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EXHIBIT 7.2
PLEDGE AGREEMENT REGARDING NOTES
OF JB OXFORD HOLDINGS, INC.
THIS PLEDGE AGREEMENT (this "Pledge Agreement"), is executed this 26th
day of May, 1998, by and between Third Capital Partners, LLC, a Tennessee
limited liability Company ("Pledgor"), and Oeri Finance Inc., a Swiss
corporation ("Pledgee"), with reference to the following recitals:
RECITALS
Pursuant to that certain Purchase Agreement dated as of May 21, 1998
between Pledgor and Pledgee and other parties (the "Purchase
Agreement"), Pledgee has agreed to purchase from Pledgor certain
9% Senior Secured Convertible Notes (the "Notes") issued by JB
Oxford Holdings, Inc., a Utah corporation (the "Company"). Unless
otherwise defined herein, capitalized terms used herein shall have
the meanings ascribed to such terms in the Purchase Agreement.
As a condition precedent to the obligations of Pledgee under the
Purchase Agreement, Pledgor has agreed to execute and deliver to
Pledgee this Pledge Agreement, pursuant to which Pledgor shall
pledge and assign to Pledgee all of its right, title and interest
in and to the Collateral (as defined below) as security for the
prompt payment of that certain promissory note dated May ___, 1998
(the "Note"), whether or not due, matured, liquidated or
contingent, and including obligations of performances as well as
payment, and interest that accrues after the commencement of any
bankruptcy or insolvency proceeding by or against Pledgor
(collectively, the "Secured Obligations").
NOW THEREFORE, in reliance on the foregoing recitals and for good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Pledgor and Pledgee hereby agree as follows:
SECTION 1. PLEDGE.
A. Pledgor hereby pledges, mortgages, assigns and grants to Pledgee,
as collateral security for the prompt payment and performance of
the Secured Obligations, a security interest in all of the
following (the "Collateral"):
that certain Senior Secured Convertible Note, Certificate No. ____, in
the face amount of $3,418,695.59, issued by the Company, in favor
of Pledgor having a Note duly endorsed on blank or accompanied by
stock powers duly executed in blank, which certificate is being
delivered by Pledgor to the law firm of Xxxxxx, Xxxxxx & Xxxxx,
LLP, or such other law firm as may be agreed between the parties
(the "Pledgeholder") to be held by such Pledgeholder for the
benefit of the parties hereto, pursuant to the terms hereof; and
any and all securities now or hereafter issued in substitution,
exchange or replacement for the Pledged Stock, or with respect
thereto, including, without limitation, as a result of
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any reorganization, recapitalization or other readjustment of the
Company or any other company issuing such Pledged Stock, or as the
result of any stock split or right to subscribe accruing because
of the Pledged Stock.
Not withstanding anything to the contrary contained in Section 1A
above, unless and until an Event of Default (as hereafter defined)
under this Pledge Agreement has occurred, Pledgor shall be
entitled to receive and collect, or to have paid over to it, all
cash payments on the Pledged Notes.
SECTION 2. EVENT OF DEFAULT; REMEDIES.
There shall be an "Event of Default" hereunder upon Pledgor's failure
to make any payment due under the Note.
With respect to any Collateral, so long as an Event of Default has
occurred and is continuing, at the option of the Pledgee and upon
prior written notice to Pledgor, all right of Pledgor to receive
the cash payments and distributions which it would otherwise be
authorized to receive and retain shall cease, and all such rights
thereupon shall become vested in Pledgee who thereupon shall have
the sole right to receive and to hold as pledged Collateral such
payments and distributions. All dividends and other distributions
which are received by Pledgor contrary to the provisions of this
paragraph shall be received in trust for the benefit of Pledgee,
shall be segregated from other funds of Pledgor and forthwith
shall be paid over to Pledgee as Collateral in the same form as
received (with any necessary endorsements).
After the occurrence of an Event of Default and during the continuation
thereof, Pledgee may, in its sole discretion, but only after
delivery of thirty (30) days written notice to Pledgor, cause the
Collateral or any part thereof to be sold by the Pledgeholder, in
one or more sales, at public or private sale conducted by any
officer or agent of, or auctioneer or attorney for Pledgeholder,
at the Company's place of business or elsewhere, for cash, upon
credit or for further delivery, and at such price or prices a
Pledgeholder in its reasonable discretion shall determine. The
purchaser of any such Collateral (the "Foreclosure Sale
Purchaser") shall after such sale hold the same absolutely, free
from any right or claim of any kind whatsoever. Pledgeholder may,
in its reasonable discretion, at any such sale restrict the
prospective bidders or purchasers as to their number, nature of
business and investment intention, including, without limitation,
a requirement that the persons making such purchase represent and
agree, to the satisfaction of Pledgeholder, that they are
purchasing the Collateral for their own account, for investment,
and not with a view to the distribution of or resale of the
Collateral or any part thereof. The Pledgee may not buy the
Collateral, or any part thereof, at any such sale. Upon any such
sale Pledgeholder shall have the right to deliver, assign and
transfer to the Foreclosure Sale Purchaser the Collateral so sold.
Each Foreclosure Sale Purchaser at any such sale shall hold the
Collateral so sold absolutely free from any claim or right of
whatsoever kind, including, without limitation, any equity or
right of redemption of Pledgor. Pledgeholder shall give Pledgor at
least ten (10) days' written prior notice of any such public or
private sale. Such notice, in case of public sale, shall state the
time and place fixed for such sale. Any such public sale shall be
held at such time or times within ordinary business hours a
Pledgeholder shall fix in the notice of such sale. At any such
sale, the Collateral may be sold in the aggregate or separately.
Pledgeholder shall not be obligated to make any sale pursuant to
any such notice. Pledgeholder may, without notice or publication,
adjourn any public or private sale or cause the same to be
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adjourned from time to time by announcement at the time and place
fixed for such sale, and any such sale may be made at any time or
place to which the same may be so adjourned without further notice
or publication. In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so
sold may be retained by Pledgeholder until the selling price is
paid by the purchaser thereof, but the Pledgeholder shall not
incur any liability in case of the failure of such purchaser to
take up and pay for the Collateral so sold, and, in case of any
such failure, the Collateral may again be sold under and pursuant
to the provisions hereof.
Pledgor shall reimburse Pledgee for all reasonable costs and expense,
of whatsoever kind or nature, including, without limitation,
reasonable attorneys' fees, incurred by Pledgee in exercising any
of its rights or remedies under this Pledge Agreement. The
foregoing reimbursement obligation of Pledgor shall be secured by
the Collateral and shall be part of the Secured Obligations.
SECTION 3. APPLICATION OF PROCEEDS.
The proceeds of any sale of all or any part of the Collateral shall be
applied by Pledgeholder to the Secured Obligations in the following order: (i)
first, to the payment of all its reasonable costs in preparing for the sale or
selling all or any of its part of the Collateral, including, without limitation,
reasonable attorneys fees and costs; (ii) then, to the payment of the Secured
Obligations; and (iii) finally, any remaining proceeds shall be paid to the
Pledgor. If the proceeds are not sufficient to pay the Secured Obligations in
full, Pledgor shall remain liable for the deficiency.
SECTION 4. NO WAIVER; NO DILIGENCE REQUIRED.
No failure on the part of Pledgee to exercise, and no delay on the
part of Pledgee in exercising, and no course of dealing with
respect to, any right, power or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise by
Pledgee of any right, power or remedy hereunder preclude any other
right, power or remedy. Each right, power and remedy herein
specifically granted to Pledgee or otherwise available to it shall
be cumulative, and shall be in addition to every other right,
power, and remedy herein specifically given or now or hereafter
existing at law, in equity, or otherwise; each such right, power
and remedy, whether specifically granted herein or otherwise
existing, may be exercised at any time and from time to time as
often and in such order as may be deemed expedient by Pledgee in
its sole and complete discretion; and no course of dealing between
Pledgor and Pledgee or any delay or omission in exercising any
right, power or remedy shall operate as a waiver thereof. Should
any part of the Secured Obligations be payable in installments,
the acceptance by Pledgee at any time and from time to time of
part payment of the aggregate amount of all installments then
matured shall not be deemed to be a waiver of any Event of Default
then existing.
Pledgee shall not be liable for failure to use diligence in the
collection of the Secured Obligations, or any part thereof, or for
its failure to give notice to Pledgor of any Event of Default.
Pledgee shall not be liable for failure to use diligence to
collect any amount payable in respect of the Collateral. Pledgee
shall not be required to take any steps or actions with regard to
the Collateral requested or authorized by Pledgor unless (i)
Pledgee shall determine, in its sole discretion, that such steps
or actions will not adversely affect the value of and the rights
of Pledgee in the Collateral and (ii)
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such request or authorization by Pledgor is make in writing and
is actually received by Pledgee.
SECTION 5. RELEASE OF COLLATERAL.
Upon payment any/or performance in full of the Secured Obligations, all
Collateral in the possession of Pledgeholder shall be immediately returned to
Pledgor and the security interests and liens granted herein in favor of to
Pledgee shall be deemed terminated and of no further force or effect.
Pledgeholder hereby agrees to execute and deliver, from time to time, any and
all further or other, instruments, and to perform such acts, as Pledgor may
reasonably request to effect the provisions of this Section 5.
SECTION 6. GOVERNING LAW.
This Pledge Agreement shall be governed by and construed in accordance
with the internal laws of the State of California.
SECTION 7. ADDITIONAL INSTRUMENTS AND ASSURANCES.
Pledgor hereby agrees to execute and deliver, from time to time, any
and all further or other, instruments, and to perform such acts, as Pledgee may
reasonably request to effect the purposes of this Pledge Agreement and to secure
to Pledgee the benefits of all rights, authorities and remedies conferred upon
Pledgee by the terms of this Pledge Agreement.
SECTION 8. NOTICES.
Except as otherwise specified in this Pledge Agreement, any notice
required to be given pursuant to this Pledge Agreement shall be given in writing
in accordance with the notice provisions in the Purchase Agreement.
SECTION 9. AMENDMENT.
This Pledge Agreement may not be amended or limited, and no provision
hereof may be waived, except by a writing executed by the party to be charged or
bound by such amendment, limitation or waiver.
SECTION 10. CREDITOR/DEBTOR RELATIONSHIP.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, PLEDGEE, BY
ACCEPTING THIS PLEDGE AGREEMENT AND THE PLEDGE OF THE COLLATERAL CONTAINED
HEREIN, OR BY TAKING ANY ACTION PURSUANT HERETO WILL NOT BE, AND NEITHER PLEDGOR
NOR PLEDGEE INTEND PLEDGEE TO BE, DEEMED A PARTNER OR JOINT VENTURER WITH
PLEDGOR OR THE COMPANY, OR IN CONTROL OF PLEDGOR OR THE COMPANY. PLEDGOR AND, BY
ACCEPTING THIS PLEDGE AGREEMENT AND THE PLEDGE OF COLLATERAL CONTAINED HEREIN,
PLEDGEE, ACKNOWLEDGE AND AGREE THAT THE RELATIONSHIP OF PLEDGOR AND PLEDGEE
UNDER THIS PLEDGE AGREEMENT AND THE PURCHASE AGREEMENT IS SOLELY THAT OF LENDER
AND BORROWER, RESPECTIVELY.
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IN WITNESS WHEREOF, Pledgor and Pledgee have duly executed this Pledge
Agreement as of the date set forth above.
PLEDGOR:
THIRD CAPITAL PARTNERS, LLC
By /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Authorized Representative
PLEDGEE:
OERI FINANCE INC.
By /s/ Xxxxx X. Oeri
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Xxxxx X. Oeri
Chairman and CEO
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