UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
International Thoroughbred Breeders, Inc.
(Name of Issuer)
Common Stock, $2.00 par value
(Title of Class of Securities)
460491 80 6
(CUSIP Number)
Tami L. Bogutz, Esquire, Cozen and O'Connor
1900 Market Street, Philadelphia PA 19103
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications
January 15, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a Statement of
Schedule 13G to report the acquisition which is the subject
of this Schedule 13D, and is filing this schedule because of
Rule 13-d-1(b)(3) or (4), check the following box .
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13-d1(a) for
other parties to whom copies are to be sent.
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SCHEDULE 13D
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1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION OF ABOVE PERSON
NPD, Inc. 74-2808297
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [ ]
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3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF, OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED TO
ITEMS 2(D) OR 2(E)
[ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
2,904,016
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8 SHARED VOTING POWER
None
- ------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
2,904,016
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10 SHARED DISPOSITIVE POWER
None
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,904,016
- -----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
24.9%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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SCHEDULE 13D
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1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION OF ABOVE PERSON
Nunzio P. DeSantis
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [ ]
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3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF, OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED TO
ITEMS 2(D) OR 2(E)
[ ]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- -------------------------------------------------------------------------------
NUMBER OF SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
None
- -----------------------------------------------------------------------------
8 SHARED VOTING POWER
2,904,016
- -------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
None
- -----------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,904,016
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,904,016
- -----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
24.9%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- ------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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SCHEDULE 13D
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1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION OF ABOVE PERSON
Anthony Coelho
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [ ]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF, OO
- -----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED TO
ITEMS 2(D) OR 2(E)
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- -----------------------------------------------------------------------------
NUMBER OF SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
None
- ------------------------------------------------------------------------------
8 SHARED VOTING POWER
2,904,016
- -----------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
None
- -----------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,904,016
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,904,016
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
24.9%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- ------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT
Item 1 Security and Issuer
This statement relates to shares of Common Stock, par
value $2.00 per share (the "Stock"), of International
Thoroughbred Breeders, Inc. (the "Issuer"). The
principal executive offices of the Issuer are at P.O. Box
1232, Cherry Hill, New Jersey 08034.
Item 2 Identity and Background
(a)-(c) The names of the persons filing this report are: NPD,
Inc. ("NPD"), Nunzio P. DeSantis ("DeSantis") and Anthony
Coelho ("Coelho"). The reporting persons constitute a
"group" as defined in Rule 13d-5(b)(1) with respect to
the Stock.
NPD. NPD is a Delaware corporation with a business
address at Bradbury Court, Suite 3B, 215 Central Avenue
N.W., Albuquerque, New Mexico 87102.
DeSantis. DeSantis has a business address at Bradbury
Court, Suite 3B, 215 Central Avenue N.W., Albuquerque,
New Mexico 87102. DeSantis currently is President, Chief
Executive Officer and a director of the Issuer. DeSantis
currently is also President, Chief Executive Officer and
Chairman of the Board of AutoLend Group, Inc.
("AutoLend"), President, Treasurer and Chairman of the
Board of NPD, Inc. and President and Chairman of the
Board of Vista Health Care Group.
Coelho. Coelho has a business address at 700 14th
Street, N.W., 5th Floor, Washington, DC 20005. Coelho is
Chairman of the Board of the Issuer. Coelho is Chairman
of the Board and Chief Executive Officer of Coelho
Associates, a New York investment brokerage firm,
Chairman of the Board and Chief Executive Officer of ETC,
an education, training and communication company which is
a subsidiary of Tele-Communications, Inc., and a director
of NPD and AutoLend Group, as well as various public
companies.
(d) During the last five years, none of the persons listed
above has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) During the last five years, none of the persons listed
above has been a party to any civil proceeding of a
judicial or administrative body of competent jurisdiction
as a result of which he or it was or is subject to a
judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding
any violations with respect to such laws.
(f) NPD is a Delaware corporation. DeSantis and Coelho are
citizens of the United States.
Item 3 Source and Amount of Funds or Other Consideration
NPD. NPD owns 2,904,016 shares of Stock which it
acquired for $11,616,064 (or $4.00 per share) from Robert
E. Brennan pursuant to a Stock Purchase Agreement dated
December 5, 1996, as amended (the "Purchase Agreement").
The total purchase price for the shares is subject to
adjustment based upon any appreciation in the market
value of the Stock during the one-year period following
the closing of the purchase of the shares. One-half of
the purchase price was paid in cash at the closing of the
acquisition and the remainder was paid by the issuance of
a recourse promissory note payable to the order of Mr.
Brennan (the "Note"). NPD borrowed one-half of the cash
portion of the purchase price from each of DeSantis and
Casino-Co Corporation, a Nevada corporation ("Casino-Co").
DeSantis. DeSantis indirectly own 2,904,016 shares of
Stock as a result of his owning approximately 77% of the
outstanding common stock of NPD and being one of its two
directors and shareholders.
Coelho. Coelho indirectly own 2,904,016 shares of Stock
as a result of his owning approximately 23% of the
outstanding common stock of NPD and being one of its two
directors and shareholders.
Item 4 Purpose of Transaction
(a) On January 15, 1997, NPD purchased 2,904,016 shares of
Stock owned by Robert E. Brennan (the "Brennan Shares")
pursuant to the Purchase Agreement.
(b) The Group does not currently have any plans or proposals
which would result in an extraordinary corporate
transaction, such as a merger, reorganization or
liquidation, involving the Issuer.
(c) The Group does not currently have any plans which would
result in a sale or transfer of a material amount of
assets of the Issuer.
(d) Simultaneous with the purchase of the Brennan Shares,
three of the Issuer's directors resigned (Frank
Koenemund, John U. Mariucci and James J. Murray), and
DeSantis, Coelho, Michael C. Abraham, Kenneth Scholl and
Joseph Zappala were immediately thereafter appointed as
directors, but the term of Mr. Zappala will not commence
until January 25, 1997. At such time, such appointments
will constitute a change in a majority of the Board of
the Issuer.
(e) The Group does not currently have any plans or proposals
which would result in any material change in the present
capitalization or dividend policy of the Issuer.
(f) The Group does not currently intend to effectuate changes
in the Issuer's business or corporate structure.
(g) The Group does not currently have any plans or proposals
which would result in any changes in the Issuer's
Certificate of Incorporation or By-laws or other actions
which may impede the acquisition of control of the Issuer
by any person.
(h) The Group does not currently have any plans or proposals
which would result in causing a class of securities of
the Issuer to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national
securities association.
(i) The Group does not currently have any plans or proposals
which would result in a class of equity securities of the
Issuer becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Act.
(j) Except as set forth above, the Group does not currently
have any other plans or proposals which would result in
any action similar to those enumerated in (a) - (i)
above.
Item 5 Interest in Securities of the Issuer
(a) NPD. NPD is the record owner of 2,904,016 shares of
Stock. Based upon the 11,651,511 shares of Stock
outstanding as of January 9, 1997, NPD beneficially owns
approximately 24.9% of the issued and outstanding shares
of Stock of the Issuer.
DeSantis. DeSantis is the beneficial owner of 2,904,016
shares of Stock. Based upon the 11,651,511 shares of
Stock outstanding as of January 9, 1997, DeSantis
beneficially owns approximately 24.9% of the issued and
outstanding shares of Stock of the Issuer.
Coelho. Coelho is the beneficial owner of 2,904,016
shares of Stock. Based upon the 11,651,511 shares of
Stock outstanding as of January 9, 1997, Coelho
beneficially owns approximately 24.9% of the issued and
outstanding shares of Stock of the Issuer.
(b) Subject to the last two sentences of this paragraph, NPD
has the sole power to vote or dispose of all of the
2,904,016 shares of Stock. DeSantis and Coelho have the
shared power to direct the vote or disposition of all of
the 2,904,016 shares of Stock as the only directors and
shareholders of NPD. Under the Purchase Agreement, NPD
has agreed not to dispose of the Brennan Shares without
the consent of Brennan, except under certain limited
circumstances. The Brennan Shares are also subject to a
pledge agreement whereby the Brennan Shares were pledged
to Brennan as collateral for NPD's obligations under the
Note.
(c) See the discussion in Item 3 regarding the purchase by
NPD on January 15, 1996 of the Brennan Shares from Robert
E. Brennan.
(d)-(e) Not Applicable.
Item 6 Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer
(a) In consideration for the loan made by Casino-Co to NPD
representing a portion of the cash purchase price paid
for the Brennan Shares, NPD granted to Casino-Co an
option to acquire all of the Brennan Shares for the same
purchase price paid by NPD; provided, however, that the
option will be deemed to terminate and be of no further
force and effect if, either (i) by February 4, 1997,
AutoLend Group, Inc. repays to Casino-Co all amounts due
Casino-Co by NPD under the loan agreement with respect to
which the loan was made or (ii) all necessary consents
and approvals required in connection with the grant of
the option to Casino-Co are not obtained.
The Casino-Co option is subject to an option NPD has
granted to Robert Green ("Green") to purchase up to one-half of the
Brennan Shares for one-half of the purchase
price paid by NPD in accordance with an Option Agreement
between Robert Green and NPD. The option is exercisable
for a period of one year following receipt by Robert
Green of all approvals required by the New Jersey Casino
Commission and the New Jersey Racing Commission. In the
event Green exercises the option, NPD will continue to
have the right to vote the shares purchased by Green for
a period of 36 months from the date of such purchase.
As collateral security for its obligation to pay Brennan
the balance of the purchase price for the Brennan Shares,
NPD has pledged to Brennan its interest in the Brennan
Shares, subject only to the option granted to Green.
Until an event of default has occurred under the Note,
NPD retains all voting rights and rights to receive cash
dividends.
Item 7 Materials to be Filed as Exhibits
Exhibit 99.1 - Stock Purchase Agreement dated December 5,
1996, as amended by First Amendment to Stock Purchase
Agreement dated January 10, 1997 between Robert E.
Brennan and NPD.
Exhibit 99.2 - Promissory Note dated January 15, 1997 of NPD
in favor of Robert E. Brennan.
Exhibit 99.3 - Pledge of Stock Agreement dated January 15,
1997 by NPD in favor of Robert E. Brennan.
Exhibit 99.4 - Promissory Note dated January 15, 1997 from
NPD to DeSantis, together with Loan Agreement dated
January 15, 1997 between NPD and DeSantis.
Exhibit 99.5 - Secured Promissory Note dated January 15,
1997 from NPD to Casino-Co, together with Loan Agreement,
Security Agreement and Pledge Agreement, each dated as of
January 15, 1997 and between NPD and Casino-Co.
Exhibit 99.6 - Letter Agreement dated January 15, 1997
between NPD and Casino-Co.
Exhibit 99.7 - Letter Agreement dated December 5, 1996
between NPD and Green.
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information with respect to me set
forth in this statement is true, complete and correct.
NPD, INC.
By: /s/ Nunzio P. DeSantis
Nunzio P. DeSantis, President
/s/ Nunzio P.DeSantis
NUNZIO P. DESANTIS
/s/ Anthony Coelho
ANTHONY COELHO
Dated: January 23, 1997
EXHIBIT INDEX
Exhibit
Number Description of Document Page
Exhibit 99.1 Stock Purchase Agreement dated December 5,
1996,as amended by First Amendment to Stock
Purchase Agreement dated January 10, 1997
between Robert E. Brennan and NPD.
Exhibit 99.2 Promissory Note dated January 15, 1997 of
NPD in favor of Robert E. Brennan.
Exhibit 99.3 Pledge of Stock Agreement dated January 15,
1997 by NPD in favor of Robert E. Brennan.
Exhibit 99.4 Promissory Note dated January 15, 1997 from
NPD to DeSantis, together with Loan
Agreement dated January 15, 1997 between NPD
and DeSantis.
Exhibit 99.5 Secured Promissory Note dated January 15,
1997 from NPD to Casino-Co, together with
Loan Agreement, Security Agreement and
Pledge Agreement, each dated as of January
15, 1997 and between NPD and Casino-Co.
Exhibit 99.6 Letter Agreement dated January 15, 1997
between NPD and Casino-Co.
Exhibit 99.7 Letter Agreement dated December 5, 1996
between NPD and Green.
Exhibit 99.1
STOCK PURCHASE AGREEMENT
AGREEMENT, made this 5th day of December, 1996 by and between
ROBERT E. BRENNAN ("Seller"), an individual residing at 264 Route
537 East, Colts Neck, New Jersey 07722-1540, and NPD, Inc., a
Delaware corporation formed solely for the purpose of this
transaction and whose sole shareholders are Nunzio P. Desantis and
Anthony Coelho ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller is a debtor-in-possession under Chapter 11 of the
United States Bankruptcy Code in a case pending in the United
States Bankruptcy Court for the District of New Jersey (the
"Bankruptcy Court"), Case No. 95-355-2 (KCF); and
WHEREAS, Seller is the owner of 2,904,016 shares (the "Shares")
of Common Stock, par value $2.00 per share (the "Common Stock"), of
International Thoroughbred Breeders, Inc. (the "Company"); and
WHEREAS, Seller wishes to sell the Shares to Purchaser, and
Purchaser wishes to purchase the Shares from Seller for
investment, subject to the terms and conditions thereof.
NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants hereinafter set forth it is hereby agreed
as follows:
1. Agreement to Purchase. Subject to the terms and conditions
hereof Seller agrees to sell to Purchaser and Purchaser agrees to
purchase from Seller, the Shares.
2. Purchase Price. The purchase price ("Purchase Price") for the
Shares shall be $11,616,064, increased or decreased under certain
circumstances subsequent to the Closing Date as set forth in
Paragraph 3(d)(iii) and (iv).
3. Closing.
(a) The closing of the sale and purchase of the Shares (the
"Closing") shall take place within ten days following the latter
of (i) entry of an Order of the Bankruptcy Court approving this
transaction and (ii) satisfaction (or waiver thereof) of all other
conditions to closing set forth in Paragraph 11, or such other
time and date as the parties shall agree in writing, at the
offices of Cole, Schotz, Meisel, Forman & Leonard, P.A., 25 Main
Street, Hackensack, New Jersey, or at such other place as the
parties hereto shall agree in writing ("Closing Date").
(b) At the Closing, Seller shall deliver to Purchaser stock
certificates representing the Shares, duly endorsed in blank for
transfer or accompanied by appropriate stock powers duly executed
in blank. At the Closing, Seller shall use reasonable efforts to
take such action to cause the Company to cause the transfer agent
for the Shares to effect the transfer of the Shares on the books of
the transfer agent.
(c) In full consideration and exchange for the Shares, Purchaser
shall deliver to Seller at the Closing.
(i) The sum of $5,808,032.00 payable by certified or bank
check to the order of Seller, and
(ii) A non-recourse promissory note in the original
principal amount of $5,808,032.00 payable to the order of Seller
substantially in the form attached hereto as Exhibit A
(the "Note").
(d) The Note shall provide as follows:
(i) The principal amount ("Note Amount") of $5,808,032.00
due and owing under the Note shall be payable on the earlier to
occur of the fifth anniversary date of the Closing Date, the date
on which Purchaser sells the Shares (but only to the extent of the
net proceeds realized from the sale of the Shares by Purchaser) or
the date to which payment is accelerated pursuant to the
provisions of subsection (iv) of this Section 3 (the "Maturity
Date").
(ii) The Note shall bear interest per annum at the prime
rate as published by the Wall Street Journal, payable
semi-annually commencing six months from the Closing Date.
(iii) One time, within one (1) year of the Closing Date, the
Seller shall have the right on ten (10) days' prior written notice
("Acceleration Notice") to Purchaser to increase the Note Amount
by an amount equal to the product of one-half of (x) the amount, if
any, by which the Market Price per share (as hereinafter defined)
of the Common Stock exceeds $4.00 and (y) 2,904,016 (the
"Additional Amount").
(iv) In the event the Seller delivers an Acceleration Notice
to Purchaser pursuant to subsection (iii) of this Section 3,
Purchaser shall, not later than the tenth (10th) day following the
date of the Acceleration Notice, either
(A) pay to Seller the Note Amount plus the Additional
Amount, if any, and all accrued interest thereon (which payment
may be made through the sale of Shares pursuant to subsection
(vii) of this Section 3, provided that if the payment which will
result from a proposed sale of the Shares, together with such
other sums as Purchaser proposes to tender, would be less than
the amount required to pay the Note Amount plus the Additional
Amount in full, Seller may revoke the Acceleration Notice
without waiving his right to issue a new Acceleration Notice
under this Section); or
(B) elect to have the Additional Amount added to the
Note Amount which shall become due at the Maturity Date. If at
the time Seller delivers an Acceleration Notice to Purchaser the
Market Price of the Common Stock is less than $4.00, then
Purchaser shall pay the Note Amount plus accrued interest,
reduced by an amount equal to the product of (x) the difference
between the Market Price and $4.00 and (y) 2,904,016.
(v) For purposes of this Agreement, the term "Market Price"
shall mean the average of the daily closing prices per share of
Common Stock for the fifteen (15) consecutive trading days
immediately preceding the date of any Acceleration Notice given by
Seller or any prepayment in full or in part of the Note within one
(1) year from the Closing Date (as adjusted for any stock dividend,
split, combination or reclassification of the Common Stock
occurring subsequent to the Closing Date). The closing price for
each day shall be the last reported sale price regular way or, in
case no such reported sale takes place on such day, the average of
the last closing bid and asked prices regular way, in either case
on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or if not listed or
admitted to trading on any national securities exchange, the
closing sale price for such day reported by NASDAQ, if the Common
Stock is traded over-the-counter and quoted in the National Market
system, or if the Common Stock is so traded, but not so quoted,
the average of the closing reported bid and asked prices of the
Common Stock as reported by NASDAQ or any comparable system.
(vi) Subject to the provisions of Section 13(b), for one year
from the Closing Date Purchaser cannot prepay the Note in whole or
in part or sell any of the Shares without Seller's prior written
consent except upon Seller's delivery of an Acceleration Notice.
Thereafter, and prior to the Maturity Date, Purchaser may prepay
the Note Amount in part or in whole and sell all or part of the
Shares without Seller's consent and without premium or penalty. All
sales of Shares must be solely in bona fide, arm's length
transactions.
(vii) Any proceeds realized by Purchaser from any sale of the
Shares shall be received in trust by Purchaser for Seller and
shall forthwith be delivered by Purchaser to Seller in reduction
of its obligations under the Note. In the event the proceeds less
commissions realized by Purchaser from the sale of all of the
Shares are delivered to Seller as required by this Section
3(d)(vii), then such proceeds, even if less than the amount due
under the Note, shall be deemed to be paid in full satisfaction
and discharge of all amounts due under the Note.
4. Deposit. As a deposit against payment of the Purchase Price
due at the Closing, Purchaser shall (a) on or before December 10,
1996 deliver to Seller a letter of credit in the amount of
$2,904,016.00, and (b) within seven (7) business days after the
date of the execution of this Agreement shall deliver to Seller a
second letter of credit also in the amount of $2,904,016.00 such
that as of that later date, Purchaser shall have as a deposit
letters of credit totalling $5,808,032.00. Both letters of credit
shall be substantially in a form reasonably acceptable to Seller
and issued by a bank or brokerage institution reasonably acceptable
to Seller. Seller, at its option, may draw against the letter of
credit in payment of the Purchase Price at the Closing. In the
event that the Closing does not occur solely due to a default in
the obligation of the Purchaser to purchase the Shares, Seller
shall be entitled as liquidated damages to draw against the letters
of credit in the amount of $150,000.00.
5. Pledge of Shares.
(a) As collateral security for the prompt payment when due of
its obligations pursuant to Agreement and the Note, Purchaser
shall enter into a Pledge of Stock Agreement with Seller
substantially in the form attached hereto as Exhibit B (the "Pledge
Agreement").
6. Representations and Warranties of Seller. Seller represents
and warrants to Purchaser as follows:
(a) Seller is the record and beneficial owner of the Shares
and no other person has any right as to the Shares, including the
right to vote or dispose of or acquire the Shares.
(b) Seller has good and valid title to the Shares and, subject
to the approval of the Bankruptcy Court, has full power and
authority to sell the Shares in accordance with the terms of this
Agreement.
(c) The Shares are free and clear of any security interests,
pledges, encumbrances or liens and any options or rights of
others.
(d) The execution and delivery of this Agreement by Seller and
the consummation of the transactions contemplated hereby constitute
the valid and binding agreement of Seller, enforceable in
accordance with its terms, subject only to prior approval by the
Bankruptcy Court.
(e) Neither the execution and delivery of this Agreement, nor
the performance of the transactions contemplated herein by Seller
will violate or conflict with or, with or without the giving of
notice the lapse of time or both, constitute a default under any
mortgage, indenture, deed of trust, lease, contract, agreement,
license or other instrument or any order, judgment or ruling of any
government authority by which Seller is a party or which any of
Seller's property is bound, subject only to prior approval by the
Bankruptcy Court.
(f) Except as expressly set forth in this Agreement, no
authorization or approval by, and no notice or filing with, any
governmental authority or regulatory body is required for the due
execution, delivery and performance by Seller of this Agreement or
the transactions contemplated hereby.
(g) No litigation, action, proceeding, investigation or suit is
pending or, to Seller's knowledge, threatened, that challenges or
may have the effect of preventing, delaying, making illegal or
otherwise interfering with Seller's performance of his obligations
under this Agreement, except as specifically provided herein.
(h) All information which Seller has provided to Purchaser is
correct and complete in all material respects as of the date set
forth below.
7.Representations and Warranties of Purchaser. Purchaser
represents and warrants to Seller as follows:
(a) Purchaser is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware and
has all requisite corporate power and authority to execute and
deliver this Agreement, the Note and the Pledge Agreement and to
perform its obligations hereunder and thereunder.
(b) The execution and delivery of this Agreement, the Note and
the Pledge Agreement by Purchaser and the performance of the
transactions herein and therein contemplated have been duly
authorized by the Board of Directors and stockholders of Purchaser
and no further corporate action on the part of Purchaser is
necessary to authorize the execution and delivery of this
Agreement, the Note and the Pledge Agreement and the performance of
such transactions. This Agreement, the Note and the Pledge
Agreement have been duly executed and delivered by Purchaser and,
assuming due authorization, execution and delivery by Seller,
constitute the valid and binding agreements of Purchaser,
enforceable in accordance with their respective terms.
(c) Neither the execution and delivery of this Agreement, the
Note or the Pledge Agreement, nor the performance of the
transactions contemplated herein or therein by Purchaser will
violate or conflict with any of the provisions of the Certificate
of Incorporation or By-Laws of Purchaser or, with or without the
giving of notice or the lapse of time or both, violate or
constitute a default under any mortgage, indenture, deed of trust,
lease, contract, agreement, license or other instrument or any
order, judgment or ruling of any governmental authority to which
Purchaser is a party or by which any of its property is bound,
except in each case for any violation or default which does not
materially impair the ability of Purchaser to consummate the
transactions contemplated hereby.
(d) Except as specifically provided herein, no authorization or
approval by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution,
delivery and performance by the Purchaser of this Agreement, the
Note or the Pledge Agreement.
(e) No litigation, action, proceeding, investigation or suit is
pending or, to Purchaser's knowledge threatened, that challenges
or may have the effect of preventing, delaying, making illegal or
otherwise interfering with Purchaser's performance of its
obligations under this Agreement, the Note or the Pledge
Agreement, except as specifically provided herein.
(f) Purchaser, by its Board of Directors, has such knowledge and
experience in financial and business matters that Purchaser is
capable of evaluating the merits and risks of investment in the
Company and of making an informed investment decision and is able
to hold the Shares for an indefinite period of time.
(g) Purchaser acknowledges that, except as expressly set forth
herein, no representations or warranties have been made by Seller
to the Purchaser.
(h) Purchaser understands that neither the Company nor any of its
officers/directors has any obligation to register the Shares under
any federal or state securities act or law.
(i) All information which the Purchaser has provided to Seller is
correct and complete in all material respects as of the date set
forth below.
(j) Purchaser acknowledges that this Agreement must be submitted
to the Bankruptcy Court and will become a part of the public
record.
(k) Purchaser is purchasing the Shares for investment purposes
only and not with a view to their distribution within the meaning
of Section 2(ii) of the Securities Act of 1933 (the "Securities
Act").
(l) Purchaser is an "Accredited Investor" as defined in Regulation
D promulgated under the Securities Act.
(m) The sole shareholders of Purchaser are Nunzio P. Desantis and
Anthony Coelho.
8. Restricted Shares; Information Concerning the Company.
Purchaser acknowledges that the Shares have not been registered
under the Securities Act, and the Shares must be held indefinitely
unless a transfer of the Shares is subsequently registered under
the Securities Act or an exemption from the requirements of such
registration is available. Purchaser understands and acknowledges
that the certificates evidencing the Shares to be delivered to
Purchaser will bear a legend restricting transfer thereof in the
absence of registration under the Securities Act, as amended, or an
available exemption therefrom, and that the Company will issue stop
transfer orders to the transfer agent for the Company's Common
Stock in furtherance of such restrictions.
Purchaser acknowledges that Seller has not provided any
information concerning the Company and Seller has not made any
warranties or representations whatsoever concerning the condition,
financial or otherwise, of the Company.
9. Brokers. Seller and Purchaser represent and warrant to one
another that there are not broker's fees or commissions due to any
party in connections with this Agreement and the transactions
contemplated herein.
10. Bankruptcy Court Approval.
(a) Seller agrees to use his best efforts to obtain the approval
of the Bankruptcy Court for this Agreement, the Note and the Pledge
and the transactions contemplated herein and therein.
(b) In the event that a third-party submits a competing bid for
the Shares and the Bankruptcy Court directs that an auction be
held, Purchaser shall continue to be entitled to match the highest
and best offer made for the Shares and, unless another bidder
elects to bid higher, Purchaser's then matching bid shall be deemed
to be the highest and best bid.
(c) In the event Purchaser is not the successful bidder at such an
auction sale because Purchaser's bid is not the highest bid, then
Purchaser shall be paid a breakup fee equal to three (3%) percent
of the purchase price when and as received by the Seller in the
same proportion as Seller (for example, if a bid were made by a
third-party of $15,000,000 ($7,500,000.00 in cash and $7,500,000.00
in a note), and this bid was approved by the Bankruptcy Court,
Purchaser would be entitled to receive $225,000.00 from the cash
portion of the Purchase Price at the closing and three (3%)
percent of all principle payments on the note when received by
Seller).
11. Conditions to the Closing.
(a) The obligation of Seller to sell the Shares to Purchaser is
subject to the fulfillment prior to or at the Closing of each of
the following conditions:
(i) The representation and warranties of Purchaser contained
in this Agreement shall be true and correct in all material
respects at the time of the Closing as though made at such time.
(ii) The Bankruptcy Court shall have approved, in all
material respects, the transactions contemplated by this
Agreement, the Pledge Agreement and the Note.
(iii) Purchaser shall have executed and delivered to Seller
the Pledge Agreement and the Note.
(iv) Purchaser shall have completed, executed and delivered
to Seller Federal Reserve Form G-3.
(v) Purchaser shall have established an unsecured Five
Million ($5,000,000.00) Dollar revolving line of credit in favor of
the Company with a term of two years from the Closing Date and an
interest rate of ten (10%) percent per annum on all funds drawn
down, calculated and payable quarterly in arrears and in a manner
consistent with the Company's obligations under its loans with
Foothill Capital Corporation.
(vi) Cozen and O'Connor, P.C., counsel for Purchaser,
shall have delivered to Seller, an opinion of counsel, dated the
Closing Date and in form and substance satisfactory to counsel for
Seller, substantially to the effect that
(A) Purchaser is a corporation duly organized,
validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(B) The Stock Purchase Agreement, the Note and the
Pledge Agreement have each been duly authorized, executed and
delivered by Purchaser and each is a legal, valid and binding
obligation of Purchaser, enforceable in accordance with its
terms.
(C) The execution and delivery of the Stock Purchase
Agreement, the Note and the Pledge Agreement, and the
performance of their respective terms will not (i) violate any
provision of any law, rule or regulation having applicability to
Purchaser, (ii) conflict with or result in a violation of the
Certificate of Incorporation or By-Laws of Purchaser, and (iii)
to such counsel's knowledge, with or without the giving of notice
or the lapse of time or both, violate or constitute a default
under any mortgage, indenture, deed of trust, lease, contract,
agreement, license or other instrument or any order, judgment or
ruling of any governmental authority to which Purchaser is a
party or by which any of its property is bound, except in each of
clause (i), (ii) and (iii) for any violation, conflict, or
default which does not materially impair the ability of Purchaser
to consummate the transactions contemplated thereby.
(D) Other than as specifically referred to in the
Stock Purchase Agreement, no authorization or approval by, and no
notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by the Purchaser of the Stock Purchase Agreement, the
Note or the Pledge Agreement.
(E) To such counsel's knowledge, no litigation,
action, proceeding, investigation or suit is pending or
threatened that challenges or may have the effect of preventing,
delaying, making illegal or otherwise interfering with
Purchaser's performance of its obligations under the Stock
Purchaser Agreement, the Note or the Pledge Agreement.
(F) The sole shareholders of the Purchaser are Nunzio
P. Desantis and Anthony Coelho.
(vii) There shall be no litigation, action, proceeding or
investigation pending or threatened challenging or having the
effect of preventing, delaying or making illegal or otherwise
interfering with the execution and delivery of this Agreement or
the consummation of the transactions contemplated by this
Agreement, the Note or the Pledge Agreement.
(b) The obligation of the Purchaser to purchase the Shares
from Seller is subject to the fulfillment prior to or at the
Closing of the following conditions:
(i) The representations and warranties of Seller contained
in this Agreement shall be true and correct at the time of the
Closing as though made at such time.
(ii) The Bankruptcy Court shall have approved, in all
material respects, the transactions contemplated by this
Agreement, the Note and the Pledge Agreement.
(iii) There shall be no litigation, action, proceeding or
investigation pending or threatened challenging or having the
effect of preventing, delaying or making illegal or otherwise
interfering with the execution and delivery of this Agreement or
the consummation of the transactions contemplated by this
Agreement, the Note or the Pledge Agreement.
(iv) As of the Closing, the Company's existing licenses
with the CCC and the Racing Commission are in full force and
effect.
12. Indemnification. Each party (an "Indemnifying Party") hereto
agrees to indemnify and hold harmless the other party from and
against any damages, liabilities, actions, costs and expenses
(including reasonable attorneys' fees) arising from the
Indemnifying Party's breach of this Agreement or of any
representation, warranty or covenant contained therein.
13. Miscellaneous.
(a) The respective representations, warranties, covenants
and agreements of each of the parties to this Agreement (except
covenants and agreements which are expressly required to be
performed and are performed in full on or before the Closing)
shall survive the Closing and the consummation of the transactions
contemplated by this Agreement. In the event of a breach of any of
such representations, warranties or covenants, the party to whom
such representations, warranties or covenants have been made shall
have all rights and remedies for such breach available to it under
the provisions of this Agreement or otherwise, whether at law or in
equity.
(b) This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors
and assigns; provided, however, that except as expressly provided
herein, neither party shall assign or delegate any of the
obligations created under this Agreement without the prior written
consent of the other party; provided, however, that at any time
after the date hereof, (A) Purchaser may transfer and/or sell the
Shares and/or assign its rights under this Agreement to AutoLend
Group, Inc., a Delaware corporation ("AutoLend") provided that (i)
Autolend is then approved as qualified by the New Jersey Casino
Control Commission ("CCC") in connection with the issuance of a
nongaming casino service license and is also approved by the New
Jersey Racing Commission ("Racing Commission"); (ii) AutoLend
agrees to be bound by the terms and conditions of this Agreement,
the Note and the Pledge and executes any and all documents required
to be executed by Purchaser pursuant to the Pledge; (iii) if
Purchaser is assigning its rights under this Agreement to AutoLend
(as opposed to selling the Shares), AutoLend agrees to execute
representations and warranties substantially similar to those
provided in Section 7 with AutoLend as Purchaser and provides an
opinion of counsel substantially similar to that provided in
Section 11(a)(vi) with AutoLend as Purchaser; and (iv) AutoLend is
not then a defendant or Debtor in a voluntary or involuntary
bankruptcy proceeding and is not a party to any litigation, action,
proceeding, investigation or suit that may threaten, challenge,
prevent, delay, make illegal or otherwise interfere with AutoLend's
performance of its obligations under the Agreement (if assigned) or
Note or the Pledge or its ability to execute its full rights as
owner under the Stock, and (B) Purchaser may sell and/or transfer
50% of the Shares to Robert Green ("Green") pursuant to the
exercise of an option granted by the Purchaser, provided that (i)
any payment received by Purchaser from Green be paid to Seller in
reduction of the Note Amount; (ii) to the extent the Note is not
paid in full Seller will allow Green to assume his proportionate
share of the Note Amount provided prior to Green's purchase of the
Shares, he acknowledges Seller's rights under the Pledge and Note
and executes any and all documents required to be executed by
Purchaser pursuant to the Pledge. In the event Green defaults on
his liability to Seller under his assumption of the Note, Seller
agrees to give Purchaser ten (10) business days from the date
Seller sends notice of such default to Purchaser to cure Green's
default. Seller agrees to deliver to Green the shares he purchases
upon Seller's receipt of full payment, provided that Purchaser and
Green shall remain liable to Seller for any Additional Amount in
the event that at the time of such delivery, Seller has not yet
delivered an Acceleration Notice and the one year time period
during which Seller may deliver a Acceleration Notice has not yet
expired. Nothing in this Agreement shall confer upon any person or
entity not a party to this Agreement, or the legal representatives
of such person or entity, any rights or remedies of any nature or
kind whatsoever under or by reason of this Agreement.
(c) Except as otherwise expressly provided in this
Agreement, all legal and other fees, costs and expenses incurred
in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such
fees, costs or expenses.
(d) All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have
been given or made if in writing and delivered personally or sent
by registered mail or certified mail (postage prepaid, return
receipt requested) to the parties at the following addresses:
(i) If to the Seller to:
Robert E. Brennan
264 Route 537 East
Colts Neck, New Jersey 07722-1540
with a copy to:
Gerald Gline, Esq.
Cole, Schotz, Meisel, Forman & Leonard
25 Main Street
Hackensack, New Jersey 07602-0800
(ii) if the Purchaser to:
NPD, Inc.
215 Central N.W. - Suite 3B
Albuquerque, New Mexico 87102
with a copy to:
Steven N. Haas, Esq.
Cozen and O'Connor
The Atrium
1900 Market Street
Philadelphia, PA 19103
or such other persons or at such other addresses as shall be
furnished by either party by like notice to the other.
(e) This Agreement, together with the exhibits hereto,
represents the entire agreement and understanding of the parties
with reference to the transactions set forth herein and no
representations or warranties have been made in connection with
this Agreement other than those expressly set forth herein or in
the exhibits, certificates and other documents delivered in
accordance herewith. This Agreement supersedes all prior
negotiations, discussions, correspondence, communications,
understandings and agreements between the parties relating to the
subject matter of this Agreement and all prior drafts of this
Agreement, all of which are merged into this Agreement.
(f) Each of the Seller and the Purchaser may by written
notice to the other (a) extend the time for the performance of any
of the obligations or other actions of the other; (b) waive any
inaccuracies in the representations and warranties of the other
contained in this Agreement; (c) waive compliance with any of the
covenants of the other contained in this Agreement; (d) waive
performance of any of the obligations of the other created under
this Agreement; or (e) waive fulfillment of any of the conditions
to its own obligations under this Agreement. The waiver by any
party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach,
whether or not similar. This Agreement may be amended, modified or
supplemented only by a written instrument executed by the parties
hereto.
(g) This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof
shall not affect the validity or enforceability of this Agreement
or of any other term or provision hereof. Furthermore, in lieu of
any such invalid or unenforceable term or provision, the parties
hereto intend that there shall be added as part of this Agreement a
provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
(h) The Article and Section headings contained in this
Agreement are solely for convenience of reference and shall not
affect the meaning or interpretation of this Agreement or of any
term or provision hereof.
(i) This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the State of New Jersey.
ATTEST: NPD, INC., a Delaware Corporation
/s/ Jeffrey Ovington By: /s/ Nunzio P. DeSantis
NUNZIO P. DeSANTIS, PRESIDENT
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.
ATTEST:
/s/ Gerald Gline /s/ Robert E. Brennan
ROBERT E. BRENNAN (Seller)
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT, dated this 10th day of
January, 1997 ("First Amendment"), to a Stock Purchase Agreement
dated December 5, 1996 (the "Stock Purchase Agreement"), is entered
into by and between ROBERT E. BRENNAN ("Seller"), an individual
residing at 264 Route 537 East, Colts Neck, New Jersey 07722-1540,
and NPD, INC., a Delaware corporation formed solely for the purpose
of effecting the transaction contemplated by the Agreement, as
amended by this First Amendment, and whose sole stockholders are
Nunzio P. DeSantis and Anthony Coelho ("Purchaser"). All
capitalized terms used herein but not defined herein shall have the
meanings given such terms as set forth in the Agreement.
W I T N E S S E T H:
WHEREAS, Seller and Purchaser are parties to
a Stock Purchase Agreement dated December 5, 1996 (the "Stock
Purchase Agreement") pursuant to which Seller has agreed to sell
the Shares to Purchaser, and Purchaser has agreed to purchase the
Shares from Seller for investment, subject to the terms and
conditions thereof; and
WHEREAS, Seller and Purchaser desire to
enter into this First Amendment to amend certain of the terms of
the Stock Purchase Agreement, and certain of the terms of the Note
and Pledge Agreement attached to the Stock Purchase Agreement as
Exhibits "A" and "B", respectively, consistent with further
agreements between Seller and Purchaser.
NOW, THEREFORE, in consideration of the
premises and the mutual promises and covenants herein set forth,
Seller and Purchaser hereby agree to amend the Stock Purchase
Agreement as follows:
1. Subsection 3(d)(i) of the Stock Purchase Agreement is amended
and restated in its entirety as follows:
"(i) The principal amount ("Note Amount") of $5,808,032.00 due
and owing under the Note shall be payable on the earlier to
occur of the fourth anniversary of the date of the Closing
Date, the date on which Purchaser sells the Shares (but only
to the extent of the net proceeds realized from the sale of
the Shares by Purchaser if less than all of the Shares are
sold) or the date to which payment is accelerated pursuant to
the provisions of subsection (iv) of this Section 3 (the
"Maturity Date")."
2. Subsection 3(d)(iv)(B) of the Stock Purchase Agreement is
amended and restated in its entirety as follows:
"elect to have the Additional Amount added to the Note Amount
which shall become due at the Maturity Date."
3. Subsection 3(d)(vii) of the Stock Purchase Agreement is amended
and restated in its entirety as follows:
"(vii) Net proceeds realized by Purchaser from any sale of the
Shares shall be received in trust by Purchaser for Seller and
shall forthwith be delivered by Purchaser to Seller in
reduction of its obligations under the Note. In the event the
proceeds less commissions realized by Purchaser from the sale
of all of the Shares are delivered to Seller as required by
this Section 3(d)(vii), then such proceeds, to the extent they
equal all amounts due under the Note (but without giving
effect to any increase in the principal amount of the Note
after the Closing Date by reason of the Additional Amount and
to accrued and unpaid interest calculated solely on the basis
of the Additional Amount), shall be deemed to be paid in full
satisfaction and discharge of all amounts due under the Note,
even if the proceeds so delivered are insufficient to pay all
or any of the Additional Amount."
4. Section 5 of the Stock Purchase Agreement is hereby amended by
restating the caption thereof to read Pledge of Shares; Guarantees,
and by the addition of a new subsection (b) as follows:
"(b) Concurrently with Seller's execution and delivery of the
Note to Purchaser, Nunzio P. DeSantis ("DeSantis") shall
execute and deliver to Purchaser his unsecured Guaranty,
substantially in the form of Exhibit "C" attached hereto (the
"DeSantis Guaranty"), pursuant to which DeSantis shall
unconditionally guarantee the prompt payment, when due under
the terms of the Note, of up to $2,000,000 of all amounts due
under the Note (but expressly excluding any portion of the
principal amount of the Note representing the Additional
Amount and to interest calculated solely on the basis of the
Additional Amount), which DeSantis Guaranty shall continue
until the earlier of the full satisfaction of the Note or its
termination in accordance with the last sentence of this
subsection 5(b). As promptly as possible following the
dismissal or withdrawal of the Involuntary Chapter 11 Petition
against AutoLend Group, Inc. ("AutoLend") pending in the
United States Bankruptcy Court for the District of New Mexico
(Bkcy No. 11-96-14835 M.A.), AutoLend shall execute and
deliver to Purchaser its substitute Guaranty, substantially in
the form of Exhibit "D" attached hereto (the "AutoLend
Guaranty"), pursuant to which AutoLend shall unconditionally
guarantee the prompt payment, when due under the terms of the
Note, of up to $2,000,000 of all amounts then due under the
Note (but expressly excluding any portion of the principal
amount of the Note representing the Additional Amount and to
interest calculated solely on the basis of the Additional
Amount), which AutoLend Guaranty shall continue until the
earlier of the full satisfaction of the Note or its
termination in accordance with subsection 13(b)(A) hereof. The
AutoLend Guarantee shall be secured by the Cash Collateral
Account, as such term is defined in the Security Agreement,
substantially in the form of Exhibit "E" attached hereto (the
"AutoLend Security Agreement"), which shall be delivered by
AutoLend to Purchaser concurrently upon delivery of the
AutoLend Guarantee. Upon delivery to Purchaser of the AutoLend
Guarantee and the AutoLend Security Agreement, the DeSantis
Guarantee shall terminate and be of no further force and
effect."
5. Section 11 of the Stock Purchase Agreement is hereby amended by
the addition of a subsection (a)(viii) as follows:
"(viii) Purchaser shall have delivered to Seller the DeSantis
Guarantee."
6. Subsection 13(b)(A) of the Stock Purchase Agreement is hereby
amended by the addition of a subsection (v) as follows:
"(v) AutoLend shall deliver to Purchaser an amendment to the
AutoLend Security Agreement which provides that (1) the security
interest granted thereby shall thereafter secure AutoLend's primary
obligations under the Note as successor obligor, but only to the
extent of up to $2,000,000 of all amounts then outstanding, if any,
and specifically excluding any portion of the principal amount of
the Note representing the Additional Amount and interest calculated
solely on the basis of the Additional Amount, and (2) that the
AutoLend Guarantee shall terminate."
7. From and after the date hereof, the Note and Pledge Agreement
shall be in the forms of Exhibits "A" and "B", respectively,
attached hereto in lieu of Exhibits "A" and "B" attached to the
Stock Purchase Agreement.
8. The provisions of subsections 13(d) through 13(i) of the Stock
Purchase Agreement are specifically incorporated by reference
herein; provided, however, that, if at any time Seller is required
to give notice to Purchaser hereunder, Seller is then a debtor in a
case pending in the United States Bankruptcy Court for the District
of New Jersey, copies of such notice shall also be delivered to the
Securities and Exchange Commission and counsel for the Committee of
Unsecured Creditors at the address designated for service to such
parties in the Bankruptcy Court proceeding; and provided, further,
that the Securities and Exchange Commission and Committee of
Unsecured Creditors also shall receive notice, at the
aforementioned address, of any material waiver by Seller of a right
hereunder or of any material amendment or modification hereto
during the pendency of such Bankruptcy Court proceeding.
9. Except as otherwise expressly provided in this First Amendment,
the Stock Purchase Agreement is hereby ratified and confirmed as in
full force and effect in every respect.
IN WITNESS WHEREOF, the parties have executed and delivered this
First Amendment as of the date first written above.
/s/ Robert E. Brennan
ROBERT E. BRENNAN (Seller)
Attest:
NPD, INC.
By: /s/ Nunzio P. DeSantis
Nunzio P. DeSantis, President
Attest: /s/ E. Gerald Riesenbach, Secretary
Exhibit 99.2
PROMISSORY NOTE
$5,808,032.00 Date: January 15, 1997
FOR VALUE RECEIVED, the undersigned, NPD, Inc. (hereinafter
referred to as the "Maker"), promises to pay to the order of Robert
E. Brennan (the "Payee"), the principal sum of FIVE MILLION EIGHT
HUNDRED EIGHT THOUSAND AND THIRTY TWO ($5,808,032.00) DOLLARS (the
"Note Amount"), in lawful money of the United States of America,
together with interest at the Prime Rate pursuant to the payment
schedule set forth herein. For the purpose of this Note, the Prime
Rate shall be prime rate of interest quoted by the Wall Street
Journal, reviewed on the monthly anniversary date of this Note.
The Note is made by Maker pursuant to the terms and conditions of
a certain Stock Purchase Agreement dated December 5, 1996 by and
among Robert E. Brennan and NPD, Inc. as amended by a First
Amendment dated January 10, 1997 (together, the "Purchase
Agreement"). The terms of the Purchase Agreement shall govern in
the event of a conflict between the terms of this Note and the
Purchase Agreement. Capitalized terms not defined herein shall have
the meaning assigned to them in the Purchase Agreement.
This Note shall not be changed, modified or amended without the
prior written consent of the Payee.
1. Payment of Principal and Interest
The Note Amount shall be payable as follows:
$5,808,032 on January 15, 2001 (the "Maturity Date")
Interest on the Note Amount shall be payable semi-annually
commencing six (6) months from the date of this Note.
2. Payment prior to the Maturity Date
Maker may prepay the entire Note Amount prior to the Maturity
Date without premium or penalty except as follows:
(a) For a period of one (1) year from the date hereof
(i) Except as provided herein, Maker may not prepay this Note
in whole or in part without Payee's prior written consent, which
Payee may grant or withhold in its sole and absolute discretion.
(ii) Payee may deliver an Acceleration Notice to Maker. In
such event then, at Maker's option, Maker shall either pay to Payee
the Note Amount and the Additional Amount, as provided in the
Purchase Agreement, or elect to have the Additional Amount added to
the Note Amount which shall become payable at the Maturity Date.
(b) Any proceeds realized from the sale of the Shares shall be
immediately applied first against accrued and unpaid interest and
then against the Note Amount.
(c) All sales of Shares by Maker must be solely in bona fide arms
length transactions.
(d) All payments under this Note, whether prior to the Maturity
Date or otherwise shall be applied first, to accrued and unpaid
interest, second, to complete satisfaction of the original
principal amount of the Note prior to any increase due to the
Additional Amount, third, to complete satisfaction of the
Additional Amount, and fourth, to complete satisfaction of all
other amounts due under the Note.
3. Event of Default
Notwithstanding anything foregoing to the contrary, the remaining
principal balance on this Note, plus all accrued interest, and the
Additional Amount, if any, shall immediately be due and payable at
the option of the Payee on the occurrence of any of the following
events, which shall be events of default:
a. default in the payment of any payment of principal or interest
due hereunder and the continuance thereof, without cure, for ten
(10) days after the Maker has received written notice of such
default;
b. the dissolution, liquidation, bankruptcy of or the making of an
assignment for the benefit of creditors by the Maker;
c. the institution of bankruptcy proceedings or proceedings for a
reorganization, liquidation, composition, dissolution, receivership
or other similar relief under any law or regulation, Federal or
State, whether instituted by or against the Maker; provided,
however, that in the event of an involuntary proceeding against the
Maker appointing or seeking the appointment of a receiver or other
fiscal officer under Federal or State proceedings, then the Maker
shall have a ninety (90) day period to cause such proceedings to be
dismissed and the dismissal will cure default for purposes of this
Note;
d. the voluntary cessation of the Maker's principal business by
the Maker or the issuance of a permanent injunction against any
material aspect of the Maker's operations by any Court of competent
jurisdiction, the result of which is to cause a material impairment
in the Maker's ability to continue in business;
e. default under the Purchase Agreement or default under the
Pledge Agreement dated January 15, 1997;
f. the sale of substantially all of the assets of the Maker;
g. a default under the AutoLend Security Agreement which is not
cured prior to the expiration of forty-five (45) days from the date
of notice by the Secured Party to the Debtor (as such terms are
defined in the AutoLend Security Agreement) of the default;
provided, however, that the Debtor continuously and diligently
exercises good faith efforts to cure the default during such
period; or
h. the breach by the Guarantor (as defined in the DeSantis
Guaranty) of the Guarantor's representation and warranty set forth
in Paragraph 2 of the DeSantis Guaranty on the date first made.
This Note is secured by a certain Pledge of Stock Agreement dated
January 15, 1997 attached hereto and Payee is entitled to the
benefits thereof. Maker's liability under this Note, specifically
excluding any amounts representing the Additional Amount and
interest calculated on the Additional Amount, shall be recourse to
Maker's assets, and Payee shall be entitled to the benefits arising
under the DeSantis Guaranty and, if applicable, the AutoLend
Guaranty and AutoLend Security Agreement, in respect of such
liability, subject to the conditions and limitations set forth
therein. Maker's liability under this Note for amounts representing
the Additional Amount and interest calculated on the Additional
Amount is non-recourse to it or to any of its assets other than as
provided in the Pledge of Stock Agreement, and is non-recourse to
the DeSantis Guaranty and, if applicable, to the AutoLend Guaranty
and AutoLend Security Agreement.
The Maker waives presentment, protest, notice of dishonor and the
right to assert in any action or proceeding with regard to the Note
any offset or counterclaims which the Maker may have.
No failure or delay by the Payee in exercising any right
hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any right preclude other or further
exercises thereof or the exercise of any other right; and the
holder may extend the time of payment of the Note, postpone the
enforcement hereof, grant any other indulgences and/or add or
release any security for this Note or any party primarily or
secondarily liable hereon without affecting or diminishing the
holder's right of recourse against the Maker or any guarantor
hereof, which right is hereby expressly reserved.
The Maker will pay all costs and expenses, including reasonable
attorneys' fees and disbursements, incurred by the Payee in
connection with the enforcement of this Note.
THE MAKER AGREES THAT SO LONG AS ROBERT E. BRENNAN IS A
DEBTOR-IN-POSSESSION IN PROCEEDINGS BEFORE THE UNITED STATES
BANKRUPTCY COURT FOR THE DISTRICT OF NEW JERSEY ("BANKRUPTCY
COURT") THE BANKRUPTCY COURT SHALL HAVE EXCLUSIVE JURISDICTION TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES PERTAINING DIRECTLY OR
INDIRECTLY TO THIS NOTE OR TO ANY MATTER ARISING THEREFROM.
THEREAFTER, THE MAKER AGREES THAT THE SUPERIOR COURT OF THE STATE
OF NEW JERSEY OR THE UNITED STATES DISTRICT COURT FOR THE DISTRICT
OF NEW JERSEY SHALL HAVE EXCLUSIVE JURISDICTION THEREOF. MAKER
EXPRESSLY SUBMITS AND CONSENTS, IN ADVANCE, TO SUCH JURISDICTION IN
ANY ACTION OR PROCESS IN SUCH COURTS, HEREBY WAIVING PERSONAL
SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS
ISSUED HEREIN, AND AGREEING THAT SERVICE OF SUCH SUMMONS OR
COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL (RETURN RECEIPT REQUESTED) ADDRESSED TO THE PARTY TO
BE SERVED AT THE ADDRESS SET FORTH BENEATH ITS SIGNATURE BELOW.
MAKER HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION
INSTITUTED BY MAKER OR PAYEE.
This Note may not be changed, modified or amended orally. This
Note shall be governed by and interpreted and enforced in
accordance with the laws of the State of New Jersey.
WITNESS: NPD, Inc.
/s/ Nunzio P. DeSantis
By: Nunzio P. DeSantis
Address: 215 Central NW
Suite 3B
Albuquerque, NM 87102
Exhibit 99.3
PLEDGE OF STOCK AGREEMENT
THIS PLEDGE OF STOCK AGREEMENT, is made this 15th day of January,
1997 by NPD, INC., a Delaware corporation, with its principal
offices located at 215 Central NW, Suite 33, Albuquerque, NM 87102
(collectively hereinafter referred to as the "Pledgor")
IN FAVOR OF
Robert E. Brennan, an individual residing at 264 Route 537 East,
Colts Neck,New Jersey 07722-1540 (hereinafter referred to as the
"Pledgee").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and delivery of this
Pledge of Stock Agreement, Pledgee has pursuant to a Stock Purchase
Agreement dated December 5, 1996, as amended by the First Amendment
dated January 10, 1997 (together the "Stock Purchase Agreement")
sold to Pledgor 2,904,016 shares (the "Shares") of Common Stock par
value $2.00 per share (the "Common Stock") of International
Thoroughbred Breeders, Inc. (the "Company"); and
WHEREAS, Pledgor has agreed to assign, convey and grant a
security interest in all of the Shares to induce Pledgee to enter
into the Stock Purchase Agreement and to defer payment of a portion
of the purchase price for the Shares which is evidenced by a
promissory note in the principal sum of $5,808,032.00 from Pledgor
to Pledgee dated contemporaneously herewith (the "Note"); and
WHEREAS, Pledgor and Pledgee wish to enter into this Pledge of
Stock Agreement in order to accomplish the aforesaid assignment,
conveyance and grant of security interest and to set forth the
rights and obligations of the parties in respect of the Collateral
(as hereinafter defined); and
WHEREAS, all words and terms not defined herein shall have the
respective meanings and be construed herein as provided in the
Stock Purchase Agreement and the Note;
NOW, THEREFORE, for and in consideration of the premises and
mutual covenants, herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor binding itself and its successors and
assigns, heirs, legal representatives, administrators and
executors, does hereby promise, covenant and agrees as follows:
1. Pledge. Upon the terms hereof, Pledgor hereby assigns,
conveys, pledges and grants to Pledgee a continuing pledge, general
lien on and security interest in and to (hereinafter referred to as
the "Security Interest") in all of the right, title and interest of
Pledgor in and to all of the following instruments and property
(said instruments and property hereinafter referred to as the
"Collateral"):
(a) the Shares as represented by Certificate Nos. _ inclusive;
(b) All certificates, options, rights, securities or other
distributions issued as an addition to, in substitution or in
exchange for, or on account of, the Shares;
(c) Any stock or other securities acquired by Pledgor or Pledgor's
designee with respect to, incident to or in lieu of the Shares or
with respect to, incident to or in lieu of the Collateral (a) due
to any dividend, stock-split, stock dividend or distribution on
dissolution, on partial or total liquidation, or for any other
reason, (b) in connection with the reduction of capital, capital
surplus or paid in surplus, (c) in connection with any spin-off,
split-off, reclassification, readjustment, merger, consolidation,
sale of assets, combination of shares or any other plan of
distribution affecting the Company;
(d) Any subscription or other rights or options issued in
connection with the Shares and, if exercised by Pledgor, all new
shares or other securities so acquired by Pledgor, which shall
immediately be assigned and delivered to Pledgee and held under the
terms of this Pledge of Stock Agreement in the same manner as the
Shares originally pledged hereunder; and
(e) Any and all proceeds, monies, income and benefits arising
from or by virtue of, and all dividends and distributions (cash or
otherwise) payable and/or distributable with respect to, all or any
of the shares or other securities and rights and interests
described in this Paragraph 1.
2. Obligations Secured. This Pledge of Stock Agreement and the
Security Interest granted hereunder, secure the following described
obligations (hereinafter referred to as the "Obligations"):
(a) The payment and performance by Pledgor of all of its
liabilities and obligations to Pledgee under the provisions of the
Note and the Stock Purchase Agreement.
3. Delivery of Collateral.
(a) All certificates, securities or instruments representing or
evidencing the Collateral shall be delivered to and held on behalf
of Pledgee by Cole, Schotz, Meisel, Forman & Leonard, P.A. ("Cole
Schotz") ("Pledgeholder") or such other successor Pledgeholder as
Pledgee may designate who shall hold the Collateral as agent for
the Pledgee pursuant to the terms of this Pledge of Stock
Agreement; provided, however, that Pledgeholder shall not be
Pledgee, an affiliate (as such term is defined under the Securities
Act of 1933, as amended) of Pledgee or any person or entity over
whom Pledgee exercises control (collectively, an "Excluded
Person"). Said delivered Collateral shall be in suitable form for
transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and
substance satisfactory to Pledgee. Pledgee shall have the right, at
any time in its discretion and timely notice to Pledgor, to
transfer to or to register in the name of Pledgeholder or any of
Pledgee's nominees (other than an Excluded Person), any or all of
the Collateral, subject only to the revocable rights specified in
Paragraph 7 hereof. In addition, Pledgee shall have the right at
any time to exchange certificates or instruments representing or
evidencing the collateral for certificates or instruments of
smaller or larger denominations.
4. Representations and Warranties. Pledgor represents and warrants
to Pledgee that: (i) Pledgor is the legal and/or beneficial owner
of the Collateral; (ii) the Collateral is duly authorized and
issued, fully paid, and nonassessable, and all documentary, stamp,
or other taxes or fees owing in connection with the issuance,
transfer and/or pledge thereof hereunder have been paid and will be
hereafter paid by Pledgor as same shall become due and payable;
(iii) no dispute, right of setoff, counterclaim or defense exists
with respect to all or any part of the Collateral; (iv) all of the
shares of the Collateral are owned or controlled by Pledgor free of
any pledge, mortgage, hypothecation, lien, charge, encumbrance or
security interest in such shares or the proceeds thereof; (v) there
are no restrictions upon the transfer, hypothecation or pledge of
any of the shares constituting the Collateral; (vi) Pledgor has the
right to pledge, transfer and hypothecate the Collateral free of
any encumbrances; (vii) the execution and delivery of this Pledge
of Stock Agreement, and the performance of its terms, will not
violate or constitute a default under the terms of any agreement,
indenture or other instrument, license, judgment, decree, order,
law, statute, ordinance or other governmental rule or regulation,
applicable to the Pledgor or any of its property; and (viii) upon
delivery of the Collateral to Pledgee, this Pledge of Stock
Agreement creates a valid first lien upon the perfected security
interest in the collateral, and the proceeds thereof, subject to no
prior security interest, lien, charge, encumbrance or agreement
purporting to grant any third party a security interest in the
property or assets or Pledgor which would include the Collateral.
5. Covenants. Pledgor further covenants and agrees to do the
following, all at its own cost and expense:
(a) from time to time to promptly execute, assign, endorse and
deliver to Pledgeholder for the benefit of Pledgee all Collateral
which may now or hereafter come into its possession and all
proxies, applications, acceptances, stock powers, chattel paper,
documents, instruments or other evidences of payment or writing
constituting or relating to any of the Collateral, and all such
other assignments, certificates, supplemental writings, and
financing statements and do all other acts or things as Pledgee may
reasonably request in order to, or more fully to, evidence and
perfect the Security Interest;
(b) to promptly furnish Pledgee with any information or writings
which Pledgor receives on account of the Collateral from the
Company and such other information which Pledgee may reasonably
request concerning the Collateral other than insider information;
(c) to promptly notify Pledgee of any material change in any fact
or circumstances warranted or represented by Pledgor in this Pledge
of Stock Agreement or in any other writing furnished by Pledgor to
Pledgee in connection with the Collateral or the Obligations;
(d) to promptly notify Pledgee of any claim, action or proceeding
affecting title to the Collateral, or any part thereof, or the
Security Interest, and at the request of Pledgee, appear in and
defend, at Pledgor's own cost and expense, any such action or
proceedings; and
(e) to promptly pay to Pledgee the amount of all court costs and
reasonable attorneys' fees incurred by Pledgee hereunder in the
enforcement of Pledgee's rights hereunder.
Pledgor further covenants and agrees that, without the prior
express written consent of Pledgee, Pledgor shall not except as
otherwise permitted under the Stock Purchase Agreement transfer
Pledgor's rights in the Collateral, or permit any of the Collateral
to ever be or become subject to any lien, attachment, execution,
sequestration, other legal or equitable process, or any lien or
encumbrance of any kind, except for presently existing liens noted
above. All assignments and endorsements by Pledgor shall be in such
form and substance as may be satisfactory to Pledgee.
6. Adjustments and Distributions Concerning Collateral. Should the
Collateral, or any part thereof, ever be converted in any manner by
the Company into another type of property or any money or other
proceeds ever be paid or delivered to Pledgor as a result of
Pledgor's rights in the Collateral, then in any such event (except
as provided in Paragraph 7 hereof), all such property, money and
other proceeds shall immediately be and become part of the
Collateral, and Pledgor covenants to forthwith pay and deliver all
money so received to Pledgeholder for the benefit of Pledgee; and,
if Pledgee deems it necessary and so requests, to properly endorse
or assign any and all such other proceeds to Pledgeholder for the
benefit of Pledgee and to deliver to Pledgeholder for the benefit
of Pledgee any and all such other proceeds which require perfection
by possession under the Uniform Commercial Code of the State of New
Jersey or other appropriate jurisdiction (hereinafter referred to
as the "UCC"). With respect to any of such property of a kind
requiring an additional security agreement, financing statement or
other writing to perfect a security interest therein in favor of
Pledgeholder for the benefit of Pledgee, Pledgor will forthwith
execute and deliver to Pledgee whatever Pledgee shall reasonably
deem necessary or proper for such purposes.
7. Voting Rights; Dividends; Etc. (i) So long as no "Event of
Default" (as defined in Paragraph 8 hereof) or event which, with
the giving of notice or the passage of time, or both, would become
an Event of Default, shall have occurred and be continuing:
(a) Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this
Pledge of Stock Agreement, or the Note.
(b) Pledgor shall be entitled to receive and retain any and all
dividends paid in respect of the Collateral; provided, however,
that any and all
(i) dividends paid or payable (other than in cash) in respect
of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any
Collateral,
(ii) dividends and other distributions paid or payable in
cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in-surplus, and
(iii) cash paid, payable or otherwise distributed in respect
of principal of, or in redemption of, or in exchange for, any
Collateral, shall be, and shall be forthwith delivered to
Pledgeholder for the benefit of Pledgee to hold as, Collateral, and
shall, if received by Pledgor, be received in trust for the benefit
of Pledgee, be segregated from the other property or funds of
Pledgor, and be forthwith delivered to Pledgeholder for the benefit
of Pledgee as Collateral in the same form as so received (with any
necessary endorsement).
c. Pledgee shall execute and deliver (or cause to be executed and
delivered) to Pledgor all such proxies and other instruments as
Pledgor may reasonably request for the purpose of enabling Pledgor
to exercise the voting and other rights which it is entitled to
exercise pursuant to paragraph (a) above and to receive the
dividends or interest payments which it is authorized to receive
and retain pursuant to paragraph (b) above.
(ii) Upon the occurrence and during the continuance of an
"Event of Default" (as defined in Paragraph 8 hereof) or an event
which, with the giving of notice or the lapse of time, or both,
would become an Event of Default:
(a) All rights of Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise
pursuant to Paragraph 7(i) and to receive the dividends and
interest payments which it would otherwise be authorized to receive
and retain pursuant to Paragraph 7(i) shall cease, and all such
rights shall thereupon become vested in Pledgee who shall thereupon
have the sole right to exercise such voting and other consensual
rights and to receive and hold as Collateral such dividends and
interest payments and, at Pledgee's option, to apply such dividends
and interest payments to the Obligations in any order of payment.
(b) All dividends and interest payments which are received by
Pledgor contrary to the provisions of subparagraph (a) of this
Paragraph 7(ii) shall be received in trust for the benefit of
Pledgee, shall be segregated from other funds of Pledgor and shall
be forthwith paid over to Pledgee as Collateral in the same form as
so received (with any necessary endorsement or instrument of
transfer).
8. Default. Pledgor shall be in default under this Pledge of
Stock Agreement upon the happening of any of the following events
or conditions (hereinafter referred to as an "Event of Default"):
a. The occurrence of an "Event of Default" as defined in the Note;
b. The filing of any financing statement with regard to the
Collateral, other than relating to or permitted by this Pledge of
Stock Agreement, or the attachment of any additional lien to any
portion of the Collateral, for the benefit of any Person other than
Pledgee;
c. Any time that Pledgee ceases to have a first priority perfected
security interest in the Collateral;
d. Pledgor shall have failed to duly observe or perform any other
covenant, condition or agreement on the part of Pledgor to be
observed or performed pursuant to the terms of the Stock Purchase
Agreement, the Note or this Pledge of Stock Agreement.
9. Registration of Collateral in Name of Pledgee. At any time
after the occurrence of an Event of Default, Pledgee, at its
option, may have any or all of the Collateral registered in its
name or that of its nominee (if the same has not already been done)
with or without indication of the security interest herein created,
and Pledgor hereby covenants that, upon Pledgee's request, Pledgor
will cause the Company to effect such registration. Immediately and
without further notice, upon the occurrence of an Event of Default,
whether or not the Collateral shall have been registered in the
name of Pledgee or its nominee, Pledgee or its nominee shall have,
with respect to the Collateral, the right to exercise all voting
rights as to all Shares subject to the Security Interest and, as to
all of the Collateral, all other corporate rights and all
conversion, exchange, subscription or other rights, privileges or
options pertaining thereto as if it were the absolute owner
thereof, including, but not limited to, the right to exchange any
or all of the Collateral upon the merger, consolidation,
reorganization, recapitalization or other readjustment of the
Company, or upon the exercise by the Company of any right,
privilege, or option pertaining to any of the Collateral, and, in
connection therewith, to deliver any of the Collateral to any
committee, depository, transfer agent, registrar or other
designated agency upon such terms and conditions as it may
determine, all without liability except to account for property
actually received by it; but Pledgee shall have no duty to exercise
any of the aforesaid rights, privileges or options and shall not be
responsible to Pledgor or any other person of any failure to do so
or delay in doing so. Thereafter, at such time as (i) all Events of
Default have been cured, and (ii) there exists no condition, event
or act which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default, then the right to exercise
all voting rights with respect to the Collateral shall revert to
Pledgor. Upon any sale or other disposition of the Collateral,
Pledgee shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold or disposed of. Each
purchaser at any such sale or other disposition (including Pledgee)
shall hold the Collateral free from any claim or right of whatever
kind, including any equity or right of redemption of Pledgor.
Pledgor specifically waives all rights of redemption, stay or
appraisal, to the extent permitted by law, which it had or may have
under any rule of law or statute now existing or hereafter adopted.
10. Remedies Upon Default. Upon the occurrence of an Event of
Default, in addition to any and all other rights and remedies which
Pledgee may then have hereunder, under the UCC or otherwise, to the
extent permitted by law, Pledgee may at his option direct
Pledgeholder to deliver the Collateral to Frank J. Dodd as Trustee
pursuant to a trust agreement ("Trustee"). Thereafter, the
Pledgeholder or the Trustee shall have the right and the power at
its option to take any action and exercise any right permitted to
the Pledgee under this Pledge Agreement, subject to the terms and
conditions of the Trust, without liability to the Pledgor, except
to account for property actually received by it, and to do any one
or more of the following: (i) in its name or in the name of Pledgor
demand, sue for, collect or receive any money or property at any
time payable or receivable on account of or in exchange for any of
the Collateral and, in connection therewith, endorse notes, checks,
drafts, money orders, documents of title or other evidences of
payment, shipment or storage in the name of Pledgor; (ii) make any
compromise or settlement deemed advisable with respect to any of
the Collateral; (iii) renew, extend, or otherwise change the terms
and conditions of any of the Collateral or the Obligations; (iv)
take or release any other collateral as security for any of the
Collateral or the Obligations; (v) add or release any guarantor,
endorser, surety or other party to any of the Collateral or the
Obligations; (vi) reduce its claim to judgment or foreclose or
otherwise enforce the Security Interest, in whole or in part, by
any available judicial procedure; (vii) except as otherwise
provided herein, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified
below of time and place of public or private sale) to or upon
Pledgor or any other person (all of which are, to the extent
permitted by law, hereby expressly waived), forthwith realize upon
the Collateral or any part thereof, and may forthwith, or agree to,
sell or otherwise dispose of or deliver the Collateral or any part
thereof or interest therein, in a commercially reasonable manner,
in one or more parcels at public or private sale or sales, at any
exchange, broker's board or at Pledgee's principal administrative
office or elsewhere, at such prices and on such terms (including,
but not limited to, a requirement that any purchaser of all or any
part of the Collateral purchase the shares constituting the
Collateral for investment without any intention to make any
distribution thereof and subject to other restrictions as may be
appropriate or necessary under applicable law) as it may deem best,
for cash or on credit, or for future delivery without assumption of
any credit risk, with the right of Pledgee or any purchaser to
purchase upon any such sale the whole or any part of the Collateral
free from any right or equity or redemption in Pledgor, which apply
by appropriate judicial proceedings for appointment of a receiver
for the Collateral, or any part thereof, and Pledgor hereby
consents to any such appointment; (viii) if at the occurrence of an
Event of Default the Market Value of the Collateral as computed
pursuant to Section 3(d)(v) of the Stock Purchase Agreement is
equal to or less than the Note Amount plus the Additional Amount,
interest and any costs and fees provided for in this Pledge,
Pledgee shall have the right, at its sole option, to retain the
Collateral in full or partial satisfaction of the Obligation of
Pledgor and Pledgor shall have no rights with respect to the
Collateral, including, but not limited to, no right to receive any
portion of any proceeds from any subsequent sale of the Collateral
by the Pledgee. Except as provided in this subsection, Pledgee
shall take all reasonable efforts to sell the Collateral in a
commercially reasonable manner in a commercially reasonable time;
or (ix) exercise any and all other rights it may have hereunder or
under the UCC or otherwise. Pledgor hereby grants to Pledgee an
irrevocable proxy for the Collateral pursuant to which proxy
Pledgee shall be entitled to vote or consent in its discretion upon
the occurrence of an Event of Default and in such event Pledgor
agrees to deliver to Pledgee such further evidence of the grant of
such proxy as Pledgee may request.
Pledgee shall be under no duty to Pledgor or any other person to
exercise or to withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to Pledgee
in this Pledge of Stock Agreement, and shall not be responsible to
Pledgor or any other person for any failure to do so or delay in so
doing.
11. Securities Laws; Consents; Etc.
a. Pledgor covenants and agrees that, because of the Securities
Act of 1933, as amended (hereinafter referred to as "Securities
Act"), or any other laws or regulations, and for other reasons,
there may be legal and/or practical restrictions or limitations
affecting Pledgee in any attempt to dispose of all or certain
portions of the Collateral and for enforcement of its rights, for
these reasons, Pledgee is hereby authorized by Pledgor, but not
obligated, in the event of the occurrence of an Event of Default,
to sell all or any part of the Collateral at private sale, subject
to investment letter, or in any other matter which will not require
the Collateral, or any part thereof, to be registered in accordance
with the Securities Act, or the rules and regulations promulgated
thereunder, or any other laws or regulations, or which will permit
the Collateral to be sold in a manner which will not violate any
applicable laws or regulations, at the best price reasonably
obtainable by Pledgee at such private sale or other disposition in
the manner mentioned above. Pledgor understands that Pledgee may,
in its discretion, approach a restricted number of potential
purchasers and that a sale under such circumstances may yield a
lower price for the Collateral, or any part or parts thereof, than
would otherwise be obtainable if same were either offered to a
large number of potential purchasers, or registered and sold in the
open market. Pledgee agrees that such private sales shall be made
in a commercially reasonable manner and Pledgee has no obligation
to delay sale of any Collateral to permit the Company to register
it for public sale under any applicable federal or state securities
law. If any consent, approval or authorization of any state,
municipal or other governmental department, agency or authority
should be necessary to effectuate any sale or other disposition of
all or any part of the Collateral, Pledgor will execute all such
applications and other instruments as may be required in connection
with securing any such consent, approval or authorization, and will
otherwise use its best efforts to secure the same.
b. In the event that Pledgee should determine that a sale of the
Collateral by private sale, as described in subparagraph (i) of
this Paragraph 11, is not in Pledgee's best interest, then Pledgor
shall upon the written request of Pledgee, at Pledgor's own cost
and expense;
(i) execute and deliver, and use its best efforts to cause
the Company and the directors and officers thereof to execute and
deliver, all such instruments and documents, and do or cause to be
done by them all such other acts and things, as may be necessary
or, in the opinion of Pledgee, advisable to register such
Collateral under the provisions of the Securities Act, and to use
their best efforts to cause the registration statement relating
thereto to become effective and to remain effective for such period
as prospectuses are required by law to be furnished, and to make
all amendments and supplements thereto and to the related
prospectus which, in the opinion of Pledgee, are necessary or
advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto;
(ii) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested
by Pledgee;
(iii) uses its best efforts to cause the Company to make
available to its security holders, as soon as practicable, an
earning statement which will satisfy the provisions of Section
11(a) of the Securities Act; and
(iv) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
12. Notification of Sale. Reasonable notification of the time and
place of any public sale of the Collateral, or reasonable
notification of the time after which any private sale or other
intended disposition of the Collateral is to be made, shall be sent
to Pledgor and to any other person entitled under the UCC to
notice; provided that, to the extent permitted by law, if any of
the Collateral threatens to decline speedily in value or is of the
type customarily sold on a recognized market, Pledgee may sell or
otherwise dispose of the Collateral without notification,
advertisement, or other notice of any kind. It is agreed that
notice sent or given not less than five (5) business days prior to
the taking of the action to which the notice relates is reasonable
notification and notice for the purposes of this Paragraph 12.
13. Permitted Sales of Collateral. In the event of a permitted
sale of all or part of the Shares pursuant to the Stock Purchase
Agreement, Pledgee shall cause Pledgeholder to deliver such shares
as directed by the Pledgor in exchange for delivery of the proceeds
of such sale to the Pledgee.
14. Satisfaction of Obligations. Upon the satisfaction in full of
all obligations and the satisfaction of all additional costs and
expenses of Pledgee as provided herein, this Pledge of Stock
Agreement shall terminate, and Pledgee shall cause Pledgeholder to
deliver to Pledgor, at Pledgor's expense, such of the Collateral in
Pledgeholder's possession as shall not have been sold or otherwise
applied pursuant to this Pledge of Stock Agreement.
15. Notices. Unless otherwise indicated differently, all notices,
payments, requests, reports, information or demands which any party
hereto may desire or may be required to give to any other party
hereunder, shall be in writing and shall be personally delivered or
sent by first-class certified or registered United States mail,
postage prepaid, return receipt requested, and sent to the party at
its address appearing below or such other address as any party
shall hereafter inform the other party hereto by written notice
given as aforesaid:
If to Pledgor: NPD, Inc.
215 Central NW
Suite 3B
Albuquerque, NM 87102
Attention: Chairman
With a copy to: Steven N. Haas, Esq.
Cozen and O'Connor
1900 Market Street
Philadelphia, PA 19103
If to Pledgee: Robert E. Brennan
264 Route 537 East
Colts Neck, New Jersey 07722-1540
With a copy to: Gerald Gline, Esq.
Cole, Schotz, Meisel,
Forman & Leonard, P.A.
Court Plaza North
25 Main Street
P.O. Box 800
Hackensack, New Jersey 07602-0800
If at any time Pledgee or Pledgeholder is required to give notice
to Pledgor hereunder, Pledgee is a debtor in a case pending in the
United States Bankruptcy Court for the District of New Jersey,
copies of such notice shall also be delivered to the Securities and
Exchange Commission and counsel for the Committee of Unsecured
Creditors at the address designated for service to such parties in
the Bankruptcy Court proceeding; and provided, further, that the
Securities and Exchange Commission and Committee of Unsecured
Creditors also shall receive notice, at the aforementioned address,
of any material waiver by Pledgee or Pledgeholder of a right
hereunder or of any material amendment or modification hereto
during the pendency of such Bankruptcy Court proceeding. All
notices, payments, requests, reports, information or demands so
given shall be deemed effective upon receipt or, if mailed, upon
receipt or the expiration of the third day following the date of
mailing, whichever occurs first, except that any notice of change
in address shall be effective only upon receipt by the party to
whom said notice is addressed.
16. Pledgee Appointed Attorney-in-Fact. Pledgor hereby appoints
Pledgee, Pledgeholder or any other designee of Pledgee (other than
an Excluded Person) pursuant to paragraph 3, and to the extent
applicable, the Trustee, as Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of
Pledgor, or otherwise from time to time in Pledgee's discretion to
take any action and to execute any instrument which Pledgee may
deem necessary or advisable to accomplish the purposes of this
Pledge of Stock Agreement, including, but not limited to, to
receive, endorse and collect all instruments made payable to
Pledgor representing any dividend, interest payment or other
distribution in respect of Collateral or any part thereof and to
give full discharge for the same.
17. Obligations of Pledgeholder.
a. The obligations of Pledgeholder are those specifically provided
for in this Pledge Agreement, and Pledgeholder shall have no
liability under, or duty to inquire into, the terms and provisions
of any agreement between Pledgor and Pledgee. The duties of
Pledgeholder are purely ministerial in nature, and Pledgeholder
shall not incur any liability whatsoever, except for any liability
arising out of Pledgeholder's willful misconduct or bad faith.
b. Pledgeholder shall not have any of the responsibility for the
genuineness or validity of any document or other item deposited
with it or of any signature thereon and shall not have any
liability for acting in accordance with any written instructions or
certificates given to it as specified hereunder.
c. Pledgor and Pledgee jointly and severally agree to hold
Pledgeholder harmless and indemnify Pledgeholder against any loss,
liability, expense (including attorney's fees), claim or demand
arising out of or in connection with the performance of its
obligations in accordance with the provisions of this Pledge
Agreement, except for any of the foregoing arising out of the
willful misconduct or bad faith of Pledgeholder.
d. Pledgeholder shall not receive any fee or other compensation
for the ordinary ministerial services it must render in connection
with this Pledge Agreement, except as provided for in Paragraph (c)
above.
e. If any dispute should arise with respect to the payment of the
Note or ownership or right of possession of the Collateral,
Pledgeholder is authorized and directed to retain the Shares in its
possession without liability to anyone until such dispute shall
have been settled either by a mutual agreement of Pledgor and
Pledgee, or by final order, decree or judgment of a court of
competent jurisdiction in the United States (the time for appeal
having expired with no appeal having been taken) but Pledgeholder
shall have no duty whatsoever to institute or defend any such
judicial proceedings.
f. Pledgor acknowledges and agrees that Cole Schotz is not
disqualified from representing Pledgee in any matter pertaining to
the Shares including, but not limited to, any disputes under the
Stock Purchase Agreement, Note and this Pledge Agreement
notwithstanding the fact that it may hold the Shares pursuant to
this Agreement.
18. Financing Statement. Pledgee shall have the right at any time
to execute and file this Pledge of Stock Agreement as a financing
statement, but the failure of Pledgee to do so shall not impair the
validity or enforceability of this Pledge of Stock Agreement.
19. Successors and Assigns. This Pledge of Stock Agreement shall
be binding upon and inure to the benefit of Pledgor and Pledgee,
and their respective successors, assigns, heirs, legal
representatives, administrators and executors; provided, that
Pledgor may not, without the prior express written consent of
Pledgee, assign any rights, powers, duties or obligations
hereunder.
20. Remedies Cumulative. The rights and remedies provided herein
and in the Note and all other agreements, instruments and Documents
pertaining hereto or thereto, are cumulative and are in addition to
and not exclusive of any rights or remedies provided by law,
including, but without limitation, the rights and remedies of a
secured party under the UCC.
21. Amendment. This Pledge of Stock Agreement may be amended only
by written instrument signed by both parties.
22. Course of Dealing. No course of dealing between the Pledgor
and Pledgee or any other person, nor any failure to exercise, nor
any delay in exercising, any right, power or privilege of Pledgee
hereunder or under the Stock Purchase Agreement or the Note shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege.
23. Invalidity of Any Provision. The invalidity of any one or more
phrases, sentences, clauses, paragraphs or section hereof shall not
affect the remaining portions of this Pledge of Stock Agreement,
all of which are being inserted conditionally on their being held
legally valid. In the event that any one or more of the phrases,
sentences, clauses, paragraphs or sections contained herein should
be invalid, or should operate to render this Pledge of Stock
Agreement invalid, then this Pledge of Stock Agreement shall be
construed as if such invalid phrase or phrases, sentence or
sentences, clause or clauses, paragraph or paragraphs, or section
or sections had not been inserted.
24. Governing Law. This Pledge of Stock Agreement is entered into
in the State of New Jersey, and the laws of the State of New Jersey
shall govern the validity, construction, enforcement and
interpretation of this Pledge of Stock Agreement.
25. Assignment of Collateral by Pledgee. Pledgee may assign all or
any part of the obligations and may assign, transfer, or deliver to
any transferee of any of the obligations, any or all of the
Collateral (other than to an Excluded Person prior to an Event of
Default), provided, however, that said transferee may take such
obligation only subject to the terms and provisions hereof, and
thereafter Pledgee shall be fully discharged from all
responsibility with respect to the Collateral so assigned,
transferred or delivered. Such transferee shall be vested with all
the powers and rights of Pledgee hereunder with respect to such
Collateral.
26. Restrictive Legend. Upon the execution of this Pledge of Stock
Agreement, the Pledgor shall cause each certificate of the common
stock of the Corporation to be endorsed as follows:
"NOTICE IS HEREBY GIVEN that the sale, assignment, transfer,
pledge, or other disposition of the shares of capital stock
represented by this certificate are subject to a certain Pledge of
Stock Agreement from NPD, Inc. to Robert E. Brennan, a copy of
which agreement is on file in the office of Cole, Schotz, Meisel,
Forman & Leonard, P.A., 25 Main Street, Hackensack, New Jersey
07602, Attn: Gerald H. Gline, Esq.
IN WITNESS WHEREOF, Pledgor has caused this Pledge of Stock
Agreement to be duly signed as of the day and year first above
written.
Signed, Sealed and Delivered NPD, INC.
in the Presence of:
/s/ E. Gerald Riesenbach By: /s/ Nunzio P. DeSantis
Exhibit 99.4
PROMISSORY NOTE
$2,904,016.00 Dated: January 15, 1997
FOR VALUE RECEIVED, NPD, INC., a Delaware corporation ("Maker"),
promises to pay to the order of NUNZIO P. DESANTIS, an individual
("Payee") with an address of 215 Central NW, Suite 3B, Albuquerque,
NM 87102, the principal sum of Two Million Nine Hundred Four
Thousand Sixteen Dollars ($2,904,016.00), lawful money of the
United States of America, together with interest accrued thereon,
at the rate and on the terms set forth below:
1. Payment of Interest and Principal.
(a) Payment of Interest. Interest on the unpaid principal amount
of this Note shall accrue at a rate equal to ten percent (10%) per
annum, and shall be paid on the first anniversary of the date of
this Note and, together with the unpaid principal balance then
outstanding, on the Maturity Date.
(b) Payment of Principal. The unpaid principal balance under this
Note, together with all accrued and unpaid interest on the unpaid
principal balance, shall be paid in full on January 15, 1999 (the
"Maturity Date").
(c) Prepayment. Maker shall have the right to prepay at any time
and from time to time, without penalty or premium, all or any
portion of the outstanding principal of this Note. All prepayments
under this Note shall be applied first to accrued and unpaid
interest, and second to unpaid principal due hereunder.
(d) Place of Payment. Maker shall make all payments to Payee at
the address of Payee as set forth above or to such other place or
places as Payee, from time to time, shall designate in writing to
Maker in accordance with the Loan Agreement dated of even date
herewith between Maker and Payee (the "Loan Agreement").
2. Events of Default; Remedies.
(a) Events of Default. The following shall constitute events of
default under this Note ("Events of Default"):
(i) Maker fails to pay when due any principal, interest or
other sums due under this Note and shall not have remedied such
failure within fifteen (15) days after written notice of such
default has been given by Payee to Maker.
(ii) Maker defaults in the observance or performance of any
condition or covenant contained in this Note or the Loan Agreement
and shall not have remedied the default within forty-five (45) days
after written notice of such default has been given by Payee to
Maker; provided, however, that if Maker has the ability to cure the
default, but such default cannot reasonably be cured within such
forty-five (45) day period, an Event of Default shall not be deemed
to occur if Maker shall commence to cure the default during such
forty-five day (45) period and shall continuously and diligently in
good faith pursue such cure to completion.
(iii) A breach by Maker of any warranty or any
misrepresentation contained in the Loan Agreement, and such breach
or misrepresentation shall not have been remedied within forty-five
(45) days after receipt of written notice of such breach has been
given by Payee to Maker.
(iv) A dissolution or liquidation of Maker shall have been
declared.
(v) If Maker shall make an assignment for the benefit of
creditors, or file a voluntary petition under the Bankruptcy Code,
as amended, or any other Federal or state insolvency law, or apply
for or consent to the appointment of a receiver, trustee or
custodian of all or part of its property.
(vi) If Maker shall file an answer admitting the jurisdiction
of the court and the material allegations of an involuntary
petition filed against it under the Bankruptcy Code, as amended, or
any other Federal or state insolvency law, or shall fail to have
such petition dismissed within ninety (90) days after its filing.
(vii) If an Order for Relief shall be entered following the
filing of an involuntary petition against Maker under the
Bankruptcy Code, as amended, or any other Federal or state
insolvency law, or if an Order shall be entered appointing a
receiver, trustee or custodian of all or part of its property.
(viii) If there shall have occurred an Event of Default
under the Loan Agreement.
b. Remedies. If an Event of Default shall occur and be continuing
then, in the sole discretion of Payee and without further notice to
Maker, the unpaid principal amount and the accrued interest
hereunder at the applicable rate specified above until full payment
of all amounts due hereunder, and all other sums due by Maker under
this Note shall become immediately due and payable without
presentment, demand, protest or other requirements of any kind, all
of which are hereby expressly waived by Maker. In addition, in
each case, Payee may recover all costs of suit and other expenses
incurred by Payee (including reasonable attorneys' fees) in
connection with the collection of any sums due hereunder. The
remedies set forth herein shall be in addition to, and not in lieu
of, any other additional rights or remedies Payee may have at law
or in equity.
4. Subordination. Payee acknowledges and hereby agrees that
Payee's rights hereunder and under the Loan Agreement to collect
any and all amounts due Payee thereunder, and to enforce Payee's
rights in the collection of the same, are subordinated to the prior
payment in full of all amounts due Casino-Co by Payee under the
under that certain Loan Agreement dated January 15, 1997 among
Maker and Casino-Co (the "Casino-Co Loan Agreement") and related
Secured Promissory Note of Maker to Casino-Co in the face amount of
$2,904,016.00 (the "Casino-Co Note")Casino-Co Loan Agreement and
Casino-Co Note, to the extent, and only to the extent, set forth in
Payee's Subordination Agreement dated January 17, 1997 delivered by
Payee to Casino-Co.
5. Rights Cumulative. The remedies of Payee as provided in this
Note shall be cumulative and concurrent; may be pursued singly,
successively or together at the sole discretion of Payee, may be
exercised as often as occasion for their exercise shall occur; and
in no event shall the failure to exercise any such right or remedy
be construed as a waiver or release of it.
6. Controlling Law. This Note and all questions relating to its
validity, interpretation or performance and enforcement shall be
governed by and construed in accordance with the laws of the State
of New Mexico.
7. Notices. Any notices or other communications required to be
delivered hereunder shall be sent or delivered in accordance with
the Loan Agreement.
8. Binding Nature of Note. This Note shall be binding upon Maker,
and its successors and assigns and shall inure to the benefit of
Payee and his heirs, personal representatives, successors and
assigns.
9. Modification. This Note may not be modified or amended other
than by an agreement in writing signed by Maker and Payee.
10. Interest Rate Limitation. It is the intent of Maker and Payee
in the execution of this Note, the Loan Agreement, the Other
Documents (as defined in the Loan Agreement) and in all
transactions related hereto and thereto to comply with the usury
laws of the State of New Mexico (or the usury laws of any other
state that might be determined by a court of competent jurisdiction
to be applicable notwithstanding such choice of law, hereinafter
collectively referred to as "Usury Laws"). In the event that, for
any reason, it should be determined that the Usury Laws apply to
the loan evidenced hereby, Payee and Maker stipulate and agree that
none of the terms and provisions contained herein shall ever be
construed to create a contract for use, forbearance or detention of
money requiring payment of interest at a rate in excess of the
maximum rate permitted to be charged by the Usury Laws. In such
event, if Payee shall collect monies or other property which are
deemed to constitute interest which would otherwise increase the
effective interest rate on this Note to a rate in excess of the
maximum rate permitted to be charged by the Usury Laws, all such
sums or property deemed to constitute interest in excess of such
maximum rate shall, at the option of Payee, be credited to the
payment of the principal sum due hereunder.
IN WITNESS WHEREOF, Maker, intending to be legally bound, has
caused its duly authorized representative to execute and deliver
this Note on the date first written above.
NPD, INC.
Attest: /s/ Nunzio P. DeSantis By: /s/ E. Gerald Riesenbach
E. Gerald Riesenbach,Secretary
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is made this 15th
day of January, 1997, by and between NPD, INC., a Delaware
corporation (the "Borrower"), and NUNZIO P. DESANTIS, an individual
(the "Lender").
W I T N E S S E T H:
Lender has agreed to loan to Borrower the sum of
$2,904,016.00 (the "Loan"), on the terms and subject to the
conditions set forth herein. The Loan is evidenced by the
Borrower's Promissory Note, dated of even date herewith (the
"Note"), in the form of Exhibit "A" attached hereto and
incorporated herein by reference. The Borrower and the Lender
desire to set forth herein the terms and conditions of an agreement
pursuant to which the Lender has advanced to the Borrower the Loan.
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants contained herein, and intending to be legally
bound hereby, the Lender and the Borrower hereby agree as follows:
1. The Loan. The Lender has granted to the Borrower
the Loan upon the terms and subject to the conditions hereinafter
set forth. The obligation of the Borrower to repay to the Lender
the aggregate outstanding principal amount under the Loan and
accrued interest thereon shall be evidenced by the Note to be
executed and delivered by the Borrower to the Lender concurrently
with the execution and delivery of this Agreement.
2. Representations and Warranties of the Borrower. As a
further inducement to the Lender to execute and deliver this
Agreement and to make the Loan available to the Borrower, the
Borrower hereby represents and warrants to, and makes the following
agreements with, the Lender:
(a) Authority. The Borrower is a corporation, duly
organized, validly existing and in good standing under the laws of
the State of Delaware. The Borrower has full power and authority to
borrow the Loan, to execute and deliver this Agreement, the Note
and any other instruments and documents required to be executed in
connection herewith and therewith (such other instruments and
documents being collectively called the "Other Documents").
(b) Validity and Enforceability. This Agreement,
the Note and the Other Documents have been duly authorized, validly
executed and delivered by the Borrower and are the legal, valid and
binding obligations of the Borrower, enforceable against the
Borrower in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency or other laws
of general application relating to or affecting the rights of
creditors generally and except that the remedy of specific
performance or injunctive relief is subject to the discretion of
the court before which such a proceeding may be brought.
(c) No Conflicts. The execution and delivery by the
Borrower of this Agreement, the Note and Other Documents and the
performance by the Borrower of all of its obligations hereunder and
thereunder (a) will not violate or be in conflict with its
certificate of incorporation or by-laws; (b) will not constitute a
default (with or without the giving of notice or the passage of
time or both) under any indenture, agreement or other instrument to
which it is a party or by which it or any of its properties or
assets is or may be bound or subject; and (c) will not result in
the creation or imposition of any lien, security interest, charge
or encumbrance of any nature upon any of its properties or assets,
which violation or conflict under clause (a), default under clause
(b), or lien, security interest, charge or encumbrance under clause
(c) would have a material adverse effect on the Borrower or
otherwise materially impair its ability to perform its obligations
under this Agreement, the Note or the Other Documents.
d. No Consents. No consent, approval or
authorization of, or registration, declaration or filing with, any
governmental authority or other third party is required as a
condition to, or in connection with, the due and valid execution
and delivery by the Borrower of this Agreement, the Note or Other
Documents other than consents, approvals, authorizations, etc.
which have been obtained.
3.Events of Default: Remedies.
(a) Events of Default. The following shall constitute
events of default under this Agreement ("Events of Default"):
(i) The Borrower fails to pay when due any
principal, interest or other sums due under the Note and shall not
have remedied such failure within fifteen (15) days after written
notice of such default has been given by the Lender to the
Borrower.
(ii) The Borrower defaults in the observance or
performance of any condition or covenant contained in this
Agreement or the Note and shall not have remedied the default
within forty-five (45) days after written notice of such default
has been given by the Lender to the Borrower; provided, however,
that if the Borrower has the ability to cure the default, but such
default cannot reasonably be cured within such forty-five (45) day
period, an Event of Default shall not be deemed to occur if the
Borrower shall commence to cure the default during such forty-five
day (45) period and shall continuously and diligently in good faith
pursue such cure to completion.
(iii) A breach by the Borrower of any warranty or any
misrepresentation contained in this Agreement or the Note, and such
breach or misrepresentation shall not have been remedied within
forty-five (45) days after receipt of written notice of such breach
has been given by the Lender to the Borrower.
(iv) A dissolution or liquidation of the Borrower
shall have been declared.
(v) If the Borrower shall make an assignment for the
benefit of creditors, or file a voluntary petition under the
Bankruptcy Code, as amended, or any other Federal or state
insolvency law, or apply for or consent to the appointment of a
receiver, trustee or custodian of all or part of its property.
(vi) If the Borrower shall file an answer admitting
the jurisdiction of the court and the material allegations of an
involuntary petition filed against it under the Bankruptcy Code, as
amended, or any other Federal or state insolvency law, or shall
fail to have such petition dismissed within ninety (90) days after
its filing.
(vii) If an Order for Relief shall be entered
following the filing of an involuntary petition against the
Borrower under the Bankruptcy Code, as amended, or any other
Federal or state insolvency law, or if an Order shall be entered
appointing a receiver, trustee or custodian of all or part of its
property.
(viii) If there shall have occurred an Event of
Default under the Note.
(b) Remedies. In the event an Event of Default shall
occur and be continuing, then, in the sole discretion of the
Lender, and without further notice to the Borrower, the unpaid
principal amount and the accrued interest at the applicable rate
specified in the Note until full payment of all amounts due under
the Note or hereunder, and all other sums due by the Borrower under
this Agreement and under the Note, shall become immediately due and
payable, without presentment, demand, protest or other requirements
of any kind, all of which are hereby expressly waived by the
Borrower. In addition, in each case, the Lender may recover all
costs of suit and other expenses incurred by the Lender (including
reasonable attorneys' fees) in connection with the collection of
any sums due hereunder. The remedies set forth herein shall be in
addition to, and not in lieu of, any other additional rights or
remedies the Lender may have at law or in equity.
4. Survival of Representations and Covenants. This
Agreement and all covenants, agreements, representations and
warranties made herein, in the Note, and in any of the Other
Documents delivered pursuant hereto or thereto shall survive the
making of the Loan and the execution and delivery of the Note, this
Agreement and the Other Documents, and shall continue in full force
and effect until all of the obligations have been fully paid,
performed, satisfied and discharged.
5. Miscellaneous.
(a) Entire Agreement: Amendments; Applicable Law.
This Agreement, the Note and the Other Documents executed and
delivered pursuant hereto constitute the entire agreement between
the Lender and the Borrower with respect to the subject matter
hereof. The provisions of this Agreement, the Note or the Other
Documents shall not be modified, rescinded or waived except in
writing executed by the party against whom such modification,
rescission or waiver is sought to be enforced. The construction,
interpretation and enforcement of this Agreement, the Note and the
Other Documents shall be governed by and construed in accordance
with the laws of the State of New Mexico.
(b) Successors and Assigns. This Agreement shall be
binding upon, and inure to the benefit of, the Lender and the
Borrower and their respective heirs, personal representatives,
successors and assigns, except that the Borrower shall not make any
assignment of its rights hereunder without the prior consent of the
Lender, which consent may be granted or withheld by the Lender in
its sole and absolute discretion.
(c) Rights Cumulative. The remedies of the Lender
as provided in this Agreement, the Note and the Other Documents
shall be cumulative and concurrent; may be pursued singly,
successively, or together at the sole discretion of the Lender, may
be exercised as often as occasion for their exercise shall occur;
and in no event shall the failure to exercise any such right or
remedy be construed as a waiver or release of it.
(d)Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be
in writing and shall be deemed to have been duly given and made
when received by the party to whom the notice, request, etc. is
directed, and which shall be delivered personally, by courier
service such as Federal Express, or by messenger, or by United
States mail, registered or certified mail, postage pre-paid, return
receipt requested, addressed as set forth below.
If to the Borrower:
NPD, Inc.
215 Central NW
Suite 3B
Albuquerque, NM 87102
Attention: Chairman
If to the Lender:
Nunzio P. DeSantis
215 Central NW
Suite 3B
Albuquerque, NM 87102
(f) Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute but one and
the same instrument.
(g) Severability. If any provisions of this Agreement
shall be held invalid under any applicable laws, such invalidity
shall not affect any other provision of this Agreement that can be
given effect without the invalid provisions and, to this end, the
provisions hereof are severable.
IN WITNESS WHEREOF, the parties hereto have caused this
Loan Agreement to be executed and delivered as of the date first
written above.
NPD, INC.
BY: /s/ E. Gerald Riesenbach
E. Gerald Riesenbach, Secretary
/s/ Nunzio P. DeSantis
Nunzio P. DeSantis
Exhibit 99.5
SECURED PROMISSORY NOTE
$2,904,016.00 Dated: January 15, 1997
FOR VALUE RECEIVED, NPD, INC., a Delaware corporation
("Maker"), promises to pay to the order of CASINO-CO CORPORATION, a
Nevada corporation ("Payee") with an address of 2805 Ashworth
Circle, Las Vegas, NV 89107, the principal sum of Two Million Nine
Hundred Four Thousand Sixteen Dollars ($2,904,016.00), lawful money
of the United States of America, together with interest accrued
thereon, at the rate and on the terms set forth below:
1. Payment of Interest and Principal.
(a) Payment of Principal and Interest. Interest on
the unpaid principal amount of this Note shall accrue at a rate
equal to ten percent (10%) per annum, and shall be paid in full,
together with the entire amount of unpaid principal balance then
outstanding, on April , 1997 (the "Maturity Date").
(b) Prepayment. Maker shall have the right to
prepay at any time and from time to time, without penalty or
premium, all or any portion of the outstanding principal of this
Note. All prepayments under this Note shall be applied first to
accrued and unpaid interest, and second to unpaid principal due
hereunder.
(c) Place of Payment. Maker shall make all
payments to Payee at the address of Payee as set forth above or to
such other place or places as Payee, from time to time, shall
designate in writing to Maker in accordance with the Loan Agreement
dated of even date herewith between Maker and Payee (the "Loan
Agreement").
2. Security Agreement and Guarantee. To secure all of
the Maker's obligations under this Note and under the Loan
Agreement Maker has concurrently herewith (i) granted to Payee a
first and prior lien and security interest in and to the
Collateral, as such term is defined in the Security Agreement (as
defined in the Loan Agreement), subject only to the rights of
Robert E. Brennan under the Brennan Pledge Agreement (as defined in
the Security Agreement), which Security Agreement is hereby
confirmed and ratified as being in full force and effect and (ii)
caused to be delivered to Payee the Guarantee (as defined in the
Loan Agreement). The security interest in the Collateral shall be
discharged upon payment in full of the indebtedness of Maker to
Payee under this Note and the Loan Agreement.
3. Events of Default; Remedies.
(a) Events of Default. The following shall
constitute events of default under this Note ("Events of Default"):
i) Maker fails to pay when due any principal,
interest or other sums due under this Note and shall not have
remedied such failure within fifteen (15) days after written notice
of such default has been given by Payee to Maker.
ii) Maker defaults in the observance or
performance of any condition or covenant contained in this Note,
the Loan Agreement or the Other Documents (as such term is defined
in the Loan Agreement) and shall not have remedied the default
within forty-five (45) days after written notice of such default
has been given by Payee to Maker; provided, however, that if Maker
has the ability to cure the default, but such default cannot
reasonably be cured within such forty-five (45) day period, an
Event of Default shall not be deemed to occur if Maker shall
commence to cure the default during such forty-five day (45) period
and shall continuously and diligently in good faith pursue such
cure to completion.
iii) A breach by Maker of any warranty or any
misrepresentation contained in the Loan Agreement or the Other
Documents, and such breach or misrepresentation shall not have been
remedied within forty-five (45) days after receipt of written
notice of such breach has been given by Payee to Maker.
iv) A dissolution or liquidation of Maker
shall have been declared.
v) If Maker shall make an assignment for the
benefit of creditors, or file a voluntary petition under the
Bankruptcy Code, as amended, or any other Federal or state
insolvency law, or apply for or consent to the appointment of a
receiver, trustee or custodian of all or part of its property.
vi) If Maker shall file an answer admitting
the jurisdiction of the court and the material allegations of an
involuntary petition filed against it under the Bankruptcy Code, as
amended, or any other Federal or state insolvency law, or shall
fail to have such petition dismissed within ninety (90) days after
its filing.
vii) If an Order for Relief shall be entered
following the filing of an involuntary petition against Maker under
the Bankruptcy Code, as amended, or any other Federal or state
insolvency law, or if an Order shall be entered appointing a
receiver, trustee or custodian of all or part of its property.
viii) If there shall have occurred an Event of
Default under the Loan Agreement any of the Other Documents.
b. Remedies. If an Event of Default shall occur and be
continuing then, in the sole discretion of Payee and without
further notice to Maker, the unpaid principal amount and the
accrued interest hereunder at the applicable rate specified above
until full payment of all amounts due hereunder, and all other sums
due by Maker under this Note shall become immediately due and
payable without presentment, demand, protest or other requirements
of any kind, all of which are hereby expressly waived by Maker. In
addition, in each case, Payee may recover all costs of suit and
other expenses incurred by Payee (including reasonable attorneys'
fees) in connection with the collection of any sums due hereunder.
In addition to other remedies available to it, the Payee may
exercise its rights under the Loan Agreement, the Security
Agreement and the Guarantee. The remedies set forth herein shall be
in addition to, and not in lieu of, any other additional rights or
remedies Payee may have at law or in equity.
4. Rights Cumulative. The remedies of Payee as
provided in this Note shall be cumulative and concurrent; may be
pursued singly, successively or together at the sole discretion of
Payee, may be exercised as often as occasion for their exercise
shall occur; and in no event shall the failure to exercise any such
right or remedy be construed as a waiver or release of it.
5. Controlling Law. This Note and all questions
relating to its validity, interpretation or performance and
enforcement shall be governed by and construed in accordance with
the laws of the State of Nevada.
6. Notices. Any notices or other communications
required to be delivered hereunder shall be sent or delivered in
accordance with the Loan Agreement.
7. Binding Nature of Note. This Note shall be binding
upon Maker, and its successors and assigns and shall inure to the
benefit of Payee and its successors and assigns.
8. Modification. This Note may not be modified or
amended other than by an agreement in writing signed by Maker and
Payee.
9. Interest Rate Limitation. It is the intent of Maker
and Payee in the execution of this Note, the Loan Agreement, the
Other Documents (as defined in the Loan Agreement) and in all
transactions related hereto and thereto to comply with the usury
laws of the State of Nevada (or the usury laws of any other state
that might be determined by a court of competent jurisdiction to be
applicable notwithstanding such choice of law, hereinafter
collectively referred to as "Usury Laws"). In the event that, for
any reason, it should be determined that the Usury Laws apply to
the loan evidenced hereby, Payee and Maker stipulate and agree that
none of the terms and provisions contained herein shall ever be
construed to create a contract for use, forbearance or detention of
money requiring payment of interest at a rate in excess of the
maximum rate permitted to be charged by the Usury Laws. In such
event, if Payee shall collect monies or other property which are
deemed to constitute interest which would otherwise increase the
effective interest rate on this Note to a rate in excess of the
maximum rate permitted to be charged by the Usury Laws, all such
sums or property deemed to constitute interest in excess of such
maximum rate shall, at the option of Payee, be credited to the
payment of the principal sum due hereunder.
IN WITNESS WHEREOF, Maker, intending to be legally bound,
has caused its duly authorized representative to execute and
deliver this Note on the date first written above.
NPD, INC.
Attest: /s/ E. Gerald Riesenbach By: /s/ Nunzio P. DeSantis
Nunzio P. DeSantis, President
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is made this 15th
day of January, 1997, by and between NPD, INC., a Delaware
corporation (the "Borrower"), and CASINO-CO CORPORATION, a Nevada
corporation (the "Lender").
W I T N E S S E T H:
Lender has agreed to loan to Borrower the sum of
$2,904,016.00 (the "Loan"), on the terms and subject to the
conditions set forth herein. The Loan is evidenced by the
Borrower's Secured Promissory Note, dated of even date herewith
(the "Note"), in the form of Exhibit "A" attached hereto and
incorporated herein by reference. The Borrower and the Lender
desire to set forth herein the terms and conditions of an agreement
pursuant to which the Lender has advanced to the Borrower the Loan.
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants contained herein, and intending to be legally
bound hereby, the Lender and the Borrower hereby agree as follows:
1. The Loan. The Lender has granted to the Borrower the
Loan upon the terms and subject to the conditions hereinafter set
forth. The obligation of the Borrower to repay to the Lender the
aggregate outstanding principal amount under the Loan and accrued
interest thereon shall be evidenced by the Note to be executed and
delivered by the Borrower to the Lender concurrently with the
execution and delivery of this Agreement.
2. Security Agreement and Guarantee. To secure all of
the Borrower's obligations under the Note and under this Agreement
the Borrower has concurrently herewith (i) granted to the Lender a
first and prior lien and security interest in and to the
Collateral, as such term is defined in the Security Agreement dated
of even date herewith in the form of Exhibit "B" attached hereto
and incorporated herein by reference (the "Security Agreement"),
subject only to the rights of Brennan under the Brennan Pledge
Agreement (as defined in the Security Agreement), which Security
Agreement is hereby confirmed and ratified as being in full force
and effect and incorporated into this Agreement by reference and
(ii) caused to be delivered to the Borrower the personal guarantee
of Nunzio P. DeSantis in the form of Exhibit "C" attached hereto
and incorporated herein by reference. The security interest in the
Collateral shall be discharged upon payment in full of the
indebtedness of Borrower to Lender under the Note and the Loan
Agreement.
3. Representations and Warranties of the Borrower. As a
further inducement to the Lender to execute and deliver this
Agreement and to make the Loan available to the Borrower, the
Borrower hereby represents and warrants to, and makes the following
agreements with, the Lender:
(a) Authority. The Borrower is a corporation, duly
organized, validly existing and in good standing under the laws of
the State of Delaware. The Borrower has full power and authority to
borrow the Loan, to execute and deliver this Agreement, the Note,
the Security Agreement and any other instruments and documents
required to be executed in connection herewith and therewith (the
Security Agreement and such other instruments and documents being
collectively called the "Other Documents").
b. Validity and Enforceability. This Agreement,
the Note and the Other Documents have been duly authorized, validly
executed and delivered by the Borrower and are the legal, valid and
binding obligations of the Borrower, enforceable against the
Borrower in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency or other laws
of general application relating to or affecting the rights of
creditors generally and except that the remedy of specific
performance or injunctive relief is subject to the discretion of
the court before which such a proceeding may be brought.
c. No Conflicts. The execution and delivery by the
Borrower of this Agreement, the Note and Other Documents and the
performance by the Borrower of all of its obligations hereunder and
thereunder (a) will not violate or be in conflict with its
certificate of incorporation or by-laws; (b) will not constitute a
default (with or without the giving of notice or the passage of
time or both) under any indenture, agreement or other instrument to
which it is a party or by which it or any of its properties or
assets is or may be bound or subject; and (c) will not result in
the creation or imposition of any lien, security interest, charge
or encumbrance of any nature upon any of its properties or assets,
which violation or conflict under clause (a), default under clause
(b), or lien, security interest, charge or encumbrance under clause
(c) would have a material adverse effect on the Borrower or
otherwise materially impair its ability to perform its obligations
under this Agreement, the Note or the Other Documents.
d. No Consents. No consent, approval or
authorization of, or registration, declaration or filing with, any
governmental authority or other third party is required as a
condition to, or in connection with, the due and valid execution
and delivery by the Borrower of this Agreement, the Note or Other
Documents other than consents, approvals, authorizations, etc.
which have been obtained.
4. Events of Default: Remedies.
a. Events of Default. The following shall
constitute events of default under this Agreement ("Events of
Default"):
(i) The Borrower fails to pay when due any
principal, interest or other sums due under the Note and shall not
have remedied such failure within fifteen (15) days after written
notice of such default has been given by the Lender to the
Borrower.
(ii) The Borrower defaults in the observance or
performance of any condition or covenant contained in this
Agreement, the Note or the Other Documents and shall not have
remedied the default within forty-five (45) days after written
notice of such default has been given by the Lender to the
Borrower; provided, however, that if the Borrower has the ability
to cure the default, but such default cannot reasonably be cured
within such forty-five (45) day period, an Event of Default shall
not be deemed to occur if the Borrower shall commence to cure the
default during such forty-five day (45) period and shall
continuously and diligently in good faith pursue such cure to
completion.
(iii) A breach by the Borrower of any warranty
or any misrepresentation contained in this Agreement, the Note or
the Other Documents, and such breach or misrepresentation shall not
have been remedied within forty-five (45) days after receipt of
written notice of such breach has been given by the Lender to the
Borrower.
(iv) A dissolution or liquidation of the
Borrower shall have been declared.
(v) If the Borrower shall make an assignment for
the benefit of creditors, or file a voluntary petition under the
Bankruptcy Code, as amended, or any other Federal or state
insolvency law, or apply for or consent to the appointment of a
receiver, trustee or custodian of all or part of its property.
(vi) If the Borrower shall file an answer
admitting the jurisdiction of the court and the material
allegations of an involuntary petition filed against it under the
Bankruptcy Code, as amended, or any other Federal or state
insolvency law, or shall fail to have such petition dismissed
within ninety (90) days after its filing.
(vii) If an Order for Relief shall be entered
following the filing of an involuntary petition against the
Borrower under the Bankruptcy Code, as amended, or any other
Federal or state insolvency law, or if an Order shall be entered
appointing a receiver, trustee or custodian of all or part of its
property.
(viii) If there shall have occurred an Event
of Default under the Note or any of the Other Documents.
(b) Remedies. In the event an Event of Default
shall occur and be continuing, then, in the sole discretion of the
Lender, and without further notice to the Borrower, the unpaid
principal amount and the accrued interest at the applicable rate
specified in the Note until full payment of all amounts due under
the Note or hereunder, and all other sums due by the Borrower under
this Agreement, the Note or the Other Documents, shall become
immediately due and payable, without presentment, demand, protest
or other requirements of any kind, all of which are hereby
expressly waived by the Borrower. In addition, in each case, the
Lender may recover all costs of suit and other expenses incurred by
the Lender (including reasonable attorneys' fees) in connection
with the collection of any sums due hereunder. In addition to other
remedies available to it, the Lender may exercise its rights under
the Note and under the Other Documents. The remedies set forth
herein shall be in addition to, and not in lieu of, any other
additional rights or remedies the Lender may have at law or in
equity.
5. Survival of Representations and Covenants. This
Agreement and all covenants, agreements, representations and
warranties made herein, in the Note, and in any of the Other
Documents delivered pursuant hereto or thereto shall survive the
making of the Loan and the execution and delivery of the Note, this
Agreement and the Other Documents, and shall continue in full force
and effect until all of the obligations have been fully paid,
performed, satisfied and discharged.
6. Miscellaneous.
(a) Entire Agreement: Amendments; Applicable Law.
This Agreement, the Note and the Other Documents executed and
delivered pursuant hereto constitute the entire agreement between
the Lender and the Borrower with respect to the subject matter
hereof. The provisions of this Agreement, the Note or the Other
Documents shall not be modified, rescinded or waived except in
writing executed by the party against whom such modification,
rescission or waiver is sought to be enforced. The construction,
interpretation and enforcement of this Agreement, the Note and the
Other Documents shall be governed by and construed in accordance
with the laws of the State of Nevada. The Lender and the Borrower
acknowledge and agree that the only appropriate forums for any
legal dispute arising under or in connection with this Agreement,
the Note and/or the Other Documents are, and each party hereby
irrevocably submits itself to the personal jurisdiction of, (i) the
United States District Court of the District of Nevada, and the
parties consent and agree that such court shall have sole
jurisdiction over any matter arising under or in connection
hereunder or thereunder, or (ii) in the event that such District
Court does not have, or will not assume, jurisdiction over such
dispute, the Eighth Judicial District of the State of Nevada.
(b) Successors and Assigns. This Agreement shall be
binding upon, and inure to the benefit of, the Lender and the
Borrower and their respective successors and assigns, except that
the Borrower shall not make any assignment of its rights hereunder
without the prior consent of the Lender, which consent may be
granted or withheld by the Lender in its sole and absolute
discretion.
(c) Rights Cumulative. The remedies of the Lender
as provided in this Agreement, the Note and the Other Documents
shall be cumulative and concurrent; may be pursued singly,
successively, or together at the sole discretion of the Lender, may
be exercised as often as occasion for their exercise shall occur;
and in no event shall the failure to exercise any such right or
remedy be construed as a waiver or release of it.
(d) Notices. All notices, requests, demands and
other communications required or permitted under this Agreement
shall be in writing and shall be deemed to have been duly given and
made when received by the party to whom the notice, request, etc.
is directed, and which shall be delivered personally, by courier
service such as Federal Express, or by messenger, or by United
States mail, registered or certified mail, postage pre-paid, return
receipt requested, addressed as set forth below.
If to the Borrower:
NPD, Inc.
215 Central NW
Suite 3B
Albuquerque, NM 87102
Attention: Chairman
If to the Lender:
Casino-Co Corporation
2805 Ashworth Circle
Las Vegas, NV 89107
Attention: Chairman
(f) Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute but one and
the same instrument.
(g) Severability. If any provisions of this Agreement
shall be held invalid under any applicable laws, such invalidity
shall not affect any other provision of this Agreement that can be
given effect without the invalid provisions and, to this end, the
provisions hereof are severable.
IN WITNESS WHEREOF, the parties hereto have caused this
Loan Agreement to be executed and delivered as of the date first
written above.
NPD, INC.
BY: /s/ Nunzio P. DeSantis
Nunzio P. DeSantis, President
Attest: /s/ E. Gerald Riesenbach
CASINO-CO CORPORATION
By: Kenneth Scholl
Attest: /s/
SECURITY AGREEMENT
THIS AGREEMENT is made as of this 15th day of January,
1997 by and between NPD, INC., a Delaware corporation with an
address at 215 Central NW, Suite 3B, Albuquerque, NM 87102 (the
"Debtor"), and CASINO-CO CORPORATION, a Nevada corporation with an
address at 2805 Ashworth Circle, Las Vegas, NV 89107 (the "Secured
Party").
BACKGROUND
The Debtor is indebted to the Secured Party under the
Promissory Note of Debtor (the "Note") dated of even date herewith
issued to the Secured Party under and pursuant to a Loan Agreement
dated of even date herewith between the Debtor and the Secured
Party (the "Loan Agreement"). The Debtor has agreed to grant to
the Secured Party security for the Debtor's current and future
obligations (collectively, the "Obligations") to the Secured Party
arising under the Note and Loan Agreement (collectively, the "Loan
Documents"). The terms of this Security Agreement without
definition that are defined in the Uniform Commercial Code, as
enacted in Nevada and in effect on the date of this Security
Agreement (the "Uniform Commercial Code"), shall have the meanings
ascribed to them in the Uniform Commercial Code, unless the context
requires otherwise.
NOW, THEREFORE, in consideration of the foregoing, and of
the covenants and mutual agreements set forth below, and intending
to be legally bound, the parties agree:
1. In consideration of and as security for the prompt
payment when due, at maturity or by acceleration upon default, of
the Obligations, the Debtor grants to the Secured Party, and
confirms the grant of, a security interest in and lien upon the
Collateral (as defined herein), which security interest shall be
second in right of priority only to the Brennan Security Interest
(as defined below). This Agreement and the security interest
granted in this Agreement shall stand as a general and continuing
security for all the Obligations and may be retained by the Secured
Party until all the Obligations have been satisfied in full. For
purposes of this Agreement, the term "Brennan Security Interest"
means all rights of Robert E. Brennan ("Brennan"), and his
successors and assigns, as pledgee under that certain Pledge
Agreement to be entered into between Brennan and the Debtor (the
"Brennan Pledge Agreement") to secure certain obligations of the
Debtor to Brennan under a Promissory Note (the "Brennan Note")
dated of even date with the Brennan Pledge Agreement. For purposes
of this Agreement, the term "Collateral" means the remainder
interest of the Debtor in and to the Collateral (as such term is
defined in the Brennan Pledge Agreement) upon full satisfaction and
discharge of all obligations of the Debtor to Brennan under the
Brennan Note and the termination of the Brennan Pledge Agreement
resulting therefrom, including, but not limited to, the shares of
common stock of International Thoroughbred Breeders, Inc. pledged
by the Debtor to Brennan under the Brennan Pledge Agreement
(collectively, the ITB Shares"), and any and all proceeds, monies,
income and benefits therefrom to which Debtor is then entitled.
2. Concurrently upon the execution of this Agreement,
the Debtor shall:
(a) open an account either at a national banking
institution selected by Debtor with a combined capital and surplus
of at least $50,000,000 or at a nationally recognized investment
banking\brokerage institution selected by Debtor, and, in each
case, in which Debtor shall have no other account or deposit (the
"Cash Collateral Account"); and
(b) deliver to Brennan and to the Pledgeholder under
the Brennan Pledge Agreement irrevocable written instructions that:
(i) any cash proceeds which the Debtor is entitled to receive upon
termination of the Brennan Pledge Agreement shall be delivered
directly to and deposited in the Cash Collateral Account; provided,
however, that such deposited cash proceeds shall not exceed the
principal amount then outstanding under the Note (the "Collateral
Amount"), and (ii) to the extent that the cash deposited in the
Cash Collateral Account is less than the principal amount then
outstanding under the Note, any certificated securities, including,
but not limited to, the ITB Shares, which the Debtor is entitled to
receive upon termination of the Brennan Pledge Agreement, shall be
delivered directly to the Secured Party. If ITB Shares are
delivered to the Secured Party, such ITB Shares shall be held
pursuant to and in accordance with the terms and conditions of the
Pledge Agreement attached hereto as Annex "A" and incorporated
herein by reference.
3. So long as an Event of Default shall not have
occurred and be continuing, Debtor shall have the right to
designate the manner in which the corpus of the Cash Collateral
Account shall be invested; provided that such investments shall be
limited to (i) obligations of the U.S. Government, (ii)
certificates of deposit of an FDIC-insured bank having combined
capital and surplus of not less than $50,000,000, or (iii) money
market funds investing in obligations of the U.S. Government;
provided that all such investments under clauses (i) and (ii) above
shall mature not later than 180 days from purchase.
4. If at any time during the term of this
Agreement, the aggregate of all funds on deposit in the Cash
Collateral Account (including the principal amount of cash
equivalents and marketable securites) equals or exceeds the
Collateral Amount, then the Secured Party shall deliver to the
Debtor any certificated securities or other property then held by
the Secured Party as Collateral hereunder which is not in the Cash
Collateral Account (and, if all of the ITB Shares held by the
Secured Party are delivered, the Pledge Agreement shall be deemed
terminated), and the term "Collateral" shall thereafter mean the
Cash Collateral Account.
5. So long as an Event of Default shall not have
occurred and be continuing, any income received in respect of the
corpus of the Cash Collateral Account which is not otherwise
required to make up any deficiency in the Collateral Amount shall
not be deemed "Collateral", and such income shall be disbursed
directly to Debtor.
6. The Debtor agrees, at any time and from time to
time, to execute and deliver to the Secured Party such certificates
of interest, instruments of assignment, financing statements,
confirmations, renewals, certificates of title and other
instruments as the Secured Party may, in its sole discretion, deem
necessary or advisable to perfect the security interest of the
Secured Party in the Collateral or to implement and continue the
rights of the Secured Party with respect to the Collateral and to
pay all costs incurred by the Secured Party in the filing,
recording, releasing, or terminating of the foregoing. To the
extent required to perfect the Secured Party's interest in the
Collateral, the Debtor shall cause the Cash Collateral Account to
be registered in the names of the Debtor and the Secured Party, as
their interests may appear; provided, however, that until an Event
of Default hereunder, Debtor shall continue to exercise all rights
with respect to the Collateral and Cash Collateral Account to which
Debtor is entitled under this Agreement, and the Secured Party
shall execute and deliver such instruments and agreements as Debtor
shall require to confirm such rights of Debtor. Notwithstanding
anything herein to the contrary, any instrument, certificate,
financing statement or similar documents prepared to reflect the
Secured Party's interest in the Collateral shall expressly state
tht such interest is subject and subordinate to the rights of the
pledgee under the Brennan Pledge Agreement.
7. The Secured Party shall have the right, at any time
and from time to time, without notice to or further consent of the
Debtor and without incurring any obligation to the Debtor or
impairing its security interest in the Collateral: (a) to inspect
all books, records and other documents of the Debtor pertaining to
the Collateral, including Cash Collateral Account statements and
confirmations, and make extracts therefrom; (b) to take any action
with respect to the Collateral required of the Debtor in the
immediately preceding paragraph upon failure by the Debtor to do so
(though the Secured Party shall be under no obligation to take any
such action) and to charge the cost of such action to the Debtor,
which cost shall be payable on demand and secured by this
Agreement; and (c) to notify any party with respect to the
Collateral of the security interest of the Secured Party in the
Collateral.
8. The Debtor warrants and represents that the
Collateral is, and will remain at all times prior to payment in
full of the Obligations, the sole property of the Debtor, free and
clear of any liens, encumbrances, security interest or claims of
adverse interest, except for those created by this Agreement and
those arising under the Brennan Pledge Agreement.
9. The occurrence of an Event of Default under the Note
or Loan Agreement shall constitute an Event of Default under this
Agreement.
10. Upon the occurrence of an Event of Default, the
Secured Party shall have with respect to the Collateral all rights
and remedies available to a secured party after default under the
Nevada Uniform Commercial Code. In furtherance and not in
limitation of the foregoing, the Secured Party may: (a) take
possession of any Collateral not in its custody; and (b) collect
all sums owing to the Debtor on the Collateral and to compromise
same if, in the discretion of the Secured Party, such compromise
shall be deemed advisable, and endorse or execute for such purpose
in the name of the Debtor any instrument of payment or release or
compromise received with respect thereto, such endorsement and
execution to be effective as that of the Debtor for all purposes.
All remedies of the Secured Party may be exercised separately or
concurrently at the discretion of the Secured Party. The Debtor
shall be liable to the Secured Party for all out-of-pocket expenses
incurred by the Secured Party in connection with the exercise of
its remedies under this Agreement, including the reasonable fees of
the Secured Party's counsel (collectively, "Collection Costs"), and
the same shall, except as otherwise required by the context, be
secured by this Agreement. The proceeds of collection, sale or
other disposition of the Collateral shall be applied first to the
Collection Costs and then, to the extent thereof, to the balance of
the Obligations secured by this Agreement; the balance of the
proceeds, if any, to be paid to the Debtor. The Debtor shall
remain liable to the Secured Party for all Collection Costs and
other Obligations secured by this Agreement remaining unpaid after
the above application of the proceeds of Collateral.
11. A photographic, or other reproduction of this
Agreement or any financing statement relating to this Agreement may
be filed as and with the effect of an original financing statement.
12. (a) Lender's right in the ITB Shares is subordinate
to the right of Robert Green ("Green") pursuant to the option
between Green and Debtor. In the event that Green exercises his
option, Lender agrees that its pledge shall not apply to the ITB
Shares transferred to Green pursuant to his option. Lender agrees
to execute any and all documents reasonably requested by Green
without cost to Green at the time he executes his option to reflect
that the ITB Shares he obtains pursuant to the exercise of that
option are obtained free and clear of any lien, claim, interest or
encumbrance of or by Lender.
(b) Lender acknowledges that the ITB Shares are
pledged to Brennan pursuant to the terms of the Lender Stock Pledge
Agreement dated January 14, 1997 (the "Pledge Agrement"). Lender
agrees that Brennan, as pledgee under the Pledge Agreement, has no
duty or obligation to Lender with respect to the ITB Shares and can
exercise any and all rights provided for under the Pledge Agreement
without regard to any lien, claim or interest of Lender in the ITB
Shares, which lien, claim or interest are at all times subordinated
to and secondary to the rights of Brennan. In the event Brennan
elects, after an event of default under the Pledge Agreement to
retain the ITB Shares, as provided for in the Pledge Agreement,
Lender will execute any and all documents reasonably requested by
Brennan to reflect the discharge of Lender's lien without any cost
or consideration from Brennan, other than the consideration
provided by his consenting to the secondary pledge provided herein.
Similarly, in the event of a sale by Brennan after default in
accordance with the Pledge Agreement, Lender will execute any and
all documents discharging its pledge hereunder so that Brennan can
convey good title to the ITB Shares to a purchaser free and clear
of any lien or or claim of Lender, without cost or additional
consideration from Brennan. Lender's right in such circumstance
shall be limited solely to the right to receive any excess proceeds
from such sale over and above all amounts which Brennan is entitled
to receive under the Pledge Agrement.
13. This Agreement shall be construed and enforced in
accordance with the laws of the State of Nevada and may be modified
and waived only in writing signed by the Secured Party and the
Debtor. This Agreement shall be binding on the Debtor and its
successors and assigns and shall inure to the benefit of the
Secured Party and his heirs, personal representatives, successors
and assigns.
IN WITNESS WHEREOF, and intending to be legally bound,
the parties have duly executed this Agreement as of the day and
year first above written.
NPD, INC.
By: /s/ Nunzio P. DeSantis
Attest: /s/ E. Gerald Riesenbach
CASINO-CO CORPORATION
By: /s/ Kenneth Scholl
Attest: /s/
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT is made as of this day of January,
1997 by among NPD, Inc., a Delaware corporation ("Pledgor"), and
CASINO-CO CORPORATION, a Nevada corporation ("Pledgee").
BACKGROUND
Pledgor and Pledgee are parties to a Security Agreement
dated of even date herewith (the "Security Agreement") pursuant to
which Pledgor has granted to Pledgee a lien on and security
interest in and to the Collateral as such term is defined in the
Security Agreement to secure indebtedness of Pledgor to Pledgee
under the Promissory Note of Pledgor (the "Note") dated of even
date herewith issued to Pledgee under and pursuant to a Loan
Agreement dated of even date herewith between Pledgor and Pledgee
(the "Loan Agreement"). Capitalized terms used herein but not
defined herein shall have the meanings given such terms in the
Security Agreement. The Security Agreement provides that if and to
the extent the Collateral comprises in part ITB Shares, the ITB
Shares shall be held by the Pledgee under and pursuant to the terms
of this Pledge Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and
intending to be legally bound hereby, and for good, valuable and
sufficient consideration, the receipt of which is hereby
acknowledged, Pledgor agrees as follows:
1. The term "Pledged Stock" shall mean ITB Shares
received by Pledgee as part of the Collateral under the Security
Agreement, together with all certificates, options, rights,
dividends or other distributions issued in addition to, in
substitution or in exchange for, or on account of, any of the
Pledged Stock, and all cash and noncash proceeds of all of the
foregoing, now or hereafter owned, acquired by or arising in favor
of Pledgor (provided, however, that any cash proceeds shall be
deposited into the Cash Collateral Account and thereafter shall be
governed by the terms of the Security Agreement.
2. (a) As security for the prompt satisfaction of the
Obligations, the Pledgor hereby assigns, pledges, hypothecates,
delivers and set over to Pledgee, the Pledged Stock and grants
Pledgee a first and prior lien on and security interest in and to
the Pledged Stock.
(b) Until an Event of Default under the Loan
Agreement, the Note, the Security Agreement, or this Agreement (an
"Event of Default") shall occur and be continuing:
(i) the Pledgor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the
Pledged Stock for any purpose not inconsistent with the terms
hereof; and
(ii) the Pledgor shall be entitled to receive
and retain any and all dividends paid in respect of the Pledged
Stock, other than dividends paid or payable other than in cash and
dividends payable in cash in respect of a partial or total
liquidation or dissolution of ITB, a reduction of capital, capital
surplus or paid-in surplus or in redemption of the Pledged Stock.
Pledgee shall execute and deliver to Pledgor all such proxies and
other instruments as Pledgor may reasonably request for the purpose
of enabling Pledgor to exercise the voting and other rights to
which it is entitled and to receive the dividends which it is
authorized to receive pursuant to this subsection 2(b).
c. If the Pledgor shall become entitled to receive
or shall receive, in connection with any of the Pledged Stock, any:
(i) Stock certificate including, without
limitation, any certificate representing a stock dividend or in
connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets,
combination of shares, stock split, spin-off or split-off;
(ii) Option, warrant, or right, whether as an
addition to or in substitution or in exchange for any of the
Pledged Stock, or otherwise;
(iii) Dividends or distributions payable in
property, including securities issued by other than ITB; or
(iv) Dividends or distributions of any sort
other than to which Pledgor is entitled under subsection 2(b)
hereof; then, Pledgor shall immediately deliver same to Pledgee to
be held by Pledgee under this Agreement, in the exact form
received, with, as applicable, Pledgor's endorsement when
necessary, or appropriate stock powers duly executed in blank,
which the Pledgor hereby agrees to make and/or furnish, subject to
the terms hereof, as part of the Pledged Stock.
d. At any time, Pledgee may have any or all of the
Pledged Stock registered in the name of Pledgee or another nominee,
and Pledgor hereby covenants that, upon the request of Pledgee,
Pledgor shall use its best efforts to cause the transfer agent of
the Pledged Stock to effect such registration. If done prior to
the occurrence of the Event of Default, Pledgor shall nevertheless
retain all voting rights with respect to the Pledged Stock and, for
that purpose, Pledgee shall execute and deliver to Pledgor all
necessary proxies. Immediately and without further notice, upon
the occurrence of an Event of Default, whether or not the Pledged
Stock shall have been registered in the name of Pledgee or its
nominee, Pledgee shall have the right to exercise all voting rights
as to all of the Pledged Stock, and shall have all other corporate
rights and all conversion, exchange, subscription or other rights,
privileges or options pertaining thereto as if Pledgee were the
absolute owner thereof including, without limitation, the right to
exchange any or all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof, or upon the exercise by such
issuer of any right, privilege, or option pertaining to any of the
Pledged Stock and, in connection therewith, to deliver any of the
Pledged Stock to any committee, depository, transfer agent,
registrar or other designated agency upon such terms and conditions
as it may determine, all without liability except to account for
property actually received by it; but Pledgee shall have no duty to
exercise any of the aforesaid rights or privileges, or may delay in
so doing. In exercising such authority, notice of such exercise
shall forthwith be delivered to Pledgor.
e. Until the occurrence of an Event of Default, Pledgor
shall be entitled to instruct Pledgee to deliver to Pledgor or to
Pledgor's representative all or part of the Pledged Stock for
purposes of consummating a bona fide sale at fair market value to a
third party, and Pledgee shall so deliver the Pledged Stock upon
its receipt of confirmation or settlement documents or cash. Upon
receipt of proceeds from such bona fide sale, Pledgee shall deposit
such cash into the Cash Collateral Account to the extent of any
deficiency between the funds deposited therein and the Collateral
Amount, and with any excess thereof being disbursed to the Pledgor.
Notwithstanding anything in this subparagraph 2(e) to the contrary,
if the proceeds from any such proposed sale, when added to the
funds then deposited in the Cash Collateral Account would not be
sufficient to equal the Collateral Amount, the prior consent of the
Pledgee to such sale shall be required.
3. (a) Upon the occurrence of an Event of Default,
Pledgee may, without demand of performance or other demand,
advertisement, or notice of any kind (except the notice specified
below of the time and place of any public or private sale or other
disposition) to or upon Pledgor or any other person (all of which
are, to the extent permitted by law, hereby expressly waived)
forthwith realize upon the Pledged Stock or any part thereof, and
may forthwith, or agree to, sell or otherwise dispose of and
deliver the Pledged Stock or any part thereof or interest therein,
in one or more parcels at public sale or sales, at any exchange,
broker's board or at issuer's offices or elsewhere, at such prices
and on such terms (including, without limitation, a requirement
that any purchaser of all or any part of the Pledged Stock purchase
the shares constituting the Pledged Stock for investment and
without any intention to make a distribution thereof, and all of
such terms as shall be required by applicable law) as it may deem
best, for or on credit or for future delivery without assumption of
any credit risk, with the right to Pledgee or any purchaser to
purchase upon any such sale the whole or any part of the Pledged
Stock free of any right or equity of redemption in Pledgor, which
right or equity is hereby expressly waived and released.
Notwithstanding anything herein to the contrary, upon an Event of
Default, the Pledgee shall be entitled to realize on only that
portion of the Pledged Stock which is reasonably expected to
generate net proceeds which, when added to the Cash Collateral
Account, will equal the Collateral Amount, it being the
understanding that the Obligations shall be satisfied first out of
the Cash Collateral Account and second the Pledged Stock.
(b) The proceeds of any such disposition or other
action by Pledgee shall be applied as follows:
(i) First, the costs and expenses incurred in
connection therewith or incidental thereto or to the care or
safekeeping of any of the Pledged Stock or in any way relating to
the rights of the Pledgee hereunder, including reasonable
attorneys' fees and legal expenses;
(ii) Second to the satisfaction of the
Obligations, subject to the terms of subsection 3(a) above;
(iii) Third, to the payment of any other
amounts required by applicable law (including, without limitation,
those under the Uniform Commercial Code as enacted in the State of
Delaware): and
(iv) Fourth, to the Pledgor to the extent of
any surplus proceeds.
Pledgee agrees to give at least five (5) days' written notice of
the time and place of any public sale or of the time after which a
private sale or other disposition may take place, which notice
Pledgor hereby deems commercially reasonable.
4. Pledgor represents and warrants that:
(a) Pledgor has, and has duly exercised, all
requisite power and authority to enter into this Agreement, to
pledge the Pledged Stock for the purposes described in subparagraph
2(a) above, and to carry out the transactions contemplated by this
Pledge Agreement:
(b) Pledgor is the legal and beneficial owner of
all the Pledged Stock registered in such Pledgor's name;
(c) The Pledged Stock is owned by Pledgor free of
any pledge, mortgage, hypothecation, lien, claim, charge,
encumbrance or security interest in such shares or the proceeds
thereof, except for those granted hereunder and under the Brennan
Security Agreement and under the Option Agreement between Robert
Green and the Pledgor dated December 5, 1996 as to fifty percent of
the ITB Shares subject to the Brennan Security Agreement;
(d) The execution and delivery of this Pledge
Agreement, and the performance of its terms, will not violate or
constitute a default under the terms of any agreement, indenture or
other instrument, license, judgment, decree, order of regulations,
applicable to Pledgor or any of Pledgor's property; and
(e) Upon delivery of the Pledged Stock to
Pledgee, this Pledge Agreement shall create a valid first lien upon
and perfected security interest in the Pledged Stock and the cash
and non cash proceeds thereof, subject to no prior security
interest, lien, charge or encumbrance, or agreement purporting to
grant to any third party a security interest in the property or
assets of Pledgor which would include the Pledged Stock other than
under the Option Agreement between Robert Green and the Pledgor
dated December 5, 1996 as to fifty percent of the ITB Shares
subject to the Brennan Security Agreement.
5. (a) Pledgor hereby covenants that, until all of the
Obligations have been satisfied in full, Pledgor will not, without
the prior consent of Pledgee or as otherwise permitted by
subparagraph 3(a), sell, convey, or otherwise dispose of any of the
Pledged Stock or any interest therein, or create, incur, or permit
to exist any pledge, mortgage, lien, charge, encumbrance or any
security interest whatsoever in or with respect to any of the
Pledged Stock or the proceeds thereof, other than that created
hereby.
(b) The breach by Pledgor of a covenant set forth
in subsection 5(a) or the misrepresentation by Pledgor or breach of
a warranty made in Section 4 hereof or the failure of Pledgor to
timely perform any material obligation hereunder shall constitute
an "Event of Default" hereunder.
6. Pledgor recognizes that Pledgee may be unable to
effect a public sale of all or a part of the Pledged Stock and may
be compelled to resort to one or more private sales to a restricted
group of purchasers who will be obligated to agree, among other
things, to acquire the Pledged Stock for their own account, for
investment and not with a view to the distribution or resale
thereof. Pledgor acknowledges that any such private sales may be
at prices and on terms less favorable to Pledgee than those of
public sales, and agree that such private sales shall be deemed to
have been made in a commercially reasonable manner and that Pledgee
have no obligation to delay sale of any Pledged Stock to permit the
issuer thereof to register it for public sale under the Securities
Act of 1933, as amended, or any other applicable law.
7. Pledgor will promptly deliver to Pledgee all written
notice received by Pledgor with respect to the Pledged Stock, and
Pledgee will promptly give like notice to Pledgor of any such
notices received by Pledgee or its nominees.
8. Pledgor shall at any time, and from time to time,
upon written request of Pledgee, execute and deliver such further
documents and do such further acts and things as Pledgee may
reasonably request to effect the purposes of this Pledge Agreement
including, without limitation, delivering to Pledgee, upon the
occurrence of an Event of Default, irrevocable proxies with respect
to the Pledged Stock in form satisfactory to Pledgee.
9. (a) No course of dealing between Pledgor and
Pledgee, nor any failure to exercise, nor any delay in exercising,
any right, power or privilege of Pledgee hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege.
(b) The rights and remedies provided hereinand in
the Loan Agreement and the Security Agreement and in all other
agreements, instruments, and documents delivered pursuant to or in
connection with the Loan Agreement or Note, are cumulative and are
in addition to and not exclusive of any rights or remedies provided
by law, including, but without limitation, the rights and remedies
of a secured party under the Nevada Uniform Commercial Code.
(c) The provisions of this Pledge Agreement are
severable, and if any clause or provision shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such
invalidity and unenforceability shall not affect any other clause
or provision in such jurisdiction and shall not in any manner
affect such clause or provision in any other jurisdiction or any
other clause or provision in any other jurisdiction or any other
clause or provision in this Pledge Agreement in any jurisdiction.
10. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by courier service, by cable, by
telecopy, by facsimile, by telegram, by telex or by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other
addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 10:
(a) if to Pledgor:
NPD, Inc.
215 Central NW
Suite 3B
Albuquerque, NM 87102
(b) if to Pledgee:
Casino-Co Corporation
2805 Ashworth Circle
Las Vegas, NV 89107
11. This Pledge Agreement shall be construed in
accordance with the substantive laws of the State of Nevada without
regard to principles of conflicts of laws and intended to take
effect as an instrument under seal.
12. In the event of any inconsistency between the terms
of this Pledge Agreement and the terms of the Security Agreement,
the terms of the Security Agreement shall govern and control.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Pledge Agreement.
NPD, INC,
By: /s/ Nunzio P. DeSantis, President
Attest: /s/ E. Gerald Riesenbach,Secretary
CASINO-CO CORPORATION
By: /s/ Kenneth Scholl, President
Attest: /s/
Exhibit 99.6
NPD, INC.
215 Centra Northwest
Suite 3B
Albuquerque, NM 87102
January 15, 1997
Casino-Co Corporation
2805 Ashworth Circle
Las Vegas, Nevada 89107
Re: Option on Brennan Shares
Gentlemen:
NPD, Inc. ("NPD") has entered into a Stock Purchase
Agreement dated December 5, 1996, as amended (the "Purchase
Agreement"), with Robert E. Brennan ("Seller") pursuant to which
the Purchaser has agreed to purchase from the Seller 2,904,016
shares of the common stock, par value $2.00 per share, of
International Thoroughbred Breeders, Inc. ("ITB") (the "Shares")
for an aggregate purchase price of $11,616,064.
In consideration for AutoLend Group, Inc. ("AutoLend")
making a loan to NPD in the amount of $2,904,016, NPD granted to
AutoLend an option (the "Option") to purchase the Shares under the
terms and subject to the conditions set forth in the Option
Agreement between NPD and AutoLend dated December 5, 1996, a copy
of which is attached hereto as Annex "A" and incorporated herein by
reference )(the "Option Agreement").
On January 13, 1997, the United States Bankruptcy Court
for the District of New Mexico, before which proceedings are
pending relating to AutoLend as debtor, issued a Temporary
Restraining Order the effect of which is to prevent AutoLend from
making the aforementioned loan to NPD. Consequently, due to the
lack of consideration for the Option, NPD has terminated the Option
Agreement with AutoLend.
In consideration for Casino-Co Corporation ("Casino-Co")
making a loan to NPD in the amount of $2,904,016.00, pursuant to
the terms of a Loan Agreement dated of even date herewith between
NPD and Casino-Co (the "Loan Agreement"), NPD hereby grants to
Casino-Co the Option, on the same terms and subject to the same
conditions set forth in the attached Option Agreement; provided,
however, that the Option Agreement shall automatically terminate
and be of no force and effect if AutoLend repays in full all
amounts due and owing Casino-Co from NPD under the Loan Agreement
and related Secured Promissory Note within twenty (20) days from
the date hereof; and, provided, further, however, that
notwithstanding the foregoing or anything else contained herein,
(i) the Option shall not become exercisable unless and until the
parties and the grant of the Option to Casino-Co have received all
required consents and approvals, including, without limitation, the
approvals of Robert E. Brennan ("Brennan") and the United States
Bankruptcy Court for the District of New Jersey, before which
certain proceedings involving Brennan, as debtor-in-possession, are
pending, and (ii) should such required consents and approvals not
be obtained, then the grant of the Option to Casino-Co shall be
rescinded and shall be deemed to be void ab initio, it being the
intention of the parties that neither the grant of the Option to
Casino-Co nor any other action taken pursuant to or in connection
with the Loan Agreement shall constitute a breach or violation of
Loan Documents, the Purchase Agreement or any order, decree,
document or instrument related thereto. NPD and Casino-Co agree to
use their best efforts to obtain all such necessary consents and
approvals.
If the foregoing collectively represents the
understanding of Casino-Co with respect to the grant of the Option,
kindly execute a copy of this letter where indicated below and
return the executed copy to the undersigned, whereupon this letter
agreement shall become a valid and binding obligation of the
parties and shall inure to the benefit of the respective successors
and assigns.
Sincerely,
NPD, Inc.
/s/ Nunzio P. DeSantis
BY: Nunzio P. DeSantis, Chairman
NPD
Agreed and Accepted:
CASINO-CO CORPORATION
By:
Title:
Dated: January 15, 1997
NPD, INC.
215 Central NW, Suite 3B
Albuquerque, New Mexico 87102
December 5, 1996
AutoLend Group, Inc.
215 Central NW, Suite 3B
Albuquerque, NM 87102
Re: International Thoroughbred Breeders, Inc. ("ITB")
Gentlemen:
NPD, Inc. (the "Purchaser") has entered into a Stock
Purchase Agreement dated December 5, 1996 (the "Purchase
Agreement") with Robert E. Brennan ("Seller") pursuant to which the
Purchaser has agreed to purchase from the Seller 2,904,016 shares
of the common stock, par value $2.00 per share, of ITB (the
"Shares") for an aggregate purchase price of $11,616,064. Attached
to this Letter Agreement as Exhibit "A" is a copy of the Purchase
Agreement which sets forth the terms and conditions pursuant to
which the purchase of the Shares shall be made.
1. The Purchaser hereby grants to AutoLend Group, Inc.,
or to a subsidiary wholly-owned by AutoLend Group, Inc.
(collectively, the "Company"), an option (the "Option") to purchase
all but not less than all of the Shares to which the Purchaser is
entitled to purchase under the Stock Purchase Agreement, subject
only to the Green Option (as defined below). In contemplation of
the Option, the Purchase Agreement provides that the Purchaser my
assign its rights under the Purchase Agreement to the Company or
sell the Shares to the Company upon its exercise of the Option,
provided that the Company comply with the conditions set forth in
Section 13(b) of the Purchase Agreement which requires, among other
things, that: (i) the Company is approved as qualified by the New
Jersey Casino Control Commission in connection with the issuance of
a non-gaming license casino service license and is approved by the
New Jersey Racing Commission (the "Approvals"); and (ii) the
Company agrees to be bound by the terms and conditions of the
Purchase Agreement and the Note and Pledge Agreement referred to
therein.
2. Upon receipt of all Approvals, the Option shall
become immediately exercisable for a sixty day period (the "Option
Term"), and shall be exercised by written notice to the Purchaser
of the Company's election to exercise the Option accompanied by
payment of the Exercise Price, as defined below.
3. The term "Exercise Price" as used herein shall mean
the (i) assumption by the Company of the Purchaser's obligations
under the Purchase Agreement plus (ii) the cancellation of the Loan
(as defined below). If the Company exercises the Option after the
purchase of the Shares by the Purchaser from the Seller under
Purchase Agreement, the term "Exercise Price" as used herein shall
mean the (i) assumption by the Company of the Purchaser's
obligations under Note and Pledge Agreement delivered by the
Purchaser to the Seller plus (ii) the payment to the Purchaser of
the sum of $2,904,016 by wire transfer or bank check to the
Purchaser plus (iii) the cancellation of the Loan (as defined
below).
4. In consideration for the grant of the Option, and to
induce the Purchaser to grant the Option, the Company has agreed to
lend to the Purchaser up to the sum of $2,904,016, which amount
shall be used by the Purchaser to fulfill certain of its
obligations to the Seller in accordance with the terms of the Stock
Purchase Agreement (the "Loan"). The Loan shall be evidenced by a
promissory note on terms mutually acceptable to the Purchaser and
the Company.
5. The Company agrees that the Option granted hereby is
expressly subject to an Agreement between the Purchaser and Robert
Green (the "Green Agreement"), pursuant to which Robert Green has
been granted an option (the "Green Option") to purchase 1,452,008
of the Shares for the sum of $5,808,032.00, plus the Additional
Amount (as defined in the Purchase Agreement), all as more fully
set forth in the Green Agreement attached hereto as Exhibit "B."
If the Green Option has not been exercised prior to the Company's
exercise of the Option, the Company shall expressly assume the
Purchaser's obligations under the Green Agreement together with its
receipt of the rights of the Purchaser thereunder.
If the foregoing correctly represents the understanding
of the Company with respect to the grant of the Option and the
making of the Loan in consideration therefor, kindly execute a copy
of this letter where indicated below and return the executed copy
to the undersigned, whereupon this letter agreement shall become a
valid and binding obligation of the Company and of each of the
undersigned and shall inure to the benefit of their respective
heirs, personal representatives, successors and assigns.
Very truly yours,
NPD, INC.
/s/ Nunzio P. DeSantis
Nunzio P. DeSantis, Chairman
AGREED AND ACCEPTED BY:
AUTOLEND GROUP, INC.
By: /s/ E. Gerald Riesenbach
Title: Corporate Secretary
Dated: December 5, 1996
Exhibit 99.7
NPD, INC.
215 Central NW, Suite 3B
Albuquerque, New Mexico 87102
December 5, 1996
Mr. Robert Green
Re: International Thoroughbred Breeders, Inc. ("ITB")
Gentlemen:
NPD, Inc. (the "Purchaser") has entered into a Stock
Purchase Agreement dated December 5,1996 (the "Purchase Agreement")
with Robert E. Brennan ("Seller") pursuant to which the Purchaser
has agreed to purchase from the Seller 2,904,016 shares of the
common stock, par value $2.00 per share, of ITB (the "Shares") for
an aggregate purchase price of $11,616,064. Attached to this
Letter Agreement is a copy of the Purchase Agreement which sets
forth the terms and conditions pursuant to which the purchase of
the Shares shall be made.
1. For good and valuable consideration, the receipt and
sufficiency of which hereby is acknowledged, and intending to be
legally bound, the Purchaser hereby agrees that, on the date the
Purchaser purchases the Shares under the Purchase Agreement (the
"Purchase Closing Date"), the Purchaser grants to you an option
(the "Option") to purchase 1,452,008 of the Shares (the "Option
Shares"). The term of the Option (the "Option Term") will be
twelve (12) months and shall terminate on the one year anniversary
of the Purchase Closing Date; provided, however, that the Option
will not become exercisable unless and until you have obtained all
requisite governmental and agency approvals to own the Option
Shares, including, but not limited to, approvals from the New
Jersey Casino Control Commission and the New Jersey Racing
Commission (collectively, the "Approvals").
2. Upon receipt of all Approvals, the Option shall
become immediately exercisable for the remainder of the Option
Term, and shall be exercised by written notice to the Purchaser of
your election to exercise the Option accompanied by payment of the
Exercise Price, as defined below.
3. The term "Exercise Price" as used herein shall mean
the sum of $5,808,032.00, plus the Additional Amount (as defined in
the Purchase Agreement), if any. The Exercise Price shall be paid:
(1) by wire transfer or cashier's check of the Exercise Price to
the Purchaser or (2) by delivery to the Purchaser of a promissory
note in the form of Exhibit "A" attached hereto (the "Note")
(provided, however, that the option to pay the Exercise Price by
the issuance of the Note shall be available only if such method of
payment does not violate the margin rules and regulations
promulgated by the Federal Reserve Board) or (3) with the consent
of the Seller, by assumption by you of the Purchaser's obligations
under the promissory note issued by the Purchaser to the Seller in
partial payment of the Shares and the obligations under the pledge
agreement executed in connection therewith. If at the time you pay
the Exercise Price in accordance with clause 1 or 2 above the
Seller has not theretofore exercised his right to cause an increase
in the purchase price for the Shares by the Additional Amount,
then, in the case of clause (1), you shall deliver a promissory
note which shall provide for the payment of the Additional Amount,
once determined, no later than the earlier to occur of (i) sixty
days from the date the Additional Amount is determined and (ii) the
date the Additional Amount is due the Seller under the Purchase
Agreement and, in the case of clause (2), the principal amount of
the promissory note shall be increased by the Additional Amount,
once determined.
4. If you exercise the Option and fail to pay the
Exercise Price in full when it is due (for example, a failure to
pay amounts due under the promissory note delivered either to the
Purchaser or the promissory note assumed by you from the
Purchaser), the Purchaser shall be entitled to retain the Option
Shares not purchased by you (on the basis of the Exercise Price
divided by the total number of Option Shares) and further, shall be
entitled to retain all of the Option Shares upon payment to you of
any amounts already paid by you in respect of the Exercise Price.
5. In connection with the grant to you of the Option,
you hereby represent and warrant to the Purchaser the following,
all of which are true and correct on the date hereof and shall be
true and correct on the date of exercise of the Option:
a. You have all requisite power and authority to
execute and deliver this Letter Agreement and the Note and to
perform your obligations hereunder and thereunder.
b. This Letter Agreement has been (and, in the
case of the Note, will be) duly executed and delivered by you and,
assuming due authorization, execution and delivery by the
Purchaser, constitute (and, in the case of the Note will
constitute) your valid and binding agreements, enforceable in
accordance with their respective terms.
c. Neither the execution and delivery of this
Letter Agreement or the Note, nor the performance of the
transactions contemplated herein or therein by you will, with or
without the giving of notice or the lapse of time or both, violate
or constitute a default under any mortgage, indenture, deed of
trust, lease, contract, agreement, license or other instrument or
any order, judgment or ruling of any governmental authority to
which you are a party or by which any of your property is bound,
except in each case for any violation or default which does not
materially impair your ability to consummate the transactions
contemplated hereby.
d. Except as provided in clause (g) below, no
authorization or approval by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due
execution, delivery and performance by you of this Agreement or the
Note.
e. No litigation, action, proceeding,
investigation or suit is pending or, to your knowledge, threatened,
that challenges or may have the effect of preventing, delaying,
making illegal or otherwise interfering with your performance of
your obligations under this Letter Agreement or the Note.
f. You acknowledge that this Letter Agreement must
be submitted to the Bankruptcy Court and will become a part of the
public record.
g. You have no reason to believe that you will not
be qualified under the standards established by the New Jersey
Casino Control Commission ("Commission") in connection with the
issuance of a nongaming casino service industry license
("Qualifier") and under the standards of the New Jersey Racing
Commission ("Racing Commission").
6. Until the Exercise Price has been paid in full, you
agree that you may not sell, assign, pledge, donate or otherwise
transfer in any manner any of the Option Shares or any interest
therein, including, but not limited to, the right to receive
dividends and distributions on account of the Option Shares. Once
you are entitled to transfer the Option Shares, the Purchaser or
its assignee shall have a right of first refusal to purchase any or
all of the Option Shares which you desire to sell or transfer on
substantially the same terms and conditions which you obtain from a
bona fide purchaser for the Option Shares.
7. Upon your exercise of the Option, you will deliver
to the Purchaser a proxy, which shall be deemed to be coupled with
an interest, pursuant to which the Purchaser or its duly authorized
substitute or substitutes shall have the authority to vote, in the
proxy holder's sole discretion, all the Option Shares on all
matters on which shareholders of ITB are entitled to vote. The
proxy shall terminate on the earlier of 36 months from the date of
the proxy and, with respect to those Option Shares which are sold
by you to a non-affiliate in a bona fide, arms-length transaction,
on the date of sale.
8. The terms of this Option will become null and void
and without any force and effect if the Purchaser does not purchase
the Shares or, prior to the exercise of the Option, the Purchaser
is required by law or court or governmental order to divest itself
of the Shares.
If the foregoing correctly represents your understanding
with respect to the grant of the Option, kindly execute a copy of
this Letter Agreement where indicated below and return the executed
copy to the Purchaser, whereupon this Letter Agreement shall become
your valid and binding obligation and shall inure to the benefit of
our respective heirs, personal representatives, successors and
assigns.
Very truly yours,
NPD, INC.
/s/ Nunzio P. DeSantis
Nunzio P. DeSantis, Chairman
AGREED AND ACCEPTED BY:
/s/ Robert Green
Robert Green
Dated: December 5, 1996
