-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HHBP66zXTxXBeu1S7P0AiKIbBuwyjqOoAIFGC4EnWh6SzRU3dcc44tUsQz6svCKq +fcBY7uqVaUERbRy7efjcw== 0001135432-03-000002.txt : 20030114 0001135432-03-000002.hdr.sgml : 20030114 20030108175748 ACCESSION NUMBER: 0001135432-03-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20021218 ITEM INFORMATION: Changes in control of registrant ITEM INFORMATION: Other events FILED AS OF DATE: 20030109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TMI HOLDINGS INC/FL CENTRAL INDEX KEY: 0001016611 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS SHOPPING GOODS STORES [5940] IRS NUMBER: 650309540 STATE OF INCORPORATION: FL FISCAL YEAR END: 1227 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-30011 FILM NUMBER: 03508369 BUSINESS ADDRESS: STREET 1: 3141 W HALLANDALE BEACH BOULEVARD CITY: HALLANDALE STATE: FL ZIP: 33009 BUSINESS PHONE: 954-985-8430 MAIL ADDRESS: STREET 1: 3141 W HALLANDALE BEACH BLVD CITY: HANNANDALE STATE: FL ZIP: 33009 FORMER COMPANY: FORMER CONFORMED NAME: THRIFT MANAGEMENT INC DATE OF NAME CHANGE: 19960711 8-K 1 doc1.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): DECEMBER 18, 2002 TMI HOLDINGS, INC. (Exact name of registrant as specified in its charter) FLORIDA 000-30011 65-0309540 (State or other (Commission (I.R.S. Employer jurisdiction of incorporation) File Number) Identification No.) 4463 PAHE'E STREET, SUITE 203-B LIHUE, HI 96766 (Address of principal executive offices) (zip code) (808) 384-4622 (Registrant's telephone number, including area code) 3141 W. HALLANDALE BEACH BOULEVARD HALLANDALE, FL 33009 (Former name or former address, if changed since last report.) ITEM 1. CHANGES IN CONTROL OF REGISTRANT On October 28, 2002, the Company's then-principal shareholder, Marc Douglas, entered into a stock purchase agreement pursuant to which Mr. Douglas agreed to sell, through a series of transactions, all 250,000 shares of the Company's Series A Preferred Stock (the "Preferred Stock") owned by him in exchange for a promissory note to Mr. Douglas in the principal amount of $150,000.00 due 120 days from the closing. The Preferred Stock sold by Mr. Douglas represented 100% of the outstanding Preferred Stock and, after cancellation of the 1,567,167 shares of Common Stock owned by Mr. Douglas and his affiliates as discussed below, represents 56% of the voting control of the Company. The closing for the sale took place upon the satisfaction of all closing conditions on December 18, 2002. In conjunction with the sale of Mr. Douglas' Preferred Stock, the then-current directors of the Company resigned from the Board and William Michael Sessions and John W. Meyers were appointed to the Board. In addition, Mr. Sessions was appointed to serve as the Company's CEO and Secretary and Mr. Meyers was appointed to serve as the Company's COO and Treasurer. In connection with the sale of his Preferred Stock, Mr. Douglas also cancelled 1,567,167 shares of the Company's Common Stock and all options and warrants to acquire the Company's Common Stock owned by him and his affiliates. The Company's new Board of Directors assigned to Mr. Douglas and his affiliates $675,000 of the outstanding principal balance of the $1,175,000 Purchase Note payable to the Company by an entity controlled by Mr. Douglas. In connection with this transaction, the Company entered into a five-year consulting agreement with Mr. Douglas whereby he agreed to provide the Company advice regarding strategies for development and expansion of the Company's business, including with respect to mergers and acquisitions. As compensation for his services under the consulting agreement, the Company will assign the remaining $500,000 balance of the Purchase Note to Mr. Douglas over the five-year term of the consulting agreement. As a result there has been both a change of voting control of the Company and a change in its management, including its Board of Directors. The Company has filed a Schedule 14f-1 with the SEC that describes this transaction and the change in control of the Company, and has mailed a copy of this filing to all of the Company's shareholders in accordance with applicable SEC regulations. Certain non-material changes were made to the terms of the transaction prior to its closing, and documents filed as exhibits to this Current Report on Form 8-K reflect those changes. For further information regarding the sale of the Preferred Stock and change in control of the Company, reference is hereby made to the Schedule 14f-1 and the exhibits hereto. 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS Not applicable. ITEM 3. BANKRUPTCY OR RECEIVERSHIP Not applicable. ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT Not applicable. ITEM 5. OTHER EVENTS Effective December 18, 2002, the Company changed its mailing address to 4463 Pahe'e Street, Suite 203-B, Lihue, HI 96766, telephone number (808) 384-4622. Effective December 18, 2002, William Michael Sessions and John W. Meyers were appointed to the Board of Directors of the Company. In addition, Mr. Sessions was appointed to serve as the Company's CEO and Secretary and Mr. Meyers was appointed to serve as the Company's COO and Treasurer. ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS Not applicable. ITEM 7. FINANCIAL STATEMENTS Not applicable. ITEM 8. CHANGE IN FISCAL YEAR Not applicable. EXHIBITS ITEM NO. DESCRIPTION - --------- ----------- 10.1 (1) Stock Purchase Agreement dated as of October 28, 2002 between Marc Douglas and Matthew P. Dwyer 10.2 Letter from Marc Douglas to Matt Dwyer dated December 18, 2002 10.3 Promissory Note of Matthew P. Dwyer in favor of Marc Douglas dated as of November 22, 2002 3 10.4 First Addendum to Promissory Note of Matthew P. Dwyer in favor of Marc Douglas dated December 16, 2002 10.5 Exhibit C, Current Liabilities, to the Stock Purchase Agreement dated as of October 28, 2002 between Marc Douglas and Matthew P. Dwyer 10.6 Stock Pledge Agreement dated as of November 22, 2002 between Matthew P. Dwyer and Marc Douglas 10.7 Escrow Agreement dated as of November 22, 2002 between Matthew P. Dwyer, Marc Douglas, and Broad and Cassell as escrow agent 10.8 Securities Assignment and Cancellation Agreement dated as of November 22, 2002 between TMI Holdings, Inc., Marc Douglas, Douglas Family Holdings, Inc., Douglas Family Limited Partnership, and Thrift Ventures, Inc. 10.9 Consulting Agreement dated as of November 22, 2002 between Marc Douglas and TMI Holdings, Inc. 10.10 Stock Purchase Agreement dated as of November 7, 2002 between Matthew P. Dwyer, John W. Meyers, and William Michael Sessions 10.11 Promissory Note of John W. Meyers and William Michael Sessions in favor of Matthew P. Dwyer dated as of November 22, 2002. 10.12 First Restated Security Agreement dated as of December 16, 2002 between John W. Meyers, William Michael Sessions, and Matthew P. Dwyer (1) Incorporated by reference from our Form 10-QSB dated November 15, 2002 as filed with the Commission on November 18, 2002. 4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: January 8, 2003 TMI Holdings, Inc. /s/ William Michael Sessions ------------------------------- By: William Michael Sessions Its: Chief Executive Officer 5 EX-10.2 3 doc2.txt NOTIFICATION LETTER MARC DOUGLAS 2920 PADDOCK ROAD FT. LAUDERDALE, FL 33331 December 18, 2002 Mr. Matt Dwyer c/o Brian Lebrecht, Esq. 2342 Avenida Empresa Suite 230 Rancho Santa Margarita, CA 92688 Re: Stock Purchase Agreement (the "Purchase Agreement") dated October 28, 2002 by and between Matthew Dwyer and Marc Douglas. Dear Mr. Dwyer: Pursuant to Section 2.4 of the Purchase Agreement, you agreed to cause TMI Holdings, Inc. (the "Company") to pay certain liabilities of the Company within 21 days of the closing of the transaction contemplated by the Purchase Agreement. This letter will confirm that I agree that such 21-day period will begin on the date hereof. This letter also serve to advise you that I have paid, out of my personal funds, the amount of $1,000 to the internal account listed on Exhibit C of the Purchase Agreement. You had previously agreed to cause the Company to pay such amount to the internal accountant. Payment by the Company for this amount should be paid to me personally and not to the internal accountant. If you have any questions, please call me at (954) 214-5912 Very truly yours, /s/ Marc Douglas Marc Douglas EX-10.3 4 doc3.txt PROMISSORY NOTE PROMISSORY NOTE $150,0000.00 Dated as of November 22, 2002 FOR VALUE RECEIVED, the undersigned, MATTHEW P. DWYER (the "Maker"), hereby promises to pay to the order of MARC DOUGLAS, (the "Holder"), at 3141 W. Hallandale Beach Blvd., Hallandale, FL 33009, or such other place as Holder may designate in writing from time to time, in lawful money of the United States of America, the principal amount of $150,000.00 plus interest on the outstanding balance thereof at the fixed annual rate of 7.5%. A single payment of principal and accrued interest on this Note shall be due and payable on January 24, 2003 (the "Maturity Date"). This Note is secured by, and is subject to the terms of, the pledge of certain securities by Maker in favor of Holder pursuant to a Pledge Agreement of even date herewith between Maker and Holder (the "Pledge Agreement"). The Pledge Agreement is incorporated herein by reference. Upon the occurrence of any default hereunder or any Event of Default under the Pledge Agreement, and so long as such default or Event of Default continues, interest shall accrue at the rate of two percent (2%) above the interest rate stated in the first paragraph of this Note. Upon a default or Event of Default, Holder may exercise any right, power or remedy permitted by law or as set forth herein or in the Pledge Agreement, including, without limitation, the right to declare the entire unpaid principal amount hereof and all interest accrued hereon, and all other sums secured by the Pledge Agreement, to be, and such principal, interest and other sums shall thereupon become, immediately due and payable. From and after any default hereunder or any Event of Default under the Pledge Agreement, any amounts past due may, at the option of the holder hereof, be added to principal and bear interest as principal. This Note may be prepaid, in whole or in part, at any time and from time to time. The undersigned hereby waives presentment, demand for payment, notice of dishonor and all other notices or demands in connection with the delivery, acceptance, performance, default or enforcement of this Note and hereby consents to any extensions of time, renewals, releases of any party to this Note, waivers or modifications that may be granted or consented to by the holder of this Note in respect of the time of payment or any other provisions of this Note. In the event that the holder hereof shall institute any action for the enforcement of the collection of this Note, there shall be immediately due from the undersigned, in addition to the unpaid interest and principal, all costs and expenses of such action, including attorneys' fees. This Note shall be governed by, and construed in accordance with, the laws of the State of Florida. MAKER AND HOLDER AGREE THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT BY HOLDER OR MAKER, ON OR WITH RESPECT TO THIS NOTE OR ANY OTHER DOCUMENT RELATED HERETO OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY. HOLDER AND MAKER EACH HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND INTELLIGENTLY, AND WITH THE ADVICE OF THEIR RESPECTIVE COUNSEL, WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. FURTHER, MAKER WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. MAKER ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS NOTE AND THAT HOLDER WOULD NOT EXTEND CREDIT TO MAKER IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS NOTE. MAKER: /s/ Matthew P. Dwyer ---------------------------- Matthew P. Dwyer EX-10.4 5 doc4.txt FIRST ADDENDUM TO NOTE FIRST ADDENDUM TO PROMISSORY NOTE WHEREAS, the undersigned, MATTHEW P. DWYER (the "Maker"), has executed a promissory note dated November 22, 2002 in the original principal amount of $150,000.00 (the "Note") in favor of MARC DOUGLAS, (the "Holder"); WHEREAS, the Maturity Date under Note was February 24, 2003; WHEREAS, Maker and Holder mutually desire by this First Addendum to Promissory Note to change the Maturity Date to January 24, 2002. NOW, THEREFORE, for good and adequate consideration, the sufficiency of which is hereby acknowledged, the parties agree as follows: 1. The Maturity Date as defined in the Note shall be January 24, 2002. All other terms and conditions of the Note shall remain unchanged and in full force and effect. Executed this 16th day of December, 2002. HOLDER: MAKER: /s/ Marc Douglas /s/ Matthew P. Dwyer - ---------------------- -------------------------- Marc Douglas Matthew P. Dwyer EX-10.5 6 doc5.txt CURRENT LIABILITIES TO SPA EXHIBIT C CURRENT LIABILITIES Broad and Cassel $25,000 Berkowitz, Dick, Pollack and Brandt $16,765 Charles N. Auerbach, CPA $12,944 In addition, the following normal course liabilities will accrue prior to the date of Closing: Transfer agent fees $ 350 per month* Bowne - 9/30/02 10-QSB Edgarization $1,000 Broad and Cassel - 9/30/02 10-QSB Legal Fees $7,000 Berkowitz Dick Pollack - 9/30/02 10-QSB Accounting Fees $7,500 Internal Accountant - 9/30/02 10-QSB Bookkeeping Fees $1,000 *Paid through December 2002 EX-10.6 7 doc6.txt STOCK PLEDGE AGREEMENT STOCK PLEDGE AGREEMENT This Stock Pledge Agreement (the "Pledge Agreement") is made and entered into as of November 22, 2002, by and between MATTHEW P. DWYER ("Dwyer") and MARC DOUGLAS ("Douglas"). A. Dwyer has purchased from Douglas 250,000 outstanding shares of Series A Preferred Stock (the "Shares") of TMI Holdings, Inc., pursuant to a Stock Purchase Agreement dated October 28, 2002 (the "Agreement"). Capitalized terms used in the Pledge Agreement without definition shall have the respective meanings given to them in the Agreement. B. Pursuant to the Agreement, Dwyer purchased the Shares from Douglas and delivered to Douglas a Promissory Note (the "Note") of even date herewith payable to Douglas representing the purchase price for the Shares. C. Dwyer is willing to pledge the marketable securities set forth on Schedule A annexed hereto (the "Pledged Shares") subject to adjustment pursuant to Section 1(b) hereof as security for payment of the Note on the terms and conditions of this Pledge Agreement. The Pledged Shares shall be delivered to the Escrow Agent and distributed pursuant to the Escrow Agreement attached hereto as Exhibit B. D. Douglas is willing to accept the pledge of the Pledged Shares as receipt on the terms and conditions of this Pledge Agreement. Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the parties agree as follows: 1. PLEDGE AND DELIVERY OF THE SHARES. --------------------------------------- (a) Dwyer hereby delivers, pledges, assigns and transfers the Pledged Shares, along with appropriate stock powers executed in blank to the Escrow Agent with signature pledged guaranteed. The Pledged Shares together with all distributions in the form of common stock comprises the collateral subject to this Pledge Agreement (the "Collateral"). Dwyer grants Douglas a security interest in the Collateral in order to secure the payment of the Note. (b) Dwyer acknowledges and agrees that the Pledged Shares shall at all times have a fair market value at least equal to $200,000 (the "Minimum Value"). The Pledged Shares shall be valued initially at the Closing Price on the date hereof. Thereafter, the Pledged Shares shall be valued at the end of each successive ten day period (a "Valuation Period") using an average of the closing bid prices for each day in the Valuation Period. In the event the value of the Pledged Shares at the end of any Valuation Period is less than the Minimum Value, then Dwyer shall add marketable securities to the Pledged Shares so that the value of the Pledged Shares is not less than the Minimum Value, and shall deliver such additional shares to the Escrow Agent. Dwyer shall have the sole discretion to select which securities constitute the Pledged Securities, and may add or delete securities at any time as long as the Minimum Value is maintained. 2. TERM. The Shares pledged hereunder shall remain so pledged until ---- the Note is paid in full unless released pursuant to Section 1(b) hereof. 3. WARRANTY OF OWNERSHIP. Dwyer represents and warrants to Douglas ----------------------- that Dwyer is the lawful owner of the Collateral, free of all claims and liens with full right to deliver, hypothecate, pledge, assign and transfer the interest of Dwyer in the Collateral and that the Collateral is not subject to any option or similar arrangement. 4. COVENANTS; VOTING RIGHTS; DIVIDENDS, ETC. So long as no Event of -------------------------------------------- Default (as defined in Section 5 hereof) shall have occurred and be continuing Dwyer shall be entitled to exercise his voting rights and other consensual rights and to receive and retain any cash dividends, or other distributions of property paid, payable or otherwise distributed in cash, in respect of the Collateral. 5. DEFAULT. ------- (a) EVENTS OF DEFAULT. The occurrence of any one or more of the following events with respect to Dwyer shall constitute an event of default hereunder ("Events of Default") with respect to Dwyer: (i) Dwyer shall assign, attempt to encumber, subject to further pledge or security interest, sell, transfer or otherwise dispose of any of the Collateral without the prior written consent of Douglas; (ii) Dwyer shall fail to pay the principal of the Note when due in accordance with the terms of the Note or otherwise default under this Pledge Agreement; (iii) Dwyer shall fail to observe or perform in any material respect any material covenant, condition or agreement required to be observed or performed by Dwyer hereunder or under the Note; (iv) any material representation or warranty made by Dwyer herein is false or incorrect in any material respect; (v) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (a "Bankruptcy Law"), Dwyer shall (i) commence a voluntary case or proceeding; (ii) consent to the entry of an order for relief against him in an involuntary case; (iii) consent to the appointment of a trustee, receiver, assignee, liquidator or similar official; (iv) make an assignment for the benefit of his creditors; or (v) admit in writing his inability to pay his debts as they become due. (b) REMEDIES UPON DEFAULT. If any Event of Default shall have occurred and be continuing: (i) All rights of Dwyer to exercise his voting and other consensual rights which he would otherwise be entitled to exercise shall cease, and all such rights shall thereupon become vested in Douglas who shall thereupon have the sole right to exercise such voting and other consensual rights. (ii) All rights of Dwyer to receive cash dividends or other distributions in cash, which he would otherwise be authorized to receive and retain pursuant to Section 4 shall cease and all rights to dividends and other distributions shall thereupon be vested in Douglas, who shall thereupon have the sole right to receive and hold as Collateral such cash dividends or other distributions. All dividends and other distributions which are received by Dwyer contrary to these provisions shall be received in trust for the benefit of Douglas, shall be segregated from other property or funds of Dwyer and shall be forthwith delivered to Douglas as Collateral in the same form as so received (with any necessary endorsement). (iii) All rights of Dwyer to sell all or any portion of the Collateral which they would otherwise be entitled to exercise pursuant to Section 4 shall cease, and all such rights shall thereupon become vested in Douglas who shall thereupon have the sole right to sell the Collateral in accordance with the provisions of this Pledge Agreement. (iv) Douglas may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code in effect in the State of Florida at that time, and Douglas may also, without notice except as specified below, sell the Collateral at a public or private sale, for cash and at such price or prices and upon such other terms as are commercially reasonable and in such manner as necessary to comply with applicable federal and state securities laws. Douglas shall be authorized at any such sale (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale Douglas shall have the right to assign, transfer and deliver to the purchaser or purchasers at any such sale and such purchasers shall hold the property sold absolutely, free from any claim or right on the part of Dwyer. To the extent notice of sale shall be required by law, Douglas shall give Dwyer at least ten business days notice of the time and place of any public sale or the time after which any private sale is to be made, which Shareholder agrees shall constitute reasonable notification. At any such sale, Douglas may bid (which bid may be, in whole or in part, in the form of cancellation of the Note) for and purchase the whole of the Collateral. Douglas shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Douglas may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Dwyer agrees that any sale of the Collateral conducted by Douglas in accordance with the foregoing provisions of this Section 6 shall be deemed to be a commercially reasonable sale. As an alternative to exercising the power of sale herein conferred upon it, Douglas may proceed by a suit or suits at law or in equity to foreclose the security interest granted under this Agreement and to sell the Collateral, or any portion thereof, pursuant to a judgment or decree of a court or courts of competent jurisdiction. (v) All cash proceeds received by Douglas in respect of any sale of, collection from, or other realization upon or any part of the Collateral following the occurrence of an Event of Default must be applied first against all reasonable costs and expenses incurred by or on behalf of Douglas in connection with Douglas' exercise of any or all of its rights and remedies under this Pledge Agreement, including without limitation, reasonable attorneys' fees, and then against the Note upon receipt. (vi) Any surplus of such cash or cash proceeds held by Douglas and remaining after payment in full of the Note shall be paid over to Dwyer or to whomsoever may be lawfully entitled to receive such surplus. 6. MISCELLANEOUS. ------------- (a) NO THIRD PARTY BENEFICIARIES. This Pledge Agreement shall not confer any rights or remedies upon any person other than the parties and their respective successors and permitted assigns. (b) ENTIRE AGREEMENT. This Pledge Agreement constitutes the entire agree- ment between the parties and supersedes any prior understandings, agreements, or representations by or between the parties, written or oral, to the extent they related in any way to the subject matter hereof. (c) SUCCESSION AND ASSIGNMENT. This Pledge Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. No party may assign either this Pledge Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other party. (d) COUNTERPARTS. This Pledge Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. (e) HEADINGS. The section headings contained in this Pledge Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Pledge Agreement. (f) NOTICES. All notices, requests, demands, claims, and other communi- cations hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given if (and then two business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below: If to Dwyer: ----------- 1410 Tuscany Way Boynton Beach, FL 33435 If to Douglas: ------------- 3141 W. Hallandale Beach Blvd. Hallandale, FL 33009 Any party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other party notice in the manner herein set forth. (g) GOVERNING LAW. This Pledge Agreement shall be governed by and construed in accordance with the domestic laws of the State of Florida without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida. (h) AMENDMENTS AND WAIVERS. No amendment of any provision of this Pledge Agreement shall be valid unless the same shall be in writing and signed by both of the parties. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. (i) SEVERABILITY. Any term or provision of this Pledge Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. (j) CONSTRUCTION. The parties have participated jointly in the negotiation and drafting of this Pledge Agreement. In the event an ambiguity or question of intent or interpretation arises, this Pledge Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Pledge Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context otherwise requires. The word "including" shall mean including without limitation. [SIGNATURES BEGIN ON FOLLOWING PAGE] IN WITNESS WHEREOF, the parties have executed and delivered this Pledge Agreement as of the date first written above. DWYER DOUGLAS /s/ Matthew P. Dwyer /s/ Marc Douglas - --------------------------- -------------------------- Matthew P. Dwyer Marc Douglas SCHEDULE A The Pledged Shares shall be 500,000 shares of common stock of Housing Solutions Hawaii, Inc. (Pink Sheet trading symbol "HSHI"). EX-10.7 8 doc7.txt ESCROW AGREEMENT ESCROW AGREEMENT ESCROW AGREEMENT, dated as of November 22, 2002, by and between Matthew P. Dwyer, an individual ("Dwyer"), Marc Douglas, an individual ("Douglas"), and Broad and Cassel (the "Agent"). Each of Dwyer, Douglas, and Agent shall be referred to as a "Party" and collectively as the "Parties." I. Escrow 1.01 Appointment and Acknowledgment of Escrow Agent. Dwyer and Douglas hereby appoint the Agent, and the Agent hereby agrees to serve, as Escrow Agent pursuant to the terms of this Agreement. The Agent acknowledges receipt of the following from Dwyer: (a) upon the execution of this Agreement, Dwyer will deposit with the Agent the shares of stock set forth on Schedule A annexed to the Stock Pledge Agreement (the "Pledge Agreement") executed on the date hereof between Dwyer and Douglas (the "Pledged Shares"). The properties described above are referred to as the "Escrowed Property." If the Escrowed Property includes property on which dividends are paid, on which interest is earned, or to which other accretions are added, then the Escrowed Property shall include such dividends, interest, or accretions. If the Escrowed Property consists of stock, the Agent shall exercise all rights and privileges of a stockholder with respect to the shares deposited and held pursuant to this Agreement. 1.02 Operation of Escrow. The Parties hereto agree that the escrow created by this Agreement (the "Escrow") shall operate as follows: (a) This Escrow shall remain in existence until February 24, 2003 (the "Escrow Period"). (b) Upon receipt by the Agent at any time after the date of this Agreement and on or before the termination of the Escrow Period, of a certificate signed by Douglas (the "Certificate") (i) stating that there has occurred or exists a breach by Dwyer under the Pledge Agreement, (ii) specifying, in reasonable detail, the circumstances of the breach (the "Claim") and (iii) specifying the portion of the Escrowed Property to be delivered to Douglas, the Agent shall deliver to Douglas, the Escrowed Property specified in the Certificate, provided, however, that the Waiting Period has expired without receipt of an Objection as hereinafter provided. (c) At the time of delivery of a Certificate to the Agent (a "Delivery"), a duplicate copy of the Certificate shall be delivered by Douglas to Dwyer. Dwyer shall have a period of ten (10) calendar days following each such delivery (the "Waiting Period") within which to object in a written statement (an "Objection") to the Claim made in the Certificate. The Objection shall state in reasonable detail the factual and/or legal basis for such Objection and shall be delivered to the Agent, with a copy of such Objection to Douglas, prior to the expiration of the Waiting Period. If Dwyer makes an Objection within the Waiting Period, the Agent shall note release any Escrowed Property in respect of such Claim unless the Claim is resolved finally pursuant to sections 1.02(d) and/or 1.02(e) hereof. Conversely, absent a timely Objection by Dwyer, the Agent, after the expiration of the Waiting Period, shall release and deliver the Escrowed Property specified in the Certificate to Douglas as set forth in section 1.02(b) above. Nothing herein shall be construed to permit the Agent to determine the sufficiency or legitimacy of either a Certificate or an Objection. (d) If Dwyer objects to any Claim made in any Certificate in accordance with section 1.02(c) above, Douglas and Dwyer shall attempt in good faith for a period of ten (10) calendar days thereafter (the "Negotiation Period") to agree upon the respective rights of the parties with respect to the Claim or with respect to the Escrowed Property, as the case may be. If Douglas and Dwyer should so agree, a memorandum setting forth such accord shall be prepared and signed by each of the parties and furnished to the Agent. The Agent shall be entitled to rely on any such memorandum and to distribute or deliver the Escrowed Property in accordance with the terms thereof. (e) In the event Douglas and Dwyer are unable to reach an accord with regard to tall of the Claims asserted in the Certificate by the end of the Negotiation Period, then either party may institute such actions or proceedings as they deem appropriate in any of the Courts provided in the Pledge Agreement to resolve the dispute. The Agent shall be entitled to act in accordance with any judgment made and entered by such courts and to authorize the making or withholding of the Escrowed Property in accordance therewith. 1.03 Further Provisions Relating to the Escrow. (a) Distributions by the Agent in accordance with the terms of this Agreement shall operate to divest all right, title, interest, claim, and demand, either at law or in equity, of any party to this Agreement (other than the distributee) in and to the Escrowed Property distributed and shall be a perpetual bar both at law and in equity with respect to such distributed Escrowed Property against the parties to this Agreement and against any person claiming or attempting to claim such distributed escrowed property from, through, or under such party. (b) Dwyer (as to half) and Douglas (as to half) agree to reimburse the Agent for the Agent's reasonable fees and other expenses (including legal fees and expenses) incurred by the Agent in connection with its duties hereunder. (c) Dwyer and Douglas, jointly and severally, agree to indemnify and hold harmless the Agent against and in respect of any and all claims, suites, actions, proceedings (formal or informal), investigations, judgments, deficiencies, damages, settlements, liabilities, and legal and other expenses (including legal counsel fees and expenses of attorneys chosen by the Agent) as and when incurred and whether or not involving a third party arising out of or based upon any act, omissions, alleged act, or alleged omission by the Agent or any other cause, in any case in connection with the acceptance of, or the performance or nonperformance by the Agent of, any of the Agent's duties under this Agreement, except as a result of the Agent's bad faith or gross negligence. The Agent shall be fully protected by acting in reliance upon any notice, advice, direction, other document, or signature believed by the Agent to be genuine, by assuming that any person purporting to give the Agent any notice, advice, direction, or other document in accordance with the provisions hereof, in connection with this Agreement, or in connection with the Agent's duties under this Agreement, has been duly authorized so to do, or by acting or failing to act in good faith on the advice of any counsel retained by the Agent, which may be Broad and Cassel. Dwyer acknowledges that the Agent acts as counsel to Douglas and may continue to serve in that capacity, and neither anything contained herein, the execution or delivery hereof by the Agent, nor the performance by the Agent of its duties hereunder shall in any way affect or require termination of such relationship with Douglas. The agent shall not be liable for any mistake of fact or of law or any error of judgment, or for any act or any omission, except as a result of the Agent's bad faith or gross negligence. If any of the Escrowed Property is represented by stock certificates, the Agent shall not be liable if the Agent submits all or a portion of the Escrowed Property to be broken into smaller denominations to the appropriate transfer agent, and such transfer agent fails to return properly that portion of the Escrowed Property to the Agent which such transfer agent was instructed to return. (d) The Agent makes no representation as to the validity, value, genuineness, or the collectibility of any security or other document or instrument held by or delivered to the Agent. (e) The Agent shall have no duties or responsibilities except those expressly set forth herein. The Parties hereto agree that the Agent will not be called upon to construe any contract or instrument. The Agent shall not be bound by any notice of a claim, or demand with respect thereto, or any waiver, modification, amendment, termination, cancellation, or revision of this Agreement, unless in writing and signed by the other Parties hereto and received by the Agent and, if the Agent's duties as Escrow Agent hereunder are affected, unless the Agent shall have given its prior written consent thereto. The Agent shall not be bound by any assignment by Dwyer or by Douglas of its rights hereunder unless the Agent shall have received written notice thereof from the assignor. The Agent is authorized to comply with and obey laws, rules, regulations, orders, judgments, and decrees of any governmental authority, court, or other tribunal. If the Agent complies with any such law, rule, regulation, order, judgment, or decree, the Agent shall not be liable to any of the Parties hereto or to any other person even if such law, rule, order, regulation, judgment, or decree is subsequently reversed, modified, annulled, set aside, vacated, found to have been entered without jurisdiction, or found to be in violation of or beyond the scope of a constitution or a law. (f) If the Agent shall be uncertain as to the Agent's duties or rights hereunder, shall receive any notice, advice, direction, or other document from any other party with respect to the Escrowed Property which, in the Agent's opinion, is in conflict with any of the provisions of this Agreement, or should be advised that a dispute has arisen with respect to the payment, ownership, or right of possession of the Escrowed Property or any part thereof, or the property to be exchanged for the Escrowed Property (or as to the delivery, non-delivery, or content of any notice, advice, direction, or other document), the Agent shall be entitled, without liability to anyone, to refrain from taking any action other than to use the Agent's reasonable efforts to keep safely the Escrowed Property until the Agent shall be directed otherwise in writing by both other parties hereto or by an order, decree, or judgment of a court of competent jurisdiction which has been finally affirmed on appeal or which by lapse of time or otherwise is no longer subject to appeal (a "Final Judgment"), but the Agent shall be under no duty to institute or to defend any proceeding, although the Agent may, in the Agent's discretion and at the expense of Dwyer and Douglas as provided in Section 1.03(c), institute or defend such proceedings. (g) The Agent (and any successor escrow agent or agents) reserves the right to resign as the Escrow Agent at any time, provided fifteen (15) day prior written notice is given to the other parties hereto, and provided further that a mutually acceptable successor Escrow Agent(s) is named within such fifteen (15) day period. The Agent may, but is not obligated to, petition any court in the State of Florida having jurisdiction to designate a successor Escrow Agent. The resignation of the Agent (and any successor escrow agent or agents) shall be effective only upon delivery of the Escrowed Property to the successor escrow agent(s). The Parties reserve the right to jointly remove the Escrow Agent at any time, provided fifteen (15) days prior written notice is given to the Escrow Agent. If no successor Escrow Agent has been appointed and has accepted the Escrowed Property within fifteen (15) days after the Notice is sent, all responsibilities of the Agent hereunder shall, nevertheless, case. The Agent's sole responsibility thereafter shall be to use the Agent's reasonable efforts to keep safely the Escrowed Property and to deliver the Escrowed Property as may be directed in writing by both of the other parties hereto or by a Final Judgment. Except as set forth in this Section 1.03(g), this Agreement shall not otherwise be assignable by the Agent without the prior written consent of the other parties hereto. (h) Dwyer and Douglas authorize the Agent, if the Agent is threatened with litigation or is sued, to interplead all interested parties in any court of competent jurisdiction and to deposit the Escrowed Property with the clerk of that court. (i) The Agent's responsibilities and liabilities hereunder, except as a result of the Agent's own bad faith or gross negligence, will terminate upon the delivery by the Agent of al the Escrowed Property under any provision of this Agreement. (j) As consideration for acting as escrow agent hereunder, Dwyer and Douglas shall pay, in advance and as a condition precedent to the establishment of the Escrow pursuant to the terms of this Agreement, a fee to the Agent of $1,250. This fee shall be deemed to have been earned in full by the Agent upon establishment of the Escrow, and shall not be subject to pro-ration or other setoff in the event the Escrow is terminated by any party. II. Miscellaneous 2.01 Further Action. At any time and from time to time, Dwyer and Douglas each agrees, at its own expense, to take such actions and to execute and deliver such documents as may be reasonably necessary to effectuate the purposes of this Agreement. If any portion of the Escrowed Property consists of stock certificates, Dwyer shall pay any transfer tax arising out of the placing of the Escrowed Property into the Escrow, the delivery of the Escrowed Property out of the Escrow, or the transfer of the Escrowed Property into the name of any person or entity pursuant to the terms of this Agreement. The Agent shall have no liability regarding transfer taxes even if one or both of the Parties hereto fails to comply with the obligations set forth in the prior sentence. 2.02 Survival. Subject to Section 1.03(i), the covenants, agreements, representations, and warranties contained in or made pursuant to this Agreement shall survive the delivery by the Agent of the Escrowed Property, irrespective of any investigation made by or on behalf of any party. 2.03 Modification. This Agreement sets forth the entire understanding of the parties with respect to the subject matter hereof, supersedes all existing agreements among them concerning such subject matter, and (subject to Section 1.03(e)) may be modified only by a written instrument duly executed by each party. 2.04 Notices. Any notice, advice, direction, or other document or communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or by Federal Express, Express Mail, or similar overnight delivery or courier service or delivered (in person or by facsimile) against receipt to the party to whom it is to be given at address of such party set forth below (or to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 2.04) with a copy to each of the other parties hereto: If to Dwyer: 1410 Tuscany Way Boynton Beach, FL 33435 If to Douglas: 3141 W. Hallandale Beach Blvd. Hallandale, FL 33009 If to Agent: Broad and Cassel 201 S. Biscayne Blvd. Miami, FL 33131 Attn: Dale S. Bergman, Esq. Facsimile (305) 373-9493 Any notice, advice, direction, or other document or communication given by certified mail shall be deemed given at the time of receipt thereof. Any notice given by other means permitted by this Section 2.04 shall be deemed given at the time of receipt thereof. 2.05 Waiver. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of that provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing. 2.06 Binding Effect. Subject to Section 1.03(g), the provisions of this Agreement shall be binding upon and inure to the benefit of Dwyer and Douglas and their respective assigns, heirs, and personal representatives, and shall be binding upon and insure to the benefit of the Agent and the Agent's successors and assigns. 2.07 No Third Douglaseneficiaries. This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement (except as provided in Section 2.06). 2.08 Separability. This entire Agreement shall be void if any provision of this Agreement other than the second and third sentences of Section 2.11 is invalid, illegal, unenforceable, or inapplicable to any person or circumstance to which it is intended to be applicable, except that the provisions of Section 1.03 shall survive. 2.09 Headings. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement. 2.10 Counterparts; Governing Law. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. It shall be governed by and construed in accordance with the laws of the State of Florida without giving effect to conflict of laws. Any action, suit, or proceeding arising out of, based on, or in connection with this Agreement , any document or instrument delivered pursuant to, in connection with, or simultaneously with this Agreement, any breach of this Agreement or any such document or instrument, or any transaction contemplated hereby or thereby may be brought only in the appropriate court in Broward County, Florida, each party covenants and agrees not to assert, by way of motion, as a defense, or otherwise, in any such action, suit, or proceeding, any claim that such party is not subject personally to the jurisdiction of such court, that such party's property is exempt or immune from attachment or execution, that the action, suit, or proceeding is brought in an inconvenient forum, that the venue of the action, suit, or proceeding is improper, or that this Agreement or the subject matter hereof may not be enforced in or by such court. IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first written above. "Dwyer" "Douglas" /s/ Matthew P. Dwyer /s/ Marc Douglas - -------------------- ------------------- Matthew P. Dwyer Marc Douglas "Agent" Broad and Cassel By: Dale S. Bergman, P. A., partner /s/ Dale S. Bergman - --------------------- By: Dale S. Bergman Its: President EX-10.8 9 doc8.txt SECURITIES ASSIGNMENT/CANCELLATION AGMT SECURITIES ASSIGNMENT AND CANCELLATION AGREEMENT THIS SECURITIES ASSIGNMENT AND CANCELLATION AGREEMENT (this "Agreement") is made and entered into as of November 22, 2002 by and among TMI Holdings, Inc., a Florida corporation ("TMI" or the "Company"), Marc Douglas, an individual ("Douglas"), Douglas Family Holdings, Inc., a Florida corporation ("DFCorp"), Douglas Family Limited Partnership, a Florida limited partnership ("DFPartnership"), and Thrift Ventures, Inc., a Florida corporation ("TVI"). Each of TMI, Douglas, DFCorp, DFPartnership, and TVI shall be referred to as a "Party" and collectively as the "Parties." RECITALS A. TVI is the obligor under that certain promissory note dated as of August 27, 2001 (the "2001 Note") in favor of TMI (referred to in the note as Thrift Management, Inc., the prior name of TMI) in the original principal amount of $1,175,000 (the "2001 Note Principal"). B. As of the date of this Agreement, the accrued interest under the 2001 Note is $116,405.48 (the "2001 Note Interest"). C. Douglas is a party, along with Matthew P. Dwyer, an individual ("Dwyer"), to that certain Stock Purchase Agreement dated October 28, 2002 (the "Stock Purchase Agreement") which requires, as a condition to the closing of the transactions contemplated thereby, the taking of the actions set forth in this Agreement. D. TMI desires to assign to Douglas, DF Corp and DFPartnership, and Douglas, DF Corp, and DFPartnership, and each of them, desires to accept the assignment of, that portion of the 2001 Note Principal equal to $675,000, plus all of the 2001 Note Interest, effective as of the date hereof, as set forth on Schedule A attached hereto and incorporated herein by reference (the "2001 Assignment"). E. Pursuant to the terms of the Stock Purchase Agreement, and as a condition to the closing of the transactions contemplated thereby, TMI has agreed to enter into a Consulting Agreement with Douglas (the "Consulting Agreement"), which provides for compensation to Douglas equal to $100,000 per year for each of five years, all of which is to be applied towards the payment of principal due to TMI under the 2001 Note. F. Pursuant to the terms of the Stock Purchase Agreement, and as a condition to the closing of the transactions contemplated thereby, Douglas, DFCorp, and DFPartnership, and each of them, has agreed to cancel (i) an aggregate of 1,567,167 shares of TMI common stock as set forth on Schedule B attached hereto and incorporated herein by reference (the "TMI Shares"), (ii) any and all of the options and warrants to acquire TMI securities currently held by Douglas or his affiliates, including but not limited to the option to acquire 105,000 shares as set forth in that certain Incentive Stock Option Agreement dated as of December 27, 1998 and the warrant to acquire 500,000 shares as set forth in that certain Warrant dated as of March 16, 2001 (the "TMI Options"), and (iii) all consulting and reimbursement agreements between TMI and Douglas, including but not limited to those set forth in the Written Consent of Directors effective as of August 1, 2002 and the Written Consent of Directors dated May 15, 2002 (the "2002 Consulting Agreements"). NOW, THEREFORE, in reliance on the foregoing recitals and in consideration of and for the mutual covenants contained herein, the Parties hereto agree as follows: AGREEMENT 1. ASSIGNMENT OF 2001 NOTE. TMI hereby assigns that portion of the -------------------------- 2001 Note Principal equal to $675,000, plus all of the 2001 Note Interest, to Douglas, DFCorp, and DFPartnership as set forth on Schedule A. TMI further agrees that effective as of the date of this Agreement, after giving effect to the assignment, the outstanding principal balance under the 2001 Note is $500,000, and that no further interest shall accrue under the 2001 Note as long as the Consulting Agreement is in effect. TMI agrees to apply the compensation due to Douglas under the Consulting Agreement against the outstanding principal balance of the 2001 Note at the rate of $100,000 per year, with the first payment to be applied as of January 1, 2003. TVI acknowledges and consents to the 2001 Assignment and the other actions set forth in this Agreement. 2. CANCELLATION OF SHARES, OPTIONS, AND WARRANTS. Douglas, DFCorp and ---------------------------------------------- DFPartnership shall, simultaneous with the execution and delivery of this Agreement, deliver to TMI the TMI Shares, along with an irrevocable stock power with signature medallion guaranteed, for cancellation by TMI. In addition, Douglas, DFCorp and DFPartnership shall deliver to TMI the TMI Options, along with written instructions to cancel same. 3. TERMINATION OF 2002 CONSULTING AGREEMENTS. Douglas and TMI hereby ------------------------------------------- acknowledge and agree that the 2002 Consulting Agreements are hereby terminated in their entirety, and the obligations of all parties thereto are deemed to be satisfied in full. 4. REPRESENTATIONS AND WARRANTIES OF DOUGLAS, DFCORP, AND ------------------------------------------------------------ DFPARTNERSHIP. Douglas, DFCorp, and DFPartnership, and each of them, have and - ------------- will transfer to TMI, good, valid and marketable title to the TMI Shares and the TMI Options, and, except with respect to the restrictions on transfer under federal and state securities laws, there are no security interests, liens, encumbrances, claims, charges, assessments or restrictions or any other defects in title of any nature whatsoever on any of the TMI Shares and TMI Options. Douglas, DFCorp, and DFPartnership, and each of them, will not assign, sell, mortgage, lease, transfer, pledge, grant a security interest in or lien upon, encumber, or otherwise dispose of or abandon, nor will they suffer or permit any of the same to occur with respect to, any part or all of the TMI Shares and the TMI Options, and have made payment or deposit or otherwise provide for the payment, when due, of all taxes, assessments or contributions required by law which have been or may be levied or assessed against them with respect to any of the TMI Shares and TMI Options. Seller has the right, power, legal capacity and authority to transfer the Shares and enter into and perform Seller's obligations under this Agreement. Douglas, DFCorp, and DFPartnership, and each of them, have the right, power, legal capacity and authority to transfer the TMI Shares and TMI Options and enter into and perform their obligations under this Agreement. 5. REPRESENTATIONS AND WARRANTIES OF TVI. TVI has the right, power, --------------------------------------- legal capacity and authority to enter into and perform its obligations under this Agreement. 6. REPRESENTATIONS AND WARRANTIES OF TMI. TMI has the right, power, --------------------------------------- legal capacity and authority to enter into and perform its obligations under this Agreement. 7. BINDING UPON SUCCESSORS AND ASSIGNS. Subject to, and unless --------------------------------------- otherwise provided in, this Agreement, each and all of the covenants, terms, provisions, and agreements contained herein shall be binding upon, and inure to the benefit of, the successors, executors, heirs, representatives, administrators and assigns of the parties hereto. 8. ENTIRE AGREEMENT. This Agreement, along with the Stock Purchase ----------------- Agreement and other documents executed in connection with the Stock Purchase Agreement, constitutes the entire understanding and agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties with respect hereto and thereto. 9. COUNTERPARTS. This Agreement may be executed in any number of ------------ counterparts, each of which shall be an original as against any party whose signature appears thereon and all of which together shall constitute one and the same instrument. 10. AMENDMENT AND WAIVERS. Any term or provision of this Agreement may ----------------------- be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a writing signed by the party to be bound thereby. The waiver by a party of any breach hereof for default in payment of any amount due hereunder or default in the performance hereof shall not be deemed to constitute a waiver of any other default or any succeeding breach or default. 11. ATTORNEYS' FEES. Should suit be brought to enforce or interpret ---------------- any part of this Agreement, the prevailing party shall be entitled to recover, as an element of the costs of suit and not as damages, reasonable attorneys' fees to be fixed by the court (including without limitation, costs, expenses and fees on any appeal). The prevailing party shall be the party entitled to recover its costs of suit, regardless of whether such suit proceeds to final judgment. A party not entitled to recover its costs shall not be entitled to recover attorneys' fees. No sum for attorneys' fees shall be counted in calculating the amount of a judgment for purposes of determining if a party is entitled to recover costs or attorneys' fees. 12. GOVERNING LAW. This Agreement shall be governed by and construed -------------- in accordance with the laws of the State of Florida, without regard to its choice of law principles. DOUGLAS: DFCORP: Douglas Family Holdings, Inc., a Florida corporation /s/ Marc Douglas /s/ Marc Douglas - ------------------------------------ ------------------------------------ Marc Douglas By: Marc Douglas Its: President DFPARTNERSHIP: TVI: Douglas Family Limited Partnership, Thrift Ventures, Inc., a Florida Limited Partnership a Florida corporation /s/ Marc Douglas /s/ Marc Douglas - ------------------------------------ ------------------------------------ By Douglas Family Holdings, Inc. By: Marc Douglas Its: General Partner Its: President Marc Douglas, President TMI: TMI Holdings, Inc., a Florida corporation /s/ W. Michael Sessions - ------------------------------------ By: W. Michael Sessions Its: Chief Executive Officer SCHEDULE A 2001 ASSIGNMENT Assignment Assignment ---------- ---------- Name of Principal of Interest - ---- ------------- ----------- Marc Douglas $ 500,129.65 $ 86,248.64 Douglas Family Holdings, Inc. $ 2,584.29 $ 445.67 Douglas Family Limited Partnership $ 172,286.06 $ 29,711.17 Total $ 675,000.00 $116,405.48 SCHEDULE B TMI SHARES TO BE CANCELLED Name No. of Shares - ---- ------------- Marc Douglas 1,161,167 Douglas Family Holdings, Inc. 6,000 Douglas Family Limited Partnership 400,000 Total 1,567,167 EX-10.9 10 doc9.txt CONSULTING AGREEMENT CONSULTING AGREEMENT -------------------- THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into effective as of November 22, 2002 (the "Effective Date") by and between MARC DOUGLAS, (the "Consultant"), and TMI HOLDINGS, INC., a Florida corporation (the "Company"). W I T N E S S E T H ------------------- WHEREAS, the Company desires to retain the Consultant to consult with the Company regarding strategies for development and expansion of the Company's business, including advice with respect to mergers and acquisitions; and WHEREAS, the Consultant and the Company desire to enter into this Agreement under the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto agree as follows: 1. ENGAGEMENT. The Company hereby retains the Consultant, and the ---------- Consultant hereby accepts such engagement, on the terms and conditions set forth herein. During the term of this Agreement and any renewal(s) hereof (all references herein to the term of this Agreement shall be deemed to include references to all periods of renewal, if any), the Consultant shall devote such time and perform diligently such services as provided in Section 3, but shall not be required to devote any specific number of hours to such service. 2. TERM. The term of this Agreement shall be five years commencing on the ---- Effective Date (the "Contract Term"). The Agreement will automatically expire upon the expiration of the preceding Contract Term. 3. CONSULTANT'S SERVICES; EXPENSES. --------------------------------- a. During the term of this Agreement, the Consultant shall: i. provide consultation services to the Company for the purpose of assisting the Company in developing and expanding the business of the Company; ii. assist the Company in developing, studying and evaluating capital-raising and merger and acquisition proposals; and iii. report to the Company and perform such services as may be requested by the Company in accordance with this Agreement. b. The Company agrees to reimburse the Consultant for any pre-approved out-of-pocket expenses related to duties undertaken by the Consultant pursuant to this Agreement. 4. COMPENSATION. As compensation for services rendered by Consultant under ------------ this Agreement, the Company shall pay Consultant an aggregate of $500,000, which shall be paid in five equal annual installments, commencing on the Effective Date of $100,000 each by the Company assigning to Consultant the sum of $100,000 per year each year during the term hereof of the sum due to the Company under that original Promissory Note in the original principal amount of $1,175,000 made by Thrift Ventures, Inc., to the Company, a copy of which is attached hereto as Exhibit A. 5. TERMINATION. This Agreement is non-cancelable. This Agreement may be ----------- terminated only in the event Consultant is not available at reasonable times to perform his duties hereunder. 6. CONFIDENTIAL INFORMATION. The Company and the Consultant understand that ------------------------ prior to and during the term of this Agreement, the Company may, from time to time, make available to the Consultant, certain financial, business and other proprietary information concerning the Company's operations (collectively, "Confidential Information") and that such Confidential Information may otherwise come into the possession of the Consultant. Confidential Information includes, without limitation, information relating to the strategies, plans, assets, customers, suppliers, employees, and business activities of the Company. The Consultant agrees that all such Confidential Information furnished or disclosed to it or otherwise obtained by it will be treated as confidential and will not be disclosed or divulged by the Consultant, directly or indirectly, to any other person or entity. Confidential Information shall not include information which becomes generally available to the public other than as a direct or indirect result of a disclosure by the Consultant. 7. INDEPENDENT CONTRACTOR. Nothing in this Agreement is intended nor shall ----------------------- be construed to create an employer/employee relationship, or a joint venture relationship, or to allow the Company to exercise control or direction (except as specifically set forth in the Agreement) in the manner or method by which the Consultant performs the services required under this Agreement; provided that the Consultant performs such services in a manner consistent with the standards governing such services and the provisions of this Agreement. The Consultant understands and agrees that: (a) it will not be treated as an employee of the Company for federal tax purposes; (b) it shall not by virtue of this Agreement be entitled to any of the benefits afforded to any employees of the Company, except as specifically set forth in the Agreement; and (c) it shall indemnify and hold the Company harmless from and against any and all loss or liability arising with respect to such payments, withholdings and benefits. 8. ATTORNEYS' FEES. In the event any litigation or controversy arises out ---------------- of or in connection with this Agreement between the parties hereto, the prevailing party in such litigation or controversy shall be entitled to recover from the other party all reasonable attorneys' fees, expenses and suit costs, including those associated with any appellate or post-judgment collection proceedings. 9. SURVIVAL. Notwithstanding anything to the contrary herein, the -------- provisions of Sections 7, 8, and 9 shall survive any termination or expiration of this Agreement. 10. NOTICES AND DEMANDS. Any notice, request, demand, offer, payment or --------------------- communication required or permitted to be given by any provision of this Agreement shall be deemed to have been delivered and given for all purposes if written and (a) if delivered personally or by courier or delivery service, at the time of such delivery, or (b) if directed by registered or certified United States mail, postage and charges prepaid, addressed to the intended recipient at the address specified below, at such time that the intended recipient or his agent signs or executes the receipt or (c) if by telefax (facsimile) at the time received by the intended recipient as evidenced by the confirmation: if to the Consultant: Marc Douglas or at any other address designated by the Consultant to the Company in writing, and if to the Company: TMI Holdings, Inc. or at any other address and/or telefax designated by the Company to the Consultant in writing. 11. SEVERABILITY. If any provision of this Agreement, the deletion of which ------------ would not adversely affect the receipt of any material benefit by any party hereunder or substantially increase the burden of any party hereto, shall be held to be invalid or unenforceable to any extent, the same shall not affect in any respect whatsoever the validity or enforceability of the remainder of this Agreement. 12. WAIVER OR MODIFICATION. No waiver or modification of this Agreement of ----------------------- any covenant, condition or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith. Furthermore, no evidence of any waiver or modification shall be offered or received in evidence in any proceeding, arbitration or litigation between the parties arising out of or affecting this Agreement, or the rights or obligations of any party hereunder, unless such waiver or modification is in writing and duly executed as aforesaid. 13. ENTIRE AGREEMENT AND ASSIGNMENT. This Agreement constitutes the entire -------------------------------- agreement of the parties hereto with respect to the subject matter of this Agreement and supersedes any and all previous agreements between the parties, whether written or oral, with respect to such matter. The parties agree that this Agreement may not be assigned by either party without the prior written consent from the other party. 14. APPLICABLE LAW, BINDING EFFECT AND VENUE. This Agreement shall be --------------------------------------------- construed and regulated under and by the laws of the State of Florida without application of the principles of conflicts of laws. The Agreement shall inure to the benefit of and be binding upon the parties hereto and their heirs, personal representatives, successors and permitted assigns. Venue for any arbitration or action related to or arising out of this Agreement shall lie in Broward County, Florida. 15. MULTIPLE COPIES OR COUNTERPARTS OF THE AGREEMENT. The original and one ------------------------------------------------- or more copies of this Agreement may be executed by one or more of the parties hereto. In such event, all of such executed copies shall have the same force and effect as the executed original and all of such counterparts taken together shall have the effect of a fully executed original. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated above. CONSULTANT: /s/ Marc Douglas -------------------------- MARC DOUGLAS COMPANY: TMI HOLDINGS, INC. /s/ John W. Meyers -------------------------- By: John W. Meyers EX-10.10 11 doc10.txt STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into as of November 7, 2002, by and among Matthew P. Dwyer ("Seller"), on the one hand, and John W. Meyers ("Meyers") and William Michael Sessions ("Sessions" who shall, along with Meyers, each be called a "Buyer" and collectively the "Buyers"). R E C I T A L S A. Seller is a party to that certain Stock Purchase Agreement dated October 28, 2002 (the "October Agreement") whereby Seller will acquire, upon the Closing as set forth in the October Agreement, 250,000 outstanding shares of Series A Preferred Stock (the "Shares"), representing all of the outstanding shares of preferred stock of all classes of TMI Holdings, Inc., a Florida corporation (the "Company"). A copy of the Statement of Designation of Series A Preferred Stock is attached as Exhibit A hereto. B. Buyers wish to purchase and Seller wishes to sell the Shares on the terms and conditions set forth in this Agreement. C. Buyers, and each of them, acknowledge that Buyers has had an opportunity to ask questions of appropriate persons concerning the business, financial condition and results of operations of the Company. NOW, THEREFORE, in reliance on the foregoing recitals and in consideration of and for the mutual covenants contained herein, the parties hereto agree as follows: A G R E E M E N T 1. SALE OF SHARES. Seller will sell and transfer to Buyers, and Buyers will -------------- purchase from Seller, with each Buyer purchasing an equal one-half, the Shares, free and clear of all security interests, liens, encumbrances, claims, charges, assessments and restrictions other than restrictions on transfer under federal and state securities laws. The purchase price for the Shares shall be $175,000 payable by issuance at Closing (as hereinafter defined) of a promissory note by Buyers in the form of Exhibit B hereto (the "Note"). 2. CLOSING. ------- 2.1 Closing of the transactions contemplated hereby ("Closing") shall take place upon satisfaction of the following conditions, but in no event later than 2 days following the closing of the October Agreement: (a) The then-current Board of Directors of the Company shall have exempted the transaction from the provisions of Section 607.0901 and 607.0902 of the Florida Statutes. (b) The closing, as set forth in the October Agreement, shall have occurred with all closing conditions satisfied. 2.2 If the conditions set forth in paragraph 2.1 are not satisfied on or prior to December 12, 2002 (45 days from the date of the October Agreement), this Agreement shall automatically terminate and be of no further force and effect. 2.3 At Closing, Seller shall deliver certificates evidencing the Shares to the Buyers, with duly executed stock powers for transfer to Buyers with a restrictive legend, and Buyers shall deliver to Seller the Note. 3. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. ------------------------------------------------------ 3.1 As of the Closing, Seller has and will transfer to Buyer, good, valid and marketable title to the Shares, and, except with respect to the restrictions on transfer under federal and state securities laws specified in this Agreement, there are no security interests, liens, encumbrances, claims, charges, assess- ments or restrictions or any other defects in title of any nature whatsoever on any of the Shares. 3.2 Seller has the right, power, legal capacity and authority to enter into and perform Seller's obligations under this Agreement. 3.3 Except as set forth herein, Seller makes no representations or warranties with respect to the Company or the Shares and Buyer is purchasing the Shares "as is". 3.4 Seller will not assign, sell, mortgage, lease, transfer, pledge, grant a security interest in or lien upon, encumber, or otherwise dispose if or abandon, nor will the Seller suffer or permit any of the same to occur with respect to, any part or all of the Shares, without the prior written consent of Buyer; Seller has made, and will continue to make until the Closing or termination of this Agreement, payment or deposit or otherwise provide for the payment, when due, of all taxes, assessments or contributions required by law which have been or may be levied or assessed against the Seller with respect to any of the Collateral Shares. 4. BUYER'S REPRESENTATIONS AND WARRANTIES. ----------------------------------------- Buyers, and each of them, hereby represent and warranty as follows: 4.1 Buyer is an "accredited investor" as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act"). 4.2 Buyer has the right, power, legal capacity and authority to transfer the Shares, enter into and perform Buyer's obligations under this Agreement. 4.3 Buyer has received, read carefully and is familiar with this Agreement. With respect to the Company, Buyer is familiar with the Company's business, plans and financial condition, and any other matters relating to the Company; the Buyer has received all materials that have been requested by the Buyer; Buyer has had a reasonable opportunity to ask questions of the Company and its representatives; and the Company has answered all inquiries that the Buyer or his representatives have put to it. Buyer has had access to all additional non-confidential information necessary, in Buyer's judgment, to evaluate the merits and risks of an investment in the Company. Buyer acknowledges that Seller has made no representations or warranties of any kind to the Buyer regarding the Company, its business, finances or prospects. 4.4 Buyer has such knowledge and experience in finance, securities, investments and other business matters so as to be able to protect the interests of the Buyer in connection with this transaction, and Buyer's investment in the Company hereunder is not material when compared to Buyer's total financial capacity. 4.5 Buyer understands the various risks of an investment in the Company and can afford to bear such risks, including, without limitation, the risks of losing the entire investment. 4.6 Buyer acknowledges that no liquid market for the Shares currently exists and none may develop in the future and that Buyer may find it impossible to liquidate the investment at a time when it may be desirable to do so, or at any other time. 4.7 Buyer will acquire the Shares for Buyer's own account for investment and not with a view to the sale or distribution thereof or the granting of any participation therein, and has no present intention of distributing or selling to others any of such interest or granting any participation therein. 4.8 Buyer has been advised by Seller that none of the Shares have been registered under the Securities Act or applicable state securities law and that the Shares will be sold in a transaction exempt therefrom. Buyer acknowledges that it is familiar with the nature of the limitations imposed by the Securities Act and the rules and regulations thereunder on the transfer of the Shares. In particular, Buyer agrees that the Company shall not be required to give any effect to a sale, assignment or transfer of the Shares, unless (i) the sale, assignment or transfer of such Shares is registered under the Securities Act, and applicable state securities laws, it being understood that the Shares are not currently registered for sale and that the Company has no obligation or intention to so register the Shares or (ii) such sale, assignment or transfer is otherwise exempt from registration under the Securities Act and applicable state securities laws. Buyer further understands that an opinion of counsel and other documents may be required to transfer the Shares. Buyer acknowledges that Shares shall be subject to stop transfer orders and the certificate or certificates evidencing any Shares shall bear the following or a substantially similar legend or such other legend as may appear on the forms of Shares and such other legends as may be required by state blue sky laws: "The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state or foreign securities laws and neither such securities nor any interest therein may be offered, sold, pledged, assigned or otherwise transferred unless (1) a registration statement with respect thereto is effective under the Securities Act and any applicable state securities laws, or (2) the Company receives an opinion of counsel to the holder of such securities, which counsel and opinion are reasonably satisfactory to the Company, that such securities may be offered, sold, pledged, assigned or transferred in the manner contemplated without an effective registration statement under the Securities Act or applicable state securities laws." 5. BINDING UPON SUCCESSORS AND ASSIGNS. Subject to, and unless otherwise -------------------------------------- provided in, this Agreement, each and all of the covenants, terms, provisions, and agreements contained herein shall be binding upon, and inure to the benefit of, the successors, executors, heirs, representatives, administrators and assigns of the parties hereto. 6. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding ----------------- and agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties with respect hereto and thereto. 7. COUNTERPARTS. This Agreement may be executed in any number of counter- ------------ parts, each of which shall be an original as against any party whose signature appears thereon and all of which together shall constitute one and the same instrument. 8. AMENDMENT AND WAIVERS. Any term or provision of this Agreement may be ----------------------- amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a writing signed by the party to be bound thereby. The waiver by a party of any breach hereof for default in payment of any amount due hereunder or default in the performance hereof shall not be deemed to constitute a waiver of any other default or any succeeding breach or default. 9. ATTORNEYS' FEES. Should suit be brought to enforce or interpret any part --------------- of this Agreement, the prevailing party shall be entitled to recover, as an element of the costs of suit and not as damages, reasonable attorneys' fees to be fixed by the court (including without limitation, costs, expenses and fees on any appeal). The prevailing party shall be the party entitled to recover its costs of suit, regardless of whether such suit proceeds to final judgment. A party not entitled to recover its costs shall not be entitled to recover attorneys' fees. No sum for attorneys' fees shall be counted in calculating the amount of a judgment for purposes of determining if a party is entitled to recover costs or attorneys' fees. 10. GOVERNING LAW. This Agreement shall be governed by and construed in -------------- accordance with the laws of the State of Florida, without regard to its choice of law principles. 11. RELIANCE BY COMPANY. The parties hereto expressly authorize the --------------------- Company and its counsel to rely upon the representations set forth herein in connection with the transfer of the Shares. SELLER: BUYERS: /s/ Matthew P. Dwyer /s/ John W. Meyers - ---------------------------- --------------------------- Matthew P. Dwyer John W. Meyers /s/ William Michael Sessions ---------------------------- William Michael Sessions EXHIBIT A STATEMENT OF DESIGNATION OF SERIES A PREFERRED STOCK EXHIBIT B PROMISSORY NOTE EX-10.11 12 doc11.txt PROMISSORY NOTE PROMISSORY NOTE $175,0000.00 Dated as of November 22, 2002 FOR VALUE RECEIVED, the undersigned, JOHN W. MEYERS and WILLIAM MICHAEL SESSIONS, and each of them, jointly and severally (collectively the "Maker"), hereby promises to pay to the order of MATTHEW P. DWYER, (the "Holder"), at 1410 Tuscany Way, Boynton Beach, FL 33435, or such other place as Holder may designate in writing from time to time, in lawful money of the United States of America, the principal amount of $175,000.00 plus interest on the outstanding balance thereof at the fixed annual rate of 7.5%. A single payment of principal and accrued interest on this Note shall be due and payable on the earlier to occur of (i) July 31, 2003 (the "Maturity Date"), or (ii) at such time as Maker, or either of them, receives any cash sums from TMI Holdings, Inc. for any reason. To secure payment of this Note, Maker has pledged Two Hundred Fifty Thousand (250,000) shares of Series A Preferred Stock of TMI Holdings, Inc. held in the name of Maker. Such security is pursuant to a Security Agreement of even date herewith between the Maker and Payee. THE PROVISIONS OF THE SECURITY AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE. Upon the occurrence of any default hereunder or any Event of Default under the Security Agreement, and so long as such default or Event of Default continues, interest shall accrue at the rate of two percent (2%) above the interest rate stated in the first paragraph of this Note. Upon a default or Event of Default, Holder may exercise any right, power or remedy permitted by law or as set forth herein or in the Security Agreement, including, without limitation, the right to declare the entire unpaid principal amount hereof and all interest accrued hereon, and all other sums secured by the Security Agreement, to be, and such principal, interest and other sums shall thereupon become, immediately due and payable. From and after any default hereunder or any Event of Default under the Security Agreement, any amounts past due may, at the option of the holder hereof, be added to principal and bear interest as principal. This Note may be prepaid, in whole or in part, at any time and from time to time. The undersigned hereby waives presentment, demand for payment, notice of dishonor and all other notices or demands in connection with the delivery, acceptance, performance, default or enforcement of this Note and hereby consents to any extensions of time, renewals, releases of any party to this Note, waivers or modifications that may be granted or consented to by the holder of this Note in respect of the time of payment or any other provisions of this Note. In the event that the holder hereof shall institute any action for the enforcement of the collection of this Note, there shall be immediately due from the undersigned, in addition to the unpaid interest and principal, all costs and expenses of such action, including attorneys' fees. This Note shall be governed by, and construed in accordance with, the laws of the State of Florida. MAKER AND HOLDER AGREE THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT BY HOLDER OR MAKER, ON OR WITH RESPECT TO THIS NOTE OR ANY OTHER DOCUMENT RELATED HERETO OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY. HOLDER AND MAKER EACH HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND INTELLIGENTLY, AND WITH THE ADVICE OF THEIR RESPECTIVE COUNSEL, WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. FURTHER, MAKER WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. MAKER ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS NOTE AND THAT HOLDER WOULD NOT EXTEND CREDIT TO MAKER IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS NOTE. MAKER: /s/ John W. Mehers ------------------------------ John W. Meyers /s/ William Michael Sessions ------------------------------ William Michael Sessions EX-10.12 13 doc12.txt FIRST RESTATED SECURITY AGMT FIRST RESTATED SECURITY AGREEMENT This First Restated Security Agreement is made as of the 16th day of December, 2002 by and between John W. Meyers, an individual ("Meyers") and William Michael Sessions ("Sessions" who, along with Meyers shall be referred to as a "Debtor" and collectively as the "Debtors"), on the one hand, and Matthew P. Dwyer, an individual (the "Secured Party"), on the other hand. This First Restated Security Agreement replaces the Security Agreement between the same parties dated November 22, 2002. The parties hereto agree as follows: 1. SECURITY INTEREST. In consideration of that certain loan extended by the Secured Party as set forth in the Note of even date herewith executed in favor of the Secured Party by the Debtor, of which this Agreement is attached as an exhibit (the "Note"), the terms of which are incorporated herein by reference, the Debtor hereby grants to Secured Party a continuing security interest in and a right of setoff against, the Collateral described in Paragraph 2, to secure the prompt payment, performance and observance of the Note (the "Obligations"). THE SECURITY INTEREST GRANTED HEREIN IS SUBORDINATE TO THE SECURITY INTEREST OF MARC DOUGLAS CREATED AS OF THE DATE HEREOF. 2. THE COLLATERAL. The Collateral is Two Hundred Fifty Thousand (250,000) shares of Series A Preferred Stock of TMI Holdings, Inc. 3. REPRESENTATIONS AND WARRANTIES. The Debtor warrants, represents and covenants that: (a) the Collateral is now, and at all times will be, owned by Debtor free and clear of all liens, security interest, claims and encumbrances; (b) Debtor will not assign, sell, mortgage, lease, transfer, pledge, grant a security interest in or lien upon, encumber, or otherwise dispose of or abandon, nor will Debtor suffer or permit any of the same to occur with respect to, any part or all of the Collateral, without prior written notice to Secured Party; Debtor has made, and will continue to make payment or deposit or otherwise provide for the payment, when due, of all taxes, assessments or contributions required by law which have been or may be levied or assessed against Debtor with respect to any of the Collateral; Secured Party shall at all times have free access to and right of inspection of the Collateral and any records pertaining thereto; at any time and from time to time, Debtor shall, at its sole cost and expense, execute and deliver to Secured Party such financing statements pursuant to the Uniform Commercial Code ("UCC"), applications for certificate of title and other papers, documents or instruments as may be requested by Secured Party in connection with this Security Agreement, and Debtor hereby authorizes Secured Party to execute and file at any time and from time to time one or more financing statements or copies thereof of this Security Agreement with respect to the Collateral signed only by Secured Party. 4. EVENTS OF DEFAULT. Each of the following events shall constitute an event of default ("Default") under this Security Agreement: (a) Debtor shall default in the punctual payment of any sum payable with respect to, or in the observance or performance of any of the terms and conditions of any Obligations; (b) the making or filing of any lien, levy, or execution on or seizure, attachment of or garnishment of, any Collateral; (c) Debtor shall become insolvent or commit an act of bankruptcy or make an assignment for the benefit of creditors; (d) there shall be filed by or against Debtor any petition for any relief under the bankruptcy laws of the United States now or hereafter in effect; 5. REMEDIES UPON DEFAULT. Upon the occurrence of any Default and at any time thereafter, Secured Party may, without notice to or demand upon Debtor, declare any Obligations immediately due and payable and Secured Party shall have all rights and remedies of a secured party under the UCC. 6. MISCELLANEOUS. Debtor hereby releases Secured Party from any claims, causes of action and demands at any time arising out of or with respect to this Security Agreement, the Obligations, the Collateral and its use and/or actions taken or omitted to be taken by Secured Party with respect thereto, and Debtor hereby agrees to hold Secured Party harmless from and with respect to any and all such claims, causes of action and demands. No act, omission or delay by Secured Party shall constitute a waiver of its rights and remedies hereunder or otherwise. Debtor hereby waives presentment, notice of dishonor and protest of all instruments included in or evidencing any Obligations or Collateral, and all other notices and demands whatsoever (except as expressly provided herein.) No provision hereof shall be modified, altered or limited except by a written instrument expressly referring to this Security Agreement and to such provision, and executed by the party to be charged. This Security Agreement and all Obligations shall be binding upon the heirs, executors, administrators, successors, or assigns of Debtor and shall, together with the rights and remedies of Secured Party hereunder, inure to the benefit of Secured Party, its successors, endorses and assigns. This Security Agreement and the Obligations shall be governed in all respects by the laws of the State of Florida applicable to contracts executed and to be performed in such State. If any term of this Security Agreement shall be held to be invalid, illegal or unenforceable, the validity of all other terms hereof shall in no way be affected thereby. IN WITNESS WHEREOF, the undersigned has executed or caused this Security Agreement to be executed in the State of Florida on the date first above set forth. SECURED PARTY: DEBTORS: /s/ Matthew P. Dwyer /s/ John W. Meyers - -------------------------- ---------------------------- Matthew P. Dwyer John W. Meyers /s/ William Michael Sessions ---------------------------- William Michael Sessions -----END PRIVACY-ENHANCED MESSAGE-----