchased for $3.75 per share, plus accrued and unpaid interest.
(b) The minimum number of Conversion Shares which may be
purchased under an exercise of the Repurchase Option is eighty
percent (80%) of the Shares issuable under the Convertible Note.
(c) For any and all Repurchase Options exercised by the
Company, the
2
50
purchase monies must be delivered by wire transfer, in immediately
available funds, to the escrow account of an escrow agent appointed by
the Holder, within two (2) business days after notice of intent to
exercise the Repurchase Option (the "Funding Date"). Closing shall
occur as soon as the Shares are available from the Company's transfer
agent, but not later than three (3) days after notice that the funding
is available in the escrow account. All notices must be made in
writing, and are irrevocable.
(d) In the event that funding is not received in the escrow
account (the "Repurchase Default") on the Funding Date, the company
waives the current Repurchase Option and any Future Repurchase
Options. The Shares purchased under the Repurchase Option will have a
mandatory "lock-up" for the sooner of (i) one (1) year following the
exercise of the Repurchase Option or (ii) until such time that
Holder's fully diluted shareholdings (including all convertible debt
securities such as convertible notes and warrants) in the Company are
less than 30,000 shares."
3. Miscellaneous
2.1 Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Georgia.
2.2 Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective local representatives,
successors and assigns.
2.3 Counterparts. this Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which taken
together shall be one and the same instrument.
[signature page follows]
3
51
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed hereunder duly authorized as of the day and year first above written.
LAHAINA ACQUISITIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Title: Chairman
---------------------------
GCA STRATEGIC INVESTMENT FUND,
LIMITED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Title: Director
----------------------------
4
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EXHIBIT C
AMENDMENT
TO
SECURITIES PURCHASE AGREEMENT
This is an AMENDMENT (the "Amendment") to the certain Securities Purchase
Agreement, dated as of December 7, 1998 (the "Securities Agreement"), by and
between Lahaina Acquisitions, Inc. ("Lahaina") and GCA Strategic Investment Fund
Limited ("GCA").
Background Statement
--------------------
WHEREAS, Lahaina and GCA have entered into a Securities Purchase Agreement
dated as of December 7, 1998 (the "Securities Agreement"):
WHEREAS, Lahaina and GCA wish to amend by this Amendment certain provisions
of the Securities Agreement;
NOW THEREFORE, in consideration of the promises and other good and valuable
consideration, the parties hereby agree as follows:
1. In the first sentence, third line, of Section 10.1(a) of the Securities
Agreement, the words "five (5) Trading Days" shall be deleted and replaced with
"three (3) Trading Days."
2. Section 3.4 of the Securities Agreement shall be deleted in its
entirety and replaced with the following language:
"Section 3.4 Mandatory Prepayments.
(a) Upon (i) the occurrence of a Change in Control of the Company, (ii) a
transfer of all or substantially all of the assets of the Company to any
Person in a single transaction or series of related transactions, (iii) a
consolidation, merger or amalgamation of the Company with or into another
Person in which the Company is not the surviving entity (other than a
merger which is effected solely to change the jurisdiction of incorporation
of the Company and results in a reclassification, conversion or exchange of
outstanding shares of Common Stock solely into shares of Common Stock)
(each of items (i), (ii) and (iii) being referred to as a "Sale Event"), or
(iv) the occurrence of a Registration Default which continues uncured for a
period of forty-five (45) days, then, in each case, the Company shall, upon
request of the Majority Holders, redeem the Convertible Notes, subject to
the provisions of Section 5 of the Convertible Notes.
(b) Upon the consummation of one or more Financings, the Company shall use
100% of the Net Cash Proceeds therefrom (unless such Net cash proceeds from
each such
53
Financing is less than $250,000) to redeem the Convertible Notes. The
redemption price payable upon any such redemption shall be the Redemption Price
in Section 5 of the Convertible Notes, as amended (referred to herein as the
"Formula Price").
(c) Upon the issuance of the Maximum Number of Shares and the failure within 90
days of such issuance to obtain shareholder approval to issue additional shares
of Common Stock (the "Redemption Event"), the Company shall redeem the
outstanding balance of each Convertible Note for the Formula Price.
(d) In the event that there is an insufficient number of authorized; issuable,
unlegended and freely tradeable shares of Common Stock registered with the
latest Form S-1 or S-1/A (or other applicable) Registration Statement filed by
the Company to fully convert the Convertible Notes and exercise all warrants
held by GCA and LKB Financial, LLC, then the Company shall immediately file a
Form S-1/A (or other applicable) amendment to the then current Registration
Statement to register a sufficient number of such shares to convert said
Convertible Notes and warrants. Upon the failure within five (5) Trading Days
to register a sufficient number of such shares, the Company shall redeem the
outstanding balance of each Convertible Note for the Formula Price. In
addition, failure of the Company to register a sufficient number of such shares
to fully convert said Convertible Notes and exercise such warrants shall be a
Registered Default under Section 10.4(e) from the date of the Notice of
Conversion to the date of the earlier of (i) the redemption of the outstanding
balance of the Convertible Notes and exercise of all such warrants or (ii) full
conversion of the Convertible Notes and exercise of all such warrants."
3. Section 9.2 of the Security Agreement shall be deleted in its entirety
and replaced with the following language: "Section 9.3 [omitted]."
4. Miscellaneous
4.1. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Georgia.
4.2. Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective legal
representatives, successors and assigns.
4.3. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which
taken together shall be one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
2
54
executed hereunder duly authorized as of the day and year first above written.
LAHAINA ACQUISITIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Title: Chairman
------------------------
GCA STRATEGIC INVESTMENT FUND,
LIMITED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Title: Director
--------------------------
****
3
55
Exhibit D
ESCROW AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this 18th day of
August 1999, by and among Lahaina Acquisitions, Inc., a Colorado corporation
(the "Company"), The Accent Group, Inc. ("Accent") and GCA Strategic Investment
Fund, Limited, a Bermuda corporation ("GCA"), and accepted by ▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
as Escrow Agent. Capitalized terms not defined herein shall have the meaning
set forth in the Securities Agreement, as defined below, unless otherwise
specified.
WITNESSETH:
WHEREAS, GCA and the Company entered into a Securities Purchase Agreement
dated as of December 7, 1998 (the "Securities Agreement") providing for, among
other things, the purchase by GCA of the Note (defined below) which is
convertible into a certain number of shares of Common Stock of the Company:
WHEREAS, GCA purchased from the Company a 9% Convertible Note No. 1
Principal Amount $775,000, dated as of December 28, 1998 and as amended to date
(the "Securities"), pursuant to the terms of the Securities Agreement, and
WHEREAS, Lahaina contemplates the merger of its wholly-owned Subsidiary,
▇▇▇▇ NO. 1, Inc. ("▇▇▇▇ 1"), with and into Accent, pursuant to that certain
Agreement and Plan of Merger by and among the Company, ▇▇▇▇ 1, Accent, Mongoose
Investments, LLC and Accent Mortgage Services, Inc. dated as of July 21, 1998,
as amended on August 19, 1989, and closed on August 19, 1989 (the "Merger
Agreement"), and that pursuant to the Merger Agreement the shareholders of
Accent shall become the majority shareholders of the Company.
WHEREAS, prior to or as of the closing of the Merger Agreement, the
Company and GCA wish for the Escrow Agent to hold certain certificates
representing a sufficient number of authorized and non-outstanding shares of
Common Stock in the Company (the "Common Shares") to be issuable upon
conversion of the Securities, in escrow until the Escrow Agent receives, or is
copied, a written notice of election to convert the Securities (the "Conversion
Notice"); and
WHEREAS, the Company and GCA desire that the Escrow Agent be empowered to
complete delivery to GCA the number of Common Shares to be issued upon
conversion of the Securities:
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
legal sufficiency of
56
which are hereby acknowledged, and intending to be legally bound hereby, the
parties agree as follows:
ARTICLE 1
TERMS OF THE ESCROW
1.1 The parties hereby agree to establish an escrow account with the
Escrow Agent whereby the Escrow Agent shall hold certain certificates
representing the Common Shares. The Company will deliver, within three (3) days
following the closing of the Merger Agreement, eight hundred eighty five
thousand seven hundred fourteen (885,714) authorized and non-outstanding shares
of Common Stock in the Company in the form of eighty-eight (88) certificates of
ten thousand Common Shares each, and one (1) certificate of five thousand
seven hundred fourteen (5,714) Common Shares.
1.2 Upon the Escrow Agent's receipt of the Conversion Notice, he
shall notify the Company, or the Company's designated attorney or agent, of the
amount of Common Shares convertible and deliverable to GCA pursuant to the
Conversion Notice.
1.3 In the event GCA elects to exercise its right to convert the
Securities, the parties hereby agree that any Conversion Notice to be delivered
by GCA shall be delivered to the Escrow Agent, along with evidence of the
Conversion Price (as defined in the Securities) as reported by Bloomberg L.P.
and a calculation of the Common Shares and accrued and unpaid interest. Upon
receipt of any Notice of Conversion from GCA (including a Notice of Conversion
delivered by facsimile), the Escrow Agent shall immediately deliver a copy of
such Notice of Conversion to the Company by facsimile or otherwise. The parties
hereto agree that the Escrow Agent shall be empowered to deliver the number of
converted Common Shares to be issued to GCA based on the information provided
to it in the applicable Conversion Notice within three (3) New York Stock
Exchange trading days of its receipt of the Conversion Notice, in accordance
with the conversion provisions set forth in the Securities Agreement.
1.4 This Agreement may be altered or amended only with the consent of
the parties hereto. Should the Company attempt to change this Agreement in a
manner which, in the Escrow Agent's discretion, shall be undesirable, the
Escrow Agent may resign as Escrow Agent by notifying the Company and GCA in
writing. In case of the Escrow Agent's resignation or removal pursuant to the
foregoing, his only duty, until receipt of notice from the Company and GCA or
their agents that a successor escrow agent shall have been appointed, shall be
to hold and preserve the Common Shares. Upon such event GCA will appoint a new
Escrow Agent. Upon receipt by the Escrow Agent of said notice from GCA of the
appointment of a successor escrow agent, the name of a successor escrow account
and a direction to transfer the Common Shares, the Escrow Agent shall promptly
thereafter transfer the Common Shares held in escrow to said successor escrow
agent. Immediately after said transfer of Common Shares, the Escrow Agent
shall furnish the Company and GCA with proof of such transfer. The Escrow Agent
is authorized to disregard any notices, request, instructions or demands
received by it from the
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Company after notice of resignation or removal shall have been given, unless the
same shall be the aforementioned notice from the Company and GCA to transfer the
Securities and funds to a successor escrow agent or to return same to the
respective parties.
1.5 The Escrow Agent shall be reimbursed by the Company for any
reasonable expenses incurred in connection with its performance
hereunder.
1.6 The Company and GCA warrant to and agree with the Escrow Agent
that:
(i) there is no security interest in the Securities or any part
thereof,
(ii) no financing statement under the Uniform Commercial Code is on
file in any jurisdiction claiming a security interest or in
describing (whether specifically or generally) the Securities
or any part thereof, and
(iii) the Escrow Agent shall have no responsibility at any time to
ascertain whether or not any security interest exists in the
Securities or any part thereof or to file any financing
statement under the Uniform Commercial Code with respect to the
Securities or any part thereof.
1.7 The Escrow Agent has no liability hereunder to either party
other than to hold and deliver the Common Shares in accordance with the Notice
of Conversion and any instructions it receives for the Company, and to deliver
them in accordance with the terms hereof. The Escrow Agent shall not be liable
for any action taken or omitted by him in good faith; and in no event shall the
Escrow Agent be liable or responsible except for the Escrow Agent's own gross
negligence or willful misconduct.
1.8 Each party hereto agrees to indemnify and hold harmless the
Escrow Agent from and with respect to any and all suits, claims, damages,
demands, actions, liabilities or losses arising in any way out of this
transaction including the obligation to defend any legal action brought
which in any way arises out of or is related to this Agreement.
1.9 Escrow Agent shall not be responsible for: (i) the sufficiency
or correctness as to the form, execution or the validity of this Agreement; or
(ii) the identity, authority or right of any person executing any notice or
document given to Escrow Agent.
ARTICLE 2
MISCELLANEOUS
2.1 No waiver or any breach of any covenant or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof, or of any other
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58
covenant or provision herein contained. No extension of time for performance of
any obligation or act shall be deemed any extension of the time for performance
of any other obligation or act.
2.2 All notices or other communications required or permitted hereunder
shall be in writing, and shall be sent by fax, overnight courier, registered or
certified mail, postage prepaid, return receipt requested, and shall be deemed
received upon receipt thereof, as follows:
(i) To the Company
Lahaina Acquisitions, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (phone)
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
(ii) To the Company's counsel:
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq. or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇ (phone)
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
(III) To GCA:
GCA Strategic Investment Fund, Limited
Mechanic Building ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇
ATTN: ▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (phone)
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
(IV) To the Escrow Agent:
Law offices of ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
( ) (phone)
( ) (fax)
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2.3. This Agreement shall be binding upon and shall inure to the
benefit of the permitted successors and assigns of the parties hereto.
2.4. This Agreement is the final expression of, and contains the
entire Agreement between, the parties with respect to the subject matter hereof
and supersedes all prior understandings with respect thereto. This Agreement may
not be modified, changed, supplemented or terminated, nor may any obligations
hereunder be waived, except by written instrument signed by the parties to be
charged or by its agent duly authorized in writing or as otherwise expressly
permitted herein.
2.5. Whenever required by the context of this Agreement, the singular
shall include the plural and masculine shall include the feminine. This
Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same, Unless otherwise
indicated, all references to Articles are to this Agreement.
2.6. The Company and CGA acknowledge and confirm that they are not
being represented in a legal capacity by the Law Office of ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and
they have had the opportunity to consult with their own legal advisors prior to
the signing of this Agreement.
2.7. The parties hereto expressly agree that this Agreement shall be
governed by, interpreted under and construed and enforced in accordance with the
laws of the State of Georgia. Any motion to enforce, existing out of, or
relating in any way to, any provisions of this Agreement shall be brought
through the American Arbitration Association at the designated locale of
Atlanta, Georgia.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of this day of August 1999.
---
LAHAINA ACQUISITIONS, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
GCA STRATEGIC INVESTMENT FUND,
LIMITED
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
LAW OFFICES OF ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
By: /s/ ▇. ▇▇▇▇▇ Den????
------------------------------
Name: ▇. ▇▇▇▇▇ Den????
Title: President
Company: The A???????????
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