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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
EXHIBITRONIX, INC.
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(NAME OF ISSUER)
COMMON STOCK
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(TITLE OF CLASS OF SECURITIES)
302049 30 9
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CUSIP NUMBER
NORMAN WRIGHT
C/O RICHARD TINGLE, Q.C., 1250, 639 5TH AVENUE S.W.
CALGARY, ALBERTA, T2P 3R7 CANADA
(403) 271-0669
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
SEPTEMBER 17, 1997
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(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEEMENT)
If the filing person has previously filed a statement on schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
Check the following box if a fee is being paid with this statement. [ ]
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for purpose of Section 18 of the Securities Exchange Act of 1934
("Act") or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
Page 1 of 8 Pages
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1 NAME OF REPORTING PERSON: NB FINANCIAL LIMITED
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCES OF FUNDS
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cook Islands
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Number of 7 SOLE VOTING POWER 5,200,000
Shares
Beneficially 8 SHARED VOTING POWER N/A
Owned By Each
Reporting 9 SOLE DISPOSITIVE POWER 5,200,000
Person With
10 SHARED DISPOSITIVE POWER N/A
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,200,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
80.9%*
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14 TYPE OF REPORTING PERSON
CO
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* Percentage calculation based on the total number of shares held by the
Reporting Person (5,200,000) divided by the total number of shares of the
Common Stock issued and outstanding (6,428,078) as set forth in the Issuer's
most recent Annual Report on Form 10-KSB.
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The Reporting Person, a corporation organized pursuant to the laws of
the Cook Islands, hereby files its Schedule 13D with the Securities and Exchange
Commission with respect to the common stock ("Common Stock") of Exhibitronix,
Inc., a Nevada corporation ("Issuer").
Item 1. Security and Issuer.
This Schedule 13D filing relates to the Common Stock of the Issuer,
with principal executive offices at c/o Richard Tingle, Q.C., 1250,
639 5th Avenue S.W. Calgary, Alberta, T2P 3R7 Canada.
Item 2. Identity and Background.
(a) Name of person filing.
NB Financial Limited, a corporation organized under the laws of the
Cook Islands.
(b) Address of Principal Business Office.
NB Financial Limited
c/o Henderson Limited
Attention: Sara Reeves
Bank of Bermuda House
Tutakimoa Road
Rarotonga, Cook Islands
(c) Principal Business.
Investments in consulting services.
(d) Criminal Proceedings.
During the last five years, none of the officers, directors, or
affiliates of the Reporting Person has been convicted in any criminal
proceedings.
(e) Civil Proceedings.
During the last five years, none of the officers, directors, or
affiliates of the Reporting Person has been party to any civil
proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such individual was or is subject to
any judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
Page 3 of 8 Pages
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Item 3. Source and Amount of Funds or Other Consideration.
The source and amount of funds or other consideration used by the
Reporting Person is:
(a) US $50,000 - in corporate funds of the Reporting Person; and
(b) US $150,000 - corporate promissory note, the source of
repayment thereof shall be the corporate funds of the Reporting
Person.
Item 4. Purpose of Transaction.
The shares of Common Stock of the Issuer were acquired by the Reporting
Person for investment purposes. Immediately upon the closing of such
acquisition, the then-current members of the Issuer's Board of Directors and
management resigned and were replaced by Norman Wright as the Issuer's sole
director and Chief Executive Officer, Chief Financial Officer, and Secretary.
Other than the changes in the Issuer's Board of Directors and
management, the Reporting Person does not have any present plans or proposals
which relate to or would result in any of the following (although the Reporting
Person reserves the rights to develop such plans or proposals): (i) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Issuer or any of its subsidiaries; (ii) a sale or
transfer of a material amount of assets of the Issuer or any of its
subsidiaries; (iii) any material change in the present capitalization or
dividend policy of the Issuer; (iv) any other material change in the Issuer's
business or corporate structure; (v) changes in the Issuer's charter or bylaws
or other actions which may impede the acquisition of control of the Issuer by
any person; (vi) causing a class of securities of the Issuer to be delisted from
a national securities exchange; (vii) a class of equity securities of the Issuer
becoming eligible for termination of registration pursuant to section 12(g)(4)
of the Act; or (viii) any actions similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) The Reporting Person as at September 17, 1997, beneficially owned
an aggregate of 5,200,000 shares, or approximately 80.9%, of the Issuer's Common
Stock. The 80.9% calculation is based on the total number of shares of Common
Stock held by the Reporting Person (5,200,000) divided by the total number of
shares of the Common Stock issued and outstanding (6,428,078) as set forth in
the Issuer's most recent Annual Report on Form 10-KSB.
(b) The Reporting Person has the sole power to vote and the sole power
to dispose of 5,200,000 shares of Common Stock. No voting power or power of
disposition is shared.
Page 4 of 8 Pages
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(c) On September 17, 1997, the Reporting Person acquired 5,200,000
shares of Common Stock at a purchase price of $0.0385 per share in a private
transaction occurring in the City of Irvine, County of Orange, State of
California.
Item 6. Contracts, Arrangements, Understanding or Relationship with respect to
Securities of the Issuer.
On September 17, 1997, Jay A. Geier and Ronald Shepston sold an
aggregate of 5,200,000 share of restricted common stock of the Issuer to NB
Financial Limited, a corporation organized pursuant to the laws of the Cook
Islands (the "Purchaser"), in consideration of the payment of $50,000 and the
delivery of the Purchaser's secured promissory note (the "Promissory Note") in
favor of Mr. Geier in the sum of $150,000. The Promissory Note bears simple
interest at the rate of 10% per annum; all principal and accrued interest is due
and payable on or before February 28, 1998. Pre-payments, if any, may be made
without penalty. On the date of closing, the Purchaser entered into a stock
pledge agreement (the "Pledge Agreement") in favor of Mr. Geier, pursuant to the
terms of which all of the shares of Common Stock acquired by the Purchaser (as
well as the proceeds therefrom and any other collateral thereafter acquired)
were pledged in support of the Purchaser's obligations under the Promissory
Note. In the event of a default under the terms of the Promissory Note, Mr.
Geier may, upon the occurrence of certain events, exercise the rights and
remedies, as defined in paragraphs 7.1, 7.2, and 8 of the Pledge Agreement, as
set forth below:
"7.1 Rights in the Event of Default. If an Event of Default shall have
occurred and be continuing and the Pledgee shall have given notice to the
Pledgor of the Pledgee's intent to exercise the following rights: (i) the
Pledgee shall have the right to receive any and all payments of any
character paid in respect of the Collateral and make application thereof
to the Obligations (in the manner set forth in paragraph 8 hereof) and
(ii) all Pledged Stock shall be registered in the name of the Pledgee or
its nominee, and the Pledgee or its nominee may thereafter exercise (A)
all voting, corporate, and other rights pertaining to the Pledged Stock
at any meeting of shareholders of the Company or otherwise and (B) any
and all rights of conversion, exchange, subscription, and any other
rights, privileges, or options pertaining to the Pledged Stock as if it
were the absolute owner thereof (including, without limitation, the right
to exchange at its discretion any and all of the Pledged Stock upon the
merger, consolidation, reorganization, recapitalization or other
fundamental change in the corporate structure of the Company, or upon the
exercise by the Pledgor or the Pledgee of any right, privilege or option
pertaining to such shares of the Pledged Stock, and in connection
therewith, the right to deposit and deliver any and all of the Pledged
Stock with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine),
all without liability except to account for property actually received by
it, but the Pledgee shall have no duty to exercise any such right,
privilege or option and shall not be responsible for any failure to do so
or delay in so doing; provided, however, that the Pledgor may exercise
any such right, privilege or option if the Pledgee fails or delays in so
doing, only if such exercise by the Pledgor, in the Pledgee's reasonable
Page 5 of 8 Pages
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judgment, would not impair the Collateral or result in any violation of
any provision of the Transaction Documents; provided, further, that the
Pledgee's exercise of his rights, as set forth in section (ii) above,
shall be conditioned upon the Pledgor's use of its best efforts as a
controlling stockholder of the Company, or otherwise, to cause each and
every business combination transaction or acquisition of equity or assets
of any third party or any assumption of liabilities of any third party to
be rescinded, such that each such transaction will be void ab initio, and
that, immediately prior to the Pledgee's exercise of his rights hereunder
and under the Note, the Company's financial status will be substantially
similar to its current status, with the exception that any sales of the
Company's equity for cash shall not be subject to such rescission. If
such rescissions are not commenced and finalized within a reasonable
period of time, the condition precedent set forth in the immediately
preceding proviso will be deemed to have been waived by the Pledgor."
"7.2 Not Conditioned or Contingent. The rights of the Pledgee
hereunder shall not be conditioned or contingent upon the pursuit by the
Pledgee of any right or remedy against the Pledgor or the Company or
against any other person which may be or become liable in respect of all
or any part of the Obligations or against any other collateral security
therefor, guaranty thereof or right of offset with respect thereto."
"8. Remedies. Subject to the conditions set forth in the final proviso
of Section 7.1, above, if an Event of Default shall have occurred and
shall be continuing, the Pledgee may exercise, in addition to all other
rights and remedies granted in this Pledge Agreement and in any other
instrument or agreement securing, evidencing or relating to the
Obligations, including, without limitation, the Transaction Documents,
all rights and remedies of a secured party under the UCC or any other
applicable law. Without limiting the generality of the foregoing, the
Pledgee, without demand of performance or other demand, defense,
presentment, protest, advertisement or notice of any kind (except any
notice required by law) to or upon the Pledgor, the Company or any other
person (all and each of which demands, defenses, presentments, protests,
advertisements and notices are hereby waived, except any notice required
by law) may in such circumstances forthwith collect, receive, appropriate
and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, assign, give an option or options to purchase or
otherwise dispose of and deliver the Collateral or any part thereof (or
contract to do any of the foregoing), in one or more portions, upon such
terms and conditions and at such prices as it may deem advisable, for
cash or on credit or for future delivery without assumption of any credit
risk. The Pledgee shall have the right, to the extent permitted by law,
upon any such sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the
Pledgor, which right or equity is hereby waived or released. The Pledgee
shall apply any Proceeds from time to time held by it and the net
proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of
every kind incurred therein or incidental to the care or safekeeping of
any of the Collateral or in any way relating to the Collateral or the
rights of the Pledgee hereunder, including, without limitation,
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reasonable attorneys' fees and disbursements, to the payment in whole or
in part of the Obligations in whatever order the Pledgee may elect and
only after such application and after the payment by the Pledgee of any
other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the UCC, need the Pledgee account for
the surplus, if any, to the Pledgor. The Pledgor waives all claims,
damages and demands it may acquire against the Pledgee arising out of the
exercise by the Pledgee of any of its rights hereunder, except any that
may arise from the gross negligence or misconduct of the Pledgee. If any
notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition. The Pledgee
shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Pledgee may postpone or adjourn any
sale of any Collateral from time to time by announcement at the time and
place fixed therefor, and such sale may, upon further notice, be made at
the time and place to which it was so postponed or adjourned."
Item 7. Material to Be Filed as Exhibits.
10.1 Secured Promissory Note, dated September 17, 1997, made by the
Reporting Person in favor of Jay Geier, in the principal amount of $150,000.
10.2 Stock Pledge Agreement, dated September 17, 1997, made by the
Reporting Person in favor of Jay Geier.
10.3 Stock Purchase Agreement, dated September 17, 1997, made by and
among the Reporting Person, Jay Geier, and Ronald Shepston.
Page 7 of 8 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated as of October 17, 1997.
NB FINANCIAL LIMITED
By: HENDERSON LIMITED, Sole Director
of NB Financial Limited
--------------------------------
Sarah Reeves, Nominee of
Henderson Limited
Page 8 of 8 Pages
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EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
10.1 Secured Promissory Note, dated September 17, 1997,
made by the Reporting Person in favor of Jay Geier,
in the principal amount of $150,000.
10.2 Stock Pledge Agreement, dated September 17, 1997,
made by the Reporting Person in favor of Jay Geier.
10.3 Stock Purchase Agreement, dated September 17, 1997,
made by and among the Reporting Person, Jay Geier,
and Ronald Shepston.
<PAGE> 1
EXHIBIT 10.1
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE
APPLICABLE SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY
INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE
SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
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SECURED PROMISSORY NOTE
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Irvine, California
$150,000.00 September 17, 1997
1. FOR VALUE RECEIVED, NB FINANCIAL LIMITED, a corporation organized
pursuant to the laws of the Cook Islands (the "Company"), hereby promises to pay
to JAY A. GEIER, an individual residing in the State of California, or his
assigns (the "Holder"), the principal sum of ONE HUNDRED FIFTY THOUSAND AND
00/100 DOLLARS ($150,000.00), together with interest on the unpaid principal
balance at the rate of ten percent (10.00%) per annum (the "Note"). The
principal plus accrued interest shall be due and payable on February 28, 1998,
and is payable in lawful money of the United States of America at the offices of
Holder as indicated in Section 7.4 hereof or at such other place within the
continental United States as the Holder may from time-to-time designate in
writing to the Company.
Interest hereunder shall be computed on the basis of a three hundred
sixty-five (365) day year for the actual number of days elapsed and shall
commence as of the date first above written. In no event shall the Holder be
entitled to interest exceeding the maximum rate permitted by the laws of the
State of California. If any excess of interest is provided for or shall be
adjudicated to be so provided for in the Note, then in such event: (i) the
provisions of this paragraph shall govern and control; (ii) the Company shall
not be obligated to pay the amount of such interest to the extent that it is in
excess of the maximum amount permitted by the laws of the State of California,
and the same shall be construed as a mutual mistake of the parties which shall
not affect the conversion rights granted herein; and (iii) any such excess which
may have been collected or attributed shall be subtracted from the then unpaid
principal amount hereof, or refunded to the Company.
The Note is made pursuant to that certain Stock Purchase Agreement of
even date herewith (the "Stock Purchase Agreement"), made by and among the
Company, the Holder, and Ronald W. Shepston, an individual ("Shepston"), and is
subject to the terms and conditions of that certain Agreement to Hold Funds in
Trust Account, dated August 15, 1997, made by and among the Company, the Holder,
Shepston, and Arter & Hadden (the "Funds Agreement").
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2. Security. The Note is secured by that certain Stock Pledge Agreement
of even date herewith (the "Pledge Agreement"), made by and among the Company,
the Holder, and Arter & Hadden.
3. Prepayment. The Note may be prepaid by the Company at any time, in
whole or in part, and without premium or penalty. All such payments shall be
applied first to accrued but unpaid interest and the remainder to principal.
4. Events of Default. The Holder shall have the right to demand
repayment of all or any portion of the indebtedness evidenced hereby, at any
time, upon the occurrence of any of the following "Events of Default."
4.1 Breach of Covenants or Obligations. The continuance for a period
of ten (10) days after notice to the Company of the breach of any one of the
covenants or obligations contained in the Note, Stock Purchase Agreement, the
Pledge Agreement, or any other agreement concurrently or subsequently entered
into by and between the parties hereto or thereto without cure within such ten
(10) day period of such breach; provided, however, that this Section 4.1 shall
not include breaches by the Holder.
4.2 Breach of the Company's Representations and Warranties. Any of
the representations or warranties made in the Note, Stock Purchase Agreement,
the Pledge Agreement, or any other agreement concurrently or subsequently
entered into by and between the parties hereto or thereto, or in any statement
or certificate at any time given in writing to the Holder pursuant to any such
agreements or in connection herewith or therewith, shall prove to have been
false or misleading in any material respect as of the date such representations
and warranties were made; provided, however, that this Section 4.2 shall not
include breaches by the Holder.
4.3 Bankruptcy. The institution of bankruptcy, insolvency,
reorganization 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, which proceedings shall not have been vacated by
appropriate court order within sixty (60) days of such institution.
4.4 Dissolution. Any order, judgment or decree shall have been
entered against the Company decreeing the dissolution or liquidation of the
Company and such order shall remain undischarged or unstayed for a period of
thirty (30) days.
4.5 Insolvency, Receiver or Trustee. The making by the Company of an
assignment for the benefit of creditors; or the making by the Company of an
offer of settlement, composition or extension to the claims of all or
substantially all of the Company's creditors or the application for or consent
to the appointment of a receiver or trustee for it or for a substantial part of
its property or business; or the appointment otherwise of such a receiver or
trustee or a committee of the Company's creditors.
4.6 Failure to Pay. The Company's failure to pay in full any amount
due hereunder, when due.
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5. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Holder that, through its Sole Director:
5.1 Existence and Good Standing; Power and Authority. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the Cook Islands. The Company has the corporate power and authority to
make, execute, deliver and perform the transactions contemplated by the Note,
Stock Purchase Agreement, Pledge Agreement, and Funds Agreement (the
"Transaction Documents"). Each of the Transaction Documents has been duly
authorized and approved by all required corporate action of the Company.
5.2 Restrictive Documents. The Company is not subject to any
charter, by-law, mortgage, lien, lease, agreement, instrument, order, law, rule,
regulation, judgment or decree, or any other restriction of any kind or
character, which would prevent consummation of the transactions contemplated by
each of the Transaction Documents.
5.3 Binding Nature. Each of the Transaction Documents has been duly
authorized and, when executed and delivered in accordance with the terms hereof
or thereof will, constitute legal, valid and binding obligations of the Company
enforceable in accordance with their respective terms except to the extent that
(i) such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (ii) such enforcement may be subject to general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
5.4 No Breach. The execution, delivery, and performance of the
Transaction Documents has not resulted and will not result in any violation of,
or conflict with, or constitute a default under any agreements, or any
applicable statute, rule, regulation, order or restriction of any federal or
state governmental entity or agency thereof nor result in the creation of any
mortgage, pledge, lien, encumbrances, or charge upon any of the properties or
assets of the Company that would have a material adverse effect upon the
Company, except as contemplated by the Transaction Documents.
5.5 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the valid execution and delivery of
the Note, except such as has already been obtained or as is not required to be
obtained prior to the date of the Note.
5.6 Securities Laws. Based in part upon the representations of the
Holder contained herein, the issuance of the Note pursuant to the terms herein
is exempt (i) from the registration requirements of Section 5 of the Securities
Act of 1933, as amended (the "Securities Act") by virtue of Section 3(b)
thereof, and (ii) from qualification under the California Corporate Securities
Law by virtue of Section 25102(f) thereof.
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6. Representations and Warranties of the Holder.
6.1 Investment Representations. The Holder hereby represents and
warrants to the Company that the Holder:
(a) Has made its own independent investigation of the Company
and has been furnished with such information relating to the Company and the
Note as the Holder has requested;
(b) Understands that the Holder must bear the economic risk of
its investment in the Note for an indefinite period of time because the Note has
not been registered under the Securities Act and, therefore, cannot be sold
unless it is either subsequently registered under the Securities Act or an
exemption from such registration is available;
(c) Is acquiring the Note for investment for its own account,
but without prejudice to the Holder's right at all times to sell or otherwise
dispose of all or part of the Note, under either an effective registration
statement under the Securities Act or under an exemption from registration
available under the Securities Act, and either in compliance with any applicable
state securities law or under an exemption available under the state law. The
Holder understands that the Note has not been registered under the Securities
Act on the ground that the issuance provided for in the Note is exempt from
registration under the Securities Act pursuant to Section 3(b) thereof, which
depends upon, among other things, the bona fide nature of the Holder's
investment intent as expressed herein; and
(d) Is authorized and otherwise duly qualified to purchase and
hold the Note, and the purchase and investment contemplated hereby are permitted
under all laws applicable to the Holder, its equity holders and their respective
beneficial owners.
7. Miscellaneous.
7.1 Survival of Warranties. The representations, warranties, and
covenants contained in or made pursuant to the Note shall terminate as set forth
in the Stock Purchase Agreement.
7.2 Exchange; Lost, Stolen, Destroyed, or Mutilated Note. Upon
receipt of evidence reasonably satisfactory to the Company of the ownership of
and the loss, theft, destruction, or mutilation of the Note and (in the case of
loss, theft, or destruction) upon delivery of an indemnity agreement in an
amount reasonably satisfactory to the Company, or (in the case of mutilation)
upon surrender and cancellation of the mutilated Note, the Company will execute
and deliver, in lieu thereof, a new Note of like tenor.
7.3 Successors and Assigns. The terms and conditions of the Note
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in the Note, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or
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liabilities under or by reason of the Note, except as expressly provided in the
Note. Notwithstanding, the Company shall not assign or transfer its obligations
under the Note without the prior written consent of the Holder.
7.4 Notices. Any notice or other communication required or permitted
under the Note shall be given in writing and shall be deemed effectively given
upon personal delivery to the party to be notified or by telex or confirmed
facsimile, or one day after deposit with Federal Express or similar overnight
express delivery service (for next day delivery), or seven days after deposit
with a domestic Post Office, by registered or certified mail, return receipt
requested, postage prepaid and addressed to the party to be notified at the
address indicated for such party below, or at such other address as such party
may designate by ten days' advance written notice to the other party:
(a) If to the Company: NB Financial Limited
c/o Henderson Limited
Attention: Sara Reeves
Bank of Bermuda House
Tutakimoa Road
Rarotonga, Cook Islands
(b) If to the Holder: Jay A. Geier
5234 Michelson Drive, #23D
Irvine, California 92612
With copy to: Arter & Hadden
5 Park Plaza, Suite 1000
Irvine, California 92614
Attention: Randolf W. Katz, Esq.
Facsimile (714) 252-0961
7.5 Severability. If one or more provisions of the Note are held to
be unenforceable under applicable law, such provision shall be excluded from the
Note and the balance of the Note shall be interpreted as if such provisions were
so excluded and shall be enforceable in accordance with its terms.
7.6 Waivers. No course of dealing between the Company and the Holder
hereof or any delay on the part of the Holder in exercising any rights hereunder
shall operate as a waiver of any rights of the Holder, except to the extent
expressly waived in writing by the Holder.
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7.7 Consents, Waivers, and Modifications. No consent, waiver or
modification of any nature relating to the Note, or the obligations of the
Company hereunder, shall be effective unless the same is in writing and signed
by an authorized representative of the Holder.
7.8 Entire Agreement. The Note (including the Schedules hereto) and
the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
7.9 Governing Law. The Note shall be construed in accordance with
and governed by the laws of the State of California and the venue shall be Los
Angeles County, California.
7.10 Further Assurance. At any time or from time-to-time upon
request of a party hereto (the "Requesting Party"), the other party hereto will
execute and deliver such further documents and do such other acts and things as
the Requesting Party may reasonable request in order fully to effectuate the
purpose of the Note, to provide for the payment of the principal and interest
due hereunder, and to facilitate a party's election to exercise a conversion
right granted herein.
7.11 Headings. The titles and subtitles used in the Note are used
for convenience only and are not to be considered in construing or interpreting
the Note.
IN WITNESS WHEREOF, the undersigned has executed or caused a duly
authorized officer or representative to execute the Note, all as of the date
first above written.
NB FINANCIAL LIMITED
By: HENDERSON LIMITED
as Director by its Nominee
Its: /s/ SARAH REEVES
----------------------------
Name: Sarah Reeves
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EXHIBIT 10.2
STOCK PLEDGE AGREEMENT
This STOCK PLEDGE AGREEMENT, dated as of September 17, 1997, made by
and among NB FINANCIAL LIMITED, a corporation organized pursuant to the laws of
the Cook Islands (the "Pledgor"), JAY A. GEIER, an individual residing in the
State of California (the "Pledgee"), and Arter & Hadden, a law firm located at 5
Park Plaza, Suite 1000, Irvine, California 92614 (the "Pledge Holder").
W I T N E S S E T H :
WHEREAS, the Pledgor and Pledgee, as well as others, have entered into
that certain Stock Purchase Agreement, of even date herewith (the "Stock
Purchase Agreement"), and that certain Agreement to Hold Funds in Trust Account,
dated August 15, 1997 (the "Funds Agreement").
WHEREAS, pursuant to the Stock Purchase Agreement and the Funds
Agreement, the Pledgor has issued that certain Secured Promissory Note, of even
date herewith (the "Note").
WHEREAS, pursuant to the Stock Purchase Agreement and the Funds
Agreement, the Pledgor is the legal and beneficial owner of the Pledged Stock
(as hereinafter defined), which consists of shares of common stock of
EXHIBITRONIX, INC., a Nevada corporation (the "Company"). This Pledge Agreement,
the Stock Purchase Agreement, the Funds Agreement, and the Note collectively may
be referred to hereinafter as the "Transaction Documents."
NOW, THEREFORE, in consideration of the premises and to secure the
obligations of the Pledgor under and evidenced by the Note, and to induce the
Pledgee to enter into the Transaction Documents, the Pledgor hereby agrees with
the Pledgee for its benefit as follows:
1. Defined Terms. Unless otherwise defined herein, terms which are
defined in the Note and used herein are so used as so defined, and the following
terms shall have the following meanings:
1.1 "Obligations" means each and every one of those obligations of
the Pledgor set forth in the Transaction Documents.
1.2 "Collateral" means the Pledged Stock and all Proceeds thereof.
1.3 "Pledge Agreement" means this Stock Pledge Agreement, as
amended, supplemented or otherwise modified from time to time.
1.4 "Pledged Stock" means all of the shares of capital stock of the
Company sold, transferred, assigned, and delivered to Pledgor pursuant to the
Stock Purchase Agreement.
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1.5 "Proceeds" means all "proceeds" as such term is defined in
Section 9-306(1) of the Uniform Commercial Code ("UCC") on the date hereof and,
in any event, shall include, without limitation, all dividends or other income
from the Pledged Stock, collections thereon or distributions with respect
thereto.
1.6 "Stock" means all of the shares of capital stock of the Company,
together with all options, rights, or other securities of any nature whatsoever
in respect of the capital stock of the Company.
2. Grant of Security Interest. The Pledgor hereby grants to the Pledgee
a first priority security interest in and lien on the Collateral as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations.
3. Pledge; Stock Assignment; Term. For the benefit of the Pledgee, the
Pledgor hereby delivers to the Pledge Holder the certificate(s) representing all
of the Pledged Stock and an undated stock assignment covering such
certificate(s) duly executed in blank, and if the Pledge Holder so requests,
with signatures guaranteed, who shall hold the Pledged Stock, stock assignment,
and any additional Collateral pursuant to this Pledge Agreement. The term of
this Pledge Agreement shall begin upon the date hereof and continue until the
Obligations have been fully and completely satisfied. Except as otherwise
provided herein, the Pledge Holder shall return the Pledged Stock, stock
assignment, and additional Collateral held by it to the Pledgor within a
reasonable time following the termination of this Pledge Agreement.
4. Representations and Warranties. The Pledgor represents and warrants
to the Pledgee that:
4.1 Existence and Good Standing; Power and Authority. The Pledgor is
a corporation duly organized, validly existing and in good standing under the
laws of the Cook Islands. The Pledgor has the corporate power and authority to
make, execute, deliver and perform this Pledge Agreement. This Pledge Agreement
has been duly authorized and approved by all required corporate action of the
Pledgor.
4.2 Record and Beneficial Owner. Pursuant to the Transaction
Documents, and subject to the terms hereof, the Pledgor is the record and
beneficial owner of, and has good, valid and marketable title to, the
Collateral, free and clear of all pledges, security interests, liens, charges,
encumbrances, equities, claims or options of whatever nature, except the
security interest and lien in favor of the Pledgee created by this Pledge
Agreement.
4.3 Valid Security Interest. Upon delivery to the Pledge Holder of
the stock certificates evidencing the Pledged Stock, and assuming the continuous
possession thereafter of such stock certificates by the Pledge Holder, the
security interest and lien granted pursuant to this Pledge Agreement will
constitute a valid, perfected first priority security interest in and lien on
the Collateral, enforceable as such against all creditors of the Pledgor and any
persons purporting to purchase any Collateral from the Pledgor.
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4.4 Restrictive Documents. The Pledgor is not subject to any
charter, by-law, mortgage, lien, lease, agreement, instrument, order, law, rule,
regulation, judgment or decree, or any other restriction of any kind or
character, which would prevent consummation of the transactions contemplated by
this Pledge Agreement.
4.5 Binding Nature. When executed and delivered in accordance with
the terms hereof, this Pledge Agreement will constitute a legal, valid and
binding obligation of the Pledgor enforceable in accordance with its terms
except to the extent that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (ii) such enforcement may be
subject to general principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law).
4.6 No Breach. The execution, delivery, and performance of this
Pledge Agreement has not resulted and will not result in any violation of, or
conflict with, or constitute a default under any agreements, or any applicable
statue, rule, regulation, order or restriction of any federal or state
governmental entity or agency thereof nor result in the creation of any
mortgage, pledge, lien, encumbrances, or charge upon any of the properties or
assets of the Pledgor that would have a material adverse effect upon the
Pledgor, except as contemplated by the this Pledge Agreement.
4.7 Effective Control. Upon the Closing Date, as that term is
defined in the Stock Purchase Agreement, and subject to the Pledge Agreement,
the Pledgor will exercise effective control of the Company.
5. Covenants. The Pledgor covenants and agrees with the Pledgee that,
during the term of this Pledge Agreement or until the Pledgee otherwise releases
the security interests in and/or liens on the Collateral:
5.1 Additional Collateral. If the Pledgor shall, as a result of its
ownership of the Pledged Stock, become entitled to receive or shall receive any
stock certificate (including, without limitation, any certificate representing a
stock dividend or a distribution in connection with any reclassification,
increase or reduction of capital and any certificate issued in connection with
any reorganization), option or right, whether in addition to, in substitution
of, as a conversion of, or in exchange for any shares of the Pledged Stock, or
otherwise in respect thereof, the Pledgor shall accept the same as the Pledgee's
agent, hold the same in trust for the Pledgee and deliver the same forthwith to
the Pledge Holder in the exact form received, duly endorsed by the Pledgor, if
required, together with an undated stock assignment covering such certificate
duly executed in blank and, if the Pledge Holder so requests, with signatures
guaranteed, to be held, subject to the terms hereof, by the Pledge Holder
hereunder as additional collateral security for the Obligations. Any sums paid
upon or in respect of the Pledged Stock upon the liquidation or dissolution of
the Company shall be forthwith paid over to the Pledge Holder to be held,
subject to the terms hereof, by it hereunder as additional collateral security
for the Obligations, and in case any distribution of capital shall be made on or
in respect of the
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Pledged Stock or any property shall be distributed upon or with respect to the
Pledged Stock pursuant to the recapitalization or reclassification of the
capital of the Company or pursuant to the reorganization thereof, the property
so distributed shall be forthwith delivered to the Pledge Holder to be held,
subject to the terms hereof, by it as additional collateral security for the
Obligations. If any sums of money or property so paid or distributed in respect
of the Pledged Stock shall be received by the Pledgor, the Pledgor shall, until
such money or property is paid or delivered to the Pledge Holder, hold such
money or property in trust for the Pledgee, segregated from other funds of the
Pledgor, as additional collateral security for the Obligations.
5.2 Negative Covenant. The Pledgor will not, directly or indirectly,
(i) cause, authorize, enable, permit, or allow the Company to issue any stock or
other equity securities of any nature or any other securities convertible into
or granting the right to purchase or exchange for any stock or other equity
securities of the Company (such grant transactions to include, but not be
limited to, grants of warrants, options, or rights exercisable (directly or
indirectly and initially or by subsequent agreement) of shares of the Company's
capital stock or sales of debt convertible (directly or indirectly and initially
or by subsequent agreement) into shares of the Company's capital stock) in any
transaction or series of transactions, whether or not, as a result thereof, (X)
a merger, consolidation, reorganization, recapitalization, or other fundamental
change in the corporate structure of the Company or (Y) a change of control of
the Company results (or reasonably could result) therefrom, if such transactions
(either individually or in series) result or could result in the issuance of not
less than forty-nine percent (49%) of the capital stock of the Company, both as
to the Company's then issued and outstanding capital stock and on a fully
diluted basis, unless, concurrently with each and every such issuance, grant, or
sale, each of the issuees (or, if a grant or sale of debt, prospective issuees)
have executed (and delivered to the Pledgee) a stock pledge agreement (or a
when-issued stock pledge agreement) solely in favor of the Pledgee, on terms and
in format substantially identical to this Pledge Agreement, such that upon any
or all of such issuances, exercises, exchanges, or conversions, whether in any
one transaction or series of transactions, not less than seventy-six percent
(76%) of the Company's capital stock, both then issued and outstanding and on a
fully diluted basis, shall be subject to stock pledge agreements solely in favor
of the Pledgee, which stock pledge agreements are on terms and in format
substantially identical to this Pledge Agreement; (ii) sell, assign, transfer,
convey, gift, exchange, or otherwise dispose of, or grant any option with
respect to, or other rights in or to the Collateral; or (iii) create, incur, or
permit to exist any lien or option in favor of, or any claim of any person with
respect to, any of the Collateral (or any part thereof), or any interest
therein, except for the security interests and liens provided for by this Pledge
Agreement. The Pledgor will defend the right, title and interest of the Pledgee
in and to the Collateral against the claims and demands of all persons
whomsoever, except for claims and demands that result from the gross negligence
or misconduct of the Pledgee.
5.3 Notification and Conformity. The Pledgor will use its best
efforts (i) to cause the Company to provide written notice to the Pledgee, which
notice shall be given to the Pledgee not less than 10 days prior to the Company
engaging, directly or indirectly, in any transaction listed in Section 5.2(i)
herein; and (ii) to ensure that any documents memorializing and/or relating to
such proposed transaction reflect and conform with the provisions of this
Section 5.3 and Section 5.2(i) herein.
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5.4 Further Assurances. At any time and from time to time, upon the
request of the Pledgee, and at the sole expense of the Pledgor, the Pledgor will
promptly and duly execute and deliver such further instruments and documents and
take such further actions as the Pledgee may reasonably request for the purposes
of obtaining or preserving the full benefits of this Pledge Agreement and of the
rights and powers herein granted. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any promissory note,
other instrument or chattel paper, such note, instrument or chattel paper shall
be immediately delivered to the Pledgee, duly endorsed in a manner reasonably
satisfactory to the Pledgee, to be held as additional collateral security for
the Obligations.
6. Cash Dividends; Interest Payments; Voting Rights. Unless an Event of
Default shall have occurred and be continuing, and the Pledgee shall have given
notice to the Pledgor of the Pledgee's intent to exercise its corresponding
rights pursuant to paragraph 7 below, the Pledgor shall be permitted to receive
all cash dividends of the Company in respect of the Pledged Stock and to
exercise all voting and corporate rights with respect to the Pledged Stock;
provided, however, that no vote shall be cast or corporate right exercised or
other action taken as a shareholder which, in the Pledgee's reasonable judgment,
would impair the Collateral or result in any violation of any provision of the
Transaction Documents, including, but not limited to, the provisions of Section
5.2(1), above.
7. Rights of the Pledgee.
7.1 Rights in the Event of Default. If an Event of Default shall
have occurred and be continuing and the Pledgee shall have given notice to the
Pledgor of the Pledgee's intent to exercise the following rights: (i) the
Pledgee shall have the right to receive any and all payments of any character
paid in respect of the Collateral and make application thereof to the
Obligations (in the manner set forth in paragraph 8 hereof) and (ii) all Pledged
Stock shall be registered in the name of the Pledgee or its nominee, and the
Pledgee or its nominee may thereafter exercise (A) all voting, corporate, and
other rights pertaining to the Pledged Stock at any meeting of shareholders of
the Company or otherwise and (B) any and all rights of conversion, exchange,
subscription, and any other rights, privileges, or options pertaining to the
Pledged Stock as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Stock upon the merger, consolidation, reorganization, recapitalization or other
fundamental change in the corporate structure of the Company, or upon the
exercise by the Pledgor or the Pledgee of any right, privilege or option
pertaining to such shares of the Pledged Stock, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Stock with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as it may determine), all without liability except to
account for property actually received by it, but the Pledgee shall have no duty
to exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing; provided, however, that the Pledgor
may exercise any such right, privilege or option if the Pledgee fails or delays
in so doing, only if such exercise by the Pledgor, in the Pledgee's reasonable
judgment, would not impair the Collateral or result in any violation of any
provision of the Transaction Documents; provided, further, that the Pledgee's
exercise of his
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rights, as set forth in section (ii) above, shall be conditioned upon the
Pledgor's use of its best efforts as a controlling stockholder of the Company,
or otherwise, to cause each and every business combination transaction or
acquisition of equity or assets of any third party or any assumption of
liabilities of any third party to be rescinded, such that each such transaction
will be void ab initio, and that, immediately prior to the Pledgee's exercise of
his rights hereunder and under the Note, the Company's financial status will be
substantially similar to its current status, with the exception that any sales
of the Company's equity for cash shall not be subject to such rescission. If
such rescissions are not commenced and finalized within a reasonable period of
time, the condition precedent set forth in the immediately preceding proviso
will be deemed to have been waived by the Pledgor.
7.2 Not Conditioned or Contingent. The rights of the Pledgee
hereunder shall not be conditioned or contingent upon the pursuit by the Pledgee
of any right or remedy against the Pledgor or the Company or against any other
person which may be or become liable in respect of all or any part of the
Obligations or against any other collateral security therefor, guaranty thereof
or right of offset with respect thereto.
8. Remedies. Subject to the conditions set forth in the final proviso
of Section 7.1, above, if an Event of Default shall have occurred and shall be
continuing, the Pledgee may exercise, in addition to all other rights and
remedies granted in this Pledge Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations, including,
without limitation, the Transaction Documents, all rights and remedies of a
secured party under the UCC or any other applicable law. Without limiting the
generality of the foregoing, the Pledgee, without demand of performance or other
demand, defense, presentment, protest, advertisement or notice of any kind
(except any notice required by law) to or upon the Pledgor, the Company or any
other person (all and each of which demands, defenses, presentments, protests,
advertisements and notices are hereby waived, except any notice required by law)
may in such circumstances forthwith collect, receive, appropriate and realize
upon the Collateral, or any part thereof, and/or may forthwith sell, assign,
give an option or options to purchase or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more portions, upon such terms and conditions and at such prices as it may
deem advisable, for cash or on credit or for future delivery without assumption
of any credit risk. The Pledgee shall have the right, to the extent permitted by
law, upon any such sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Pledgor,
which right or equity is hereby waived or released. The Pledgee shall apply any
Proceeds from time to time held by it and the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Pledgee hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Obligations in whatever order the Pledgee may elect
and only after such application and after the payment by the Pledgee of any
other amount required by any provision of law, including, without limitation,
Section 9-504(1)(c) of the UCC, need the Pledgee account for the surplus, if
any, to the Pledgor. The Pledgor waives all claims, damages and demands it may
acquire against the Pledgee arising out of the exercise by the Pledgee of any of
its rights hereunder, except any that
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may arise from the gross negligence or misconduct of the Pledgee. If any notice
of a proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition. The Pledgee shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given. The
Pledgee may postpone or adjourn any sale of any Collateral from time to time by
announcement at the time and place fixed therefor, and such sale may, upon
further notice, be made at the time and place to which it was so postponed or
adjourned.
9. Private Sales; Further Assurances.
9.1 Private Sales. The Pledgor recognizes that the Pledgee may be
unable to effect a public sale of any or all of the Collateral by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable to the Pledgee than if such sale were a public
sale and agrees that such circumstances shall not, in and of themselves, result
in a determination that such sale was not made in a commercially reasonable
manner.
9.2 Further Assurances. The Pledgor further agrees to do or cause to
be done all such other acts as may be necessary to make any sale or sales of all
or any portion of the Collateral pursuant to this Pledge Agreement valid and
binding and in compliance with any or all applicable Articles of Incorporation
and By-Laws or other organizational or governing documents of the Company, and
all laws, treaties, rules or regulations or determinations of an arbitrator or a
court or other governmental authority. The Pledgor authorizes the Pledgee to
disclose information regarding the Company in the Pledgee's possession to a
potential purchaser of the Collateral in a foreclosure sale, provided that such
purchaser agrees to keep such information confidential. The Pledgor further
agrees that a breach of any of the covenants contained in this paragraph 9 will
cause irreparable injury to the Pledgee, that the Pledgee has no adequate remedy
at law in respect of such breach and, as a consequence, that each and every
covenant contained in this paragraph 9 shall be specifically enforceable against
the Pledgor, and the Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred and is continuing, that prior
payment has been made, or that prior performance has occurred.
10. Limitation on Duties Regarding Collateral. The Pledge Holder's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall
be to deal with it in the same manner as the Pledge Holder deals with similar
securities and property for its own account. Such duty shall not include any
obligation to ascertain or to initiate any action with respect to, or to inform
the Pledgor of, maturity dates, conversion, call, exchange rights, offers to
purchase the Collateral or any similar matters, notwithstanding the Pledge
Holder's knowledge of these matters. The
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Pledge Holder shall not have any duty to initiate any action to protect against
the possibility of a decline in the market value of the Collateral. The Pledge
Holder shall not be liable for failure to demand, collect or realize upon the
Collateral, or any part thereof, or for any delay in doing so or shall be under
any obligation to sell or otherwise dispose of any Collateral upon the request
of the Pledgor or otherwise or to take any other action whatsoever with regard
to the Collateral or any part thereof.
11. The Pledgee Appointed Attorney-in-Fact and Proxy. The Pledgor
hereby appoints the Pledgee or the Pledgee's designee as the Pledgor's
attorney-in-fact and proxy, with full authority and power in the Pledgor's place
and stead, and in the Pledgor's name, from time to time in the Pledgee's
discretion from and after the occurrence and during the continuance of an Event
of Default to take any action and to execute any instrument which the Pledgee
may deem necessary or advisable to perfect, protect or enforce any right or
security interest hereunder or otherwise accomplish the purposes of this Pledge
Agreement, including, without limitation, to execute and file alone any
financing statement under the UCC and any document or instrument under any other
applicable laws, and to receive, endorse and collect all instruments made
payable to the Pledgor representing any dividend or other distribution in
respect of any of the Collateral and to give full discharge for the same. The
Pledgor ratifies and approves all such acts of such attorney and proxy. Neither
the Pledgee nor said attorney and proxy will be liable for any acts or
omissions, nor for any error of judgment or mistake of fact or law, other than
the Pledgee's or said attorney's and proxy's gross negligence or misconduct as
determined by a final non-appealable judgment of a court of competent
jurisdiction. This power, being coupled with an interest, is irrevocable until
all Obligations have been fully satisfied or until the Pledgee otherwise
releases the security interests in and/or liens on the Collateral.
12. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
13. Severability. The invalidity, illegality or unenforceability in any
jurisdiction of any provision in or obligation under this Pledge Agreement shall
not affect or impair the validity, legality or enforceability of the remaining
provisions or obligations under this Pledge Agreement or of such provision or
obligation in any other jurisdiction.
14. Headings. All headings used in this Pledge Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
15. Failure or Indulgence Not Waiver; Cumulative Remedies. No failure
or delay on the part of the Pledgee in the exercise of any power, right or
privilege under this Pledge Agreement and no course of dealing with respect
thereto shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude any other or further
exercise thereof or any other right, power or privilege. The rights and remedies
of the Pledgee provided under this Pledge Agreement, the Note, and the other
related documents are cumulative,
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may be exercised singly or concurrently and are cumulative to, and not exclusive
of any rights or remedies provided by law or otherwise available.
16. Security Interest Absolute; Successors and Assigns; Governing Law;
Compliance. All rights of the Pledgee and security interests hereunder, and all
obligations of the Pledgor under this Pledge Agreement, shall be absolute and
unconditional irrespective of (i) any lack of validity or enforceability of any
Obligations or the Note or any other related document; (ii) the absence of any
attempt to collect Obligations from the Pledgor or any other person or of any
other action to enforce the same; (iii) any change of the time, manner or place
of payment, or any other term, of any Obligations; (iv) any exchange, release or
non-perfection of any collateral securing payment of any Obligations; (v) any
law, regulation or order of any jurisdiction affecting any term of any
Obligations or the Pledgee's rights with respect thereto; and (vi) any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, the Pledgor, any guarantor or any other person. This Pledge
Agreement shall be binding upon and inure to the benefit of the successors and
permitted assigns of the Pledgor and the Pledgee, except that the Pledgor may
not assign its rights or obligations hereunder or under any other related
document (or any portion hereof or thereof) without the prior written consent of
the Pledgee, which shall not be unreasonably withheld by the Pledgee. THIS
PLEDGE AGREEMENT SHALL BE GOVERNED AND CONTROLLED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA (BUT
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICT OF LAWS) AS TO INTERPRETATION,
ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT AND IN ALL OTHER RESPECTS, BUT
EXCLUDING PERFECTION, WHICH SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE
RELEVANT JURISDICTION.
17. Notices. All notices, approvals, requests, demands and other
communications required or permitted to be given hereunder shall be given (and
shall be effective) in accordance with the notice provision of the Stock
Purchase Agreement.
18. Irrevocable Authorization and Instruction to Company. The Pledgor
hereby authorizes and instructs the Company to comply with any instruction
received by it from the Pledgee, in his capacity as a stockholder and owner of
Stock, in writing (with a copy to the Pledgor) that (a) states that an Event of
Default has occurred and is continuing and (b) is otherwise in accordance with
the terms of this Pledge Agreement, without any other or further instructions
from the Pledgor, and the Pledgor agrees that the Company shall be fully
protected from all claims or causes of action of the Pledgor arising therefrom
or related thereto in so complying, except for those claims or causes of action
of the Pledgor resulting from the gross negligence or misconduct of the Company.
19. Termination of Pledge Agreement; Release of Collateral. This Pledge
Agreement, and all obligations of the Pledgor hereunder, shall terminate upon
payment in full of all Obligations or the release by the Pledgee of the security
interests in and/or liens on the Collateral and all right, title and interest of
the Pledgee in and to the Collateral shall revert to the Pledgor and its
successors and assigns. Upon the termination of the Pledgee's security interest
and the release of the Collateral, the Pledgee will, at the written request and
expense of the Pledgor,
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(a) promptly execute and deliver to the Pledgor such documents as the Pledgor
shall reasonably request to evidence the termination of such security interest
or the release of the Collateral, and (b) promptly deliver or cause to be
delivered to the Pledgor all property of the Pledgor then held by the Pledgee or
any agent or nominee of the Pledgee pursuant to this Pledge Agreement. If, at
any time, all or part of any payment of the Obligations theretofore made by the
Pledgor or any other person is rescinded or otherwise must be returned by the
Pledgee for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of the Pledgor or any other person),
this Pledge Agreement shall continue to be effective or shall be reinstated, as
the case may be, as to the Obligations which were satisfied by the payment to be
rescinded or returned, all as though such payment had not been made.
20. Changes in Writing. No amendment, modification, termination or
waiver of any provision of this Pledge Agreement, or consent to any departure by
the Pledgor therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Pledgee and the Pledgor.
21. Counterparts. This Pledge Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts and
by the different parties in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute one and the same instrument. This Pledge
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.
22. Duties of Pledge Holder.
22.1 General Duties. The Pledge Holder shall hold the Collateral,
pursuant to the terms of this Pledge Agreement, until this Pledge Agreement
terminates hereunder or the Pledgee delivers to it written instructions with
respect to the Pledgee's exercise of his rights and/or remedies hereunder. Upon
the receipt of such written instructions from the Pledgee, the Pledge Holder
shall take such action(s) or cause such action(s) to be taken with respect to
the Collateral as directed by the Pledgee, and shall be relieved of any further
responsibilities or liability in connection with the Collateral.
22.2 Conflicting Instructions. In the event conflicting
instructions are served upon the Pledge Holder as to the Collateral, or if
either the Pledgee or Pledgor fails to give its or his written approval of any
transaction or act proposed to be taken by the Pledge Holder (it being
understood that such approval is expressly not required but may be sought by the
Pledge Holder at its sole option) the Pledgee and Pledgor agree that the Pledge
Holder shall have the absolute right at its election to do either or both of the
following: (i) immediately cease and withhold any further action(s) to be taken
by it pursuant to this Pledge Agreement, or (ii) file a suit in interpleader and
obtain an order from a court as to the Pledgor and the Pledgee and their
respective claims and rights between themselves. In the event such interpleader
suit is brought, the Pledge Holder shall upon filing such suit be fully released
and discharged from all obligations to further perform any and all duties or
obligations imposed upon it pursuant to this Pledge Agreement, and the Pledgor
agrees to pay to the Pledge Holder all costs, expenses, and attorneys'
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fees expended or incurred by it, the amount thereof to be fixed in a judgment
thereof to be render by the court in such suit.
22.3 Substitution. The Pledge Holder may, at its sole option, upon
not less than 10 days' written notice to the Pledgee and Pledgor, fully
discharge all of its obligations under this Pledge Agreement by transferring the
Collateral held by it subject to this Pledge Agreement to any national bank
located in the County of Orange, State of California, upon the terms of this
Pledge Agreement, with such additional general terms as may ordinarily be
imposed by such bank in connection with such agreements.
22.4 Further Limitations on Duties Regarding Collateral. In
addition to those limitations set forth in Section 10 herein, the Pledge Holder
shall not be held liable for the sufficiency or correctness as to form, manner
of execution, or validity of any instrument deposited in the Pledge Agreement,
nor as to identity, authority, or rights of any person executing the same, nor
for failure to comply with any of the provisions of any agreement, contract, or
other instrument filed herein or referred to herein, and its duties hereunder
shall be limited to the safekeeping of such Collateral received by it as Pledge
Holder, and for the disposition or other transfer of same in accordance with
this Pledge Agreement and any written instructions given by the Pledgee. Pledge
Holder shall not have any responsibilities to secure permits, orders, or
releases from any governmental agencies respecting the issue, release, or
transfer of the Collateral.
22.5 Costs. All costs and expenses of and for the Pledge Holder
shall be paid by the Pledgor.
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IN WITNESS WHEREOF, the parties hereto have executed or have caused a
duly authorized officer or representative to execute this Pledge Agreement, all
as of the date and year first above written.
PLEDGOR:
NB FINANCIAL LIMITED
By: HENDERSON LIMITED
as Director by its Nominee
Its: /s/ SARAH REEVES
----------------------------
Name: Sarah Reeves
PLEDGEE:
/s/ JAY A. GEIER
----------------------------------
Jay A. Geier
PLEDGE HOLDER:
ARTER & HADDEN
By: /s/ RANDOLF W. KATZ, ESQ.
------------------------------
Randolf W. Katz, Esq.
12
<PAGE> 1
EXHIBIT 10.3
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") dated as of September 17,
1997, by and among NB FINANCIAL LIMITED, a corporation organized pursuant to the
laws of the Cook Islands ("Buyer"), JAY A. GEIER, an individual residing in the
State of California ("Geier"), and RONALD W. SHEPSTON, an individual residing in
the State of California ("Shepston"). Geier and Shepston are stockholders of
EXIBITRONIX, INC., a Nevada corporation ("Company"), and may be collectively
referred to hereinafter as "Stockholder."
R E C I T A L S
A. Geier and Shepston respectively own 5,120,101 and 214,660 shares of
common stock, $0.001 par value per share, of Company (the "Stock").
B. Stockholder desires to sell, and Buyer desires to purchase, the
Stock pursuant to the terms and conditions of this Agreement, that certain
Secured Promissory Note, of even date herewith, made by and between Buyer and
Geier (the "Note"), that certain Stock Pledge Agreement, of even date herewith,
made by and between Buyer and Geier (the "Pledge Agreement"), and that certain
Agreement to Hold Funds in Trust Account, dated as of August 15, 1997, made by
and among Geier, Shepston, Buyer, and Arter & Hadden (the "Funds Agreement").
This Agreement, the Note, the Pledge Agreement, and the Funds Agreement
collectively may be referred to hereinafter as the "Transaction Documents."
C. The parties hereto acknowledge that the current reporting status of
the Company's common stock with the Securities and Exchange Commission and the
current status thereof on the Nasdaq's OTC Bulletin Board, as well as the
current good standing of the Company in the office of the Nevada Secretary of
State and with the Internal Revenue Service is due to the efforts of the
Stockholder for the benefit of all of the Company's stockholders.
D. The parties hereto acknowledge that the sale of the Stock, as
detailed hereinbelow, will result in a change of control of the Company, subject
to the terms and conditions of the Pledge Agreement and that Buyer's failure to
pay all principal and interest accrued thereon in accordance with the terms and
conditions of the Note will, as among the parties hereto and the Company, create
an irrebuttable presumption of Buyer's financial insecurity, which would cause
irreparable harm to the Company and all of its stockholders, with the exception
of the Buyer, as well as to the equity or debt holders of any enterprise that
engages with the Company in any business combination transaction of the type or
nature contemplated by Section 5.2(i) of the Pledge Agreement.
E. The parties hereto acknowledge that, in the event of any such
financial insecurity, it will be in the best interest of the Company and all of
its stockholders, with the exception of the Buyer, as well as in the best
interest of the equity or debt holders of any enterprise that engages with the
Company in any business combination transaction of the type or nature
contemplated by Section 5.2(i) of the Pledge Agreement or any acquisition of
equity or assets of any third party or any assumption of liabilities of any
third party, to rescind each and every such transaction, such that
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each such transaction will be void ab initio and that Stockholder and Buyer
shall use their respective best efforts and take, or cause to be taken, all such
actions as may be required to accomplish same, such that, upon Stockholder's
exercise of his rights under the Pledge Agreement, the Company's financial
status will become substantially similar to its current status, with the
exception that any sales of the Company's equity for cash shall not be subject
to such rescission.
F. The parties hereto acknowledge that the Company's current status
with the Securities and Exchange Commission, Nasdaq, the office of the Nevada
Secretary of State, and the Internal Revenue Service is of value and is
beneficial to the Company and all of its stockholders and that, from and after
the consummation of the transactions contemplated hereby, Buyer will use its
best efforts to maintain or enhance such status.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, and for such other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE 1
SALE OF STOCK
1. Sale of Stock. Subject to the terms and conditions of the
Transaction Documents, Stockholder agrees to sell, assign, transfer and deliver
to Buyer on the Closing Date (as herein defined), and Buyer agrees to purchase
from Stockholder on the Closing Date, the following shares of Stock for a
purchase price of Two Hundred Thousand and 00/100 Dollars ($200,000) as follows
(the "Purchase Price"):
# of Purchase
Stockholder Shares Price
----------- --------- --------
Geier 5,000,000 $192,493
Shepston 195,000 7,507
--------- --------
5,195,000 $200,000
========= ========
The certificates representing the Stock shall be duly endorsed in blank, or
accompanied by stock powers duly executed in blank, by Stockholder. Stockholder
shall cure any deficiencies with respect to the endorsement of the certificates
representing the Stock owned by Stockholder or with respect to the stock power
accompanying any such certificates, such that, then and there, Buyer shall
become the beneficial owner, and may become the record owner, thereof, subject
to the Pledge Agreement.
1.1 Purchase Price. The Purchase Price shall be payable on the date
set forth in the Funds Agreement as follows: Buyer shall (a) pay to Geier
Forty-Two Thousand Four Hundred Ninety-Three and 00/100 Dollars ($42,493) and to
Shepston Seven Thousand Five Hundred Seven and 00/100 Dollars ($7,507) in
immediately available funds by check drawn upon the Trust
2
<PAGE> 3
Account, as that term is defined in the Funds Agreement, and (b) issue and
deliver to Geier the Note in the amount of One Hundred Fifty Thousand and 00/100
Dollars ($150,000).
1.2 Closing. The sale referred to in Section 1 shall take place at
10:00 A.M. at the offices of Arter & Hadden, 5 Park Plaza, Suite 1000, Irvine,
California 92614 on September 17, 1997, or at such other time and date as the
parties shall designate in writing. Such time and date are herein referred to as
the "Closing Date."
ARTICLE 2
REPRESENTATIONS OF STOCKHOLDER
2. Representations of Stockholder. Stockholder represents and warrants
to, and agrees with, Buyer as follows:
2.1 Ownership of Stock. Stockholder is the lawful owner of the
Stock, free and clear of all liens, encumbrances, restrictions and claims of
every kind; Stockholder has full legal right, power and authority to enter into
the Transaction Documents and to sell, assign, transfer and convey the shares of
Stock so owned by Stockholder pursuant to the Transaction Documents; and the
delivery to Buyer of the Stock will transfer to Buyer valid title thereto, free
and clear of all liens, encumbrances, restrictions, preemptive rights, options
and claims of every kind, except as set forth in the Pledge Agreement.
2.2 Authorization. Upon their execution and delivery by Stockholder,
the Transaction Documents will be the legal, valid and binding obligations of
Stockholder enforceable in accordance with their respective terms, except to the
extent that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (ii) such enforcement may be
subject to general principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law).
2.3 Broker's or Finder's Fees. Stockholder has not employed any
broker, finder, or financial advisor or incurred any liability for any such fee
or commissions in connection with any of the transactions contemplated by the
Transaction Documents.
2.4 Consents. Any consents of third parties to the transfer of the
Stock have been obtained.
2.5 Financial Statements. Stockholder has delivered to Buyer the
Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
1996, and Quarterly Report on Form 10-QSB for the quarters ended March 31, 1997
and June 30, 1997, which are complete in all material respects, were filed with
the Securities and Exchange Commission, fairly present the financial position of
the Company as of the dates of and periods covered by said reports, and, with
respect to the financial statements included therein, have been prepared in
accordance
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<PAGE> 4
with generally accepted accounting principles applied on a consistent basis. The
financial statements included in the Company's Quarterly Reports on Form 10-QSB
for the quarters ended March 31, 1997 and June 30, 1997, are subject to year-end
adjustments.
ARTICLE 3
REPRESENTATIONS OF BUYER
3. Representations of Buyer. Buyer represents and warrants to, and
agrees with, Stockholder as follows:
3.1 Existence and Good Standing; Power and Authority. Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the Cook Islands. Buyer has the corporate power and authority to make,
execute, deliver and perform the transactions contemplated by each of the
Transaction Documents. Each of the Transaction Documents has been duly
authorized and approved by all required corporate action of Buyer.
3.2 Restrictive Documents. Buyer is not subject to any charter,
by-law, mortgage, lien, lease, agreement, instrument, order, law, rule,
regulation, judgment or decree, or any other restriction of any kind or
character, which would prevent consummation of the transactions contemplated by
each of the Transaction Documents.
3.3 Binding Nature. Each of the Transaction Documents has been duly
authorized and, when executed and delivered in accordance with the terms hereof
or thereof will, constitute legal, valid and binding obligations of Buyer
enforceable in accordance with their respect terms except to the extent that (i)
such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (ii) such enforcement may be subject to general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
3.4 No Breach. The execution, delivery, and performance of the
Transaction Documents has not resulted and will not result in any violation of,
or conflict with, or constitute a default under any agreements, or any
applicable statue, rule, regulation, order or restriction of any federal or
state governmental entity or agency thereof nor result in the creation of any
mortgage, pledge, lien, encumbrances, or charge upon any of the properties or
assets of Buyer that would have a material adverse effect upon Buyer, except as
contemplated by the Transaction Documents.
3.5 Purchase for Investment. Buyer will acquire the Stock for its
own account for investment and not with a view toward any resale or distribution
thereof; provided, however, that the disposition of Buyer's property shall at
all times remain within the sole control of Buyer.
3.6 Broker's or Finder's Fees. Neither Buyer nor any of its
officers, directors, employees, or agents has employed any broker, finder, or
financial advisor or incurred any liability
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<PAGE> 5
for any such fee or commissions in connection with any of the transactions
contemplated by the Transaction Documents.
3.7 Restrictions. Buyer understands that (i) neither the Stock nor
the sale thereof to it has been registered under the Securities Act of 1933, as
amended ("Securities Act"), or qualified under any state securities law; (ii) no
registration statement has been filed with the Securities and Exchange
Commission ("Commission"), nor with any other regulatory authority and that, as
a result, any benefit which might normally accrue to an investor such as the
Buyer by an impartial review of such a registration statement by the Commission
or other regulatory commission will not be forthcoming; and (iii) the Stock is
characterized as a "restricted security" under the federal securities laws
inasmuch as it is being acquired from Stockholder in a transaction not involving
a public offering and that under such laws and applicable regulations such
securities may be resold without registration under the Securities Act only in
certain limited circumstances. In this connection, Buyer represents that it is
familiar with the Commission's Rule 144, as presently in effect, and agrees that
it will not sell all or any portion of the Stock without registration under all
applicable securities laws or exemptions therefrom.
3.8 Information. Buyer has made an investigation of Stockholder and
the Company, had an opportunity to speak with Stockholder and the directors and
officers of the Company, and received all information from Stockholder and/or
the Company that Buyer has requested, or such information has been made
available to Buyer.
3.9 Effective Control. Upon the Closing Date, and subject to the
Pledge Agreement, the Buyer will exercise effective control of the Company.
ARTICLE 4
CONDITIONS TO BUYER'S OBLIGATIONS
4. Conditions to Buyer's Obligations. The purchase of the Stock by
Buyer on the Closing Date is conditioned upon satisfaction or waiver by Buyer,
on or prior to such date, of the following conditions:
4.1 Truth of Representation and Warranties. The representations and
warranties of Stockholder contained in the Transaction Documents or in any
Schedule attached hereto or thereto shall be true and correct on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date.
4.2 Performance of Obligations. All of the obligations of
Stockholder to be performed on or before the Closing Date pursuant to the terms
of the Transaction Documents shall have been duly performed.
4.3 No Litigation Threatened. No action or proceedings shall have
been instituted or, to the best knowledge, information and belief of
Stockholder, threatened before a
5
<PAGE> 6
court or other government body or by any public authority to restrain or
prohibit the consummation of any of the transactions contemplated by the
Transaction Documents.
4.4 Approvals and Consents. All governmental consents and approvals
and other third party consents and approvals, if any, necessary to permit the
consummation of the transactions contemplated by the Transaction Documents shall
have been received.
4.5 Proceedings. All proceedings to be taken in connection with the
transactions contemplated by the Transaction Documents shall be reasonably
satisfactory in form and substance to Buyer, and Buyer shall have received
copies of all such documents and other evidences as it may reasonably request in
order to establish the consummation of such transactions and the taking of all
proceedings in connection therewith.
4.6 Funds Agreement. Stockholder shall have executed and delivered
the Funds Agreement.
ARTICLE 5
CONDITIONS TO STOCKHOLDER'S OBLIGATIONS
5. Conditions to Stockholder's Obligations. The sale of the Stock by
Stockholder on the Closing Date is conditioned upon satisfaction or waiver by
Stockholder, on or prior to such date, of the following conditions:
5.1 Truth of Representations and Warranties. The representations and
warranties of Buyer contained in the Transaction Documents or in any Schedule
attached hereto or thereto shall be true and correct on and as of the Closing
Date with the same effect as though such representations and warranties had been
made on and as of such date, and Buyer shall have delivered to Stockholder a
certificate, dated the Closing Date, to such effect.
5.2 Performance of Obligations. All of the obligations of Buyer to
be performed on or before the Closing Date pursuant to the terms of the
Transaction Documents shall have been duly performed, and Buyer shall have
delivered to Stockholder a certificate, dated the Closing Date, to such effect.
5.3 Approvals and Consents. All governmental consents and approvals
and other third party consents and approvals, if any, necessary to permit the
consummation of the transactions contemplated by the Transaction Documents shall
have been received.
5.4 No Litigation Threatened. No action or proceedings shall have
been instituted or, to the best knowledge, information and belief of Buyer,
threatened before a court or other government body or by any public authority to
restrain or prohibit the consummation any of the transactions contemplated by
the Transaction Documents.
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<PAGE> 7
5.5 Proceedings. All proceedings to be taken in connection with the
transactions contemplated by the Transaction Documents shall be reasonably
satisfactory in form and substance to Stockholder, and Stockholder shall have
received copies of all such documents and other evidences as they may reasonably
request in order to establish the consummation of such transactions and the
taking of all proceedings in connection therewith.
5.6 Resolutions. Buyer shall have furnished Stockholder with a
certified copy of the resolutions duly adopted by the Board of Directors of
Buyer approving the Transaction Documents and the transactions contemplated
herein and therein.
5.7 Stock Pledge Agreement. Buyer shall have executed and delivered
to Stockholder the Pledge Agreement and an undated stock assignment as set forth
is the Pledge Agreement.
5.8 Issuance of Note. Buyer shall have authorized and validly issued
the Note.
5.9 Funds Agreement. Buyer shall have executed and delivered the
Funds Agreement, and shall have delivered the Trust Account Funds to the Trust
Fund Account Holder as set forth in the Funds Agreement.
ARTICLE 6
JOINT CONDITIONS SUBSEQUENT
6. Joint Conditions Subsequent. The obligation of the parties to
consummate the sale of the Stock contemplated by this Agreement shall be subject
to satisfaction or waiver in writing by all parties of the requirements for
release of the Trust Account Funds as set forth in the Funds Agreement.
ARTICLE 7
BUYER'S COVENANTS
7.1 Notification and Conformity. During the term of the Pledge
Agreement, Buyer will use its best efforts (i) to cause the Company to provide
written notice to Geier, which notice shall be given to Geier not less than 10
days prior to the Company engaging, directly or indirectly, in any transaction
listed in Section 5.2(i) of the Pledge Agreement, and shall include (X) the
substance of each proposed transaction and (Y) the name, address, fax and
telephone numbers, and contact person of each party to such proposed
transaction; and (ii) to ensure that any documents memorializing and/or relating
to such proposed transaction reflect and conform with the provisions of Sections
5.2(i) and 5.3 of the Pledge Agreement.
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<PAGE> 8
7.2 Certain Rescission Transactions. In the event that Buyer fails
to pay all principal and interest accrued in accordance with the terms and
conditions of the Note, and Geier takes such action and provides such notice as
required or permitted by either or both of the Note and the Pledge Agreement,
Buyer shall use its best efforts and take, or cause to be taken, all such
actions as may be required to rescind each and every business combination
transaction or acquisition of equity or assets of any third party or any
assumption of liabilities of any third party, such that each such transaction
will be void ab initio, such that, upon Geier's exercise of his rights under the
Pledge Agreement, the Company's financial status will become substantially
similar to its current status, with the exception that any sales of the
Company's equity for cash shall not be subject to such rescission.
7.3 Filing Status. From and after the consummation of the
transactions contemplated hereby, Buyer will use its best efforts to maintain or
enhance the Company's current status with the Securities and Exchange
Commission, Nasdaq, the office of the Nevada Secretary of State, and the
Internal Revenue Service for the benefit of the Company and all of its
stockholders.
ARTICLE 8
SURVIVAL; INDEMNIFICATION
8.1 Survival of Representations and Warranties and Related
Agreements. All of the terms, covenants, representations and warranties and
agreements contained in or made pursuant to the Transaction Documents shall
terminate upon the Closing Date hereunder.
8.2 General Indemnification.
(a) Geier and Shepston shall, jointly and severally, indemnify
and hold harmless Buyer and its respective officers, directors, employees and
agents from and against, and shall reimburse such party on demand for, any loss,
liability, damage or expense (including, interest, penalties, attorneys' fees,
costs of investigation and costs of appeals), resulting from any breach of any
representation, warranty, agreement or covenant on the part of Stockholder
contained in the Transaction Documents.
(b) Buyer shall indemnify and hold harmless both Geier and
Shepston from and against, and shall reimburse such Stockholder on demand for,
any loss, liability, damage or expense (including, interest, penalties,
attorneys' fees, costs or investigation and costs of appeals), resulting from
any breach of any representation, warranty, agreement or covenant on the part of
Buyer contained in the Transaction Documents.
(c) If a third party asserts a claim against any indemnified
party for which indemnification would be available under this Section 8.2 hereof
(a "Claim"), the indemnified party shall promptly give notice of such Claim,
describing such Claim with reasonable specificity, to the indemnifying party;
provided, however, that the failure to give such notice shall not affect the
right of the indemnified party to indemnification hereunder except to the extent
that
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<PAGE> 9
such failure prejudices the ability of the indemnifying party to defend any
Claim or take any other remedial action. The indemnifying party shall be
entitled to assume the defense of such Claim, including the employment of
counsel reasonably satisfactory to the indemnified party; provided, however,
that in the event that the indemnified party reasonably determines (based upon
the written advice of counsel) that a conflict of interest with regard to such
Claims may exist between such indemnified party and the indemnifying party, such
indemnified party shall have the right to participate in the defense of such
Claim and to have its reasonable legal expenses reimbursed with respect to such
Claim (but in no event for more than one counsel). In addition, in the event
that such indemnified party will (upon further notice to such indemnifying
party) have the right to participate in its defense of such Claim for the
account of such indemnifying party and to have its expenses reimbursed with
respect to such Claim, regardless of which party is controlling the defense of
any Claim, (i) both the indemnifying party and the indemnified party shall act
in good faith and (ii) no settlement of such Claim may be agreed to without the
written consent of both the indemnifying party and the indemnified party. The
controlling party shall deliver, or cause to be delivered, to the other party
copies of all correspondence, pleadings, motions, briefs, appeals or other
written statements relating to or submitted in connection with the defense of
any such Claim, and timely notices of, and the right to participate in (as an
observer), any hearing or other court proceeding relating to such Claim.
ARTICLE 9
MISCELLANEOUS
9.1 Expenses. Buyer shall pay all of the legal expenses of
Stockholder relating to the transactions contemplated by the Transaction
Documents, not to exceed $10,000.
9.2 Governing Law. The interpretation and construction of the
Transaction Documents, and all matters relating hereto or thereto, shall be
governed by the laws of the State of California applicable to agreements
executed and to be performed solely within such State.
9.3 Jurisdiction; Agents for Service of Process. Any judicial
proceeding brought against any of the parties to the Transaction Documents on
any dispute arising out of the Transaction Documents or any matter related
hereto or thereto may be brought in the courts of the County of Orange, State of
California, or in the United States District Court for the Central District,
and, by execution and delivery of the Transaction Documents, each of the parties
to the Transaction Documents accepts the exclusive jurisdiction of such courts,
and irrevocably agrees to be bound by any judgment rendered thereby in
connection with the Transaction Documents.
9.4 Captions. The Article and Section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
9.5 Notices. Any notice or other communication required or permitted
under the Transaction Documents shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or by telex
or confirmed facsimile, or one day after
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<PAGE> 10
deposit with Federal Express or similar overnight express delivery service (for
next day delivery), or seven days after deposit with a domestic Post Office, by
registered or certified mail, return receipt requested, postage prepaid and
addressed to the party to be notified at the address indicated for such party
below, or at such other address as such party may designate by ten days' advance
written notice to the other party:
(a) If to Buyer: NB Financial Limited
c/o Henderson Limited
Attention: Sara Reeves
Bank of Bermuda House
Tutakimoa Road
Rarotonga, Cook Islands
(b) If to Geier: Jay A. Geier
5234 Michelson Drive, #23D
Irvine, California 92612
With copy to: Arter & Hadden
5 Park Plaza, Suite 1000
Irvine, California 92614
Attention: Randolf W. Katz, Esq.
Facsimile (714) 252-0961
(c) If to Shepston: Ronald Shepston
5234 Michelson Drive, #23D
Irvine, California 92612
With copy to: Arter & Hadden
5 Park Plaza, Suite 1000
Irvine, California 92614
Attention: Randolf W. Katz, Esq.
Facsimile (714) 252-0961
9.6 Parties in Interest. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns. Notwithstanding, Buyer shall
not assign, transfer, or otherwise convey its rights to purchase the Stock under
this Agreement.
9.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original and all of
which taken together shall constitute one instrument.
9.8 Entire Agreement. The Transaction Documents contain the entire
understanding of the parties hereto and thereto with respect to the subject
matter contained herein
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and therein. The Transaction Documents supersede all prior agreements and
understandings between the parties with respect to such subject matter.
9.9 Amendments and Waivers. This Agreement may be changed only by an
agreement in writing signed by Buyer and Stockholder. The failure by any party
hereto to comply with any obligation, covenant, agreement or condition contained
herein may be expressly waived in writing by the party or parties hereto
adversely affected by such failure, but such waiver or failure to insist upon
strict compliance should not operate as a waiver of, or estoppel with respect
to, any subsequent or other failure.
9.10 Severability. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
9.11 Third Party Beneficiaries. Each party hereto intends that the
Transaction Documents shall not benefit or create any right or cause of action
in or on behalf of any person other than the parties hereto.
9.12 Attorneys' Fees. In the event any arbitration or action at law
or equity is necessary to enforce or interpret the terms of the Transaction
Documents, the prevailing party shall be entitled to reasonable attorneys' fees,
costs and necessary disbursements in addition to any other relief to which such
party may be entitled.
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IN WITNESS WHEREOF, the parties hereto each have executed or have
caused a duly authorized officer or representative to execute this Agreement,
all as of the day and year first above written.
BUYER:
NB FINANCIAL LIMITED
By: HENDERSON LIMITED
as Director by its Nominee
Its: /s/ SARAH REEVES
----------------------------
Name: Sarah Reeves
STOCKHOLDER:
/s/ JAY A. GEIER
-----------------------------
Jay A. Geier
/s/ RONALD W. SHEPSTON
-----------------------------
Ronald W. Shepston
12
