SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported): October 15, 1997
OXFORD CAPITAL CORP.
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(Exact name of Registrant as specified in its charter)
2-98747-D
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(Commission file number)
Nevada 87-0421454
- ------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation)
4245 North Central Expressway, Suite 300, Dallas, Texas 75205
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(Address of principal executive offices) (Zip code)
(214) 520-0100
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 15, 1997, the Registrant purchased all of the issued and
outstanding capital stock of Crest Outsourcing, Inc. ("Crest") in exchange for
100,000 shares of Series A Convertible Redeemable Preferred Stock ("Preferred
Stock"), a $250,000 promissory note ("Note") and 250,000 warrants (the
"Warrants"). Each share of the Preferred Stock has voting rights equal to ten
(10) shares of the Registrant's common stock, has a $10 per share liquidation
preference and is convertible into one share of common stock and one warrant
(the "Conversion Warrants") of the Registrant as follows: The first 25,000
shares of Preferred Stock converted are convertible into common shares and
Conversion Warrants upon payment of $1.00 per converted share. The second 25,000
shares of Preferred Stock converted are convertible into common shares and
Conversion Warrants upon payment of $1.50 per converted share. The balance of
the Preferred Stock shall be converted into common shares and Conversion
Warrants upon payment of an amount per share equal to 80% of the average closing
bid price of the Registrant's common stock over the twenty trading- day period
ending on the trading day immediately preceding the date on which the Registrant
receives each conversion notice.
The holders of shares of Preferred Stock are entitled to an annual dividend
of $.20 per share during the first year, $.40 per share during the second year
and $.60 per share during the third year. No dividend is payable after the third
year. The Preferred Stock is redeemable after one year at $10.00 per share at
the option of the Company and any shares of Preferred Stock remaining
outstanding on the third anniversary of the issuance of the shares shall, at the
option of the Registrant, be either redeemed at $10.00 per share or converted
into twenty shares of common stock.
The Conversion Warrants are exercisable for a period of one year from date
of issuance at a price equal to the closing bid price of the Registrant's common
stock on the date of issuance of the Conversion Warrant.
The Note bears interest at six percent (6%) per annum and is payable in
fifty-eight (58) monthly installments of $5,000 including interest.
Crest is a Nevada corporation engaged in the staff leasing and human
resource industry. Crest's integrated employment related services consist of
human resource administration; employment regulatory compliance management; and
providing workers compensation coverage and health care benefits. In addition to
providing businesses with a work force, Crest targets it services towards
helping small business owners manage escalating workers compensation and health
insurance costs and in reducing time and effort in dealing with the complex
legal and regulatory environment affecting employment. Crest is licensed to
provide these services in New Mexico, Arizona, Colorado and California.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statement of Business Acquired
Financial Statements required by this item for Crest Outsourcing, Inc.
will be filed by amendment not later than 60 days after the due date
of this report.
(b) Pro Forma Financial Information
Pro forma financial information required by this item will be filed by
amendment not later than 60 days after the due date of this report.
(c) Exhibits
2.1 Exchange Agreement with the Shareholder of Crest Outsourcing,
Inc. (1)
2.2 First Amendment to Exchange Agreement.
4.1 Certificate of Designations, Voting Powers, Preferences and
Rights of the Preferred Stock of Oxford Capital Corp. to be
Designated Series A Convertible Redeemable Preferred Stock.
4.2 Common Stock Purchase Warrant
4.3 Common Stock Conversion Warrant
10.1 Promissory Note
10.2 Escrow Agreement
- ------------------------
(1) Filed with Form 8-K dated February 21, 1997
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OXFORD CAPITAL CORP.
By: /s/ Robert E. Cheney
------------------------------------
Robert E. Cheney
Chairman and Chief Executive Officer
Date: November 12, 1997
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FIRST AMENDMENT TO EXCHANGE AGREEMENT
This First Amendment to Exchange Agreement (the "Amendment") is entered
into on October 15, 1997, by and between OXFORD CAPITAL CORP. ("Oxford"), CREST
OUTSOURCING, INC. ("Crest") and AMERICAN TELETRONICS, INC. (the "Shareholder")
with respect to the following:
WHEREAS, Oxford, Crest and the Shareholder have entered into an Exchange
Agreement dated February 14, 1997, (the "Agreement") (capitalized terms used and
not otherwise defined herein shall have the meaning set forth in the Agreement);
and
WHEREAS, Oxford has or plans to recapitalize Oxford and Oxford has
discharged certain obligations that were planned in the Agreement to be utilized
by the securities issued to Shareholder pursuant to the Agreement; and
WHEREAS, Shareholder desires to assist in such recapitalization and receive
securities that reflect the ownership percentage anticipated in the Agreement;
and
WHEREAS, Oxford, Crest, and Shareholder desire to amend the Agreement in
the following respects.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Return of Previously Issued Shares. Shareholder hereby tenders for
cancellation the securities issued pursuant to the Agreement and Oxford cancels
the obligations and releases Shareholder from the obligations set forth on
Exhibit AA hereto.
2. Amendment to Section 4.01. Section 4.01 of the Agreement is hereby
deleted in its entirety and replaced with the following:
"Section 4.01. The Exchange. On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date (as defined in Section 4.04),
the Shareholder hereby agrees to assign, transfer, and deliver to Oxford,
free and clear of all liens, pledges, encumbrances, charges, restrictions
or known claims of any kind, nature, or description, the number of shares
of common stock of Crest set after his signature at the foot of this
Agreement, in the aggregate constituting 100% of the issued and outstanding
securities of Crest, and Oxford agrees to acquire such shares on such date
by issuing and delivering in exchange therefore 100,000 shares of Series A
$10.00 Convertible Redeemable Preferred Stock (the "Preferred Shares"), a
note payable in the amount of $250,000 (the "Note") and 250,000 warrants
(the "Warrants"), substantially in the form attached hereto as Exhibit W,
each exercisable to purchase one share of common stock of Oxford $0.001 par
value (the "Common Stock"), for a period of three years at $1.00 per share.
The Note shall be substantially in the form attached hereto as Exhibit X,
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shall bear interest at 6% per annum and shall, subject to the provisions
set forth below regarding the issuance of the Notes in escrow, be payable
over fifty-eight (58) months in monthly installments of $5,000, including
interest. Each of the Preferred Shares shall be convertible at the option
of the holder, into one fully paid and non-assessable share of Common Stock
and one warrant (the "Conversion Warrants"). In order to convert shares of
Series A Preferred Stock, the holder shall submit to Oxford a notice of
conversion accompanied by payment of the then applicable conversion price.
With respect to the first twenty-five thousand (25,000) Preferred Shares
converted the conversion price shall be $1.00 per share; with respect to
the second twenty-five thousand (25,000) Preferred Shares converted, the
conversion price shall be $1.50 per share; with respect to all remaining
Preferred Shares converted, the conversion price shall be equal to eight
percent (80%) of the average closing bid price of the Common Stock as
calculated over the twenty trading-day period ending on the trading day
immediately preceding the date on which Oxford receives (by telecopier)
each conversion notice. The form of Conversion Warrant is attached hereto
as Exhibit BB. The Conversion Warrants shall be exercisable for a period of
one year from the date of issuance and shall be convertible to acquire one
share of Common Stock per Conversion Warrant at a price equal to the
closing bid price of Oxford's common stock on the date of issuance of each
Conversion Warrant.
If Oxford should sell the business of Crest to a third party, the holder of
the Preferred Shares shall have the option to convert the Preferred Shares,
as set forth above, or to have Oxford redeem the unconverted Preferred
Shares at $10.00 per share. On the third anniversary of the issuance of the
Preferred Shares, all Preferred Shares remaining outstanding and
unconverted shall, at Oxford's option, be redeemed at $10.00 per share or
converted into Common Stock at the rate of twenty shares of Common Stock
for each Preferred Share. The Preferred Shares shall be entitled to ten
votes per share with respect to all matters submitted to a vote of the
shareholders of Oxford.
At Closing, the Preferred Shares, the Note, and the Warrants shall be
deposited with Hank Vanderkam, Esq. and Robert Forrester, Esq. to be held
in escrow, pursuant to the Escrow Agreement attached hereto as Exhibit Y.
As further assurance of the satisfactory resolution of the Disputes, the
Shareholder shall deliver to Oxford at closing an Indemnification Agreement
substantially in the form attached hereto as Exhibit Z pursuant to which
the Shareholder shall hold harmless and indemnify Oxford against certain
losses, damages, claims, expenses or injuries.
3. Representations and Warranties of Oxford. Oxford represents and warrants
that as of the date hereof, there are no more than 17,187,238 issued and
outstanding shares of Common Stock or shares of Common Stock that may be issued
upon the exercise of options or warrants or securities that are convertible in
to Common Stock, including the Warrants, the Preferred Stock and the Conversion
Warrants associated with this transaction. Excluding the Warrants, the Preferred
Stock, the Conversion Warrants, to the extent that there are a greater number of
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shares of Common Stock issued and outstanding, the number of Preferred Shares,
Conversion Warrants, and Warrants shall increase proportionately, including the
number of shares of Common Stock that may be purchased pursuant to the
conversion of the first 25% of Preferred Stock, the second 25% of Preferred
Stock and the remaining 50% of Preferred Stock.
4. Ratification of Remaining Terms. Except as amended hereby, all other
terms of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the corporate parties hereto have caused this amendment
to be executed by their respective officers, hereunto duly authorized, as of the
date first-above written.
ATTEST OXFORD CAPITAL CORP.
- ------------------------- By:
Secretary ---------------------------------
Robert E. Cheney, President
ATTEST CREST OUTSOURCING, INC.
- ------------------------- By:
Secretary ---------------------------------
Harry K. Myers, Jr.,
Authorized Representative
ATTEST AMERICAN TELETRONICS, INC.
- ------------------------- By:
Assistant Secretary ---------------------------------
Harry K. Myers, Jr., Chairman
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CERTIFICATE OF DESIGNATIONS, VOTING POWERS,
PREFERENCES AND RIGHTS
OF
THE SERIES OF PREFERRED STOCK
OF
OXFORD CAPITAL CORP.
TO BE DESIGNATED
SERIES A CONVERTIBLE REDEEMABLE PREFERRED STOCK
Oxford Capital Corp., a Nevada Corporation (the "Corporation"), by way of
this Certificate of Designation, Preferences and Rights (as it may hereafter be
amended, modified or supplemented upon vote of the Board of Directors of the
Corporation and approval of all holders of Series A Preferred Stock, as such
term is hereinafter defined, (the "Certificate") certifies that, pursuant to the
authority expressly vested in the Board of Directors by the Corporation's
Articles of Incorporation, and in accordance with the provisions of Section
78.195 of the Nevada Revised Statutes, the Board of Directors of the Corporation
has duly adopted the following resolutions creating a series of its Preferred
Stock designated as Series A Convertible Redeemable Preferred Stock:
RESOLVED, that pursuant to the authority expressly granted to and vested in
the Board of Directors of the Corporation by the provisions of the Articles
of Incorporation of the Corporation, as amended, this Board of Directors
hereby creates a series of Preferred Stock, $.001 par value, and this Board
of Directors hereby fixes the designation and the voting power, preferences
and rights, and the qualifications, limitations or restrictions thereof, of
the shares of such series (in addition to the powers, preferences and
rights, and the qualifications, limitations or restrictions thereon, set
forth in the Articles of Incorporation, as amended, which are applicable to
all series of Preferred Stock of the Corporation) as follows:
One Hundred Thousand (100,000) shares of Preferred Stock, par value $.001
per share, of the Corporation are hereby constituted as a series of
Preferred Stock designated as Series A Preferred Convertible Redeemable
Stock ("Series A Preferred Stock") with the voting powers and the
preferences and rights hereinafter set forth:
1. Voting Rights. The holders of the Series A Preferred Stock shall vote as if
each share of Series A Preferred Stock were ten shares of Common Stock of
the Corporation and shall vote in parity with said Common Stock. Without
the approval of holders of a majority of the outstanding shares of Series A
Preferred Stock, the Corporation shall not (a) authorize, create or issue
any shares of any class or series ranking senior to the Series A Preferred
Stock as to liquidation rights, (b) amend, alter or repeal, by any means,
<PAGE>
the Certificate of Incorporation if the powers, preferences, or special
rights of the Series A Preferred Stock would be adversely affected, or (c)
become subject to any restriction on the Series A Preferred Stock, other
than restrictions arising solely under the Nevada Revised Statutes or
existing under the Certificate of Incorporation as in effect on the date of
this Certificate of Designation.
2. Liquidation or Dissolution. Subject to the prior rights of the
Corporation's creditors and holders of securities senior to the Series A
Preferred Stock in respect of distributions upon liquidation, dissolution,
or winding-up of the Corporation, in the event of the voluntary or
involuntary liquidation, dissolution, or winding-up of the Corporation, the
holders of Series A Preferred Stock shall be entitled to receive $10.00 per
share (the "Liquidation Preference"), together with accrued and unpaid
dividends payable thereon to the date fixed for payment of such
distribution, if any, all of which shall be paid in cash, before any
distribution is made to holders of any Junior Stock. If, upon any such
liquidation, dissolution, or winding-up of the Corporation, the assets
distributable among the holders of Series A Preferred Stock (and any series
of preferred stock ranking in parity with the Series A Preferred Stock in
respect of distributions upon liquidation, dissolution, or winding-up)
shall be insufficient to permit the payment in full to such holders of the
preferential amount payable to such holders determined as aforesaid, then
the holders of Series A Preferred Stock will share ratably in any
distribution of the Corporation's assets in proportion to the respective
preferential amounts that would have been payable if such assets were
sufficient to permit payment in full of all such amounts. After payment of
the full amount of the Liquidation Preference to which they are entitled,
the holders of Series A Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Corporation.
3. Conversion Rights.
(a) Conversion. Each share of the Series A Preferred Stock shall be
convertible at the option of the holder thereof into one fully paid
and non-assessable share of Common Stock of the Corporation (the
"Conversion Shares") and one warrant of the Corporation (the
"Conversion Warrants"). In order to convert shares of the Series A
Preferred Stock, the holder shall submit to the Corporation a
Conversion Notice (as defined below) accompanied by payment of the
then applicable Conversion Price (as defined below). The Conversion
Price ("Conversion Price") shall be as follows: with respect to the
first twenty five thousand shares of Series A Preferred Stock
converted, the Conversion Price shall be $1.00 per share; with respect
to the second twenty five thousand shares of Series A Preferred Stock
converted, the Conversion Price shall be $1.50 per share; with all
respect all remaining shares of Series A Preferred Stock, the
Conversion Price shall be equal to eighty percent (80%) of the average
closing bid price of the Common Stock as calculated over the twenty
trading-day period ending on the trading day immediately preceding the
date on which the Company receives (by telecopier) each Conversion
Notice (as defined herein) (the "Conversion Date Average"). Each
Conversion Warrant shall be exercisable for a period of one year from
the date of issuance to purchase one share of Common Stock at a price
equal to the closing price of the Corporation's Common Stock on the
date of submission of the Conversion Notice pursuant to which such
Conversion Warrant was issued.
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An individual share of Series A Preferred Stock may only be permitted
to convert in its entirety. Partial conversion of an individual share
of Series A Preferred Stock is not permitted.
(b) Mechanics of Conversion. The holder of any shares of Series A
Preferred Stock may exercise the conversion right as to any part
thereof by delivering via facsimile to the Corporation, at the office
of the Corporation at 4245 N. Central Expressway, Suite 300, Dallas,
Texas 75205, a conversion notice (the "Conversion Notice"). The
Conversion Notice shall state (i) that the holder elects to convert
its shares, (ii) the number of shares of Series A Preferred Stock
which such holder is converting, and (iii) subject to applicable
securities laws, the name(s) in which the certificate(s) representing
the Conversion Shares to which such holder is entitled are to be
issued. Notice given by telecopier to telecopier number 1-
214-521-8409 shall be deemed notice for purposes of this paragraph and
shall be deemed given at the time of the holder's transmittal. The
Conversion Notice shall be deemed accepted by the Corporation provided
the holder surrenders, or causes any agent for the holder to
surrender, the certificate(s) for the Series A Preferred Stock to be
converted, duly endorsed or assigned in blank, to the Corporation, and
accompanied by a certified check, wire transfer or other good funds in
full payment of the Conversion Price at the location set forth above,
within three (3) business days after delivery of the Conversion
Notice. Provided that the certificate(s) and Conversion Price are
delivered in accordance with the preceding sentence, the conversion
shall be deemed to have been effected on the date of delivery of the
Conversion Notice by telecopier, and such date is referred to herein
as the "Conversion Date." Within three (3) business days of receipt by
the Corporation of the certificate(s) representing the Series A
Preferred Stock accompanied by payment of the Conversion Price, the
Corporation shall deliver instructions to its transfer agent to issue
to such holder a certificate or certificates representing the number
of Conversion Shares and Conversion Warrants which such holder is
entitled to receive. Unless (i) such Conversion Shares and Conversion
Warrants have been held long enough to satisfy the holding period set
forth in Rule 144(k) (or any successor provision) promulgated under
the Securities Act, (ii) such shares and Conversion Warrants become
freely tradeable pursuant to another exemption under the Securities
Act, or (iii) the converting holder purchased such shares pursuant to
a current prospectus under an effective registration statement
covering the purchase and sale of such shares, the certificate(s)
representing the Conversion Shares and Conversion Warrants will bear
the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF EITHER AN EFFECTIVE
REGISTRATION STATEMENT FOR THESE SHARES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT.
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The person in whose name the certificate(s) for the Conversion Shares
and Conversion Warrants are to be issued shall be deemed to have
become a stockholder of record on the applicable Conversion Date
unless the transfer books of the Corporation are closed on that date,
in which event he or she shall be deemed to have become a stockholder
of record on the next succeeding date on which the transfer books are
open. Upon conversion of only a portion of the number of whole shares
covered by a certificate representing shares of Series A Preferred
Stock surrendered for conversion, the Corporation shall issue and
deliver to or upon the written order of the holder of the certificate
so surrendered for conversion, at the expense of the Corporation, a
new certificate covering the number of shares of Series A Preferred
Stock representing the unconverted portion of the certificate so
surrendered, which new certificate shall entitle in all respects the
holder thereof to the rights of Series A Preferred Stock represented
thereby to the same extent as if the certificate theretofore covering
such unconverted shares had not been surrendered for conversion.
(c) Fractional Shares. No fractional or scrip representing fractions of
shares will be issued on conversion, but the number of shares issuable
shall be rounded up to the nearest whole number of shares.
(d) No Impairment. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization (pursuant
to any petition under the Bankruptcy Code or otherwise), transfer of
assets, consolidation, merger or dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, but will at all times in good
faith assist in the carrying out of all the provisions of this Section
3 and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion rights of the holders
of the Series A Preferred Stock against impairment.
(e) Taxes Upon Conversion. The Corporation shall pay all documentary,
stamp or other transaction taxes attributable to the issuance or
delivery of shares of Common Stock upon conversion of any shares of
Series A Preferred Stock.
(f) Reservation of Common Stock. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares
of Common Stock solely for the purpose of effecting the conversion of
shares of Series A Preferred Stock, the full number of whole shares of
Common Stock then deliverable upon the conversion of all shares of
Series A Preferred Stock at the time outstanding subject to any
adjustment provided herein.
4. Dividends. Each holder of shares of Series A Preferred Stock shall be
entitled to receive, in preference to the holders of Common Stock or any
other Junior Stock, a cumulative annual dividend payment as follows: $0.20
for each share of Series A Preferred Stock held up to and including the
first anniversary of the issuance of such shares; $0.40 for each share of
Series A Preferred Stock held after the first anniversary and up to and
including the second anniversary of the issuance of such shares; and $0.60
for each share of Series A Preferred Stock held after the second
anniversary and up to and including the third anniversary of the issuance
of such shares. No dividends shall accrue or be payable on the Series A
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Preferred Stock after the third anniversary of the issuance of such shares.
Dividends are payable in cash on each anniversary of the issuance of the
shares and on the earlier of conversion or redemption of the shares.
Dividends on the shares of Series A Preferred Stock shall accumulate from
the date such shares are originally issued through the applicable
anniversary date or the date of conversion or redemption, if earlier, on
the basis of a calendar year consisting of twelve (12) months each
consisting of thirty (30) days. Dividends shall only be payable out of the
assets of the corporation legally available for the payment thereof.
5. Redemption.
(a) Optional Redemption. At the option of the Corporation, the Series A
Preferred Stock shall be subject to redemption, in whole or in part,
at a price equal to $10.00 per share plus any accrued and unpaid
dividends, at any time after one year from the issuance of such
shares.
(b) Mandatory Redemption or Conversion. On the third anniversary of the
date of original issuance, the Corporation shall either (i) redeem all
shares of Series A Preferred Stock remaining outstanding and
unconverted by paying to the holders of such outstanding Series A
Preferred Stock in cash the sum of $10.00 per share together with all
accrued and unpaid dividends, or (ii) convert each share of the Series
A Preferred Stock into twenty shares of Common Stock.
(c) Mechanics of Redemption. Notice of Redemption by the Corporation (the
"Redemption Notice") shall be sent to the holder at such holder's
address and telecopier number as the same shall appear on the books of
the Corporation. The Corporation shall redeem the shares of Series A
Preferred Stock called for redemption pursuant to paragraph 5(a) on
the seventh (7th) calendar day following the date on which the
Corporation provides a Redemption Notice (the "Redemption Date"). The
Redemption Notice shall state that (a) the shares of Preferred Stock
will be redeemed at the close of business on the Redemption Date, (b)
the redemption price, (c) the place at which certificates for shares
of Series A Preferred Stock called for redemption must be surrendered
to collect the redemption price, (d) dividends on shares of Series B
Preferred Stock called for redemption cease to accrue at the close of
the last day prior to the Redemption Date and (e) the Section of this
Certificate of Designations, Voting Powers, Preferences and Rights
pursuant to which they are to be redeemed. From and after the
Redemption Date, unless the Corporation shall default in the payment
of redemption price pursuant to the Redemption Notice, all dividends
on the Series A Preferred Stock designated to be redeemed by the
Corporation shall cease to accrue and all rights of the holders
thereof as stockholders of such shares, except the right to receive
the redemption price (but without interest thereon), shall cease and
terminate. Any and all shares of Series A Preferred Stock redeemed,
purchased or otherwise acquired by the Corporation thereafter shall be
canceled and returned to the status of authorized and unissued
Preferred Stock.
(d) Transfer Books. To facilitate the redemption of any shares of Series A
Preferred Stock, the Board of Directors is authorized to cause the
transfer books for such Series A Preferred Stock to be closed as to
the shares to be redeemed, unless the rules of any national securities
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exchange or automated quotation system on which the Series A Preferred
Stock may be listed or quoted prohibit the closing of such transfer
books.
6. No Preemptive Rights. No holder of Series A Preferred Stock shall have any
preemptive or preferential right of subscription to any shares of stock of
the Corporation, or to options, warrants or other interests therein or
therefor, or to any obligations convertible into stock of the Corporation,
issued or sold, or any right of subscription to any thereof other than
such, if any, as the Board of Directors, in its discretion, from time to
time may determine and at such price or prices as the Board of Directors
from time to time may fix pursuant to the authority conferred by the
Corporation's Certificate of Incorporation.
7. Definitions.
(a) "Common Stock" shall mean the shares of common stock of the
Corporation, par value $.001 per share, and any stock into which such
Common Stock may hereinafter be changed.
(b) "Conversion Date" shall have the meaning such term is given in Section
3(a) hereof.
(c) "Conversion Notice" shall have the meaning such term is given in
Section 3(b) hereof.
(d) "Conversion Price" shall have the meaning such term is given in
Section 3(a) hereof.
(e) "Conversion Shares" shall have the meaning such term is given in
Section 3(a) hereof.
(f) "Conversion Warrants" shall have the meaning such term is given in
Section 3(a) thereof.
(g) "Junior Stock" shall mean the Common Stock or any other class or
series of capital stock of the Corporation which at the time of
issuance is not declared to be senior to or on a parity with the
Series A Preferred Stock as to dividends or rights upon liquidation.
(h) "Liquidation Preference" shall have the meaning such term is given in
Section 2 hereof.
(i) "Person" shall mean any individual, corporation, association, company,
business trust, partnership, joint venture, joint-stock company,
trust, unincorporated organization or association or government or any
agency or political subdivision thereof.
(j) "Redemption Date" shall have the meaning such term is given in Section
5(d) hereof.
(k) "Redemption Notice" shall have the meaning such term is given in
Section 5(d) hereof.
(l) "Securities Act" shall mean the Securities Act of 1933, as amended.
(m) "Trading Day" shall mean any day on which trading takes place (a) in
the over-the-counter- market and prices reflecting such trading are
published by the National Association of
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Securities Dealers Automated Quotation System or (b) if the Common
Stock is then listed or admitted to trading on a national securities
exchange, on the principal national securities exchange on which the
Common Stock is then listed or admitted to trading.
IN WITNESS WHEREOF, Oxford Capital Corp. has caused this Certificate to be
duly executed and attested as of this 15th day of October, 1997.
By:
-------------------------------------
Name: Robert E. Cheney
Title: President
ATTEST:
By:
--------------------------
Title: Secretary
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No. COI-1
OXFORD CAPITAL CORP.
Common Stock Purchase Warrant
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), NOR UNDER ANY STATE SECURITIES LAW AND SHALL NOT BE TRANSFERRED, SOLD,
ASSIGNED OR HYPOTHECATED IN VIOLATION THEREOF UNTIL EITHER (i) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAW OR (ii) THE COMPANY RECEIVES AN OPINION OF
COUNSEL TO THE COMPANY OR OTHER COUNSEL TO THE HOLDER OF SUCH SECURITIES WHICH
OPINION IS SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH SECURITIES MAY
BE TRANSFERRED, SOLD, ASSIGNED OR HYPOTHECATED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.
OXFORD CAPITAL CORP., a Nevada corporation (the "Company"), hereby
certifies that, for value received, AMERICAN TELETRONIC, INC. or his permitted
registered successors and assigns (the "Holder"), is entitled, subject to the
terms and conditions set forth below, to purchase from the Company 250,000 fully
paid and nonassessable shares of Common Stock, $.001 par value per share (the
"Common Stock"), of the Company at the purchase price per share set forth below
during the exercise period described below.
1. Exercise of Warrant.
1.1 The exercise price (the "Exercise Price") of this Warrant shall be
$1.00 per share.
1.2 The rights represented by this Warrant shall be exercisable for a
period commencing on the date hereof and expiring three years from
said date (the "Exercise Period").
1.3 The rights represented by this Warrant may be exercised at any time
within the Exercise Period, in whole or in part, by (i) the surrender
of this Warrant (with the purchase form at the end hereof properly
executed) at the principal offices of the Company (or such other
office or agency of the Company as it may designate by notice in
writing to the Holder at the address of the Holder appearing on the
books of the Company); and (ii) payment to the Company, in cash,
certified check or other means satisfactory to the Company, of the
Exercise Price then in effect for the number of shares of Common Stock
specified in the above-mentioned purchase form together with
applicable stock transfer taxes, if any. If this Warrant shall be
exercised in part, the Company shall, upon surrender of this Warrant,
execute and deliver a new Warrant evidencing the rights of the holder
to purchase the balance of the shares underlying this Warrant.
<PAGE>
1.4 Upon proper tender of the Exercise Price and purchase form in
accordance with paragraph 1.3 above, the Company shall issue, or cause
to be issued, to the Holder one or more certificates evidencing
ownership of the number of shares of Common Stock with respect to
which this Warrant has been properly exercised. In any event, assuming
proper exercise, the Company shall deliver such certificate(s) within
certificate(s) within thirty (30) days following receipt of the items
required by paragraph 1.3 above.
2. Anti-Dilution Provisions. The Exercise Price in effect at any time and the
number and kind of securities purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the happening of
certain events as follows:
a. If the Company shall (i) declare a dividend or make a distribution on
its outstanding shares of Common Stock in shares of Common Stock, (ii)
subdivide or reclassify its shares, or (iii) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares,
the Exercise Price in effect at the time of the effective date or
record date, as the case may be, for such sale, dividend or
distribution or of the effective date of such subdivision, combination
or reclassification shall be adjusted so that it shall equal the price
determined by multiplying the Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock
outstanding after giving effect to such action, and the numerator of
which shall be the number of shares of Common Stock outstanding
immediately prior to such action. No adjustment shall be made for any
cash dividends.
b. Whenever the Exercise Price payable upon exercise of each Warrant is
adjusted pursuant to paragraph 2.a. above, the number of shares of
Common Stock purchasable upon exercise of this Warrant shall
simultaneously be adjusted by multiplying the number shares of Common
Stock initially issuable upon exercise of this Warrant by the Exercise
Price in effect on the date hereof and dividing the product so
obtained by the Exercise Price, as adjusted.
c. Notwithstanding any adjustment in the Exercise Price or the number or
kind of shares of Common Stock purchasable upon the exercise of this
Warrant, certificates for Warrants issued prior or subsequent to such
adjustment may continue to express the same price and number and kind
of shares of Common Stock as are initially expressed pursuant to this
Warrant.
d. Notwithstanding anything to the contrary in this Agreement, there
shall be no adjustment in the Exercise Price or the number or kind of
shares of Common Stock purchasable upon exercise of this Warrant
solely as a result of the Company's sale of shares of Common Stock,
including the issuance of shares of Common Stock or other change in
the capitalization of the Company as a result of the Company's
acquisition, directly or indirectly, of the assets or outstanding
capital stock of any other corporation or entity.
3. Fractional Shares. The Company shall not be required to issue any
fractional shares of Common Stock upon exercise of this Warrant. If any
fractional interest in a share of Common Stock shall be deliverable upon
the exercise of any Warrant, the Company shall purchase such fractional
interest for an amount of cash (computed to the nearest cent) equal to the
product of such fraction multiplied by the Exercise Price then in effect.
2
<PAGE>
4. Restrictions on Transfer.
(a) Neither this Warrant nor the shares of Common Stock issuable upon
exercise hereof have been registered under the Act nor under any state
securities law and shall not be transferred, sold, assigned or
hypothecated in violation thereof. As a result, any such transfer,
sale, assignment or hypothecation shall be permitted only after the
Company has reviewed an opinion of counsel satisfactory to the Company
and its counsel, stating that such action is permitted under this
paragraph 4 and that such action does not violate the Act or such
state securities laws.
(b) Holder has represented that it is acquiring this Warrant for its own
account and not with a view to the distribution thereof or of the
shares of Common Stock which may issued upon exercise of this Warrant.
(c) The certificates evidencing the shares of Common Stock which may be
issued upon exercise of this Warrant shall bear a legend substantially
in the form set forth at the beginning of this Warrant.
5. Covenants. The Company covenants and agrees that all shares of Common Stock
which may be issued upon exercise of this Warrant will, upon issuance, be
duly and validly issued, fully paid and nonassessable and no personal
liability will attach to the Holder thereof. The Company further covenants
and agrees that during the Exercise Period, the Company will at all times
have authorized and reserved a sufficient number of shares of its Common
Stock to provide for the exercise of this Warrant.
6. Notices. All notices and other communications hereunder shall be in writing
and deemed to have been duly given when hand-delivered, or mailed by
registered or certified mail, return receipt requested, as follows:
a. If to the Holder of this Warrant, to the address of such Holder as
shown on the books of the Company; or
b. If to the Company, to: Oxford Capital Corp., Attn: Robert Cheney, 4245
North Central Expressway, Suite 300, Dallas, Texas 75205.
7. Governing Law. This Warrant shall be construed in accordance with the laws
of the State of Texas.
IN WITNESS WHEREOF, the undersigned has caused this Warrant to be signed in
its corporate name by its duly authorized officer as of the 15th day of October,
1997.
OXFORD CAPITAL CORP.
By: /s/ Robert E. Cheney
-----------------------------------
Robert E. Cheney, President
3
<PAGE>
PURCHASE FORM
The undersigned, , the Holder of Common
------------------------------------
Stock Purchase Warrant No. of Oxford Capital Corp. evidencing
---------------
the right to purchase shares of Common Stock of the Company,
---------------------
hereby elects to exercise the rights under said Warrant as set forth below and
delivers said Warrant and the Exercise Price payable with respect to the
exercise of such rights:
Name of Holder:
----------------------------------
Address of Holder:
-------------------------------
Number of Shares:
--------------------------------
Exercise Price Delivered:
------------------------
If the Warrant is exercised with respect to less than all of the shares
issuable upon exercise of such Warrant, please issue a new Warrant evidencing
the right to acquire the remainder of such shares.
DATED: , 19 .
--------------------- -----
Signature:
------------------------------
4
No. COI-1
OXFORD CAPITAL CORP.
Common Stock Purchase Warrant
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), NOR UNDER ANY STATE SECURITIES LAW AND SHALL NOT BE TRANSFERRED, SOLD,
ASSIGNED OR HYPOTHECATED IN VIOLATION THEREOF UNTIL EITHER (i) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAW OR (ii) THE COMPANY RECEIVES AN OPINION OF
COUNSEL TO THE COMPANY OR OTHER COUNSEL TO THE HOLDER OF SUCH SECURITIES WHICH
OPINION IS SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH SECURITIES MAY
BE TRANSFERRED, SOLD, ASSIGNED OR HYPOTHECATED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.
OXFORD CAPITAL CORP., a Nevada corporation (the "Company"), hereby
certifies that, for value received, AMERICAN TELETRONIC, INC. or his permitted
registered successors and assigns (the "Holder"), is entitled, subject to the
terms and conditions set forth below, to purchase from the Company _______ fully
paid and nonassessable shares of Common Stock, $.001 par value per share (the
"Common Stock"), of the Company at the purchase price per share set forth below
during the exercise period described below.
1. Exercise of Warrant.
1.1 The exercise price (the "Exercise Price") of this Warrant shall be at
a price equal to the closing bid price of the Company's Common Stock
on the date of issuance of each Warrant.
1.2 The rights represented by this Warrant shall be exercisable for a
period commencing on the date hereof and expiring one year from said
date (the "Exercise Period").
1.3 The rights represented by this Warrant may be exercised at any time
within the Exercise Period, in whole or in part, by (i) the surrender
of this Warrant (with the purchase form at the end hereof properly
executed) at the principal offices of the Company (or such other
office or agency of the Company as it may designate by notice in
writing to the Holder at the address of the Holder appearing on the
books of the Company); and (ii) payment to the Company, in cash,
certified check or other means satisfactory to the Company, of the
Exercise Price then in effect for the number of shares of Common Stock
specified in the above-mentioned purchase form together with
applicable stock transfer taxes, if any. If this Warrant shall be
exercised in part, the Company shall, upon surrender of this Warrant,
execute and deliver a new Warrant evidencing the rights of the holder
to purchase the balance of the shares underlying this Warrant.
<PAGE>
1.4 Upon proper tender of the Exercise Price and purchase form in
accordance with paragraph 1.3 above, the Company shall issue, or cause
to be issued, to the Holder one or more certificates evidencing
ownership of the number of shares of Common Stock with respect to
which this Warrant has been properly exercised. In any event, assuming
proper exercise, the Company shall deliver such certificate(s) within
thirty (30) days following receipt of the items required by paragraph
1.3 above.
2. Anti-Dilution Provisions. The Exercise Price in effect at any time and the
number and kind of securities purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the happening of
certain events as follows:
a. If the Company shall (i) declare a dividend or make a distribution on
its outstanding shares of Common Stock in shares of Common Stock, (ii)
subdivide or reclassify its shares, or (iii) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares,
the Exercise Price in effect at the time of the effective date or
record date, as the case may be, for such sale, dividend or
distribution or of the effective date of such subdivision, combination
or reclassification shall be adjusted so that it shall equal the price
determined by multiplying the Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock
outstanding after giving effect to such action, and the numerator of
which shall be the number of shares of Common Stock outstanding
immediately prior to such action. No adjustment shall be made for any
cash dividends.
b. Whenever the Exercise Price payable upon exercise of each Warrant is
adjusted pursuant to paragraph 2.a. above, the number of shares of
Common Stock purchasable upon exercise of this Warrant shall
simultaneously be adjusted by multiplying the number shares of Common
Stock initially issuable upon exercise of this Warrant by the Exercise
Price in effect on the date hereof and dividing the product so
obtained by the Exercise Price, as adjusted.
c. Notwithstanding any adjustment in the Exercise Price or the number or
kind of shares of Common Stock purchasable upon the exercise of this
Warrant, certificates for Warrants issued prior or subsequent to such
adjustment may continue to express the same price and number and kind
of shares of Common Stock as are initially expressed pursuant to this
Warrant.
d. Notwithstanding anything to the contrary in this Agreement, there
shall be no adjustment in the Exercise Price or the number or kind of
shares of Common Stock purchasable upon exercise of this Warrant
solely as a result of the Company's sale of shares of Common Stock,
including the issuance of shares of Common Stock or other change in
the capitalization of the Company as a result of the Company's
acquisition, directly or indirectly, of the assets or outstanding
capital stock of any other corporation or entity.
3. Fractional Shares. The Company shall not be required to issue any
fractional shares of Common Stock upon exercise of this Warrant. If any
fractional interest in a share of Common Stock shall be deliverable upon
the exercise of any Warrant, the Company shall purchase such fractional
interest for an amount of cash (computed to the nearest cent) equal to the
product of such fraction multiplied by the Exercise Price then in effect.
2
<PAGE>
4. Restrictions on Transfer. (a) Neither this Warrant nor the shares of Common
Stock issuable upon exercise hereof have been registered under the Act nor
under any state securities law and shall not be transferred, sold, assigned
or hypothecated in violation thereof. As a result, any such transfer, sale,
assignment or hypothecation shall be permitted only after the Company has
reviewed an opinion of counsel satisfactory to the Company and its counsel,
stating that such action is permitted under this paragraph 4 and that such
action does not violate the Act or such state securities laws.
(b) Holder has represented that it is acquiring this Warrant for its own
account and not with a view to the distribution thereof or of the
shares of Common Stock which may issued upon exercise of this Warrant.
(c) The certificates evidencing the shares of Common Stock which may be
issued upon exercise of this Warrant shall bear a legend substantially
in the form set forth at the beginning of this Warrant.
5. Covenants. The Company covenants and agrees that all shares of Common Stock
which may be issued upon exercise of this Warrant will, upon issuance, be
duly and validly issued, fully paid and nonassessable and no personal
liability will attach to the Holder thereof. The Company further covenants
and agrees that during the Exercise Period, the Company will at all times
have authorized and reserved a sufficient number of shares of its Common
Stock to provide for the exercise of this Warrant.
6. Notices. All notices and other communications hereunder shall be in writing
and deemed to have been duly given when hand-delivered, or mailed by
registered or certified mail, return receipt requested, as follows:
a. If to the Holder of this Warrant, to the address of such Holder as
shown on the books of the Company; or
b. If to the Company, to: Oxford Capital Corp., Attn: Robert Cheney, 4245
North Central Expressway, Suite 300, Dallas, Texas 75205.
7. Governing Law. This Warrant shall be construed in accordance with the laws
of the State of Texas.
IN WITNESS WHEREOF, the undersigned has caused this Warrant to be signed in
its corporate name by its duly authorized officer as of the day of , 1997.
OXFORD CAPITAL CORP.
By:
--------------------------------
Robert E. Cheney, President
3
<PAGE>
PURCHASE FORM
The undersigned, , the Holder of Common Stock
-----------------------------
Purchase Warrant No. of Oxford Capital Corp. evidencing the
-------------------
right to purchase shares of Common Stock of the Company,
---------------------
hereby elects to exercise the rights under said Warrant as set forth below and
delivers said Warrant and the Exercise Price payable with respect to the
exercise of such rights:
Name of Holder:
------------------------------
Address of Holder:
---------------------------
Number of Shares:
----------------------------
Exercise Price Delivered:
--------------------
If the Warrant is exercised with respect to less than all of the shares
issuable upon exercise of such Warrant, please issue a new Warrant evidencing
the right to acquire the remainder of such shares.
DATED: , 19 .
---------------- -----
Signature:
--------------------------------
4
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO
REGISTRATION UNDER THE ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT AND APPLICABLE STATE SECURITIES LAWS.
October 15, 1997 $250,000
OXFORD CAPITAL CORP.
6% PROMISSORY NOTE
THIS NOTE is delivered by Oxford Capital Corp., a corporation duly
organized and existing under the laws of the State of Nevada (the "Company"), as
partial payment of the purchase price set forth in that certain Exchange
Agreement, as amended by a First Amendment to Exchange Agreement (collectively,
the "Agreement") by and between the Company and the Shareholder of Crest
Outsourcing, Inc. ("Crest") pursuant to which the Company agreed to purchase,
and the Shareholder agreed to sell, all of the outstanding securities of Crest
in exchange for certain shares of preferred stock, warrants and this Note.
Capitalized terms used and not otherwise defined herein shall have the meaning
set forth in the Agreement, the Indemnification Agreement and in an Escrow
Agreement (the "Escrow Agreement") between the Shareholder, the Company, Robert
Forrester and Hank Vanderkam.
FOR VALUE RECEIVED, the Company promises to pay to AMERICAN TELETRONICS,
INC., the registered holder hereof and its successors and assigns (the
"Holder"), the principal sum (subject to offset as provided for below) of Two
Hundred Fifty Thousand United States Dollars ($250,000) and to pay interest on
the principal sum outstanding at the rate of 6% per annum. Accrual of interest
shall commence on the first business day to occur after the date hereof and
shall continue until payment in full of the principal sum has been made or duly
provided for. The interest so payable will be paid to the person in whose name
this Note (or one or more predecessor Notes) is registered on the records of the
Company regarding registration and transfers of the Notes (the "Note Register");
provided, however, that the Company's obligation to a transferee of this Note
arises only if such transfer, sale or other disposition is made in accordance
with the terms and conditions of the Agreement. The principal of, and interest
on, this Note are payable in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts, at the address last appearing on the Note Register of the Company
as designated in writing by the Holder hereof from time to time. The Company
will pay the principal of and all accrued and unpaid interest due upon this Note
on the Payment Dates, less any amounts required by law to be deducted or
withheld. The forwarding of checks to the holders at the address appearing on
the Note Register shall constitute a payment of principal and interest hereunder
and shall satisfy and discharge the liability for principal and interest on this
Note to the extent of the sum represented by such check plus any amounts so
deducted.
This Note is subject to the following additional provisions:
1. Payment Dates and Amounts. (a) The principal balance of this Note shall
be payable in monthly installments of $5,000. The first installment of principal
hereunder shall be due thirty (30) days after the date hereof. Thereafter,
principal installments shall be due and payable on the same day of each
succeeding month until the principal balance of the Note is paid in full.
<PAGE>
(b) Interest shall accrue on this Note from the date first set out herein.
(c) All payments hereon made pursuant to this paragraph shall be applied
first to accrued interest and then to principal.
2. Tax Withholding. The Company shall be entitled to withhold from all
payments of principal of, and interest on, this Note any amounts required to be
withheld under the applicable provisions of the United States income tax or
other applicable laws at the time of such payments.
3. Transferability. This Note has been issued subject to investment
representations of the original holder hereof and may be transferred or
exchanged only in compliance with the Securities Act of 1933, as amended (the
"Act"), and applicable state securities laws. Prior to due presentment for
transfer of this Note, the Company and any agent of the Company may treat the
person in whose name this Note is duly registered on the Company's Note Register
as the owner hereof for the purpose of receiving payment as herein provided and
all other purposes, whether or not this Note be overdue, and neither the Company
nor any such agent shall be affected by notice to the contrary.
4. Redemption. The Company shall have the right, on the giving of fifteen
(15) days prior written notice, to redeem this Note in whole by paying the full
principal balance then owing along with all accrued and unpaid interest in good
funds on the date set for redemption.
5. Miscellaneous.
(a) No provision of this Note shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, and
interest on, this Note at the time, place and rate, and in the coin or currency,
herein prescribed. This Note ranks equally and ratably with all other Notes now
or hereafter issued under the terms set forth herein.
(b) The Company hereby expressly waives demand and presentment for payment,
notice of nonpayment, protest, notice of protest, notice of dishonor, notice of
acceleration or intent to accelerate, bringing of suit and diligence in taking
any action to collect amounts called for hereunder and shall be directly and
primarily liable for the payment of all sums owing and to be owing hereon,
regardless of and without any notice, diligence, act or omission as or with
respect to the collection of any amount called for hereunder.
(c) The Company agrees to pay all costs and expenses, including reasonable
attorney's fees, which may be incurred by Holder in collecting any amount due
under this Note.
(d) The following shall constitute "Events of Default" under this Note:
(i) Any default in the payment of principal or interest on this Note;
(ii) If any of the representations or warranties made by the Company
herein, in the Agreement between the Company and the Holder, or
in any certificate or financial or other statements heretofore or
hereafter furnished by or on behalf of the Company in connection
with the execution and delivery of this Note or the Agreement
shall be false or misleading in any material respect at the time
made;
2
<PAGE>
(iii)If the Company shall fail to perform or observe any other
covenant, term, provision, condition, agreement or obligation of
the Company under this Note and such failure shall continue
uncured for a period of seven (7) days after notice from the
Holder of such failure;
(iv) If the Company shall (i) become insolvent, (ii) admit in writing
its inability to pay its debts as they mature, (iii) make an
assignment for the benefit of creditors or commence proceedings
for its dissolution, or (iv) apply for or consent to the
appointment of a trustee, liquidator or receiver for it or for a
substantial part of its property or business;
(v) If a trustee, liquidator or receiver shall be appointed for the
Company or for a substantial part of its property or business
without its consent and shall not be discharged within thirty
(30) days after such appointment;
(vi) If any governmental agency or any court of competent jurisdiction
at the instance of any governmental agency shall assume custody
or control of the whole or any substantial portion of the
properties or assets of the Company and shall not be dismissed
within thirty (30) days thereafter;
(vii)If any money judgment, writ or warrant of attachment, or similar
process, except mechanics and materialmen's liens incurred in the
ordinary course of business, in excess of $500,000 in the
aggregate shall be entered or filed against the Company or any of
its properties or other assets and shall remain unvacated,
unbonded or unstayed for a period of fifteen (15) days or in any
event later than five (5) days prior to the date of any proposed
sale thereunder; or
(viii) If bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any bankruptcy
law or any law for the relief of debtors shall be instituted by
or against the Company and, if instituted against the Company,
shall not be dismissed, stayed or bonded within ninety (90) days
after such institution or the Company shall by any action or
answer approve of, consent to, or acquiesce in any such
proceedings or admit the material allegations of, or default in
answering a petition filed in any such proceeding.
Upon the occurrence of an Event of Default, then, or at any time
thereafter, and in each and every such case, unless such Event of Default shall
have been waived in writing by the Holder (which waiver shall not be deemed to
be a waiver of any subsequent default) at the option of the Holder and in the
Holder's sole discretion, the Holder may consider this Note immediately due and
3
<PAGE>
payable, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, anything herein or in any note or other
instruments contained to the contrary notwithstanding, and the Holder may
immediately, and without expiration of any period of grace, enforce any and all
of the Holder's rights and remedies provided herein or any other rights or
remedies afforded by law.
(e) For so long as any amount payable under this Note remains unpaid, the
Company shall furnish to the Holder the following information:
(i) No later than ninety (90) days following the end of each fiscal
year, beginning with the fiscal year ending June 30, 1997,
consolidated balance sheets, statements of income and statements
of cash flow and shareholders' equity of the Company and its
subsidiaries, if any, prepared in accordance with generally
accepted accounting principles ("GAAP"), and audited by a firm of
independent public accountants (i.e., Form 10-K or Form 10-KSB).
(ii) Within forty-five (45) days after the end of each quarter (except
the fourth quarter) of each fiscal year, consolidated balance
sheets, statements of income and statements of cash flow of the
Company and its subsidiaries, if any (i.e., Form 10-Q or Form
10-QSB).
(f) The Company covenants and agrees that until all amounts due under this
Note have been paid in full, unless the Holder waives compliance in writing, the
Company shall:
(i) Give prompt written notice to the Holder of any Event of Default
as defined in this Note or of any other matter which has resulted
in, or could reasonably be expected to result in, a materially
adverse change in its financial condition or operations.
(ii) Give prompt written notice to the Holder of any claim, action or
proceeding which, in the event of any unfavorable outcome, would
or could reasonably be expected to have a material adverse effect
on the financial condition of the Company.
(iii)Upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Note
and (A) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it, or (B) in the case of mutilation,
upon surrender and cancellation of this Note, the Company, at its
expense, will execute and deliver a new Note, dated the date of
the lost, stolen, destroyed or mutilated Note.
(g) The Holder of this Note agrees to bear the cost of any U.S. withholding
tax on interest payable under this Note.
(h) No recourse shall be had for the payment of the principal of, or the
interest on, this Note, or for any claim based hereon, or otherwise in respect
4
<PAGE>
hereof, against any incorporator, shareholder, officer or director, as such,
past, present or future, of the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
(i) The Holder of this Note, by acceptance hereof, agrees that this Note is
being acquired for investment and that Holder will not offer, sell or otherwise
dispose of this Note except under circumstances which will not result in a
violation of the Act or any applicable state Blue Sky law or similar laws
relating to the sale of securities.
(j) In case any provision of this Note is held by a court of competent
jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is
enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Note will not in any way be affected or
impaired thereby.
(k) This Note, the Agreement, the Indemnification Agreement and the Escrow
Agreement constitute the full and entire understanding and agreement between the
Company and the Holder with respect to the subject hereof. Neither this Note nor
any term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the Company and the Holder.
(l) This Note shall be governed by the construed in accordance with the
laws of the State of Nevada.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
OXFORD CAPITAL CORP.
Dated: October 15, 1997 By: /s/ Robert Cheney
----------------------------------
Name: Robert Cheney
Title: President
5
ESCROW AGREEMENT
ESCROW AGREEMENT dated October 15th, 1997, among AMERICAN TELETRONICS,
INC., a Colorado corporation ("ATI"), and OXFORD CAPITAL CORP., a Nevada
corporation ("Oxford"), and HANK VANDERKAM and ROBERT FORRESTER ("Escrow
Agents").
Pursuant to an agreement between Oxford and ATI (the "Purchase Agreement"),
among others, and amended concurrently herewith, Oxford has acquired from ATI
all of the outstanding stock of CREST OUTSOURCING, INC., a Nevada corporation
("Crest") in exchange solely for an aggregate of 100,000 Series A Convertible
Preferred Shares (the "Preferred Shares"), a note in the principal amount of
$250,000 (the "Note"), and a Warrant to purchase 250,000 shares of Oxford's
Common Stock, par value $0.001 (the "Warrant"). This Escrow Agreement is being
entered into pursuant to Section 4.01 of the Purchasing Agreement, as amended
concurrently herewith, for the purpose of securing to Oxford the obligations of
ATI under Section 4.01 of the Purchase Agreement and for the other purposes set
forth herein.
In consideration of the execution of the Purchase Agreement, as amended,
the parties hereto agree as follows:
I. Collateral
1.01 Simultaneously with the execution and delivery of the Escrow
Agreement, ATI is delivering to the Escrow Agents a stock certificate or
certificates registered in the name of the Escrow Agents representing ATI's
beneficial interest in an aggregate of 100,000 Preferred Shares, the Note and
the Warrant (the "Securities"). The Escrow Agents hereby acknowledge receipt of
the Securities.
1.02 As used herein, the term "Collateral" means (a) the Securities being
delivered to the Escrow Agents as described in Section 1.01 hereof and (b) all
distributions received by the Escrow Agent pursuant to Section 1.03 hereof.
1.03 ATI hereby authorizes delivery directly to the Escrow Agents (and
agree that it will deliver to the Escrow Agents if they shall first receive the
same) to be held as Collateral hereunder, all dividends and other distributions
on or with respect the Securities held as Collateral, including, without
limitation, any Common Stock and warrants into which the Preferred Stock may be
converted.
1.04 While any Collateral is held in escrow hereunder, ATI will have the
rights with respect thereto, except (a) the right of possession and (b) the
right to receive any dividends or other distributions referred to in Section
1.03 hereof. Without limiting the generality of the foregoing, the Escrow Agents
will vote the Shares held by it as Collateral hereunder in accordance with
written instruction received by the Escrow Agents from Oxford, so long as Robert
Cheney is Chief Executive Officer of Oxford, and, if Robert Cheney is not Chief
Executive Officer of Oxford, in accordance with written instruction by the
Escrow Agents from ATI, otherwise. In default of such instructions Escrow Agents
may vote or omit to vote such Securities in their discretion. Proxy soliciting
material received by the Escrow Agent as the record holder of Securities held as
Collateral will be forwarded promptly to ATI.
<PAGE>
II. Delivery of Collateral by Escrow Agents
The Escrow Agents shall hold the Collateral in escrow until authorized
hereunder to deliver the same or any portion thereof, as follows:
2.01 Promptly after March 31, 1998, the Escrow Agents shall deliver to ATI,
free and clear of any interest of Oxford therein, all Collateral then held by
the Escrow Agents, other than Collateral then being held in respect of any Claim
or Claims (as defined in the Indemnity Agreement executed concurrently herewith,
(the "Indemnity Agreement") hereunder pursuant to Section 2.02 hereof or then
deliverable to Oxford pursuant to Section 2.03 hereof.
2.02 At any time within the period specified in Section 2.01 hereof, Oxford
may give notice to the Escrow Agents that, pursuant to the Indemnity Agreement,
Oxford is asserting against ATI a Claim. Such notice must be accompanied a
written statement by the one asserting the Claim that contains a written demand
for a specified amount. Such notice, together with the written assertion by a
third party, shall constitute the assertion of such Claim by Oxford against the
Collateral held in escrow hereunder. Upon receipt by the Escrow Agents of any
such notice of a Claim, the Escrow Agents shall hold in escrow hereunder a
portion of the Collateral that in Oxford's opinion will be sufficient to pay
such Claim (but in no event shall such amount of any Claim asserted by Oxford
exceed the amount asserted by the one making the Claim) and all other pending
Claims hereunder (or shall hold in escrow hereunder the entire Collateral then
in its possession if such notice has been so received for all pending Claims but
in Oxford's opinion the Collateral then in the Escrow Agents's possession will
not be sufficient to pay the full amount, as estimated by Oxford and supported
by the written demand of third parties, of all such Claims) until there has been
a Determination of all pending Claims in accordance with the provisions of
Section 3.01 hereof. Notice of a claim given to the Escrow Agents pursuant to
this Section 2.02 shall briefly set forth the basis of the Claim and, if then
determinable by Oxford, a reasonable estimate of the amount thereof supported by
a written demand or pleading from the one making the Claim. If the estimated
amount of a Claim is not set forth in the notice of Claim given to the Escrow
Agents, Oxford will give a further notice to the Escrow Agents setting forth the
amount of such Claim promptly after it is reasonably able to make such estimate
and support such estimate be a written demand of a third party. Promptly after
receipt thereof, the Escrow Agents shall send to ATI a copy of any notice
received by the Escrow Agents pursuant to this Section 2.02.
2.03 Promptly after the Determination of a Claim in accordance with the
provisions of Section 3.01(a) hereof and promptly after receipt of notice of the
Determination of a Claim in accordance with the provisions of Section 3.01(b)
hereof (which notice shall be accompanied by a copy of any agreement, final
arbitration award, or final court order, judgement or decree evidencing such
Determination), the Escrow Agents shall deliver to Oxford, free and clear of any
interests of ATI therein, Collateral having a value (determined in accordance
with Section 3.02 hereof) equal to the amount, if any, of such Claim payable to
Oxford pursuant to such Determination. If the value of the Collateral then held
by the Escrow Agents is not greater than the amount, if any, of such Claim so
payable, the Escrow Agents shall deliver to Oxford all of the Collateral then
held by it, free and clear of any interest of the Sellers therein. Any cash paid
pursuant to the Note and the Note, or portion thereof, shall be first delivered
to Oxford; and if the Determination is in any amount less than the principal
amount of the Note, then a new Note shall be issued in the principal amount left
after subtracting the principal payments made thereon and the amount of the
Determination. If the value of the Collateral then held by the Escrow Agents is
not greater than the amount, if any, of such Claim so payable, the Escrow Agent
shall deliver to ATI all of the Collateral then held by it, free and clear of
any interest of Oxford therein.
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<PAGE>
III. Determination of Claims; Valuation of Collateral
3.01 The Determination of a Claim asserted hereunder pursuant to Section
2.02 hereof shall be made as follows:
3.01(a) The Claim shall be deemed to have resulted in a Determination
in favor of Oxford, and to have resulted in a liability of ATI to Oxford in
an amount equal to the amount of such Claim estimated by Oxford pursuant to
Section 2.02 hereof, on the 30th day after Oxford gives the Escrow Agents
notice of the estimated amount of such Claim pursuant to section 2.02
hereof, unless prior thereto the Escrow Agents have received notice from
ATI that ATI disputes the Claim. Promptly after receipt of any notice from
ATI disputing any Claim, the Escrow Agents shall sent Oxford a copy of such
notice.
3.01(b) If a Claim asserted hereunder is disputed by ATI in the manner
provided in Section 3.01(a) hereof, the Determination of such Claim in
accordance with the provisions for the settlement of disputes contained in
Section 4.01 hereof and shall be evidenced by the documentation referred to
in such Section.
3.02 Collateral being delivered pursuant to Section 2.03 hereof in respect
of a Claim shall be valued on the basis of current market value at the date of
delivery. If the Collateral being delivered consists in while or in part of
Common Stock, the per share current market value of such shares shall be deemed
to be the average of the closing sale prices for the Shares for the last three
days during which they are traded immediately preceding the third trading day
prior to the date of delivery. The closing price for each day shall be the last
reported sales price on the principal national securities exchange, the bid
quotation of the Nasdaq market, or if not such quotations are available, the
highest bid price in the over-the-counter market as furnished by the National
Quotation Bureau Incorporated. The current market value at the date of delivery
of any other Collateral shall be determined by the Escrow Agents in good faith,
which determination shall be conclusive and binding on the parties.
IV. Settlement of Disputes
4.01 Any dispute that may arise under this Escrow Agreement with respect to
(a) any Claim asserted by Oxford pursuant to Section 2.02 hereof; (b) the
delivery, ownership, or right to possession of the Collateral or any portion
thereof; (c) the facts upon which the Escrow Agents's determinations are based;
(d) the duties of the Escrow Agent hereunder; and (e) any other questions
arising under his Escrow Agreement shall be settled by mutual agreement of the
parties to such dispute evidenced by appropriate instructions in writing to the
Escrow Agent signed by all of the parties to such dispute or by a binding and
final arbitration award or by a final judgment, order, or decree of a court of
competent jurisdiction in the United States of American (the time for appeal
therefrom having expired and no appeal having been perfected). The Escrow Agents
shall be under no duty to institute or defend any such proceedings and none of
the costs and expenses of any such proceedings shall be borne by the Escrow
Agents. Prior to the settlement of any dispute as provided in this Section 4.01,
the Escrow Agents are authorized and directed to retain in its possession,
without any liability to anyone, the portion of the Collateral that is the
subject of or involved in the dispute.
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<PAGE>
V. Concerning the Escrow Agents
5.01 The Escrow Agents shall be each entitled to a fee of $5,000 per annum
for their services hereunder, and upon request (which shall not be made more
than once during any three month period commencing on the date hereof) and
submission to Oxford and ATI of a reasonably detailed itemized statement
thereof, shall be reimbursed for all reasonable expenses, disbursements, and
advances (including reasonable attorneys' fees and expenses) incurred or made by
them in performance of their duties hereunder. One-half of such fee
disbursements, expenses, and advances shall be paid by Oxford and one-half shall
be paid by ATI.
5.02 The Escrow Agents may resign and be discharged from their duties
hereunder at any time by giving notice of such resignation to Oxford and ATI
specifying a date (not less than 30 days after the giving of such notice) when
such resignation shall take effect. Promptly after such notice, a successor
escrow agent shall be appointed. If Hank Vanderkam resigns or his successor,
then the successor shall be appointed by Oxford. If Robert Forrester resigns or
his successor, then the successor shall be appointed by ATI. Such successor
escrow agent shall become one of the Escrow agents hereunder upon the
resignation date specified in such notice. If Oxford or ATI are unable to agree
upon a successor escrow agent within 30 days after such notice, the resigning
Escrow Agent shall be entitled to appoint his successor. The Escrow Agent shall
continue to serve until his successor accepts the escrow and receives the
Collateral. Oxford and ATI may agree at any time to substitute a new escrow
agent by giving notice thereof to the Escrow Agent, or, either of them, then
acting.
5.03 The Escrow Agents undertake to perform only such duties as are
specifically set forth herein. The Escrow Agents, acting or refraining from
acting in good faith, shall not be liable for any mistake of the fact or error
of judgment by them or for any acts or omissions by them of any kind, unless
caused by willful misconduct or gross negligence, and shall be entitled to rely,
and shall be protected in doing so, upon (a) any written notice, instrument, or
signature believed by them to be genuine and to have been signed or presented by
the proper party or parties duly authorized to do so and (b) the advice of
counsel (which may be of the Escrow Agents's or Agent's own choosing). The
Escrow Agents shall have no responsibility for the contents of any writing
submitted to them hereunder and shall be entitled in good faith to rely without
any liability upon the contents thereof.
5.04 Each party hereto agrees to indemnify the Escrow Agents and hold each
and of them and harmless against any and all liabilities incurred by each
hereunder as a consequence of such party's action, and the parties further agree
jointly to indemnify the Escrow Agents and each of them harmless against any and
all liabilities incurred by either hereunder that are not a consequence of
each's respective action, except in either case for liabilities incurred by an
Escrow Agent resulting from his own willful misconduct or gross negligence.
VI. Miscellaneous
6.01 This Escrow Agreement will be binding upon, inure to the benefit of,
and be enforceable by the respective heirs, beneficiaries, representatives,
successors, and assigns of the parties hereto.
6.02 This Escrow Agreement contains the entire understanding of the parties
with respect to its subject matter, and may be amended only by a written
instrument duly executed by all the parties hereto.
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<PAGE>
6.03 All notices, claims, requests, demands, and other communications
hereunder ("notices") shall be in writing and shall be given as follows:
If to Oxford:
Oxford Capital Corporation
Attn: Robert Cheney, President
4245 N. Central Expressway, Suite 300
Dallas, Texas 75205
Telecopier: (214) 520-1881
If to ATI:
American Teletronics, Inc.
Attn: Dal McKinney, President
15400 Knoll Trail, Suite 200
Dallas, Texas 75248
Telecopier: (972) 233-6754
If to Hank Vanderkam:
Vanderkam & Sanders
440 Louisiana, Suite 475
Houston, Texas
Telecopier: (713) 547-8910
If to Robert Forrester:
Robert A. Forrester, Esq.
1215 Executive Drive West, Suite 102
Richardson, Texas 75081
Telecopier: (972) 480-8406
or to such other address as the person to whom notice is to be given may
have previously furnished to the others in the above-referenced matter.
A notice given in accordance with the preceding sentence shall be deemed to
have been duly given upon receipt or (if receipt is not expressly required by
the terms hereof) upon mailing by registered or certified mail, postage prepaid,
return receipt requested.
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<PAGE>
6.04 This Escrow Agreement shall be governed by and construed and enforced
in accordance with, the laws of the State of Texas, without regard to its
conflict-of-laws rules.
6.05 This Escrow Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.06 This Escrow Agreement shall remain in full force and effect until the
Escrow Agents have delivered all the Collateral in their possession in
accordance with the terms hereof.
6.07 Article headings contained herein are for reference purposes only and
shall not in any was affect the meaning or interpretation of this Escrow
Agreement.
IN WITNESS WHEREOF, this Escrow Agreement has been duly executed and
delivered by the duly authorized officers of ATI, Oxford, and the Escrow Agents,
as of the date first above written.
OXFORD CAPITAL CORPORATION
/s/ Robert Cheney
---------------------------------------
Robert Cheney, President
AMERICAN TELETRONICS, INC.
/s/ Harry K. Myers, Jr.
----------------------------------------
Harry K. Myers, Jr., Chairman
HANK VANDERKAM
----------------------------------------
ROBERT FORRESTER
/s/ Robert Forrester
----------------------------------------
Robert Forrester
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