UNITED STATES
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): June 8, 1998
JB Oxford Holdings, Inc.
(Exact name of registrant as specified in its charter)
UTAH 0-16240 95-4099866
(State of incorporation or organization) (I.R.S. Employer
(Commission File Number) Identification No.)
9665 Wilshire Blvd., Suite 300; Beverly Hills, 90212 California
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 777-8888
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
JB Oxford Holdings, Inc., a Utah Corporation (the "Company"),
entered into an agreement (the _Purchase Agreement") dated as of
May 21, 1998, by and among the Company; Third Capital Partners,
LLC ("Third Capital"); 3421643 Canada Inc. (the "Bier Group");
Felix A. Oeri, the Company's Chairman; and Oeri Finance Inc.
("Oeri Finance"), a company controlled by Mr. Oeri. As a result
of the Purchase Agreement, which was fully completed and performed
on June 8, 1998, six major events occurred:
1. Third Capital and the Bier Group (together, the
"Investors") purchased approximately $3.9 million in
outstanding principal amount of the Company's 9% Senior
Secured Convertible Notes ("the Convertible Notes") from Oeri
Finance, with the Company agreeing to reduce the conversion
ratio from $1.00 to $0.70 per share of the Company's common
stock, par value $0.01 per share (the "Common Stock"), and
the Investors agreeing to extend the maturity date of the
Convertible Notes to December 31, 1999. This transaction was
completed on May 26, 1998.
2. Third Capital purchased from the Company $2.0
million in newly issued secured convertible debentures (the
"New Notes") having substantially the same terms as the
Convertible Notes, modified as described in paragraph 1 ,
except that the New Notes will be subordinate to certain
other outstanding notes of the Company, and that the New
Notes will be converted into a new issue of voting preferred
stock of the Company if such new issue is approved by the
Company's shareholders at a meeting to be held later in 1998.
The preferred stock will be convertible into Common Stock on
the same terms as the Convertible Note and the New Notes.
This transaction was completed on June 8, 1998.
3. Felix Oeri and Oeri Finance granted to Christopher
L. Jarratt, the Chief Executive Officer of Third Capital, or
his designee the right to vote all Common Stock beneficially
owned by Mr. Oeri and Oeri Finance (approximately 2.4 million
shares, or 17.1% of the Company's outstanding Common Stock)
and granted the Investors a right of first refusal to
purchase such stock and any other stock, options, or warrants
of the Company now or hereafter owned by Oeri and Oeri
Finance. This transaction was completed on May 26, 1998.
4. Third Capital, following completion of the
transactions contemplated by the Purchase Agreement, is
obligated to undertake to obtain for the Company at least
$7.0 million in new equity capital as soon as practicable,
but no later than September 8, 1998, on terms to be
negotiated.
5. The Company's Board of Directors elected four
representatives of the Investors, Christopher L. Jarratt,
James G. Lewis, Elliott L. Bier, and Mark D. Grossi, to the
Company's Board of Directors. The Company's prior board
members, Felix A. Oeri, Stephen Rubenstein, Mitchell S. T.
Wine, and John M. Broome, resigned effective June 8, 1998,
leaving Messrs. Jarratt, Lewis, Bier and Grossi as the only
directors of the Company. Mr. Jarratt has been elected
Chairman and Chief Executive Officer of the Company,
replacing Mr. Oeri as Chairman and Stephen M. Rubenstein as
Chief Executive Officer. Mr. Lewis has been elected
President and Chief Operating Officer of the Company. Mr.
Rubenstein will remain as President of the Company's
principal subsidiary, JB Oxford & Company, reporting to Mr.
Lewis.
6. The Company and Third Capital, LLC, a Tennessee
limited liability company ("Third Capital 2"), entered into
an advisory agreement which calls for $30,000 monthly
payments by the Company to Third Capital 2. Mr. Jarratt is
the Chief Manager and Mr. Lewis is a member of Third Capital
2. Under the advisory agreement, Third Capital 2 will
provide certain services of Messrs. Jarratt and Lewis to the
Company. Under the terms of the advisory agreement, Messrs.
Jarratt and Lewis are not required to devote all of their
time and efforts to the business of the Company.
Third Capital presently owns approximately $3.4 million of
the Convertible Notes and all of the New Notes which are
convertible into 4,883,850 and 2,857,142 shares of Common Stock,
respectively. The Bier Group presently owns $0.5 million of the
Convertible Notes which are convertible into 714,285 shares of
Common Stock. Assuming conversion, Third Capital's holdings and
the Bier Group's holdings represent 35.4% and 4.8%, respectively.
Additionally, Christopher L. Jarratt beneficially owns 87,500
shares of Common Stock and 800,000 options to purchase shares of
Common Stock under the Company Employee Stock Option Plan at an
exercise price of $1.3125 with vesting over a three year period
with 1/3 of the options becoming exerciseable on each of the first
three anniversaries of the effective date of the grant. James G.
Lewis owns 42,800 shares of Common Stock and 750,000 options to
purchase shares of Common Stock under the Company Employee Stock
Option Plan at an exercise price of $1.3125 with vesting over a
three year period with 1/3 of the options becoming exerciseable on
each of the first three anniversaries of the effective date of the
grant. Mr. Jarratt's and Mr. Lewis' options are subject to
approval by the Company's stockholders at the annual meeting of a
proposal to increase the number of shares available for grant
under the Company Employee Stock Option Plan. If such approval is
not granted, the options provide a formula to grant Messrs.
Jarratt and Lewis comparable compensation. Further, Mr. Jarratt
holds a proxy to vote 2,420,419 shares of the Company's Common
Stock owned by Felix A. Oeri and/or Oeri Finance.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth those persons who, to the
Company's knowledge, beneficially owned more than five percent of
the Common Stock as of June 8, 1998. In addition, the number of
shares of the Common Stock beneficially owned by each director and
executive officer, and the number of shares beneficially owned by
the directors and executive officers of the Company as a group, as
of June 8, 1998 are disclosed below in the same table, to the
Company's knowledge. The information was furnished to the Company
by the identified persons and by the Company's Transfer Agent.
Amount and Nature Percent of Common
Name of Beneficial Stock Outstanding (2)
Ownership (1)
Beneficial Owners of More Than 5%
Third Capital 7,740,992 (3) 35.4%
Partners, LLC
314 Church Street, 9th Floor
Nashville, TN 37201
Oeri Finance Inc. 1,555,753 (4) 11.0%
Peter Merian-Strasse 50
CH-4002 Basel, Switzerland
Felix A. Oeri 2,420,419 (5) 17.1%
Peter Merian-Strasse 50
CH-4002 Basel, Switzerland
Executive Officers
Christopher L. Jarratt, 11,048,911 (6) 48.7%
CEO, Chairman and Director
James G. Lewis, 792,800 (7) 5.3%
President, COO and Director
Michael J. Chiodo, 5,817 (8) --% (13)
CFO
Scott G. Monson, 26,161 (9) --% (13)
General Counsel, Secretary
Stephen Rubenstein, 360,627 (10) 2.5%
President of JB Oxford & Company
Directors
Mark D. Grossi 50,000 (11) --% (13)
Elliot L. Bier 764,285 (12) 5.4%
Directors & Executive Officers as a Group
13,048,601 53.1%
(1) All shares are common class.
(2) The percentages for certain holders reflect conversion of
convertible securities and exercise of stock options.
(3) Includes 4,883,850 shares which may be acquired pursuant
to the terms of the Convertible Notes, and 2,857,142
shares which may be acquired pursuant to the New Notes.
(4) These shares are subject to a proxy granted to Mr. Jarratt.
(5) Includes 1,555,753 shares held by Oeri Finance, Inc., a
company of which Mr. Oeri is a principal shareholder.
These shares are subject to a proxy granted to Mr. Jarratt.
(6) Includes 4,883,850 shares which may be acquired pursuant
to the terms of the Convertible Notes, and 2,857,142
shares which may be acquired pursuant to the New Notes,
both of which are held by Third Capital of which Mr.
Jarratt is the Chief Manager; 2,420,419 shares owned by
Mr. Oeri and Oeri Finance for which Mr. Jarratt was
granted a proxy; 47,500 shares held by Mr. Jarratt's
wife; and 800,000 shares which may be acquired upon
exercise of options pursuant to the Company Employee Stock
Option Plan, which are 0% vested.
(7) Includes 750,000 shares which may be acquired upon
exercise of options pursuant to the Company Employee Stock
Option Plan, which are 0% vested.
(8) Includes 5,817 shares pursuant to the Company Employee
Stock Ownership Plan, which are 100% vested.
(9) Includes 4,211 shares pursuant to the Company Employee
Stock Ownership Plan, which are 100% vested.
(10) Includes 350,000 shares which may be acquired upon
exercise of options, which are 88.6% vested; and 627
shares pursuant to the Company Employee Stock Ownership
Plan, which are 60% vested.
(11) Includes 50,000 shares which may be acquired upon
exercise of options pursuant to the Company Non-Employee
Director Stock Option Plan, which are 50% vested.
(12) Includes 714,285 shares which may be acquired by the Bier
Group, pursuant to the terms of the Convertible Notes and
50,000 shares which may be acquired upon exercise of
options pursuant to the Company Non-Employee Director
Stock Option Plan, which are 50% vested.
(13) Less than 1%.
ITEM 7. EXHIBITS
2.1 Purchase Agreement dated as of May 21, 1998 by and among the
Company, Third Capital Partners, LLC, a Tennessee limited
liability company, 3421643 Canada Inc., a Canadian
corporation, Felix A. Oeri and Oeri Finance Inc.
4.1 9% Secured Convertible Note Due December 31, 1999 in the
principal amount of $2,000,000 between the Company and Third
Capital Partners, LLC.
EXHIBIT 2.1 PURCHASE AGREEMENT
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") dated as of May
21, 1998 by and among JB OXFORD HOLDINGS, INC., a Utah
corporation ("Oxford"), THIRD CAPITAL PARTNERS, LLC, a Tennessee
limited liability company ("Third Capital"), 3421643 CANADA INC.,
a Canadian corporation (the "Bier Group"), FELIX A. OERI and OERI
FINANCE INC., ("Oeri Finance"). Collectively, Third Capital and
the Bier Group shall be referred to herein as the "Purchasers";
Felix A. Oeri and Oeri Finance shall be referred to as "Oeri";
and, Oxford and Oeri shall be referred to as the "Sellers."
WITNESSETH:
WHEREAS, the Board of Directors of Oxford have approved, and
deem it advisable and in the best interest of Oxford and its
shareholders to obtain additional funding for Oxford, upon the
terms and subject to the conditions set forth in this Agreement;
and
WHEREAS, the Purchasers and Sellers desire to make certain
representations, warranties, covenants and agreements in
connection with the transactions contemplated hereby.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and
other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties agree as follows:
ARTICLE I
PURCHASE OF SECURITIES
S1.1 Purchase of Convertible Notes. Subject to the terms
and conditions herein stated, Oeri Finance agrees to sell,
transfer, assign and deliver to Purchasers on the Note Closing
Date, and Purchasers agree to purchase from Oeri Finance on the
Note Closing Date, all of those certain outstanding convertible
debentures of Oxford in the face amount of Four Million Five
Hundred Thousand and No/100 Dollars ($4,500,000) and having an
outstanding principal balance of Three Million Nine Hundred
Eighteen Thousand Six Hundred Ninety Five and 59/100 Dollars
($3,918,695.59), commonly referred to as Oxford's 9% Senior
Convertible Notes (the _Convertible Notes_) which are due
December 31, 1998.
S1.2 Payment of Purchase Price - Third Capital. In full
consideration for the sale, transfer and assignment of
Convertible Notes having an outstanding principal balance of
Three Million Four Hundred Eighteen Thousand Six Hundred Ninety
Five and 59/100 Dollars ($3,418,695.59), Third Capital shall pay
to Oeri Finance an aggregate amount equal to Three Million Four
Hundred Eighteen Thousand Six Hundred Ninety Five and 59/100
Dollars ($3,418,695.59) (the "Third Capital Purchase Price").
The Third Capital Purchase Price shall be payable at Closing as
follows:
Third Capital shall pay Oeri Finance One Million Nine
Hundred Eighteen Thousand Six Hundred Ninety Five
and 59/100 Dollars ($1,918,695.59) by wire transfer
of immediately available funds; and
Third Capital shall execute a promissory note in favor
of Oeri Finance in the amount of One Million Five
Hundred Thousand and No/100 Dollars ($1,500,000.00)
(the _Third Capital Note_), which note shall bear
interest at the rate of Eight percent (8%) per
annum, with balloon principal payments of Seven
Hundred Fifty Thousand and No/100 ($750,000) each
due December 31, 1998, and June 1, 1999; such note
shall be secured by a pledge of the Convertible
Notes purchased by Third Capital under this
Agreement.
S1.3 Payment of Purchase Price - The Bier Group. In full
consideration for the sale, transfer and assignment of
Convertible Notes having an outstanding principal balance of Five
Hundred Thousand and No/100 ($500,000.00), the Bier Group shall
pay to Oeri Finance an aggregate amount equal to Five Hundred
Thousand and No/100 Dollars ($500,000.00) (the "Bier Purchase
Price"). The Bier Purchase Price shall be payable at Closing by
wire transfer of immediately available funds.
S1.4 Modification to Convertible Notes. Oxford and
Purchasers hereby agree to modify the terms of the Convertible
Notes as follows:
(a) Extension of Due Date. The maturity date of the
Convertible Notes shall be extended until December 31, 1999; and
(b) Conversion. The conversion rate on the Convertible
Notes shall be reduced to $0.70 per common share and the
conversion provisions shall be modified to allow the debenture
holders to convert into common shares at any time.
S1.5 Issuance of Additional Convertible Debentures.
Subject to the terms and conditions herein stated, Oxford agrees
to issue and deliver to Third Capital on the Second Closing Date,
and Third Capital agrees to purchase from Oxford on the Second
Closing Date, newly issued convertible debentures (the _New
Notes_) having a face value of Two Million and No/Dollars
($2,000,000.00) and having the same terms and conditions as the
Convertible Notes, as modified by Sections 1.2 and 1.4 hereof,
except that the New Notes shall be subordinate to: the
Convertible Notes and those certain convertible notes owned by
Hareton Sales which have an outstanding balance of Five Hundred
Thirty One Thousand and No/100 Dollars ($531,000.00). In full
consideration for the issuance by Oxford of the New Notes, Third
Capital shall pay to Oxford an aggregate amount equal to Two
Million and No/Dollars ($2,000,000.00) (the "New Notes Purchase
Price"). The New Notes Purchase Price shall be payable at
Closing by wire transfer of immediately available funds.
S1.6 Conversion to Preferred Stock. Third Capital hereby
agrees, subject to obtaining all necessary approvals from
Oxford's stockholders, to convert the New Notes into newly issued
preferred stock of Oxford (the "Preferred Stock") having the
rights and terms set forth in Section 1.5 as soon as is
practicable after obtaining all necessary approvals. Neither
Third Capital nor Oxford shall have any obligation with respect
to the conversion or issuance of Preferred Stock unless all
necessary approvals are obtained prior to January 1, 1999.
S1.7 Terms of Preferred Stock. Oxford and Third Capital
hereby agree that, unless agreed otherwise, the Preferred Stock
shall have the following rights and terms:
(a)Dividend Obligation. Each issued and outstanding
share of Preferred Stock shall entitle the holder thereof to
receive annual dividends in the amount 9% of the issue price of
such security, which shall be paid quarterly; but only to the
extent Oxford has assets legally available for the payment of
dividends under applicable law and such dividend payments would
not result in Oxford's failure to meet NASD capital requirements.
All dividends payable to the holders of the Preferred Stock
shall be cumulative.
(b)Distributions Upon Liquidation or Dissolution. In
the event of any liquidation, dissolution or winding up of
Oxford, whether voluntary or involuntary, before any distribution
or payment shall be made to the holders of common stock, the
holders of the Preferred Stock shall be entitled to be paid prior
and in preference to any distribution of any of the assets or
surplus funds of Oxford, the following amounts: (i) an amount
equal to all cumulative unpaid dividends accrued pursuant to
subparagraph 1.5(a) above, and (ii) an amount equal to the issue
price per share of Preferred Stock issued and outstanding.
(c) Conversion Option. At the option of the holder
thereof, the Preferred Stock shall be convertible into common
stock of Oxford on equivalent terms as the New Notes are
convertible into common stock, which terms shall be appropriately
adjusted for any stock splits, reverse splits, stock dividends
and the like occurring subsequent to the date of this Purchase
Agreement.
(d) Voting Rights. Each holder of record of Preferred
Stock shall be entitled to vote his or her ownership interest at
any meeting of the stockholders of Oxford, including without
limitation, any meeting to elect the directors of Oxford or
otherwise take action which is reserved for the stockholders of
Oxford under its Articles of Incorporation, its Bylaws, or under
applicable law. The Preferred Stock shall be structured, subject
to the approval of the stockholders, such that the holders of the
Preferred Stock will be entitled to vote such shares with the
common stockholders on an `as converted basis'; or in such other
manner as agreed to by Purchasers that will provide the
Purchasers with similar and substantial voting rights with
respect to the election of Directors and with respect to any
material event to be voted upon by the shareholders.
(e)Mandatory Redemption. In the event of a sale,
consolidation or merger of Oxford with or into another
corporation, or the sale, lease or transfer of all or a
substantial part of the assets of Oxford to another corporation,
or other event resulting in a change in control of Oxford, then,
unless the record holders of the Preferred Stock approve such
event by a two-thirds vote of the preferred stockholders voting
separately as a class, Oxford shall redeem all issued and
outstanding Preferred Stock. Such redemption shall be at a per
share price equal to the greater of: (i) the issue price per
share, plus all accrued and unpaid dividends thereon, or (ii) a
price equal to number of common shares into which such Preferred
Stock is convertible, multiplied by the then current market price
of Oxford's common stock, as determined by the 30-day average
closing price of such stock at the time of such event.
(f) Optional Redemption. At any time after January 1,
2010, Oxford shall have the option of redeeming all of the issued
and outstanding Preferred Stock at a price equal to issue price
per share, plus all accrued and unpaid dividends thereon;
provided, however, in the event Oxford makes such election, all
record holders of Preferred Stock shall be entitled the
opportunity to convert their Preferred Stock to common stock
prior to such redemption.
(g) Registration Rights. After the issuance of the
Preferred Stock, Oxford shall cause to be filed with the
Securities and Exchange Commission ("SEC"), a registration
statement providing for the sale by the holders of such stock;
and shall use reasonable and diligent efforts to cause such
registration statement to be declared effective by the SEC. Such
registration statement shall be filed as soon as is practical
after the issuance of the Preferred Stock, but in no event later
than 90 days after Oxford receives written demand from a holder
of Preferred Stock to make such registration. Purchasers agree
(and shall cause subsequent holders of the Preferred Stock to
agree) that they will not make a registration demand on the
Company prior to January 1, 1999.
(h) Other Rights. The holders of the Preferred Stock
shall be entitled to such other rights and preferences as are
normal and customary under the circumstances.
S1.8 Closings.
(a) Note Closing. The closing of the Convertible Notes
to be purchased pursuant to Section 1.1 shall take place on or
before May 27, 1998, as may be extended by agreement of the
parties (the "Note Closing Date" or "Note Closing"). Unless
otherwise agreed among the parties, the procedure for the Note
Closing shall be as follows. Third Capital shall deliver into
escrow with the Company's legal counsel, Munger, Tolles & Olson
("Escrow Agent") by wire transfer, the Three Million Nine Hundred
Eighteen Thousand Six Hundred Ninety Five and 59/100 Dollars
($3,918,695.59) cash needed to close its purchase obligations
under this Agreement. After the delivery of such funds to the
Escrow Agent, then on or before May 27, 1998, in Basel,
Switzerland (or such other date or location as the parties may
mutually agree):
Oeri shall deliver to Oxford the original Convertible
Notes, together with all necessary or appropriate
transfer documents transferring ownership thereof
to the Purchasers; and
Oeri shall deliver to Oxford and the Purchasers, the
fully executed Irrevocable Proxy and Right of
First Refusal in favor of Third Capital in
accordance with Section 2.3 hereof; and
Oxford shall deliver evidence of, and certify to the
Purchasers that it is possession of, duly executed
director appointments and resignations in
accordance with the obligations described in
Section 2.1 hereof.
Upon the timely delivery of items 1, 2 and 3 above, Oxford shall
deliver notice (the "Transfer Notice") to the Purchasers' and
Escrow Agent stating: (i) that Oxford is in receipt of all such
items, (ii) that the transfer of the Convertible Notes to the
Purchasers is complete and in accordance with the terms thereof,
(iii) that Oxford will issue two (2) new and separate Convertible
Note certificates to the Purchasers in the amounts indicated on
Exhibit A as soon as possible, (iv) that the individuals
indicated in Section 2.1 hereof have been appointed as new
directors of Oxford, and (v) Oxford has obtained the director
resignations to be obtained pursuant to Section 2.1.
Simultaneously with the delivery of the Transfer Notice, the
Escrow Agent shall wire One Million Nine Hundred Eighteen
Thousand Six Hundred Ninety Five and 59/100 Dollars
($1,918,695.59) to the account of Oeri Finance, or such other
account as Oeri Finance may designate, as partial payment for the
Convertible Notes purchased by Third Capital, the remaining
portion being paid at closing in accordance with Section 1.2(b)
hereof.
(b) Second Closing. The remaining Two Million and
No/100 Dollars ($2,000,000.00) shall be held in escrow by the
Escrow Agent pending completion and execution of all appropriate
and necessary documentation to issue and transfer the New Notes
to be purchased pursuant to Section 1.3. The closing of the New
Notes shall take place at a mutually agreeable location on or
before June 8, 1998, or at such other time as the parties hereto
shall designate and agree (the "Second Closing Date" or "Second
Closing") (Collectively, the Note Closing Date and the Second
Closing Date shall be referred to herein as the "Closing Date").
S1.9 Conditions to Obligations. The fulfillment of each of
the parties obligations under this Agreement are conditioned upon
the following items which shall have occurred, or shall have been
waived by the parties in their sole discretion:
(a) Truth of Representations and Warranties.
The representations and warranties of Sellers and Purchasers
contained in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the
Closing Date and each of the parties shall have delivered to the
other party on the Closing Date a certificate, dated the Closing
Date, to such effect; and
(b) Performance of Agreements. Each and all of the
agreements of Sellers and Purchasers to be performed on or before
the Closing Date pursuant to the terms hereof shall have been
duly performed in all material respects; and
(c) No Judgment or Order. There shall be no judgment
order of a court of competent jurisdiction or any ruling,
regulation or order of any governmental agency which would
prohibit the issuance or transfer of the securities as
contemplated herein or subject either party to any material
penalty if the transactions contemplated herein were consummated;
and
(d) Governmental Approvals. All governmental and other
consents and approvals, if any, necessary to permit the
consummation of the transactions contemplated by this Agreement
shall have been applied for and received; and
(e) Approval of Attachments. Oxford shall have prepared,
and the Purchasers shall have approved, all Exhibits, Schedules
and other attachments hereto, which by this reference are
incorporated herein. All such Exhibits, Schedules and other
attachments have been previously delivered to Purchasers prior to
the execution hereof, and the Purchasers' agree they have
approved such attachments.
ARTICLE II
ADDITIONAL COVENANTS AND AGREEMENTS
S2.1 Appointment of Directors. Simultaneously with the
Note Closing, Oxford shall take such action as is necessary to
appoint the following individuals to Oxford's Board of Directors:
Christopher L. Jarratt, James G. Lewis, Elliot L. Bier, and Mark
D. Grossi. Purchasers shall provide Oxford with such information
as to such individuals (and shall be solely responsible for such
information) as may be required for Oxford to comply with its
obligations under Section 14(f) of, or Rule 14f-1 under, the
Securities Exchange Act of 1934. Unless otherwise agreed by
Third Capital, Oxford shall also obtain resignations from each of
Oxford's existing Directors immediately simultaneous with the
Note Closing; provided, however, such resignations shall not be
effective until ten (10) days after the Note Closing.
S2.2 Additional Capital. Immediately after the Second
Closing, Third Capital shall undertake to obtain additional
equity capital for Oxford of at least Seven Million and No/100
Dollars ($7,000,000.00). Such additional equity capital to be
obtained as soon as practicable with a closing to occur within 90
days after the Second Closing.
S2.3 Oeri Proxy: Right of First Refusal. Oeri shall grant
to Christopher L. Jarratt the right to vote all common stock
beneficially owned by Oeri for so long as such stock is owned by
Oeri; and shall grant Purchasers a right of first refusal to
purchase any all securities of Oxford beneficially owned by Oeri,
including without limitation, all common stock, options and
warrants of Oxford whether now owned or hereafter acquired.
S2.4 Allocation of Securities. The parties acknowledge
that each of the Purchasers is purchasing a portion of the
securities described herein and, notwithstanding anything
contained in this Agreement to the contrary, each Purchaser is
only committing to purchase the type and amount of securities
described on Schedule 2.4 which together shall aggregate all of
the securities to be purchased by the Purchasers pursuant to
Article I of this Agreement. Purchasers agree that Oxford is not
obligated to close the transactions contemplated herein unless
Purchasers (or their permitted assignees) purchase all of the
securities to be purchased by the Purchasers at the Note Closing
and the Second Closing pursuant to Article I.
ARTICLE III
REPRESENTATIONS OF OXFORD
S3.0 Representations of Oxford. Oxford hereby represents,
warrants and agrees as follows:
S3.1 Existence; Good Standing; Corporate Authority and
Authorization. Oxford is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Utah. Attached hereto as Schedule 3.1 is a true and complete
copy of the Certificate of Incorporation and Bylaws of Oxford
which are in effect as of the date hereof and as of the Closing
Date. Oxford has the full power and authority to enter into and
perform this Agreement. Oxford is not a party to any contract or
subject to any legal restriction that would prevent or restrict
complete fulfillment by Oxford of all of the terms and conditions
of this Agreement or compliance with any of Oxford's obligations
under it. Oxford has taken all necessary corporate actions to
authorize and approve the execution, delivery and performance of
this Agreement. This Agreement constitutes a legal, valid and
binding obligation of Oxford, enforceable against Oxford in
accordance with its terms.
S3.2 Capital Stock. Oxford has an authorized
capitalization consisting of Ten Million (10,000,000) shares of
preferred stock, having a par value of $10.00 per share, of which
no shares are outstanding; and One Hundred Million (100,000,000)
shares of voting common stock, having a par value of $0.01 per
share, of which Fourteen Million One Hundred Forty One Thousand
Two Hundred Five (14,141,205) shares have been issued and are
outstanding. There are no other shares of stock of Oxford issued
and outstanding. Except as set forth on Schedule 3.3, no shares
of capital stock of Oxford are reserved for issuance and there
are no outstanding options, warrants, rights, calls, commitments,
conversion rights, rights of exchange, plans or other agreements
of any character providing for the purchase, issuance or sale of
any shares of the capital stock of Oxford.
S3.3 Issuance of New Notes. Oxford warrants and agrees
that its has the legal right, power and authority to issue the
New Notes pursuant to this Agreement and covenants that the
delivery to Purchasers of the New Notes pursuant to the
provisions of this Agreement will transfer to Purchasers valid
title to the New Notes, free and clear of all liens,
encumbrances, restrictions and claims of every kind.
S3.4 Convertible Notes. Oxford warrants and agrees that
the aggregate amount of Convertible Notes issued and outstanding
is $4,421,310.59 and that Oeri Finance is the record holder of
Convertible Notes having an aggregate amount owed of
$3,918,695.59; and that upon delivery to Oxford of validly
executed assignment and transfer documents, transferring title of
the Convertible Notes from Oeri to the Purchasers as described
herein, Oxford will transfer record ownership of such Convertible
Notes to the Purchasers.
S3.5 Subsidiaries. Set forth in Schedule 3.5 is a list of
each of Oxford's subsidiaries. Each subsidiary is a corporation
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, as set forth in
such schedule. References in this Agreement to Oxford shall be
deemed to include each and every subsidiary of Oxford unless
otherwise specifically stated.
S3.6 Public Filings. Attached hereto as Schedule 3.6 is a
complete listing of all public filings made by Oxford since
December 31, 1995 (the _Public Filings_). Oxford hereby
represents and warrants that the information disclosed in the
Public Filings (which term shall not include any information or
documents incorporated therein by reference) were true and
accurate in all material respects at the time they were filed,
and did not, at the time they were filed, contain any untrue
statement of a material fact, or omit any statement of a material
fact necessary in order to make the statements contained therein
not misleading. Except as disclosed in the Public Filings or as
set forth in Schedule 3.6, there is no fact, action or event
known to Oxford or its officers which could materially or
adversely affects the business, prospects or financial condition
of Oxford, its properties or assets. The Public Filings include
all forms, reports and documents required to be filed by Oxford
with the Securities and Exchange Commission since December 31,
1995.
S3.7 Financial Statements. Oxford represents and warrants
that the Consolidated Statements of Financial Condition,
Consolidated Statements Of Operations, and Consolidated
Statements of Cash Flows included in the Public Filings (the
_Financial Statements_) have been prepared in accordance with
generally accepted accounting principles consistently followed
according to past practice throughout the periods indicated.
Such Financial Statements fairly present the financial condition
of Oxford at the respective dates thereof and, except as
indicated therein, reflect all claims against and all debts and
liabilities of Oxford, fixed or contingent, as at the date
thereof and fairly present the results of the operations of
Oxford and its subsidiaries and the changes in the financial
position for the periods indicated.
S3.8 No Material Changes. Since December 31, 1997, there
has been no material adverse change in the assets or liabilities,
or in the business or condition, financial or otherwise, or in
the results of operations, of Oxford. To the best knowledge,
information and belief of Oxford and its officers, no fact or
condition exists or is contemplated or threatened which might
cause such a change in the future. During the period from the
execution of this Agreement through the Closing Date, Oxford will
not take, nor agree to take: (i) any action which is not in the
ordinary course of its business operation or (ii) any action that
would have a material effect on the assets or liabilities of
Oxford, without the express written consent of the Purchasers.
S3.9 Employment Matters. Set forth on Schedule 3.9 is a
complete listing of all employees of Oxford and their respective
titles, compensation agreements, bonus formulas, employee benefit
plans and the like. Except as disclosed in Schedule 3.9, Oxford
has no employees, consultants, representatives (foreign or
domestic), or agreements relating thereto. Except as disclosed
on Schedule 3.9, Oxford has no employee benefit plans within the
meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended. All employee benefit plans
disclosed on Schedule 3.9 have been fully funded and are in full
compliance with the Employee Retirement Income Security Act of
1974, as amended, and all other applicable laws and regulations.
S3.10 Material Contracts. Except as set forth in Schedule
3.10 to be attached hereto and made a part hereof, Oxford is not
now bound by (a) any agreement, contract or commitment relating
to the employment of any person by Oxford, or any bonus, deferred
compensation, pension, profit sharing, stock option, employee
stock purchase, retirement or other employee benefit plan, (b)
any agreement, indenture or other instrument which contains
restrictions with respect to payment of dividends or any other
distribution in respect of its capital stock, (c) any agreement,
contract or commitment relating to capital expenditures, (d) any
loan or advance to, or investment in, any other person or any
agreement, contract or commitment relating to the making of any
such loan, advance or investment, (e) any guarantee or other
contingent liability in respect of any indebtedness or obligation
of any affiliate, person or company (other than the endorsement
of negotiable instruments for collection in the ordinary course
of business), (f) any management service, consulting or any other
similar type contract, (g) any agreement, contract or commitment
limiting the freedom of Oxford to engage in any line of business
or to compete with any other person, (h) any agreement, contract
or commitment which involves the payment in the aggregate of One
Hundred Thousand and No/100 Dollars ($100,000.00) or more and is
not cancelable without penalty within (30) days, or (i) any
agreement, contract or commitment which might reasonably be
expected to have a potential material impact on the business or
operations of Oxford. Each contract or agreement set forth in
Schedule 3.10 is in full force and effect and there exists no
default or event of default or event, occurrence, condition or
act which, with the giving of notice, the lapse of time or the
happening of any other event or condition, would become a default
or event of default thereunder. Contracts made in the ordinary
course of business involving annual aggregate payments by Oxford
of less than Twenty-Five Thousand and No/100 Dollars ($25,000.00)
shall be deemed not to be material for purposes of this Section
3.10.
S3.11 Governmental Investigation. The Purchasers and the
Sellers acknowledge that Oxford and certain of its officers and
directors are the subject of an ongoing investigation by the US
Attorneys Office and the Securities and Exchange Commission, as
disclosed in Oxford's Form 10-Q for the quarter ended September
30, 1997 and Form 10-K for the year ended December 31, 1997. The
aforementioned disclosures were and are, to the best of the
Seller's knowledge, true and accurate.
S3.12 Reaffirmation; No Affiliation. To the best knowledge
information and belief of Oxford, its officers and directors,
assuming the Purchasers' representations and warranties contained
herein to be true and assuming the performance of the parties
obligations hereunder, then: (1) Oxford has no affiliation with
any person whose affiliation with Oxford might cause Oxford to be
suspended or disqualified from any type of broker/dealer or
investment advisory business (other than direct employees or
Foreign Representatives acting solely in such capacity, a
complete list of such employees and Foreign Representatives is
disclosed in Schedule 3.9), and (2) Oxford has no affiliation
with any person whom Oxford would need to disclose to the SEC
under any orders applicable to Oxford or otherwise (other than:
(i) officers and employees of Oxford, (ii) the individuals named
in Section 2.1, and (iii) Felix A. Oeri by sole reason of Oeri's
ownership of 2,420,419 shares of Oxford's common stock, which
shares shall be subject to Purchasers' right to vote such shares
as described in Section 2.3 hereof).
S3.13 No Brokers, Finders, Discounts, etc. Oxford
represents and warrants that all negotiations relating to this
Agreement and the transactions contemplated herein, have been
carried on without the participation of any person or entity
acting on behalf of Oxford in such a manner as to give rise to
any valid claim against Oxford for any brokerage or finder's
commission, fee, discount or similar compensation upon
consummation of the transactions contemplated hereby; and Oxford
further represents and warrants that to the best of its knowledge
and the knowledge of its directors and officers, Oxford has no
knowledge of any brokerage or finder's commission, fee, discount
or similar compensation to be paid to any person or entity upon
the consummation of the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS OF OERI
S4.0 Representations of Oeri. Oeri hereby represents,
warrants and agrees as follows:
S4.1 Existence; Good Standing; Corporate Authority and
Authorization. Oeri Finance is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Both Oeri Finance and Felix
A. Oeri have the full power and authority to enter into and
perform this Agreement. Neither Oeri Finance nor Felix A. Oeri
is a party to any contract or subject to any legal restriction
that would prevent or restrict complete fulfillment by each of
them of all of the terms and conditions of this Agreement or
compliance with any of their obligations under it. Oeri Finance
and Felix A. Oeri have each taken all necessary corporate actions
to authorize and approve the execution, delivery and performance
of this Agreement. This Agreement constitutes a legal, valid and
binding obligation of Oeri Finance and Felix A. Oeri, enforceable
against them in accordance with its terms.
S4.2 Convertible Notes. Oeri warrants and agrees that
Oeri Finance is the record holder of Convertible Notes
representing an aggregate amount due from Oxford of
$3,918,695.59; and that Oeri Finance has the legal right, power
and authority to transfer and assign the Convertible Notes
pursuant to this Agreement and covenants that the delivery to
Purchasers of the Convertible Notes pursuant to the provisions of
this Agreement will transfer to Purchasers valid title to the
Convertible Notes, free and clear of all liens, encumbrances,
restrictions and claims of every kind.
S4.3 Public Filings. Felix A. Oeri and Oeri Finance
represent and warrant that, to the best knowledge, information
and belief of Felix A. Oeri, after reasonable investigation of
same, the information disclosed in the Public Filings (which term
shall not include any information or documents incorporated
therein by reference), were true and accurate in all material
respects at the time they were filed, and did not, at the time
they were filed, contain any untrue statement of a material fact,
or omit any statement of a material fact necessary in order to
make the statements contained therein not misleading.
S4.4 No Material Changes. Felix A. Oeri and Oeri Finance
represent and warrant that, to the best knowledge, information
and belief of Felix A. Oeri, after reasonable investigation of
same, since December 31, 1997, there has been no material adverse
change in the assets or liabilities, or in the business or
condition, financial or otherwise, or in the results of
operations, of Oxford; and no fact or condition exists or is
contemplated or threatened which might cause such a change in the
future.
S4.5 No Brokers, Finders, Discounts, etc. Felxi A. Oeri
and Oeri Finance represent and warrant that all negotiations
relating to this Agreement and the transactions contemplated
herein, have been carried on without the participation of any
person or entity acting on behalf of Oeri in such a manner as to
give rise to any valid claim against Oeri for any brokerage or
finder's commission, fee, discount or similar compensation upon
consummation of the transactions contemplated hereby; and Felix
A. Oeri and Oeri Finance further represent and warrant that to
the best of their knowledge, Oeri has no knowledge of any
brokerage or finder's commission, fee, discount or similar
compensation to be paid to any person or entity upon the
consummation of the transactions contemplated hereby.
ARTICLE V
REPRESENTATIONS OF THIRD CAPITAL
S5.Representations of Third Capital. Third Capital
represents, warrants and agrees as follows:
S5.1 Existence; Good Standing; Authority and Authorization
Third Capital is a limited liability company duly organized,
validly existing and in good standing under the laws of the State
of Tennessee. Third Capital has the requisite power and
authority to make, execute, deliver and perform this Agreement.
This Agreement has been duly authorized and approved by all
required action of Third Capital and this Agreement is a valid
and binding obligation of Third Capital, enforceable against
Third Capital in accordance with its terms.
S5.2 Purchase for Investment. Third Capital is acquiring
the securities described herein for its own account for
investment, with no present intention of reselling or otherwise
disposing of all or any portion of the same; it does not have in
mind any sale of the securities either currently or after the
passage of a fixed or determinable period of time or upon the
occurrence or non-occurrence of any predetermined event or
circumstance; it has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment
providing for or which is likely to compel a disposition of the
securities; it is not aware of any circumstances presently in
existence which are likely in the future to prompt a disposition
of the securities. Third Capital is an "accredited investor" as
defined in Regulation D under the Securities Act of 1933, as
amended; it possesses the experience in the business in which
Oxford is involved necessary to make an informed decision to
acquire the securities; and, it has the financial means to bear
the economic risk of the investment in the securities.
S5.3 Assets Available. Third Capital has available liquid
assets or written commitments therefore sufficient for it to
perform its obligations under this Agreement.
S5.4 Compliance with Laws. Third Capital will fully comply
with all applicable federal and state laws, including without
limitation securities laws, in all actions that it takes in
connection with fulfilling its commitment to obtain additional
equity capital for Oxford.
S5.5 No Affiliations. Third Capital has no affiliation
with any person other than the individuals named in Section 2.1
whom Oxford would need to disclose to the SEC under any orders
applicable to Oxford or otherwise. Third Capital has no
affiliation with any person whose affiliation with Oxford might
cause Oxford to be suspended or disqualified from any type of
broker/dealer or investment advisory business.
S5.6 No Brokers, Finders, Discounts, etc. Third Capital
represents and warrants that all negotiations relating to this
Agreement and the transactions contemplated herein, have been
carried on without the participation of any person or entity
acting on behalf of Third Capital in such a manner as to give
rise to any valid claim against Third Capital for any brokerage
or finder's commission, fee, discount or similar compensation
upon consummation of the transactions contemplated hereby; and
Third Capital further represents and warrants that to the best of
its knowledge and the knowledge of its directors and officers,
Third Capital has no knowledge of any brokerage or finder's
commission, fee, discount or similar compensation to be paid to
any person or entity upon the consummation of the transactions
contemplated hereby.
ARTICLE VI
REPRESENTATIONS OF BIER GROUP
S6.0 Representations of Bier Group. Bier Group represents,
warrants and agrees as follows:
S6.1 Existence; Good Standing; Authority and Authorization.
Bier Group is a Canadian corporation duly organized, validly
existing and in good standing under the laws of Canada. Bier
Group has the requisite power and authority to make, execute,
deliver and perform this Agreement. This Agreement has been duly
authorized and approved by all required action of Bier Group and
this Agreement is a valid and binding obligation of Bier Group,
enforceable against Bier Group in accordance with its terms.
S6.2 Purchase for Investment. Bier Group is acquiring the
securities described herein for its own account for investment,
with no present intention of reselling or otherwise disposing of
all or any portion of the same; it does not have in mind any sale
of the securities either currently or after the passage of a
fixed or determinable period of time or upon the occurrence or
non-occurrence of any predetermined event or circumstance; it has
no present or contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for or which is
likely to compel a disposition of the securities; it is not aware
of any circumstances presently in existence which are likely in
the future to prompt a disposition of the securities. The Bier
Group is an "accredited investor" as defined in Regulation D
under the Securities Act of 1933, as amended; it possesses the
experience in the business in which Oxford is involved necessary
to make an informed decision to acquire the securities; and, it
has the financial means to bear the economic risk of the
investment in the securities.
S6.3 Assets Available. The Bier Group has available liquid
assets or written commitments therefore sufficient for it to
perform its obligations under this Agreement.
S6.4 Compliance with Laws. The Bier Group will fully comply
with all applicable federal and state laws, including without
limitation securities laws, in all actions that it takes in
connection with fulfilling its commitment to obtain additional
equity capital for Oxford.
S6.5 No Affiliations. The Bier Group has no affiliation
with any person other than the individuals named in Section 2.1
whom Oxford would need to disclose to the SEC under any orders
applicable to Oxford or otherwise. The Bier Group has no
affiliation with any person whose affiliation with Oxford might
cause Oxford to be suspended or disqualified from any type of
broker/dealer or investment advisory business.
S6.6 No Brokers, Finders, Discounts, etc. The Bier Group
represents and warrants that all negotiations relating to this
Agreement and the transactions contemplated herein, have been
carried on without the participation of any person or entity
acting on behalf of the Bier Group in such a manner as to give
rise to any valid claim against the Bier Group for any brokerage
or finder's commission, fee, discount or similar compensation
upon consummation of the transactions contemplated hereby; and
the Bier Group further represents and warrants that to the best
of its knowledge and the knowledge of its directors and officers,
the Bier Group has no knowledge of any brokerage or finder's
commission, fee, discount or similar compensation to be paid to
any person or entity upon the consummation of the transactions
contemplated hereby.
ARTICLE VII
MISCELLANEOUS
S7.1 Governing Law. The interpretation and construction of
this Agreement, and all matters relating hereto shall be governed
by the laws of the State of Tennessee.
S7.2 Publicity. Except as otherwise required by law, or as
may be mutually consented and agreed to, none of the parties
hereto shall issue any press release or make any other public
statement, in each case relating to or in connection with or
arising out of this Agreement or the matters contained herein,
without obtaining the prior approval of the Purchasers and the
Sellers to the contents and the manner of presentation and
publication thereof. The parties shall work together in
determining the appropriate content of any required press
release, public statement or public filing. If a party is
required by law to make any disclosure which cannot be mutually
agreed upon, such party shall first provide to the other party
the content of the proposed disclosure, the reasons that such
disclosure is required by law, and the time and place that the
disclosure will be made.
S7.3 Survival of Representations. The respective
representations and warranties of parties contained in this
Agreement or in any Schedule or Exhibit delivered pursuant
hereto, shall survive the closings contemplated hereby for a
period of three (3) years from the such Closing Date.
Notwithstanding the foregoing, all representations and warranties
of the Sellers relating to the Purchasers' title to the
Convertible Notes and the New Notes shall survive the respective
Closing Date and continue until thirty (30) days after the
expiration date of the applicable and appropriate statute of
limitations with respect to the respective representation or
warranty.
S7.4 Indemnification. From and after the Closing Date,
each party agrees to indemnify, defend and hold harmless the
other parties against and from any claim, liability, obligation,
loss, damage, assessment, judgment, cost and expense (including,
without limitation, reasonable attorney's fees and costs) of any
kind or character arising out of or in any manner incident,
relating or attributable to: (i) the inaccuracy in any
representation or breach of warranty, of such party contained in
this Agreement, or in any certificate, instrument or other
document or agreement executed by such party in connection with
this Agreement, or (ii) any failure by such party to perform or
observe any covenant, agreement or condition to be performed or
observed by it under this Agreement or under any certificates or
other documents or agreements executed by it in connection with
this Agreement.
S7.5 Best Efforts; Fulfillment of Agreement. All parties
hereto agree to use their best efforts and all due diligence to
fulfill the terms and conditions of this Agreement as soon as
practicable. The parties agree to deliver on each Closing Date,
and thereafter at such other times and places as shall be
reasonably agreed upon, such instruments as may be reasonably
requested for the purpose of consummating and carrying out this
Agreement and its terms, conditions and requirements.
S7.6 Notices. Any notice or other communications required
or permitted hereunder shall be sufficiently given if delivered
in person or by express mail or sent by registered or certified
mail, postage prepaid, addressed as follows:
(i)If to Oxford:
JB Oxford Holdings, Inc.
Third Floor
9665 Wilshire Boulevard
Beverly Hills, CA 90212
Fax: (310) 777-8840
Attn: Stephen Rubenstein, CEO
(ii) If to Third Capital:
Third Capital Partners, LLC
Ninth Floor
314 Church Street
Nashville, TN 37201
Fax: (615) 255-3199
Attn: C. L. Jarratt, Chief Manager
(iii) If to Bier Group:
Elliot L. Bier
3421643 Canada Inc.
c/o Adessky Poulin
Place Canada Trust, 18th Floor
999 de Maisonneuve Blvd. W.
Montreal, Quebec H3A 3L4
Fax: (514) 288-2697
(iv) If to Oeri:
Felix A. Oeri
Oeri Finance Inc.
Peter Merian-Strasse 50
CH-4002 Basel, Switzerland
Fax: 011-41-61-279-8899
or such other address as shall be furnished in writing by any
such party, and such notice or communication shall be deemed to
have been given as of the date so delivered, sent by telex or ten
(10) days following mailing.
S7.7 Counterparts. This Agreement may be executed in one
or more counterparts, all of which taken together shall
constitute one instrument.
S7.8 Assignment. This Agreement may be assigned by the
Purchasers upon obtaining the written consent of both Sellers,
which consent may be withheld in Sellers' sole discretion.
Notwithstanding the foregoing, Sellers hereby expressly consent
to the assignment by the Purchasers of this Agreement to any
affiliate of Third Capital, the Bier Group or any individual
named in Section 2.1 of this Agreement. The Sellers have no
right to assign this Agreement.
S7.9 Entire Agreement. This Agreement, including the other
documents referred to herein which form a part hereof, contains
the entire understanding of the parties hereto with respect to
the subject matter contained herein and therein. This Agreement
supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
S7.10 Amendment; Waiver; and Rules of Construction. This
Agreement may only be amended or modified, and waivers or consent
given, in writing signed by all parties to the Agreement. The
normal rules of construction which require the terms of an
agreement to be construed most strictly against the drafter of
such agreement are hereby waived since each party has been
represented by counsel in the drafting and negotiation of this
Agreement.
S7.11 Exclusive Dealing; Other Offers. During the period
from the execution of this Agreement to the earlier of: (1) the
Closing Date, as extended if applicable, or (2) the termination
of this Agreement, the Sellers shall not take any action to,
directly or indirectly, encourage, initiate, solicit, facilitate
or engage in discussions or negotiations with, or provide any
information to, any corporation, partnership, person, or other
entity or group, other than the Purchasers, concerning any
purchase of an interest in the Sellers or any merger,
consolidation, sale of substantial assets or similar transaction
involving any Seller and/or its assets (any such action being
referred to herein as a _Transaction_). Nor shall any Seller
enter into any agreement or understanding requiring such Seller
to abandon, terminate or fail to consummate the transactions
contemplated herein. Provided, however, the foregoing shall not
prohibit Oxford from terminating this Agreement pursuant to
Section 7.12 (including payment of the fees described therein to
the Purchasers) or prohibit taking any required action if and to
the extent that the Board of Directors, after consulting with its
legal counsel and Purchasers' legal counsel, has concluded in
good faith that such action is required by the Board of Directors
in the exercise of its fiduciary duties to the stockholders of
Oxford. The Sellers shall promptly notify Purchasers after
receipt of any proposal or any indication that any person or
entity is considering making a proposal involving a Transaction
and shall keep Purchasers fully informed with respect to any such
proposals, negotiations and the like. Each Seller shall, and
shall cause such Seller's directors, officers, employees, agents
and representatives to, cease immediately and cause to be
terminated all activities, discussions or negotiations, if any,
with any persons conducted heretofore with respect to any such
proposal.
S7.12 Termination; Break-Up Fees. This Agreement may be
terminated at any time prior to the Note Closing Date by the
written agreement of all parties to this Agreement. This
Agreement may also be terminated by Oxford at any time by
delivery to the Purchasers of: (a) a break-up fee in the amount
of $750,000, and (b) a written certification by the Board of
Directors of Oxford that it has determined in good faith, after
consulting with outside counsel, that it is required in the
exercise of its fiduciary duties to the stockholders of Oxford to
enter into a definitive agreement with respect to another
Transaction or to recommend to the stockholders another
Transaction. Further, if Oxford is unable to complete the
transactions contemplated by this Agreement for any other reason
(other than the failure of any representation or warranty of
either Purchaser set forth in this Agreement, or the failure of
either Purchaser to comply with its obligations under this
Agreement), Oxford agrees to pay the Purchasers $300,000.
[The remainder of this page is intentionally left blank.]
IN WITNESS WHEREOF, each of the parties herein below stated has
executed this Agreement as of the date and year first above
written.
WITNESSES:
___________________________ JB OXFORD HOLDINGS, INC.
Print Name:_________________
___________________________ By: _______________________ (Seal)
Print Name:_________________ Stephen Rubenstein, President
and Chief Executive Officer
___________________________ THIRD CAPITAL PARTNERS, LLC
Print Name:_________________
___________________________ By: _________________________
Print Name:_________________ C. L. Jarratt
Chief Manager
___________________________ 3421643 CANADA INC.
Print Name:_________________
___________________________ By: __________________________
Print Name:_________________ Elliot L. Bier
Authorized Representative
___________________________ OERI FINANCE INC.
Print Name:_________________
___________________________ By: _______________________
Print Name:_________________ Felix A. Oeri
Authorized Representative
____________________________ FELIX A. OERI
Print Name:_________________
___________________________
Print Name:_________________
EXHIBIT 4.1 9% SECURED CONVERTIBLE NOTE
NO. S-1
NEITHER THIS NOTE NOR ANY SECURITIES INTO
WHICH IT IS CONVERTIBLE HAS BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY APPLICABLE SECURITIES LAW OF ANY
JURISDICTION AND MAY NOT BE TRANSFERRED UNTIL
(i) A REGISTRATION STATEMENT UNDER SUCH
SECURITIES ACT OR SUCH APPLICABLE SECURITIES
LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD
THERETO, OR (ii) IN THE OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY REGISTRATION UNDER
SUCH SECURITIES ACT OR SUCH APPLICABLE
SECURITIES LAWS IS NOT REQUIRED IN CONNECTION
WITH SUCH PROPOSED TRANSFER, INCLUDING,
WITHOUT LIMITATION, PURSUANT TO REGULATION S
PROMULGATED UNDER SUCH SECURITIES ACT.
JB OXFORD HOLDINGS, INC.
9% Secured Convertible Note Due December 31, 1999
$2,000,000 June
8, 1998
FOR VALUE RECEIVED, JB OXFORD HOLDINGS, INC., a Utah
corporation ("Issuer"), hereby promises to pay, pursuant to the
terms and conditions hereof, to Third Capital Partners, LLC or
registered assigns ("Payee"), the principal sum of Two Million
Dollars ($2,000,000), together with interest from the date first
written above on the unpaid principal balance at nine percent
(9%) per annum, compounded monthly. Interest shall be computed
on the basis of actual days elapsed in a 365 or 366 day year, as
the case may be.
1. Parents of Principal and Interest. On the last
day of each month until and including November 30, 1999, Issuer
shall pay interest calculated in accordance with the provisions
set forth above on the unpaid outstanding principal balance, and
shall make a final payment of all remaining principal and accrued
interest thereon on December 31, 1999. If the specified payment
date for any payment of principal and/or interest shall be on
Saturday, Sunday or a legal holiday, or the equivalent for
banking institutions generally in the State of California, then
such payment may be made in the next succeeding day which is not
one of the foregoing days without additional interest and with
the same force and effect as if made on the specified date for
such payment, and such date shall be deemed the "payment date" of
such payment for all purposes hereof.
2. Application of Payments. All sums paid by Issuer
to Payee in connection with this Note shall be applied first to
accrued but unpaid interest thereon, next to principal thereof
and the balance, if any, to any other obligations owing hereunder
(if any).
3. Compounding Interest. If any installment of
principal or interest hereunder is not paid when due with respect
to this Note, Payee shall have the right to (in addition to the
other rights set forth herein, in the Note Purchase Agreement,
and under law) compound interest by adding the unpaid interest to
the principal balance of the Note, with such amount thereafter
bearing interest at the rate provided in this Agreement.
4. Note Purchase Agreement, Conversion: Redemption,
Defaults. Reference is hereby made to the further provisions of
this Note set forth, in fun in the Note Purchase Agreement, dated
as of the date hereof, by and between Issuer and Third Capital
Partners, LLC, a Tennessee limited liability company
("Purchaser") (the "Note Purchase Agreement)including, limitation,
the provisions relating to conversion, redemption and
events of default of this Note, all of which provisions shall for
all purposes have the same effect as if set forth in full herein.
Attached hereto and incorporated herein by this reference is a
form of Conversion Notice. Terms not otherwise defined in this
Note shall have the meanings ascribed to them in the Note
Purchase Agreement.
5. Security for Payment. This Note is secured by a
pledge of Common Stock of JB Oxford & Company, a Utah
corporation, and a pledge of Common Stock of Prolyx Data Systems,
Inc., a Utah corporation, pursuant to a Stock Pledge Agreement,
dated as of the date hereof, by and between Issuer and Payee (for
itself and as agent for subsequent registered holders of this
Note).
6. No Usurious Charges. Issuer acknowledges that
Payee does not intend to contract for, charge or receive any
interest or other charge which is usurious. Notwithstanding any
other provision hereof, in no event shall the interest rate and
other charges hereunder exceed the highest rate permissible under
any law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. In the event that a court
determines that the Payee has received interest and other charges
hereunder in excess of the highest rate applicable hereto, such
excess shall be deemed received on account of, and automatically
shall be applied to reduce, the principal of this Note, other
than interest, and the provisions hereof shall be deemed amended
to provide for the highest permissible race. If there is no
principal balance of this Note outstanding, Payee shall refund to
Issuer such excess interest paid.
7. Registered Form of Note.
(a) This Note is one of a duly authorized issue
of Notes of Issuer designated as its 9% Secured Convertible Notes
due December 31, 1999 (herein called the _Notes_), issued under
the Note Purchase Agreement. Reference is hereby made to the
Note Purchase Agreement for a statement of the respective rights,
limitations, duties and obligations thereunder of Issuer and
Payee, and the terms upon which the Notes are, and are to be,
authenticated and delivered.
(b) The Notes are issuable only in registered
form without coupons in denominations of $1,000 and integral
multiples of $1,000 in excess thereof and transferable and be
changeable as provided in the Note Purchase Agreement. As
provided in the Note Purchase Agreement and subject to certain
limitations therein set forth, the Notes are exchangeable for a
like aggregate principal amount of Notes of a different
authorized denomination, as requested by the holder surrendering
the same.
(c) Prior to due presentment of this Note for
registration of transfer, Issuer and any agent of Issuer, may
treat the person in whose name this Note is registered as the
owner hereof.
(d) Issuer shall maintain a written record of the
ownership of this Note and the obligations to pay interest and
principal evidenced hereby. In addition to any other provisions
regarding transfer of the Note set forth herein, the obligations
evidenced by the Note to pay principal and interest may only be
transferred if the holder shall indorse the Note in favor of a
named transferee, and the transferee, as new holder thereof,
shall surrender the Note to the Company, whereupon the Issuer
shall promptly issue a new Note in favor of such transferee. The
Note may not be transferred to, or otherwise indorsed, in favor
of bearer, nor may it be indorsed in blank. The Issuer shall
recognize as the holder of a Note only a holder who has acquired
title in the manner described in the preceding sentences.
(e) Prior to making any payments under the Note,
the Issuer shall ascertain whether it is obligated under Internal
Revenue Code Sections 1441 or 1442, as applicable, to withhold in
respect to any such payment. If requested by the Issuer, the
holder of this Note shall execute and deliver an IRS Form W-8
Certificate of Foreign Status to the Issuer certifying that such
holders are foreign entities that are not subject to U.S.
information return reporting or withholding rules. In the event
the Issuer has determined that withholding is required, and the
holder of this Note claims the benefits of any applicable tax
treaty providing for a reduced rate of withholding, the holder of
this Note shall execute and deliver to the Issuer Internal
Revenue Service Form 1001. All holders of this Note shall notify
the Issuer of any loss of, or exchange in, its exempt status.
(f) Payee and its transferees, if any, agree to
indemnify the Issuer for any tax, interest or penalty loss
imposed on the Issuer in the event that any taxing authority
determines that the Issuer is or was required to withhold with
respect to any payment made hereunder. However, the previous
sentence shall not apply to any tax, interest or penalty imposed
after the Issuer has either been notified by any taxing authority
that withholding is required, or after the Payee (or such
transferee) has informed the Issuer that the Payee (or such
transferee) is no longer exempt from withholding. In that event,
the Payee (or such transferee, as applicable) shall not be liable
for interest and penalties imposed by any taxing authority that
arise out of the Issuer's failure to withhold. If the Issuer
fails to withhold the necessary amount from any subsequent
payment, the Issuer's only remedy shall be to withhold tax on any
subsequent payments, or to obtain reimbursement for the tax only.
8. Amendments and Waivers. No failure on the part of
Payee to exercise any right or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any
such right or remedy preclude further exercise thereof or the
exercise of any other right or remedy hereunder. This Note may
be amended, or in compliance with any provision hereof waived,
only by a written agreement duly executed by Payee (or any
successor or assign) and Issuer.
9. Cumulative Rights. The remedies of Payee as
provided herein shall be cumulative and concurrent and may be
pursued successively or concurrently against Issuer and/or the
collateral securing this Note, and the failure to exercise any
such right or remedy shall in no event be construed as a waiver
or release of the same.
10. Attorneys' Fees. In the event of any litigation
in connection with this Note, the prevailing party shall be
entitled to reasonable costs, including, without limitation,
attorneys' fees.
11. Issuer's Waivers. Issuer waives notice of
acceptance hereof, presentment and demand for payment, protest
and notice of dishonor or default, trial by jury, and the right
to interpose any set-off or counterclaim of any nature or
description.
12. Severability. If any section or provision of this
Note, or the application of such section or provision, is held
invalid, the remainder of this Note and the application of such
section or provision to persons or circumstances other than those
to which its application is held invalid shall not be affected
thereby.
13. Assignment by Payee. Payee may assign its rights
under this Note as described in the Note Purchase Agreement.
14. Governing Law. This Note and the legal relations
between Issuer and Payee shall be governed by and construed in
accordance with the internal laws of the State of California.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Note as of the date first above written.
ISSUER
JB OXFORD HOLDINGS, INC.,
a Utah corporation
By: Michael J. Chiodo
Title: Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, JB Oxford Holdings, Inc. has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
JB Oxford Holdings, Inc.
__/s/_Michael J. Chiodo__________
Michael J. Chiodo
Chief Financial Officer and
Chief Accounting Officer
June 18, 1998
