SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement ("Agreement") between Online Processing,
Inc., a Nevada corporation ("ONLINE"), and the persons listed in Exhibit A
hereof (collectively the "Shareholders"), being the owners of record of all of
the issued and outstanding stock of Communication Field Services, Inc., a Nevada
corporation ("CFSC"), is entered into as of February 28, 2003.
RECITALS
A. CFSC is a Nevada corporation.
B. The Shareholders own all of the issued and outstanding shares of common
stock of CFSC (the "CFSC Stock").
C. The Shareholders have agreed to sell to ONLINE, and ONLINE has agreed to
purchase, the CFSC Shares from the Shareholders in exchange for shares of common
stock of ONLINE, pursuant to the terms and conditions set forth in this
Agreement.
D. CFSC will become a wholly owned subsidiary of ONLINE.
NOW THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
1. Exchange of Stock.
------------------
(a) The Shareholders agree to transfer to ONLINE, and ONLINE agrees to
purchase from the Shareholders, all of the Shareholders' right, title
and interest in their CFSC Stock, representing 100% of the issued and
outstanding stock of CFSC, free and clear of all mortgages, liens,
pledges, security interests, restrictions, encumbrances, or adverse
claims of any nature.
(b) At the Closing (as defined in Section 2 below), upon surrender by the
Shareholders of the certificates evidencing the CFSC Stock duly
endorsed for transfer to ONLINE or accompanied by stock powers
executed in blank by the Shareholders, ONLINE will cause 10,800,000
shares (subject to adjustment for fractionalized shares as set forth
below) of the common voting stock, par value $0.001 of ONLINE (the
"ONLINE Stock") to be issued to the Shareholders, in full satisfaction
of any right or interest which each Shareholder held in the CFSC
Stock. The ONLINE Stock will be issued to the Shareholders on a pro
rata basis, in the same proportion as the percentage of their
ownership interest in the CFSC Stock, as set forth on Exhibit A. Any
--------- fractional shares that will result due to such pro rata
distribution will be rounded up to the next highest whole number. As a
result of the exchange of the CFSC Stock in exchange for the ONLINE
Stock, CFSC will become a wholly-owned subsidiary of ONLINE.
ONLINE intends to change its name to CFS Corporation or a similar name
available in Nevada and the stock certificates to be issued to the
shareholders may be issued in the name of ONLINE or such new name as
may be available.
2. Closing.
--------
(a) The parties to this Agreement will hold a closing (the "Closing") for
the purpose of executing and exchanging all of the documents
contemplated by this Agreement and otherwise effecting the
transactions contemplated by this Agreement. The Closing will be held
on or after February 28, 2003, at the offices CFSC's counsel at 000
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, unless another place or time is
mutually agreed upon in writing by the parties. All proceedings to be
taken and all documents to be executed and exchanged at the Closing
will be deemed to have been taken, delivered and executed
simultaneously, and no proceeding will be deemed taken nor documents
deemed executed or delivered until all have been taken, delivered and
executed. If agreed to by the parties, the Closing may take place
through the exchange of documents by fax and/or express courier.
(b) With the exception of any stock certificates which must be in their
original form, any copy, fax, e-mail or other reliable reproduction of
the writing or transmission required by this Agreement or any
signature required thereon may be used in lieu of an original writing
or transmission or signature for any and all purposes for which the
original could be used, provided that such copy, fax, e-mail or other
reproduction is a complete reproduction of the entire original writing
or transmission or original signature, and the originals are promptly
delivered thereafter.
3. Representations and Warranties of ONLINE.
-----------------------------------------
ONLINE represents and warrants as follows:
(a) ONLINE is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Nevada and is licensed or
qualified as a foreign corporation in all states in which the nature
of its business or the character or ownership of its properties makes
such licensing or qualification necessary.
(b) The authorized capital stock of ONLINE consists of (i) 25,000,000
shares of common stock, $0.001 par value per share, of which 3,613,900
shares are issued and outstanding as of the date of this Agreement.
All of the issued and outstanding shares of ONLINE's common stock are
fully paid and nonassessable. Other than as set forth herein, there
are no subscription rights, options, warrants, convertible securities,
or other rights (contingent or otherwise) presently outstanding, for
the purchase, acquisition, or sale of the capital stock of Online, or
any securities convertible into or exchangeable for capital stock of
Online or other securities of Online, from or by Online.
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(c) ONLINE has no subsidiaries.
(d) Execution of this Agreement and performance by ONLINE hereunder has
been duly authorized by all requisite corporate action on the part of
ONLINE, and this Agreement constitutes a valid and binding obligation
of ONLINE, and ONLINE's performance hereunder will not violate any
provision of any charter, bylaw, indenture, mortgage, lease, or
agreement, or any order, judgment, decree, or, to ONLINE's knowledge
any law or regulation, to which any property of ONLINE is subject or
by which ONLINE is bound.
(e) The written consent of a majority of shareholders to be provided
pursuant Section 6(c) herein, satisfies the requirements of NRS 78.378
to 78.3793, inclusive, regarding acquisition of controlling interest
and as a result the CFS Shareholders will have full right and
authority to vote the Online Stock upon consummation of the
transactions contemplated herein.
(f) ONLINE has full corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder, and will deliver
at the Closing a certified copy of resolutions of its board of
directors authorizing execution of this Agreement by its officers and
performance hereunder.
(g) At the Closing ONLINE will have no assets and no liabilities.
(h) There are no material actions, suits, judgments, investigations or
proceedings of any kind whatsoever outstanding, pending or threatened
against or affecting ONLINE at law or in equity or before or by any
Federal, State, Municipal or other governmental department,
commission, board, bureau or agency of any kind whatsoever and there
is no basis therefore.
(i) ONLINE is not a party to any material contract. For purposes of this
Agreement "material" shall mean any contract, debt, liability, claim
or other obligation valued or otherwise worth $2,000 or more.
(j) Other than Xxxxx Xxxxxxxx, ONLINE has no officers, directors or
employees.
(k) No current officer, director, affiliate or person known to ONLINE to
be the record or beneficial owner of in excess of 5% of Online's
common stock, or any person known to be an associate of any of the
foregoing is a party adverse to ONLINE or has a material interest
adverse to ONLINE in any material pending legal proceeding.
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(l) ONLINE has filed in correct form all federal, state, and other tax
returns of every nature required to be filed by it and has paid all
taxes and all assessments, fees and charges which it is obligated to
pay by federal, state or other taxing authority to the extent that
such taxes, assessments, fees and charges have become due. ONLINE has
also paid all taxes which do not require the filing of returns and
which are required to be paid by it. To the extent that tax
liabilities have accrued, but have not become payable, they have been
adequately reflected as liabilities on the books of ONLINE.
(m) ONLINE is a publicly reporting company pursuant to Section 15(d) of
the Securities Exchange Act of 1934, as amended (the "Act") and is in
compliance with all reporting requirements of the Act. ONLINE's Form
10-KSB for the period ending December 31, 2002, and any other periodic
filings made by ONLINE as filed with the SEC, including all exhibits,
documents and attachments thereto, are true and correct in all
material respects and do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make any statement therein not materially
misleading.
(n) ONLINE's common stock currently trades on the over-the-counter market
bulletin board market commonly referred to as the "OTCBB." ONLINE is
not aware of any fact or circumstance that would jeopardize or
otherwise impair the ability of ONLINE's common stock to continue
trading on the OTCBB presently or after consummation of the
transactions contemplated herein.
(o) ONLINE has had the opportunity to perform all due diligence
investigations of CFSC and its business and operations as it has
deemed necessary or appropriate and to ask questions of the officers
and directors of CFSC and has received satisfactory answers to all of
its questions. ONLINE has had access to all documents and information
about CFSC and has reviewed sufficient information to allow it to
evaluate the merits and risks of the transactions contemplated by this
Agreement.
(p) ONLINE is acquiring the CFSC shares to be transferred to it under this
Agreement for investment and not with a view to the sale or
distribution thereof.
4. Representations and Warranties of the Shareholders.
---------------------------------------------------
The Shareholders, jointly and severally, represent and warrant as follows:
(a) CFSC is a corporation duly organized, validly existing, and in good
standing under the laws of Nevada and is licensed or qualified as a
foreign corporation in all places in which the nature of its business
or the character or ownership of its properties makes such licensing
or qualification necessary.
4
(c) There are no agreements purporting to restrict the transfer of the
CFSC Stock, nor any voting agreements, voting trusts or other
arrangements restricting or affecting the voting of the CFSC Stock.
The CFSC Stock held by the Shareholders are duly and validly issued,
fully paid and non-assessable, and issued in full compliance with all
federal, state, and local laws, rules and regulations. There are no
subscription rights, options, warrants, convertible securities, or
other rights (contingent or otherwise) presently outstanding, for the
purchase, acquisition, or sale of the capital stock of CFSC, or any
securities convertible into or exchangeable for capital stock of CFSC
or other securities of CFSC, from or by CFSC.
(d) The Shareholders have full right, power and authority to sell,
transfer and deliver the CFSC Stock, and upon delivery of the
certificates therefore as contemplated in this Agreement, the
Shareholders will transfer to ONLINE valid and marketable title to the
CFSC Stock, including all voting and other rights to the CFSC Stock,
free and clear of all pledges, liens, security interests, adverse
claims, options, rights of any third party, or other encumbrances.
Each of the Shareholders owns and holds that the number or percentage
of CFSC Stock, which are listed opposite their names on Exhibit A
attached hereto.
(d) There is no litigation or proceeding pending, or to any Shareholder's
knowledge, threatened, against or relating to CFSC or to the CFSC
Shares.
(e) CFSC has filed in correct form all tax returns of every nature
required to be filed by it and has paid all taxes as shown on such
returns and all assessments, fees and charges received by it to the
extent that such taxes, assessments, fees and charges have become due.
CFSC has also paid all taxes which do not require the filing of
returns and which are required to be paid by it. To the extent that
tax liabilities have accrued, but have not become payable, they have
been adequately reflected as liabilities on the books of CFSC.
(f) The financial statements that have been provided to ONLINE have been
prepared consistent with U.S. Generally Accepted Accounting Principles
(" U.S. GAAP") and fairly present the assets and liabilities of CFSC
as of the date of such financial statements.
(g) The current residence address or principal place of business (for any
non-individual shareholder) of the CFSC Shareholders is as listed on
Exhibit A attached hereto.
5
(h) The CFSC Shareholders have had the opportunity to perform all due
diligence investigations of ONLINE and its business as they have
deemed necessary or appropriate and to ask questions of ONLINE's
officers and directors and have received satisfactory answers to all
of their questions. The Shareholders have had access to all documents
and information about ONLINE and have reviewed sufficient information
to allow them to evaluate the merits and risks of the acquisition of
the ONLINE Stock.
(i) The Shareholders are acquiring the ONLINE Stock for their own account
(and not for the account of others) for investment and not with a view
to the distribution therefor. The Shareholders will not sell or
otherwise dispose of the ONLINE Stock without registration under the
Securities Act of 1933, as amended, or an exemption therefrom, and the
certificate or certificates representing the ONLINE Stock will contain
a legend to the foregoing effect.
(j) The representations and warranties of the Shareholders shall be true
and correct as of the date hereof and as of the Closing Date.
5. Conduct Prior to the Closing.
-----------------------------
ONLINE and the Shareholders covenant that between the date of this
Agreement and the Closing as to each of them:
(a) No change will be made in the charter documents, by-laws, or other
corporate documents of ONLINE or CFSC.
(b) ONLINE and CFSC will each use its best efforts to maintain and
preserve its business organization, employee relationships, and
goodwill intact, and neither ONLINE or CFSC will enter into any
material commitment except in the ordinary course of business.
(c) None of the Shareholders will sell, transfer, assign, hypothecate,
lien, or otherwise dispose or encumber the CFSC Stock owned by them.
6. Conditions to Obligations of Shareholders.
------------------------------------------
The Shareholder's obligation to complete the transactions contemplated
herein is subject to fulfillment on or before the Closing of each of the
following conditions, unless waived in writing by the Shareholders as
appropriate:
(a) The representations and warranties of ONLINE set forth herein will be
true and correct the Closing as though made at and as of that date,
except as affected by transactions contemplated hereby.
6
(b) ONLINE will have performed all covenants required by this Agreement to
be performed by it on or before the Closing.
(c) This Agreement will have been approved by the Board of Directors of
ONLINE and at least a majority of the Shareholders of ONLINE by
written consent or otherwise.
(d) ONLINE will have delivered to the Shareholders the documents set forth
below in form and substance reasonably satisfactory to counsel for the
Shareholders, to the effect that:
(i) ONLINE is a corporation duly organized, validly existing, and in
good standing;
(ii) ONLINE's authorized capital stock is as set forth herein;
(iii)Certified copies of the resolutions of the Board of Directors
and Shareholders of ONLINE authorizing the execution of this
Agreement and the consummation hereof;
(iv) An opinion of T. Xxxx Xxxx & Associates, P.C., counsel to ONLINE,
(A) that the company has had legitimate operations since the date
of inception and, as a result, Online's restricted common stock
shall be eligible for sale in accordance with the provisions of
Rule 144 promulgated under the Securities Act of 1933, as amended
and (B) that the written consent of a majority of shareholders to
be provided pursuant Section 6(c) herein, satisfies the
requirements of NRS 78.378 to 78.3793, inclusive, regarding
acquisition of controlling interest and as a result the CFS
Shareholders will have full right and authority to vote the
Online Stock upon consummation of the transactions contemplated
herein; and
(v) Any further document as may be reasonably requested by counsel to
the Shareholders in order to substantiate any of the
representations or warranties of ONLINE set forth herein.
(e) Xxxxx Xxxxxxxx shall have canceled back 2,000,000 shares of ONLINE's
common stock that she currently owns at or prior to Closing.
(f) Xxxxx Xxxxxxxx shall have entered into the option agreements set forth
as Exhibit B & C (the "Option Agreements"), respectively with those
persons listed on Exhibit D (the "Optionees").
(g) There will have occurred no material adverse change in the business,
operations or prospects of ONLINE.
7
7. Conditions to Obligations of ONLINE.
------------------------------------
ONLINE's obligation to complete the transaction contemplated herein will be
subject to fulfillment on or before the Closing of each of the following
conditions, unless waived in writing by the ONLINE, as appropriate:
(a) The representations and warranties of the Shareholders set forth
herein will be true and correct at the Closing as though made at and
as of that date, except as affected by transactions contemplated
hereby.
(b) The Shareholders will have performed all covenants required by this
Agreement to be performed by them on or before the Closing.
(c) The Shareholders will have delivered to ONLINE the documents set forth
below in form and substance reasonably satisfactory to counsel for
ONLINE, to the effect that:
(i) CFSC is a corporation duly organized, validly existing, and in
good standing;
(ii) CFSC's authorized capital stock is owned as set forth herein and
Exhiibit A hereto; and
(iii)Any further document as may be reasonably requested by counsel
to the Shareholders in order to substantiate any of the
representations or warranties of CFSC set forth herein.
(d) Xxxxx Xxxxxxxx shall have entered into the option agreements set forth
as Exhibit B & C (the "Option Agreements"), respectively with those
persons listed on Exhibit D (the "Optionees").
(e) The Shareholders shall have deposited 10,800,000 of ONLINE Stock
issued pursuant to this Agreement with Law Offices of Xxxxx X.
Xxxxxxx, as the escrow agent, pursuant to the terms of the Stock
Pledge and Escrow Agreements set forth in Exhibits E & F,
respectively, until such time as the Optionees have complied in full
with the terms of the Option Agreements.
(f) 190,000 shares ONLINE's common stock shall be issued to Xxxx
Management, LLC.
(g) CFSC shall have engaged an auditor reasonably acceptable to ONLINE and
such auditor shall have commenced its audit of CFSC's financial
statements.
(h) There will have occurred no material adverse change in the business,
operations or prospects of CFSC.
8
8. Additional Covenants.
---------------------
(a) Between the date of this Agreement and the Closing, the Shareholders,
with respect to CFSC, and ONLINE, with respect to itself, will, and
will cause their respective representatives to, (i) afford the other
party and its representatives access to their personnel, properties,
contracts, books and records, and other documents and data, as
reasonably requested by the other party; (ii) furnish the other party
and its representatives with copies of all such contracts, books and
records, and other existing documents and data as the other may
reasonably request in connection with the transaction contemplated by
this Agreement; and (iii) furnish the other party and its
representatives with such additional financial, operating, and other
data and information as the other may reasonably request. The
Shareholders will cause CFSC to, and ONLINE will provide the
Shareholders, with complete copies of all material contracts and other
relevant information on a timely basis in order to keep the other
party fully informed of the status of their respective business and
operations.
(b) ONLINE will deliver ONLINE's corporate books and records, including
all records relating to ONLINE's audited financial statements, to the
CFSC Shareholders at Closing.
(c) The parties agree that they will not make, and the Shareholders will
not permit CFSC to make, any public announcements relating to this
Agreement or the transactions contemplated herein without the prior
written consent of the other party, except as may be required upon the
written advice of counsel to comply with applicable laws or regulatory
requirements after consulting with the other party hereto and seeking
their consent to such announcement.
(d) ONLINE and the Shareholders will cooperate with each other in the
preparation of a Form 8-K to be filed with the SEC describing the
transaction contemplated by this Agreement and such other items as are
required by the SEC rules and regulations.
(e) Each of the ONLINE officers and directors will deliver a written
statement to ONLINE resigning from all officer and director positions
held by them at ONLINE.
(f) ONLINE will not issue any shares pursuant to Form S-8 until the Option
Agreements referred to in paragraph 7(d) have been exercised and paid
in full or have otherwise terminated in accordance with their terms
and ONLINE has completed its first acquisition is completed.
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9. Termination.
------------
This Agreement may be terminated (1) by mutual consent in writing; (2) by
either the Shareholders or ONLINE if there has been a material misrepresentation
or material breach of any warranty or covenant by any other party that is not
cured by March 31, 2003; or (3) by any of the Shareholders or ONLINE if the
Closing has not taken place by March 31, 2003, unless adjourned to a later date
by mutual consent in writing.
10. Expenses.
----------
Whether or not the Closing is consummated, each of the parties will pay all
of his, her, or its own legal and accounting fees and other expenses incurred in
the preparation of this Agreement and the performance of the terms and
provisions of this Agreement.
11. Survival of Representations and Warranties.
--------------------------------------------
The representations and warranties of the Shareholders and ONLINE set out
in this Agreement will survive Closing for a period twelve months.
12. Waiver.
-------
Any failure on the part of either party hereto to comply with any of its
obligations, agreements, or conditions hereunder may be waived in writing by the
party to whom such compliance is owed.
13. Brokers.
--------
Each party agrees to indemnify and hold harmless the other party against
any fee, loss, or expense arising out of claims by brokers or finders employed
or alleged to have been employed by the indemnifying party.
13. Notices.
--------
All notices and other communications under this Agreement must be in
writing and will be deemed to have been given only if delivered in person or by
internationally recognized commercial courier service such as UPS or Federal
Express, as follows:
If to ONLINE, to:
Online Processing, Inc.
000 X. Xxxxxxxxxx 00
Xxxxx 000
Xxxxxxxx, XX 00000
If to the Shareholders, to:
the addresses set forth on Exhibit A hereto.
---------
10
14. General Provisions.
-------------------
(a) This Agreement will be governed by and under the laws of the State of
New York, USA without giving effect to conflicts of law principles. If
any provision hereof is found invalid or unenforceable, that part will
be amended to achieve as nearly as possible the same effect as the
original provision and the remainder of this Agreement will remain in
full force and effect.
(b) The parties hereto expressly agree that this Agreement shall be
governed by, interpreted under, and construed and enforced in
accordance of the laws of the State of Nevada. The parties agree that
any dispute arising under or with respect to or in connection with
this Agreement, whether during the term of this Agreement or at any
subsequent time, shall be resolved fully and exclusively by binding
arbitration in accordance with the commercial rules then in force of
the American Arbitration Association with the proceedings taking place
in Dallas, Texas before a panel of three (3) arbitrators, each with at
least 10 years experience in the securities industry. The arbitrators
shall not alter the terms of this Agreement or any related agreement.
(c) In any adverse action, the parties will restrict themselves to claims
for compensatory damages and/or securities issued or to be issued and
no claims will be made by any party or affiliate for lost profits,
punitive or multiple damages.
(d) This Agreement constitutes the entire agreement and final
understanding of the parties with respect to the subject matter hereof
and supersedes and terminates all prior and/or contemporaneous
understandings and/or discussions between the parties, whether written
or verbal, express or implied, relating in any way to the subject
matter hereof. This agreement may not be altered, amended, modified or
otherwise changed in any way except by a written agreement, signed by
both parties.
(e) This Agreement will inure to the benefit of, and be binding upon, the
parties hereto and their successors and assigns; provided, however,
that any assignment by either party of its rights under this Agreement
without the written consent of the other party will be void.
(f) The parties agree to take any further actions and to execute any
further documents which may from time to time be necessary or
appropriate to carry out the purposes of this Agreement.
(g) The headings of the Sections, paragraphs and subparagraphs of this
Agreement are solely for convenience of reference and will not limit
or otherwise affect the meaning of any of the terms or provisions of
this Agreement. The references in this Agreement to Sections, unless
otherwise indicated, are references to sections of this Agreement.
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(h) This Agreement may be executed in counterparts, each one of which will
constitute an original and all of which taken together will constitute
one document. This Agreement may be executed by delivery of a signed
signature page by fax to the other parties hereto and such fax
execution and delivery will be valid in all respects.
SIGNATURE PAGE FOLLOWS
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EXECUTED:
ONLINE PROCESSING, INC.
By: /s/ Xxxxx Xxxxxxxx
---------------------------------
Xxxxx Xxxxxxxx, President
THE SHAREHOLDERS OF COMMUNICATION FIELD SERVICES, INC.:
/s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxx, Xx.
------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx
Partners Resources, LLC
By:
---------------------------------
/s/ Xxxxx Xxxxxxxxx
------------------------------------
Xxxxx Xxxxxxxxx
13
/s/ Xxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx
/s/ Xxxxxxx Xxxxx
------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxx Xxxxxxxxx
------------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxxx
14
EXHIBIT A
---------
Shareholder CFS Shares held Online Shares to be issued
----------- --------------- --------------------------
Xxxxx Xxxxxx 20,300 3,260,000
000 Xxxxxxx Xxxxxxxx #X
Xxx Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxx, Xx. 504 81,000
X.X. Xxx 000
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx 504 81,000
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxxx 504 81,000
0000 Xxxx Xxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Xxxxxxx X. Xxxx 000 81,000
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Partners Resources LLC 2,030 326,000
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxx Xxxxxxxxx 12,993 2,086,000
0 Xxx Xxxxxxxxx
Xxx Xxxx, Xxxx Xxxxxxx,
Xxxxxx Xxxxxxx
Xxxx Xxxxxx XX0000X, Xxxxxx Xxxxxxx
Xxxx X. Xxxxxxx 10,815 1,736,000
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxxxx Xxxxx 10,815 1,736,000
000 Xxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
15
Xxxxx Xxxxxxxxx 2,604 418,000
00000 X. 00XX XXXXXX
XXXXXXXXXXX, XX. 00000
Xxxxxxxx X. Xxxxxx 3,864 620,000
0000 Xxxxx Xxxx Xxxxxxx
Townhouse 310
Lauderdale by the Xxx, XX 00000
Xxxxxxx X. Xxxxxxxxx 1,831 294,000
000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
16
OPTION AGREEMENT
This option agreement (the "Agreement") dated as of February 28, 2003, is
entered into by and between Xxxxx Xxxxxxxx (the "Optionor") and Xxxxx Xxxxxxxxx
(the "Option Holder").
Recitals
--------
A. Optionor is the owner of 205,000 shares of Online Processing, Inc. (the
"Company's") common stock, par value $.001 (the "Shares") originally acquired on
March 28, 2002.
B. Optionor desires to grant Option Holder the option to buy the Shares
from the Optionor pursuant to the terms of this Agreement.
Now therefore, in consideration of the premise and the mutual promises and
covenants contained herein and subject specifically to the conditions hereof,
and intending to be legally bound thereby, the parties agree as follows:
1. Grant of Option.
-------------------
Optionor hereby grants to the Option Holder, the right and option
(hereinafter called the "Option"), to require Optionor to sell all or any part
of an aggregate of 205,000 Shares of the Company's common stock (such number
being subject to adjustment as provided in paragraph 6 hereof) on the terms and
conditions set forth herein.
2. Purchase Price.
------------------
The purchase price of the shares of the Shares covered by the Option shall
be $.61 per share (such price being subject to adjustment as provided in
paragraph 6 hereof).
3. Term of Option.
------------------
The term of this Option shall be two (2) years from the date of this grant.
4. Vesting.
-----------
The Options shall vest and become exercisable in full on the date which is
120 days from the date of this Agreement.
5. Payment.
-----------
The purchase price of the Shares as to which the Option shall be exercised
shall be paid in full by check, money order or wire transfer, at the option of
the Option Holder, to the address set forth in Section 8 and all such payments
shall be made payable to:
T. Xxxx Xxxx & Associates, P.C.
Attorney IOLTA Account F/B/O
Xxxxx Xxxxxxxx
Compass Bank
Arlington, TX
ABA No. 000000000
Account No. 00000000
6. Changes in Capital Structure.
--------------------------------
If all or any portion of the Option shall be exercised subsequent to any
stock dividend, stock split-up, recapitalization, reclassification, merger,
consolidation, combination or exchange of shares, separation, reorganization, or
liquidation occurring after the date hereof, as a result of which shares of the
Company's common stock shall be changed into the same or a different number of
shares of the same or another class or classes of stock, the price per share to
paid by the Option Holder to Optionor upon exercise of the Option, shall be
appropriately adjusted so as to account for such change in the Company's capital
structure. In no event shall the Option Holder be required to pay more than
$125,050 in the aggregate for the Shares, as adjusted, or shall Optionor be paid
less than $125,050 upon exercise of the full Option granted herein.
7. Method of Exercising Option.
-------------------------------
Subject to the terms and conditions of this Option, the Option may be
exercised by written notice to Optionor presented any time prior to termination
of this Option to the address set forth in Section 8. The exercise date will be
the date of the written notice of exercise. Such notice shall state the election
to exercise the Option and the number of Shares in respect of which it is being
exercised and shall be signed by the person or persons so exercising the Option.
8. Notices.
-----------
All notices and other communications under this Agreement must be in
writing and will be deemed to have been given only if delivered in person or by
internationally recognized commercial courier service such as UPS or Federal
Express, as follows:
If to Optionor, to:
Xxxxx Xxxxxxxx
X/X X. Xxxx Xxxx & Xxxxxxxxxx, X.X.
0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
with a copy which shall not constitute notice to:
Xxxxx X. Xxxxxxx, Esq.
Law Offices of Xxxxx X. Xxxxxxx, P.C.
000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
If to the Option Holder to:
Xxxxx Xxxxxxxxx
00000 X. 00xx Xxxxxx
Xxxxxxxxxx, XX 00000
with a copy which shall not constitute notice to:
Xxxxxxx X. Xxxxxxxxx, Esq.
Kaufmann, Feiner, Yamin, Xxxxxx and Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
9. Disclaimer.
--------------
Optionor will not advise Option Holder as to the tax consequences resulting
from the execution of the designated options. It is solely the responsibility of
the Option Holder to consult with the Option Holder's tax and/or financial
advisors regarding any financial or tax liabilities that may result due to the
execution of the designated Options.
IN WITNESS WHEREOF, Optionor has executed this Option as of the date first
set forth above.
OPTIONOR
/s/ Xxxxx Xxxxxxxx
---------------------------
Xxxxx Xxxxxxxx
OPTION AGREEMENT
This option agreement (the "Agreement") dated as of February 28, 2003, is
entered into by and between Xxxxx Xxxxxxxx (the "Optionor") and Xxxxxxx
Xxxxxxxxx (the "Option Holder").
Recitals
--------
A. Optionor is the owner of 205,000 shares of Online Processing, Inc. (the
"Company's") common stock, par value $.001 (the "Shares") originally acquired on
March 28, 2002.
B. Optionor desires to grant Option Holder the option to buy the Shares
from the Optionor pursuant to the terms of this Agreement.
Now therefore, in consideration of the premise and the mutual promises and
covenants contained herein and subject specifically to the conditions hereof,
and intending to be legally bound thereby, the parties agree as follows:
1. Grant of Option.
-------------------
Optionor hereby grants to the Option Holder, the right and option
(hereinafter called the "Option"), to require Optionor to sell all or any part
of an aggregate of 205,000 Shares of the Company's common stock (such number
being subject to adjustment as provided in paragraph 6 hereof) on the terms and
conditions set forth herein.
2. Purchase Price.
------------------
The purchase price of the shares of the Shares covered by the Option shall
be $.61 per share (such price being subject to adjustment as provided in
paragraph 6 hereof).
3. Term of Option.
------------------
The term of this Option shall be two (2) years from the date of this grant.
4. Vesting.
-----------
The Options shall vest and become exercisable in full on the date which is
120 days from the date of this Agreement.
5. Payment.
-----------
The purchase price of the Shares as to which the Option shall be exercised
shall be paid in full by check, money order or wire transfer, at the option of
the Option Holder, to the address set forth in Section 8 and all such payments
shall be made payable to:
T. Xxxx Xxxx & Associates, P.C.
Attorney IOLTA Account F/B/O
Xxxxx Xxxxxxxx
Compass Bank
Arlington, TX
ABA No. 000000000
Account No. 00000000
6. Changes in Capital Structure.
--------------------------------
If all or any portion of the Option shall be exercised subsequent to any
stock dividend, stock split-up, recapitalization, reclassification, merger,
consolidation, combination or exchange of shares, separation, reorganization, or
liquidation occurring after the date hereof, as a result of which shares of the
Company's common stock shall be changed into the same or a different number of
shares of the same or another class or classes of stock, the price per share to
paid by the Option Holder to Optionor upon exercise of the Option, shall be
appropriately adjusted so as to account for such change in the Company's capital
structure. In no event shall the Option Holder be required to pay more than
$125,050 in the aggregate for the Shares, as adjusted, or shall Optionor be paid
less than $125,050 upon exercise of the full Option granted herein.
7. Method of Exercising Option.
-------------------------------
Subject to the terms and conditions of this Option, the Option may be
exercised by written notice to Optionor presented any time prior to termination
of this Option to the address set forth in Section 8. The exercise date will be
the date of the written notice of exercise. Such notice shall state the election
to exercise the Option and the number of Shares in respect of which it is being
exercised and shall be signed by the person or persons so exercising the Option.
8. Notices.
-----------
All notices and other communications under this Agreement must be in
writing and will be deemed to have been given only if delivered in person or by
internationally recognized commercial courier service such as UPS or Federal
Express, as follows:
If to Optionor, to:
Xxxxx Xxxxxxxx
X/X X. Xxxx Xxxx & Xxxxxxxxxx, X.X.
0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
with a copy which shall not constitute notice to:
Xxxxx X. Xxxxxxx, Esq.
Law Offices of Xxxxx X. Xxxxxxx, P.C.
000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
If to the Option Holder to:
Xxxxxxx Xxxxxxxxx
000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
2
with a copy which shall not constitute notice to:
Xxxxxxx X. Xxxxxxxxx, Esq.
Kaufmann, Feiner, Yamin, Xxxxxx and Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
9. Disclaimer.
--------------
Optionor will not advise Option Holder as to the tax consequences resulting
from the execution of the designated options. It is solely the responsibility of
the Option Holder to consult with the Option Holder's tax and/or financial
advisors regarding any financial or tax liabilities that may result due to the
execution of the designated Options.
IN WITNESS WHEREOF, Optionor has executed this Option as of the date first
set forth above.
OPTIONOR
/s/ Xxxxx Xxxxxxxx
---------------------------
Xxxxx Xxxxxxxx
3
STOCK PLEDGE AGREEMENT
----------------------
STOCK PLEDGE AGREEMENT dated as of February 28, 2003, made by and between
those certain parties set forth on Schedule A hereto (each a "Pledgor" and
collectively the "Pledgors") and Xxxxx Xxxxxxxx (the "Secured Party") and Law
Offices of Xxxxx X. Xxxxxxx, P.C. (the "Agent"), as agent for the Secured
Parties.
PRELIMINARY STATEMENTS:
I. The Pledgors own 10,800,000 shares of the common stock, $.001 par value
(the "Pledged Securities"), of Online Processing, Inc., a Nevada corporation
("Online").
II. It is a condition precedent to Online closing that certain Share
Exchange Agreement dated February 28, 2003, to purchase to all of the issued and
outstanding shares of Communication Field Services, Inc. ("CFSC"), by and
between Online and the Pledgors that the Pledgors shall have made the pledge
contemplated by this Agreement.
III. Contemporaneously with the execution of this Agreement, the parties
hereto shall also execute an Escrow Agreement.
NOW THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
SECTION A. Pledge.
------------------
The Pledgors hereby pledge to the Agent, and grant to the Agent a security
interest in, the following (the "Pledged Collateral"):
1. the Pledged Securities and the certificates representing the Pledged
Securities, and all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Securities;
and
2. all proceeds of any and all of the foregoing Pledged Collateral
(including, without limitation, proceeds that constitute property of
the types described above).
SECTION B. Security for Obligations.
------------------------------------
This Agreement secures the payment of all obligations of Pledgors now or
hereafter existing under those certain option agreements between the Pledgors
and the Secured Party (the "Options"), copies of which are attached hereto as
Exhibits A & B, respectively.
SECTION C. Delivery of Pledged Collateral.
------------------------------------------
All certificates or instruments representing or evidencing the Pledged
Collateral shall be delivered to and held by or on behalf of the Agent pursuant
hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Agent. Upon the occurrence and during
the continuation of an Event of Default (as defined below), the Agent shall have
the duty, at any time at the direction of a majority in interest of the Secured
Parties on ten (10) business days notice to the Pledgor, to transfer to or to
register in the name of the Agent or any of its nominees, or in the name of each
of the Secured Parties on a pro rata basis based on each Secured Party's amount
subscribed for compared to the total amount subscribed for, any or all of the
Pledged Collateral as provided herein, subject only to the revocable rights
specified in Section F(a). In addition, the Agent shall have the right at any
such time to exchange certificates or instruments representing or evidencing
Pledged Collateral for certificates or instruments of smaller or larger
denominations.
SECTION D. Representations and Warranties.
------------------------------------------
The Pledgors, jointly and severally, represent and warrant as follows:
1. The Pledgors are the owners of the Pledged Collateral free and clear
of any lien, security interest, option or other charge or encumbrance
except for the security interest created by this Agreement.
2. The pledge of the Pledged Collateral pursuant to this Agreement
creates a valid and perfected first priority security interest in the
Pledged Collateral, securing the exercise and payment of the Options.
SECTION E. Further Assurances.
------------------------------
The Pledgors agree that at any time and from time to time the Pledgors will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that the Agent may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Agent to exercise and
enforce its rights and remedies hereunder with respect to any Pledged
Collateral. Such acts by Pledgors shall be at Pledgor's expense until such time
as the Options have been exercised and paid in full and at the Secured Party's
expense once the Options have been exercised and paid in full, except for those
expenses that accrued prior to such exercise and payment in full.
SECTION F. Voting Rights; Dividends; Etc.
-----------------------------------------
1. So long as no Event of Default shall have occurred and be continuing;
(a) The Pledgors shall be entitled to exercise or refrain from
exercising any and all voting and other consensual rights
pertaining to the Pledged Collateral or any part thereof for any
purpose not inconsistent with the terms of this Agreement.
(b) The Pledgors shall be entitled to receive and retain any and all
dividends and distributions paid in respect of the Pledged
Collateral, provided, however, that any and all (i) dividends
paid or payable other than in cash in respect of, and instruments
and other property received, receivable or otherwise distributed
in respect of, or in exchange for, Pledged Collateral, and (ii)
dividends and other distributions paid or payable in cash in
respect of any Pledged Collateral in connection with a partial or
total liquidation or dissolution, shall be, and shall be
forthwith delivered to the Agent to hold as, Pledged Collateral
and shall, if received by the Pledgors, be received in trust for
the benefit of the Agent, be segregated from the other property
or funds of the Pledgors, and be forthwith delivered to the Agent
as Pledged Collateral in the same form as so received (with any
necessary endorsement or assignment).
-2-
(c) The Agent shall execute and deliver (or cause to be executed and
delivered) to the Pledgors upon demand and without undue delay
all such proxies and other instruments as the Pledgors may
reasonably request for the purpose of enabling the Pledgors to
exercise the voting and other rights which it is entitled to
exercise pursuant to paragraph (i) above and to receive the
dividends which it is authorized to receive and retain pursuant
to paragraph (ii) above.
2. Upon the occurrence and during the continuance of an Event of Default
or an event which, with the giving of notice or the lapse of time, or
both, would become an Event of Default:
(a) All rights of the Pledgors to exercise or refrain from exercising
the voting and other consensual rights which they would otherwise
be entitled to exercise pursuant to Section F(1)(a) and to
receive the dividends payments which they would otherwise be
authorized to receive and retain pursuant to Section F(1)(b)
shall cease, and all such rights shall thereupon become vested in
the Agent who shall thereupon have the sole right to exercise or
refrain from exercising such voting and other consensual rights
at the direction of the Secured Party and to receive and hold as
Pledged Collateral such dividends.
(b) All dividends which are received by the Pledgors contrary to the
provisions of paragraph (a) of this Section F(2) shall be
received in trust for the benefit of the Agent, shall be
segregated from other funds of the Pledgors and shall be
forthwith paid over to the Agent as Pledged Collateral in the
same form as so received (with any necessary endorsement).
3. As used herein, "Event of Default" shall mean the following:
(a) Any failure on the part of Online or the Pledgors to honor the
terms of the Options.
(b) The issuance of any shares of the Online's capital stock, in a
single transaction or group of transactions that would cause the
Pledged Securities to be less than 51% of the issued and
outstanding stock of ONLINE, without the written consent of the
Secured Party. The terms of this paragraph 3(b) shall include
securities convertible into shares of Online's capital stock as
well.
SECTION G. Transfers and Other Liens.
-------------------------------------
The Pledgors agrees that they will not (i) sell, assign (by operation of
law or otherwise) or otherwise dispose of, or grant any option with respect to,
any of the Pledged Collateral, or (ii) create or permit to exist any lien,
security interest, option or other charge or encumbrance upon or with respect to
any of the Pledged Collateral, except for the security interest under this
Agreement.
-3-
SECTION H. Agent Appointed Attorney-in-Fact.
--------------------------------------------
The Pledgors hereby appoint the Agent the Pledgors' attorney-in-fact, with
full authority in the place and stead of the Pledgors and in the name of the
Pledgors or otherwise, from time to time in the Agent's discretion to take any
action and to execute any instrument which the Agent may deem necessary or
advisable to accomplish the purposes of this Agreement (subject to the rights of
the Pledgors under Section F), including, without limitation, to receive,
indorse and collect all instruments made payable to the Pledgors representing
any dividend or any part thereof and to give full discharge for the same.
SECTION I. Agent May Perform.
-----------------------------
If the Pledgors fail to perform any agreement contained herein, the Agent
may itself perform, or cause performance of, such agreement, and the expenses of
the Agent incurred in connection therewith shall be payable by the Pledgors
under Section L.
SECTION J. The Agent's Duties.
------------------------------
1. The powers conferred on the Agent hereunder are solely to protect the
Secured Party's interest in the Pledged Collateral and shall not impose any duty
upon it to exercise any such powers, except upon the direction of the Secured
Party. Except for the safe custody of any Pledged Collateral in its possession
and the accounting for moneys actually received by it hereunder, the Agent shall
have no duty as to any Pledged Collateral, as to ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Pledged Collateral, whether or not the Agent has or is
deemed to have knowledge of such matters, or as to the taking of any necessary
steps to preserve rights against any parties or any other rights pertaining to
any Pledged Collateral. The Agent shall be deemed to have exercised reasonable
care in the custody and preservation of any Pledged Collateral in its possession
if such Pledged Collateral is accorded treatment substantially equal to that
which the Agent accords its own property.
2. Each Pledgor and the Secured Party hereby, jointly and severally, agree
to indemnify and defend the Agent and to hold the Agent harmless from any loss,
liability or expense incurred by the Agent without willful malfeasance or
nonfeasance or bad faith on its part arising out of or in connection with the
acceptance or administration by the Agent of its duties hereunder, including,
but not limited to, the reasonable fees, costs and expenses of defending itself
against claims of liability hereunder. Anything in the foregoing to the contrary
notwithstanding, in the event of a dispute between the parties or between either
or both of the parties and the agent or in the event of the agent's resignation
if no successor agent has been appointed within 30 days following written notice
to the parties by the Agent of such resignation, at the sole discretion of the
Agent, the Agent may at any time deposit any or all of the Pledged Collateral
with a federal or state court located in New York County, New York selected by
the Agent and in such event (x) all liability and responsibility of the Agent
shall terminate upon such deposit having been made, and (y) after such deposit
is made, and absent willful malfeasance or nonfeasance or bad faith on the part
of the Agent, the Agent may represent the Secured Party in connection with any
dispute or proceeding relating to the disposition of the Pledged Collateral.
Absent willful malfeasance or nonfeasance or bad faith on the part of the Agent,
the Secured Party and each of the Pledgors hereby waive any actual or alleged
conflict of interest by reason of the Agent serving as Agent hereunder or in
connection with any such representation. Any breach or violation of the terms of
this Agreement by any party, including the provisions and restrictions of this
Section J, in addition to giving rise to monetary damages, may be enjoined. The
Agent shall not be bound in any way by any agreement or contract between the
Secured Party and any Pledgor whether or not it has knowledge thereof, and the
-4-
Agent's only duties and responsibilities hereunder shall be to hold the Pledged
Collateral as Agent and to dispose of the Pledged Collateral in accordance with
the terms of this Agreement. The Agent may act upon any instruments or other
writings believed by the Agent in good faith to be genuine and to be signed or
presented by the proper persons. The Agent shall not be liable for any error in
judgment, law or fact or for any act done or omitted to be done in connection
with the performance of its duties under this Agreement, except for its own
willful malfeasance or nonfeasance or bad faith. The Agent may consult with
independent counsel and a written opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken or omitted
by the Agent hereunder in good faith and in reliance upon such opinion.
SECTION K. Remedies upon Default.
---------------------------------
Subject to the provisions of Section F, if any Event of Default shall have
occurred and be continuing:
1. The Agent may, as directed by the Secured Party, (i) transfer the
Pledged Collateral to the Secured Party in full satisfaction of the Pledgors'
obligations under the Options or (ii) exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of the Secured Party on
default under the Uniform Commercial Code in effect in the State of New York at
the time (the "Code") (whether or not the Code applies to the affect
Collateral), and may also, without notice except as specified below, sell the
Pledged Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange, broker's board or at any office of the Agent or
elsewhere, for cash, on credit or for future delivery, and upon such other terms
as the Agent may deem commercially reasonable, as directed by the Secured Party.
The Pledgor agrees that, to the extent notice of sale shall be required by law,
at least ten days' notice to the Pledgor of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Agent shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been given. The Agent may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
2. Any cash held by the Agent as Pledged Collateral and all cash proceeds
received by the Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Pledged Collateral may, in the
discretion of the Agent, be held by the Agent as collateral for, and/or then or
at any time thereafter be applied (after payment of any amounts payable to the
Agent pursuant to Section L) in whole or in part by the Agent to satisfy the
obligations of Online and the Pledgors pursuant to the Options, as the Agent
shall be directed by the Secured Party. Any surplus of such cash or cash
proceeds held by the Agent and remaining after satisfaction in full of such
obligations shall be paid over to the Pledgors or to whomsoever may be lawfully
entitled to receive such surplus.
SECTION L. Expenses.
--------------------
Prior to exercise and payment in full of the Options, the Pledgors will
upon demand pay to the Agent the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Agent may incur in connection with (i) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Pledged Collateral, (ii) the exercise or enforcement of any of the rights
of the Agent hereunder or (iii) the failure by the Pledgors to perform or
observe any of the provisions hereof. Subsequent to the exercise and payment in
full of the options, the Secured Party shall be responsible for all reasonable
expenses of the Agent, except for such expenses that accrued prior to exercise
and payment in full of the options.
-5-
SECTION M. Amendments, Etc.
---------------------------
This Agreement may be altered or amended only with the written consent of
all of the parties hereto.
SECTION N. Addresses for Notices.
---------------------------------
All notices and other communications under this Agreement must be in
writing and will be deemed to have been given only if delivered in person or by
internationally recognized commercial courier service such as UPS or Federal
Express, as follows:
If to the Secured Party, to:
Xxxxx Xxxxxxxx
X/X X. Xxxx Xxxx & Xxxxxxxxxx, X.X.
0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
If to the Pledgors, to:
the addresses set forth on Exhibit A hereto.
---------
with a copy which shall not constitute notice to:
Xxxxxxx X. Xxxxxxxxx, Esq.
Kaufmann, Feiner, Yamin, Xxxxxx and Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
If to the Agent, to:
Xxxxx X. Xxxxxxx, Esq.
Law Offices of Xxxxx X. Xxxxxxx, P.C.
000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
SECTION O. Continuing Security Interest.
----------------------------------------
1. This Agreement shall create a continuing security interest in the
Pledged Collateral and shall (i) remain in full force and effect until the
exercise and payment in full of the Options and all other amounts payable under
this Agreement, (ii) be binding upon the Pledgors, their successors and assigns,
and (iii) inure to the benefit of, and be enforceable by, the Agent and its
successors, transferees and assigns.
-6-
2. Upon the payment in full of the obligations and all other amounts
payable under this Agreement, the security interest granted hereby shall
terminate and all rights to the Pledged Collateral shall revert to the Pledgors.
Upon any such termination, the Agent will, at the Pledgors' expense, return to
the Pledgors such of the Pledged Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof and execute and deliver to the
Pledgors such documents as the Pledgors shall reasonably request to evidence
such termination.
SECTION P. Governing Law; Terms.
--------------------------------
The parties hereto expressly agree that this Agreement shall be governed
by, interpreted under, and construed and enforced in accordance of the laws of
the State of New York. The parties agree that any dispute arising under or with
respect to or in connection with this Agreement, whether during the term of this
Agreement or at any subsequent time, shall be resolved fully and exclusively by
binding arbitration in accordance with the commercial rules then in force of the
American Arbitration Association with the proceedings taking place in New York,
New York before a panel of three (3) arbitrators, each with at least 10 years
experience in the securities industry. The arbitrators shall not alter the terms
of this Agreement or any related agreement.
SECTION Q. This Agreement may be executed in counterparts, each one of
which will constitute an original and all of which taken together will
constitute one document. This Agreement may be executed by delivery of a signed
signature page by fax to the other parties hereto and such fax execution and
delivery will be valid in all respects.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
-7-
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered as of the date first above written.
EXECUTED:
PLEDGORS:
/s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxx, Xx.
------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx
Partners Resources, LLC
By:
---------------------------------
/s/ Xxxxx Xxxxxxxxx
------------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx
/s/ Xxxxxxx Xxxxx
------------------------------------
Xxxxxxx Xxxxx
-8-
/s/ Xxxxx Xxxxxxxxx
------------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxxx
SECURED PARTY:
/s/ Xxxxx Xxxxxxxx
------------------------------------
Xxxxx Xxxxxxxx
AGENT:
Law Offices Of Xxxxx X. Xxxxxxx, P.C.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Xxxxx X. Xxxxxxx
-9-
EXHIBIT A
---------
Pledgor Online Shares
------- -------------
Xxxxx Xxxxxx 3,260,000
000 Xxxxxxx Xxxxxxxx #X
Xxx Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxx, Xx. 81,000
X.X. Xxx 000
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx 81,000
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxxx 81,000
0000 Xxxx Xxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Xxxxxxx X. Xxxx 81,000
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Partners Resources LLC 326,000
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxx Xxxxxxxxx 2,086,000
0 Xxx Xxxxxxxxx
Xxx Xxxx, Xxxx Xxxxxxx,
Xxxxxx Xxxxxxx
Xxxx Xxxxxx XX0000X, Xxxxxx Xxxxxxx
Xxxx X. Xxxxxxx 1,736,000
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxxxx Xxxxx 1,736,000
000 Xxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Xxxxx Xxxxxxxxx 418,000
00000 X. 00XX XXXXXX
XXXXXXXXXXX, XX. 00000
-10-
Xxxxxxxx X. Xxxxxx 620,000
0000 Xxxxx Xxxx Xxxxxxx
Townhouse 310
Lauderdale by the Xxx, XX 00000
Xxxxxxx X. Xxxxxxxxx 294,000
000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
-11-
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT ("Agreement") is made as of February 28, 2003 by and
between those parties listed on Exhibit A hereto (each a "Pledgor" and
collectively, the "Pledgors"), Xxxxx Xxxxxxxx, (the "Secured Party") and Law
Offices of Xxxxx X. Xxxxxxx, P.C. (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Pledgors, Online Processing, Inc. (the "Company") and the
Secured Party are parties to certain option agreements (the "Options") and a
stock pledge agreement (the "Stock Pledge Agreement"), all dated as of February
28, 2003, pursuant to which 10,800,000 shares of the Company's common stock
owned by the Pledgors (the "Shares") are to be held in escrow; and
WHEREAS, the Pledgors and the Secured Party have requested that the Escrow
Agent hold the Shares in escrow pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE 1
---------
TERMS OF THE ESCROW
1.1 The parties hereby agree to have Law Offices of Xxxxx X. Xxxxxxx, P.C.
act as Escrow Agent whereby the Escrow Agent shall receive the Shares in escrow
and distribute the same as set forth in this Agreement. Any capitalized terms
not defined herein shall have the meaning ascribed to them in the Transaction
Documents.
1.2 At or prior to the issuance of the Options, the Pledgors shall deliver
to the Escrow Agent certificates representing the (i) 10,800,000 Shares of the
Company's common stock, (ii) stock powers executed by the Pledgors for each
certificate representing the Shares, and (iii) a letter addressed to the
transfer agent of the company authorizing the Transfer Agent to transfer such
Shares into the name of the Secured Party.
1.3 (a) Upon an event of Default pursuant to the Stock Pledge Agreement,
Escrow Agent is hereby authorized, 10 days after Pledgor has received notice of
such default and had an opportunity to cure, to release to the Secured Party (i)
the Shares, (ii) stock powers and (iii) a letter from the Pledgors authorizing
the transfer agent of the Company to transfer the Shares to the Secured Party.
(b) Upon exercise and payment in full or termination of all of the
Options, the Escrow Agent shall return the Shares to the Pledgors, less any
shares released to the Secured Party pursuant Section 1.3(a).
(c) Upon the Escrow Agent's completion of its obligations under
Sections 1.3(a) or (b) this Agreement shall terminate and the Escrow Agent
shall have no further liability hereunder.
1.4 This Agreement may be altered or amended only with the written consent
of all of the parties hereto. Should the Pledgors or the Secured Party attempt
to change this Agreement in a manner, which, in the Escrow Agent's discretion,
shall be undesirable, the Escrow Agent may resign as Escrow Agent by notifying
the Pledgors and the Secured Party in writing. In the case of the Escrow Agent's
resignation or removal pursuant to the foregoing, his only duty, until receipt
of notice from the Pledgors and the Secured Party that a successor escrow agent
has been appointed, shall be to hold and preserve the Shares that are in his
possession. Upon receipt by the Escrow Agent of said notice from the Pledgors
and the Secured Party of the appointment of a successor escrow agent, the name
of a successor escrow account and a direction to transfer the Shares, the Escrow
Agent shall promptly thereafter transfer all of the Shares that it is still
holding in escrow, to said successor escrow agent. Immediately after said
transfer of the Shares, the Escrow Agent shall furnish the Pledgors and Secured
Parties with proof of such transfer. The Escrow Agent is authorized to disregard
any notices, requests, instructions or demands received by it from the Pledgors
or the Secured Party after notice of resignation or removal has been given.
1.5 The Escrow Agent shall be reimbursed by the Pledgors and the Secured
Party for any reasonable expenses incurred in the event there is a conflict
between the parties and the Escrow Agent shall deem it necessary to retain
counsel, upon whose advice the Escrow Agent may rely. The Escrow Agent shall not
be liable for any action taken or omitted by him in good faith and in no event
shall the Escrow Agent be liable or responsible except for the Escrow Agent's
own gross negligence or willful misconduct. The Escrow Agent has made no
representations or warranties to the Pledgors or the Secured Party in connection
with this transaction. The Escrow Agent has no liability hereunder to either
party other than to hold the Shares received by the Secured Party and to deliver
them under the terms hereof. Each party hereto agrees to indemnify and hold
harmless the Escrow Agent from and with respect to any suits, claims, actions or
liabilities arising in any way out of this transaction including the obligation
to defend any legal action brought which in any way arises out of or is related
to this Agreement or the investment being made by Secured Party. The Pledgors
acknowledge and represents that they are not being represented in a legal
capacity by Law Offices of Xxxxx X. Xxxxxxx, P.C., and have had the opportunity
to consult with their own legal advisors prior to the signing of this Agreement.
The Pledgors acknowledge that the Escrow Agent is not rendering securities
advice to them with respect to this transaction or otherwise. The Escrow Agent
has acted as legal counsel for the Secured Party and may continue to act as
legal counsel for the Secured Party, from time to time, notwithstanding its
duties as the Escrow Agent hereunder. The Pledgors consent to the Escrow Agent
acting in such capacity as legal counsel for the Secured Party and waive any
claim that such representation represents a conflict of interest on the part of
the Escrow Agent. The Company understands that the Secured Party and Escrow
Agent are relying explicitly on the foregoing provisions contained in this
Section 1.5 in entering into this Agreement.
2
1.6 The Escrow Agent shall be obligated only for the performance of such
duties as are specifically set forth herein and may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed by
the Escrow Agent to be genuine and to have been signed or presented by the
proper party or parties. The Escrow Agent shall not be personally liable for any
act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while
acting in good faith, and any act done or omitted by the Escrow Agent pursuant
to the advice of the Escrow Agent's attorneys-at-law shall be conclusive
evidence of such good faith.
1.7 The Escrow Agent is hereby expressly authorized to disregard any and
all warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order, judgment
or decree, the Escrow Agent shall not be liable to any of the parties hereto or
to any other person, firm or corporation by reason of such decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
1.8 The Escrow Agent shall not be liable in any respect on account of the
identity, authorities or rights of the parties executing or delivering or
purporting to execute or deliver the Agreement or any documents or papers
deposited or called for hereunder.
1.9 If the Escrow Agent reasonably requires other or further documents in
connection with this Agreement, the necessary parties hereto shall join in
furnishing such documents.
1.10 It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the documents or the
Shares held by the Escrow Agent hereunder, the Escrow Agent is authorized and
directed in the Escrow Agent's sole discretion (a) to retain in the Escrow
Agent's possession without liability to anyone all or any part of said documents
or the Shares until such disputes shall have been settled either by mutual
written agreement of the parties concerned or by a final order, decree or
judgment of a court of competent jurisdiction after the time for appeal has
expired and no appeal has been perfected, but the Escrow Agent shall be under no
duty whatsoever to institute or defend any such proceedings or (b) to deliver
the Shares and any other property and documents held by the Escrow Agent
hereunder to a state or federal court having competent subject matter
jurisdiction and located in the State of New York in accordance with the
applicable procedure therefor.
ARTICLE 2
---------
MISCELLANEOUS
2.1 No waiver of any breach of any covenant or provision herein contained
shall be deemed a waiver of any preceding or succeeding breach thereof, or of
any other covenant or provision herein contained. No extension of time for
performance of any obligation or act shall be deemed any extension of the time
for performance of any other obligation or act.
3
2.2 This Agreement shall be binding upon and shall inure to the benefit of
the permitted successors and assigns of the parties hereto.
2.3 This Agreement is the final expression of, and contains the entire
agreement between, the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto. This Agreement may not
be modified, changed, supplemented or terminated, nor may any obligations
hereunder be waived, except by written instrument signed by the parties to be
charged or by its agent duly authorized in writing or as otherwise expressly
permitted herein.
2.4 Whenever required by the context of this Agreement, the singular shall
include the plural and masculine shall include the feminine. This Agreement may
be executed in two or more counterparts, all of which taken together shall
constitute one instrument. Execution and delivery of this Agreement by exchange
of facsimile copies bearing the facsimile signature of a party shall constitute
a valid and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.
2.5 The parties hereto expressly agree that this Agreement shall be
governed by, interpreted under, and construed and enforced in accordance of the
laws of the State of New York. The parties agree that any dispute arising under
or with respect to or in connection with this Agreement, whether during the term
of this Agreement or at any subsequent time, shall be resolved fully and
exclusively by binding arbitration in accordance with the commercial rules then
in force of the American Arbitration Association with the proceedings taking
place in New York, New York before a panel of three (3) arbitrators, each with
at least 10 years experience in the securities industry. The arbitrators shall
not alter the terms of this Agreement or any related agreement.
2.6 All notices and other communications under this Agreement must be in
writing and will be deemed to have been given only if delivered in person or by
internationally recognized commercial courier service such as UPS or Federal
Express, as follows:
If to the Secured Party, to:
Xxxxx Xxxxxxxx
X/X X. Xxxx Xxxx & Xxxxxxxxxx, X.X.
0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
If to the Shareholders, to:
the addresses set forth on Exhibit A hereto.
---------
4
with a copy which shall not constitute notice to:
Xxxxxxx X. Xxxxxxxxx, Esq.
Kaufmann, Feiner, Yamin, Xxxxxx and Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
If to the Escrow Agent, to:
Xxxxx X. Xxxxxxx, Esq.
Law Offices of Xxxxx X. Xxxxxxx, P.C.
000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
2.7 By signing this Agreement, the Escrow Agent becomes a party hereto only
for the purpose of this Agreement; the Escrow Agent does not become a party to
the Transaction Documents.
2.8 Each party acknowledges and agrees that this Agreement shall not be
deemed prepared or drafted by any one party. In the event of any dispute between
the parties concerning this Agreement, the parties agree that any rule of
construction, to the effect that any ambiguity in the language of the Agreement
is to be resolved against the drafting party, shall not apply.
2.9 This Agreement may be executed in counterparts, each one of which will
constitute an original and all of which taken together will constitute one
document. This Agreement may be executed by delivery of a signed signature page
by fax to the other parties hereto and such fax execution and delivery will be
valid in all respects.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SIGNATURE PAGE FOLLOWS
5
EXECUTED:
PLEDGORS:
/s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxx, Xx.
------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx
Partners Resources, LLC
By:
---------------------------------
/s/ Xxxxx Xxxxxxxxx
------------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx
/s/ Xxxxxxx Xxxxx
------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxx Xxxxxxxxx
------------------------------------
Xxxxx Xxxxxxxxx
6
/s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxxx
SECURED PARTY:
/s/ Xxxxx Xxxxxxxx
------------------------------------
Xxxxx Xxxxxxxx
ESCROW AGENT:
Law Offices Of Xxxxx X. Xxxxxxx, P.C.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Xxxxx X. Xxxxxxx
7
EXHIBIT A
---------
Pledgor Online Shares
------- -------------
Xxxxx Xxxxxx 3,260,000
000 Xxxxxxx Xxxxxxxx #X
Xxx Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxx, Xx. 81,000
X.X. Xxx 000
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx 81,000
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxxx 81,000
0000 Xxxx Xxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Xxxxxxx X. Xxxx 81,000
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Partners Resources LLC 326,000
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxx Xxxxxxxxx 2,086,000
0 Xxx Xxxxxxxxx
Xxx Xxxx, Xxxx Xxxxxxx,
Xxxxxx Xxxxxxx
Xxxx Xxxxxx XX0000X, Xxxxxx Xxxxxxx
Xxxx X. Xxxxxxx 1,736,000
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxxxx Xxxxx 1,736,000
000 Xxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Xxxxx Xxxxxxxxx 418,000
00000 X. 00XX XXXXXX
XXXXXXXXXXX, XX. 00000
8
Xxxxxxxx X. Xxxxxx 620,000
0000 Xxxxx Xxxx Xxxxxxx
Townhouse 310
Lauderdale by the Xxx, XX 00000
Xxxxxxx X. Xxxxxxxxx 294,000
000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
9
STOCK PLEDGE AGREEMENT
----------------------
STOCK PLEDGE AGREEMENT ("Agreement") dated as of February 28, 2003, made by
and between Online Processing, Inc., a Nevada corporation ("Pledgor"), the
parties listed on Exhibit A hereto (the "Secured Parties"), Xxxxx Xxxxxxxx
("Xxxxxxxx") and Kaufman, Feiner, Yamin, Xxxxxx & Xxxxxxx LLP (the "Agent").
PRELIMINARY STATEMENTS:
I. The Pledgor, and the Secured Parties and Xxxxxxxx are parties to certain
option agreements all dated February 28, 2003, pursuant to which the Pledgor has
granted Xxxxxxxx an option (the "Put Option") to sell 410,000 shares of
Pledgor's common stock to Pledgor for $.61 per share ($250,100 total).
II. In order to secure payment of the Put Option, the secured parties have
pledged 10,800,000 shares of Pledgor's common stock to Xxxxxxxx pursuant to a
Stock Pledge Agreement (the "Online Pledge Agreement"), and as a result, in the
event of a default of the Put Option, the Secured Parties would cease to own any
shares of the Pledgor.
III. In such event of default of the Put Option, the parties agree that
Pledgor shall divest itself of all ownership interest of Communication Field
Services, Inc., a Nevada corporation ("CFSC") and as a result have entered into
this Agreement.
IV. In order to carry out such divestiture, Pledgor is pledging 67,268
shares of CFSC common (the "CFSC Shares") pursuant to the terms of this
Agreement.
IV. Contemporaneously with the execution of this Agreement, the parties
hereto shall also execute an Escrow Agreement.
NOW THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
SECTION A. Pledge.
-------
The Pledgor hereby pledges to the Agent, and grants to the Agent a security
interest in, the following (the "Pledged Collateral"):
1. the CFSC Shares and the certificates representing the CFSC Shares, and
all dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of the CFSC Shares; and
2. all proceeds of any and all of the foregoing Pledged Collateral
(including, without limitation, proceeds that constitute property of
the types described above).
SECTION B. Security for Obligations.
-------------------------
This Agreement secures the Pledgor's agreement to divest itself of all
shares of CFSC in the event that it defaults on the payment of the Put Option to
Xxxxxxxx.
SECTION C. Delivery of Pledged Collateral.
-------------------------------
All certificates or instruments representing or evidencing the Pledged
Collateral shall be delivered to and held by or on behalf of the Agent pursuant
hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Agent. Upon the occurrence and during
the continuation of an Event of Default (as defined below), the Agent shall have
the duty, at any time at the direction of a majority in interest of the Secured
Parties on ten (10) business days notice to the Pledgor, to transfer to or to
register in the name of the Agent or any of its nominees, or in the name of each
of the Secured Parties on a pro rata basis based on each Secured Party's amount
subscribed for compared to the total amount subscribed for, any or all of the
Pledged Collateral as provided herein, subject only to the revocable rights
specified in Section F(a). In addition, the Agent shall have the right at any
such time to exchange certificates or instruments representing or evidencing
Pledged Collateral for certificates or instruments of smaller or larger
denominations.
SECTION D. Representations and Warranties.
------------------------------
The Pledgor represents and warrants as follows:
1. The Pledgor is the owners of the Pledged Collateral free and clear of
any lien, security interest, option or other charge or encumbrance
except for the security interest created by this Agreement.
2. The pledge of the Pledged Collateral pursuant to this Agreement
creates a valid and perfected first priority security interest in the
Pledged Collateral, securing Pledgor's agreement to divest itself of
the CFSC shares in the event that it defaults in the payment of the
Put Option.
SECTION E. Further Assurances.
-------------------
The Pledgor agrees that at any time and from time to time the Pledgor, at
its expense, will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that the Agent may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Pledged Collateral.
SECTION F. Voting Rights; Dividends; Etc.
------------------------------
1. So long as no Event of Default shall have occurred and be continuing;
(a) The Pledgor shall be entitled to exercise or refrain from
exercising any and all voting and other consensual rights pertaining
to the Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement.
-2-
(b) The Pledgor shall be entitled to receive and retain any and all
dividends and distributions paid in respect of the Pledged Collateral,
provided, however, that any and all (i) dividends paid or payable
other than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or in
exchange for, Pledged Collateral, and (ii) dividends and other
distributions paid or payable in cash in respect of any Pledged
Collateral in connection with a partial or total liquidation or
dissolution, shall be, and shall be forthwith delivered to the Agent
to hold as, Pledged Collateral and shall, if received by the Pledgors,
be received in trust for the benefit of the Agent, be segregated from
the other property or funds of the Pledgor, and be forthwith delivered
to the Agent as Pledged Collateral in the same form as so received
(with any necessary endorsement or assignment).
(c) The Agent shall execute and deliver (or cause to be executed and
delivered) to the Pledgor upon demand and without undue delay all such
proxies and other instruments as the Pledgor may reasonably request
for the purpose of enabling the Pledgor to exercise the voting and
other rights which it is entitled to exercise pursuant to paragraph
(i) above and to receive the dividends which it is authorized to
receive and retain pursuant to paragraph (ii) above.
2. Upon the occurrence and during the continuance of an Event of Default:
(a) All rights of the Pledgor to exercise or refrain from exercising
the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant to Section F(1)(a) and to receive the
dividends payments which it would otherwise be authorized to receive
and retain pursuant to Section F(1)(b) shall cease, and all such
rights shall thereupon become vested in the Agent who shall thereupon
have the sole right to exercise or refrain from exercising such voting
and other consensual rights at the direction of the Secured Party and
to receive and hold as Pledged Collateral such dividends.
(b) All dividends which are received by the Pledgor contrary to the
provisions of paragraph (a) of this Section F(2) shall be received in
trust for the benefit of the Agent, shall be segregated from other
funds of the Pledgor and shall be forthwith paid over to the Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsement).
3. As used herein, "Event of Default" shall mean any failure on the part
of Pledgor to honor the terms of the Put Option.
SECTION G. Transfers and Other Liens.
--------------------------
The Pledgor agrees that it will not (i) sell, assign (by operation of law
or otherwise) or otherwise dispose of, or grant any option with respect to, any
of the Pledged Collateral, or (ii) create or permit to exist any lien, security
interest, option or other charge or encumbrance upon or with respect to any of
the Pledged Collateral, except for the security interest under this Agreement.
-3-
SECTION H. Agent Appointed Attorney-in-Fact.
---------------------------------
The Pledgor hereby appoints the Agent the Pledgor's attorney-in-fact, with
full authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise, from time to time in the Agent's discretion to take any
action and to execute any instrument which the Agent may deem necessary or
advisable to accomplish the purposes of this Agreement (subject to the rights of
the Pledgor under Section F), including, without limitation, to receive, indorse
and collect all instruments made payable to the Pledgor representing any
dividend or any part thereof and to give full discharge for the same.
SECTION I. Agent May Perform.
------------------
If the Pledgor fails to perform any agreement contained herein, the Agent
may itself perform, or cause performance of, such agreement, and the expenses of
the Agent incurred in connection therewith shall be payable by the Pledgor under
Section L.
SECTION J. The Agent's Duties.
-------------------
1. The powers conferred on the Agent hereunder are solely to protect the
Secured Parties interest in the Pledged Collateral and shall not
impose any duty upon it to exercise any such powers, except upon the
direction of the Secured Parties. Except for the safe custody of any
Pledged Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Agent shall have no duty as to
any Pledged Collateral, as to ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Pledged Collateral, whether or not the Agent
has or is deemed to have knowledge of such matters, or as to the
taking of any necessary steps to preserve rights against any parties
or any other rights pertaining to any Pledged Collateral. The Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of any Pledged Collateral in its possession if such
Pledged Collateral is accorded treatment substantially equal to that
which the Agent accords its own property.
2. Each Pledgor and the Secured Party hereby, jointly and severally,
agree to indemnify and defend the Agent and to hold the Agent harmless
from any loss, liability or expense incurred by the Agent without
willful malfeasance or nonfeasance or bad faith on its part arising
out of or in connection with the acceptance or administration by the
Agent of its duties hereunder, including, but not limited to, the
reasonable fees, costs and expenses of defending itself against claims
of liability hereunder. Anything in the foregoing to the contrary
notwithstanding, in the event of a dispute between the parties or
between either or both of the parties and the agent or in the event of
the agent's resignation if no successor agent has been appointed
within 30 days following written notice to the parties by the Agent of
such resignation, at the sole discretion of the Agent, the Agent may
at any time deposit any or all of the Pledged Collateral with a
federal or state court located in New York County, New York selected
by the Agent and in such event (x) all liability and responsibility of
the Agent shall terminate upon such deposit having been made, and (y)
after such deposit is made, and absent willful malfeasance or
nonfeasance or bad faith on the part of the Agent, the Agent may
represent the Secured Party in connection with any dispute or
proceeding relating to the disposition of the Pledged Collateral.
Absent willful malfeasance or nonfeasance or bad faith on the part of
the Agent, the Secured Party and each of the Pledgors hereby waive any
actual or alleged conflict of interest by reason of the Agent serving
as Agent hereunder or in connection with any such representation. Any
breach or violation of the terms of this Agreement by any party,
including the provisions and restrictions of this Section J, in
addition to giving rise to monetary damages, may be enjoined. The
Agent shall not be bound in any way by any agreement or contract
between the Secured Party and any Pledgor whether or not it has
-4-
knowledge thereof, and the Agent's only duties and responsibilities
hereunder shall be to hold the Pledged Collateral as Agent and to
dispose of the Pledged Collateral in accordance with the terms of this
Agreement. The Agent may act upon any instruments or other writings
believed by the Agent in good faith to be genuine and to be signed or
presented by the proper persons. The Agent shall not be liable for any
error in judgment, law or fact or for any act done or omitted to be
done in connection with the performance of its duties under this
Agreement, except for its own willful malfeasance or nonfeasance or
bad faith. The Agent may consult with independent counsel and a
written opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or omitted
by the Agent hereunder in good faith and in reliance upon such
opinion.
SECTION K. Remedies upon Default.
----------------------
Subject to the provisions of Section F, if any Event of Default shall have
occurred and be continuing:
1. The Agent may, as directed by the Secured Parties, (i) transfer the
Pledged Collateral to the Secured Parties in full satisfaction of the
Pledgor's obligations under this Agreement or (ii) exercise in respect
of the Pledged Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and
remedies of the Secured Party on default under the Uniform Commercial
Code in effect in the State of New York at the time (the "Code")
(whether or not the Code applies to the affect Collateral), and may
also, without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange, broker's board or at any office of the
Agent or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Agent may deem commercially reasonable,
as directed by the Secured Party. The Pledgor agrees that, to the
extent notice of sale shall be required by law, at least ten days'
notice to the Pledgor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute
reasonable notification. The Agent shall not be obligated to make any
sale of Pledged Collateral regardless of notice of sale having been
given. The Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned.
2. Any cash held by the Agent as Pledged Collateral and all cash proceeds
received by the Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Pledged Collateral may,
in the discretion of the Agent, be held by the Agent as collateral
for, and/or then or at any time thereafter be applied (after payment
of any amounts payable to the Agent pursuant to Section L) in whole or
in part by the Agent to satisfy the obligations of Pledgor, as the
Agent shall be directed by the Secured Parties. Any surplus of such
cash or cash proceeds held by the Agent and remaining after
satisfaction in full of such obligations shall be paid over to the
Pledgor or to whomsoever may be lawfully entitled to receive such
surplus.
SECTION L. Expenses.
---------
Prior to exercise and payment in full of the Options, the Pledgors will
upon demand pay to the Agent the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Agent may incur in connection with (i) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Pledged Collateral, (ii) the exercise or enforcement of any of the rights
of the Agent hereunder or (iii) the failure by the Pledgor to perform or observe
any of the provisions hereof.
-5-
SECTION M. Amendments, Etc.
----------------
No amendment or waiver of any provision of this Agreement, and no consent
to any departure by the Pledgor herefrom, shall in any event be effective unless
the same shall be in writing and signed by the Agent, as directed by the Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION N. Addresses for Notices.
---------------------
All notices and other communications under this Agreement must be in
writing and will be deemed to have been given only if delivered in person or by
internationally recognized commercial courier service such as UPS or Federal
Express, as follows:
If to the Secured Parties, to:
the addresses set forth on Exhibit A hereto.
If to Xxxxx Xxxxxxxx, to:
X/X X. Xxxx Xxxx & Xxxxxxxxxx, X.X.
0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
with a copy which shall not constitute notice to:
Xxxxx X. Xxxxxxx, Esq.
Law Offices of Xxxxx X. Xxxxxxx, P.C.
000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
If to the Pledgor, to:
Online Processing, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
If to the Agent, to:
Xxxxxxx X. Xxxxxxxxx, Esq.
Kaufmann, Feiner, Yamin, Xxxxxx and Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
-6-
SECTION O. Continuing Security Interest.
-----------------------------
1. This Agreement shall create a continuing security interest in the
Pledged Collateral and shall (i) remain in full force and effect until
the exercise and payment in full of the Options and all other amounts
payable under this Agreement, (ii) be binding upon the Pledgor, its
successors and assigns, and (iii) inure to the benefit of, and be
enforceable by, the Agent and its successors, transferees and assigns.
2. Upon the payment in full of the obligations and all other amounts
payable under this Agreement, the security interest granted hereby
shall terminate and all rights to the Pledged Collateral shall revert
to the Pledgor. Upon any such termination, the Agent will, at the
Pledgor's expense, return to the Pledgor such of the Pledged
Collateral as shall not have been sold or otherwise applied pursuant
to the terms hereof and execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such
termination.
SECTION P. Governing Law; Terms.
---------------------
The parties hereto expressly agree that this Agreement shall be governed
by, interpreted under, and construed and enforced in accordance of the laws of
the State of New York. The parties agree that any dispute arising under or with
respect to or in connection with this Agreement, whether during the term of this
Agreement or at any subsequent time, shall be resolved fully and exclusively by
binding arbitration in accordance with the commercial rules then in force of the
American Arbitration Association with the proceedings taking place in New York,
New York before a panel of three (3) arbitrators, each with at least 10 years
experience in the securities industry. The arbitrators shall not alter the terms
of this Agreement or any related agreement.
SECTION Q. This Agreement may be executed in counterparts, each one of
which will constitute an original and all of which taken together will
constitute one document. This Agreement may be executed by delivery of a signed
signature page by fax to the other parties hereto and such fax execution and
delivery will be valid in all respects.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
-7-
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered as of the date first above written.
SECURED PARTIES:
/s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxx, Xx.
------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx
Partners Resources, LLC
By:
---------------------------------
/s/ Xxxxx Xxxxxxxxx
------------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx
/s/ Xxxxxxx Xxxxx
------------------------------------
Xxxxxxx Xxxxx
-8-
/s/ Xxxxx Xxxxxxxxx
------------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxxx
PLEDGOR
Online Processing, Inc.
By:
---------------------------------
AGENT:
KAUFMAN, FEINER, YAMIN, XXXXXX & XXXXXXX LLP
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxxx
-9-
EXHIBIT A
CFS Shares
----------
Secured Party to be issued upon default
------------- -------------------------
Xxxxx Xxxxx 20,300
000 Xxxxxxx Xxxxxxxx #X
Xxx Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxx, Xx. 504
X.X. Xxx 000
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx 504
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxxx 504
0000 Xxxx Xxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Xxxxxxx X. Xxxx 504
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Partners Resources LLC 2,030
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxx Xxxxxxxxx 12,993
0 Xxx Xxxxxxxxx
Xxx Xxxx, Xxxx Xxxxxxx,
Xxxxxx Xxxxxxx
Xxxx Xxxxxx XX0000X, Xxxxxx Xxxxxxx
Xxxx X. Xxxxxxx 10,815
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxxxx Xxxxx 10,815
000 Xxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
-10-
Xxxxx Xxxxxxxxx 2,604
00000 X. 00XX XXXXXX
XXXXXXXXXXX, XX. 00000
Xxxxxxxx X. Xxxxxx 3,864
0000 Xxxxx Xxxx Xxxxxxx
Townhouse 310
Lauderdale by the Xxx, XX 00000
Xxxxxxx X. Xxxxxxxxx 1,831
000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
-11-
Signature page cont'd for Stock Pledge Agreement
/s/ Xxxxx Xxxxxxxx
------------------------------------
Xxxxx Xxxxxxxx
-12-
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT ("Agreement") is made as of February 28, 2003 by and
between Online Processing, Inc., a Nevada corporation ("Pledgor"), the parties
listed on Exhibit A hereto (the "Secured Parties"), Xxxxx Xxxxxxxx ("Xxxxxxxx")
and Kaufman, Feiner, Yamin, Xxxxxx & Xxxxxxx LLP (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Pledgor, and the Secured Parties and Xxxxxxxx are parties to
certain option agreements all dated February 28, 2003, pursuant to which the
Pledgor has granted Xxxxxxxx an option (the "Put Option") to sell 410,000 shares
of Pledgor's common stock to Pledgor for $.61 per share ($250,100 total);
WHEREAS, in order to secure payment of the Put Option, the secured parties
have pledged 10,800,000 shares of Pledgor's common stock to Xxxxxxxx pursuant to
a Stock Pledge Agreement (the "Online Pledge Agreement"), and as a result, in
the event of a default of the Put Option, the Secured Parties would cease to own
any shares of the Pledgor;
WHEREAS, in such event of default of the Put Option, the parties agree that
Pledgor shall divest itself of all ownership interest of Communication Field
Services, Inc., a Nevada corporation ("CFSC") and as a result have entered into
the Stock Pledge Agreement (the "CFSC Pledge Agreement") attached hereto as
Exhibit A; and
WHEREAS, the parties have requested that the Escrow Agent hold the shares
of CFSC pledged pursuant to the CFSC Pledge Agreement in escrow pursuant to the
terms of this Agreement.
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE 1
---------
TERMS OF THE ESCROW
1.1 The parties hereby agree to have Kaufman, Feiner, Yamin, Xxxxxx &
Xxxxxxx LLP act as Escrow Agent whereby the Escrow Agent shall receive the CFSC
Shares in escrow and distribute the same as set forth in this Agreement. Any
capitalized terms not defined herein shall have the meaning ascribed to them in
the Share Exchange Agreement dated as of February __, 2003 and related documents
(the "Transaction Documents").
1
1.2 At or prior to the issuance of the Put Option, the Pledgors shall
deliver to the Escrow Agent certificates representing the (i) 67,268 Shares of
the CFSC's common stock, (ii) stock powers executed by the Pledgor for each
certificate representing the CFSC Shares, and (iii) a letter addressed to the
transfer agent of the company authorizing the Transfer Agent to transfer such
CFSC Shares into the name of the Secured Parties.
1.3 (a) Upon Xxxxxxxx gaining control of the shares of Pledgor's stock held
pursuant to the Online Pledge Agreement, the Escrow shall release to the Secured
Parties (i) the CFSC Shares, (ii) stock powers and (iii) a letter from the
Pledgors authorizing the transfer agent of the Company to transfer the CFSC
Shares to the Secured Party.
(b) Upon exercise and payment in full or termination of the Put
Options, the Escrow Agent shall return the CFSC Shares to the Pledgor, less
any shares released to the Secured Parties pursuant Section 1.3(a).
(c) Upon the Escrow Agent's completion of its obligations under
Sections 1.3(a) or (b) this Agreement shall terminate and the Escrow Agent
shall have no further liability hereunder.
1.4 This Agreement may be altered or amended only with the written consent
of all of the parties hereto. Should the Pledgor or the Secured Parties attempt
to change this Agreement in a manner, which, in the Escrow Agent's discretion,
shall be undesirable, the Escrow Agent may resign as Escrow Agent by notifying
the Pledgor and the Secured Parties in writing. In the case of the Escrow
Agent's resignation or removal pursuant to the foregoing, his only duty, until
receipt of notice from the Pledgor and the Secured Parties that a successor
escrow agent has been appointed, shall be to hold and preserve the Shares that
are in his possession. Upon receipt by the Escrow Agent of said notice from the
Pledgor and the Secured Parties of the appointment of a successor escrow agent,
the name of a successor escrow account and a direction to transfer the CFSC
Shares, the Escrow Agent shall promptly thereafter transfer all of the CFSC
Shares that it is still holding in escrow, to said successor escrow agent.
Immediately after said transfer of the CFSC Shares, the Escrow Agent shall
furnish the Pledgors and Secured Parties with proof of such transfer. The Escrow
Agent is authorized to disregard any notices, requests, instructions or demands
received by it from the Pledgor or the Secured Parties after notice of
resignation or removal has been given.
1.5 The Escrow Agent shall be reimbursed by the Pledgor and the Secured
Parties for any reasonable expenses incurred in the event there is a conflict
between the parties and the Escrow Agent shall deem it necessary to retain
counsel, upon whose advice the Escrow Agent may rely. The Escrow Agent shall not
be liable for any action taken or omitted by him in good faith and in no event
shall the Escrow Agent be liable or responsible except for the Escrow Agent's
own gross negligence or willful misconduct. The Escrow Agent has made no
representations or warranties to the Pledgor or the Secured Parties in
connection with this transaction. The Escrow Agent has no liability hereunder to
either party other than to hold the CFSC Shares received by the Secured Parties
and to deliver them under the terms hereof. Each party hereto agrees to
indemnify and hold harmless the Escrow Agent from and with respect to any suits,
claims, actions or liabilities arising in any way out of this transaction
including the obligation to defend any legal action brought which in any way
arises out of or is related to this Agreement or the investment being made by
Secured Parties.
2
1.6 The Escrow Agent shall be obligated only for the performance of such
duties as are specifically set forth herein and may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed by
the Escrow Agent to be genuine and to have been signed or presented by the
proper party or parties. The Escrow Agent shall not be personally liable for any
act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while
acting in good faith, and any act done or omitted by the Escrow Agent pursuant
to the advice of the Escrow Agent's attorneys-at-law shall be conclusive
evidence of such good faith.
1.7 The Escrow Agent is hereby expressly authorized to disregard any and
all warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order, judgment
or decree, the Escrow Agent shall not be liable to any of the parties hereto or
to any other person, firm or corporation by reason of such decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
1.8 The Escrow Agent shall not be liable in any respect on account of the
identity, authorities or rights of the parties executing or delivering or
purporting to execute or deliver the Agreement or any documents or papers
deposited or called for hereunder.
1.9 If the Escrow Agent reasonably requires other or further documents in
connection with this Agreement, the necessary parties hereto shall join in
furnishing such documents.
1.10 It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the documents or the
CFSC Shares held by the Escrow Agent hereunder, the Escrow Agent is authorized
and directed in the Escrow Agent's sole discretion (a) to retain in the Escrow
Agent's possession without liability to anyone all or any part of said documents
or the CFSC Shares until such disputes shall have been settled either by mutual
written agreement of the parties concerned or by a final order, decree or
judgment of a court of competent jurisdiction after the time for appeal has
expired and no appeal has been perfected, but the Escrow Agent shall be under no
duty whatsoever to institute or defend any such proceedings or (b) to deliver
the CFSC Shares and any other property and documents held by the Escrow Agent
hereunder to a state or federal court having competent subject matter
jurisdiction and located in the State of New York in accordance with the
applicable procedure therefor.
3
ARTICLE 2
---------
MISCELLANEOUS
2.1 No waiver of any breach of any covenant or provision herein contained
shall be deemed a waiver of any preceding or succeeding breach thereof, or of
any other covenant or provision herein contained. No extension of time for
performance of any obligation or act shall be deemed any extension of the time
for performance of any other obligation or act.
2.2 This Agreement shall be binding upon and shall inure to the benefit of
the permitted successors and assigns of the parties hereto.
2.3 This Agreement is the final expression of, and contains the entire
agreement between, the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto. This Agreement may not
be modified, changed, supplemented or terminated, nor may any obligations
hereunder be waived, except by written instrument signed by the parties to be
charged or by its agent duly authorized in writing or as otherwise expressly
permitted herein.
2.4 Whenever required by the context of this Agreement, the singular shall
include the plural and masculine shall include the feminine. This Agreement may
be executed in two or more counterparts, all of which taken together shall
constitute one instrument. Execution and delivery of this Agreement by exchange
of facsimile copies bearing the facsimile signature of a party shall constitute
a valid and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.
2.5 The parties hereto expressly agree that this Agreement shall be
governed by, interpreted under, and construed and enforced in accordance of the
laws of the State of New York. The parties agree that any dispute arising under
or with respect to or in connection with this Agreement, whether during the term
of this Agreement or at any subsequent time, shall be resolved fully and
exclusively by binding arbitration in accordance with the commercial rules then
in force of the American Arbitration Association with the proceedings taking
place in New York, New York before a panel of three (3) arbitrators.
2.6 All notices and other communications under this Agreement must be in
writing and will be deemed to have been given only if delivered in person or by
internationally recognized commercial courier service such as UPS or Federal
Express, as follows:
If to the Secured Parties, to:
the addresses set forth on Exhibit A hereto.
4
If to Xxxxx Xxxxxxxx, to:
X/X X. Xxxx Xxxx & Xxxxxxxxxx, X.X.
0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
with a copy which shall not constitute notice to:
Xxxxx X. Xxxxxxx, Esq.
Law Offices of Xxxxx X. Xxxxxxx, P.C.
000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
If to the Pledgor, to:
Online Processing, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
If to the Escrow Agent, to:
Xxxxxxx X. Xxxxxxxxx, Esq.
Kaufmann, Feiner, Yamin, Xxxxxx and Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
2.7 By signing this Agreement, the Escrow Agent becomes a party hereto only
for the purpose of this Agreement; the Escrow Agent does not become a party to
the Transaction Documents.
2.8 Each party acknowledges and agrees that this Agreement shall not be
deemed prepared or drafted by any one party. In the event of any dispute between
the parties concerning this Agreement, the parties agree that any rule of
construction, to the effect that any ambiguity in the language of the Agreement
is to be resolved against the drafting party, shall not apply.
2.9 This Agreement may be executed in counterparts, each one of which will
constitute an original and all of which taken together will constitute one
document. This Agreement may be executed by delivery of a signed signature page
by fax to the other parties hereto and such fax execution and delivery will be
valid in all respects.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SIGNTURE PAGE FOLLOWS
5
SECURED PARTIES:
/s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxx, Xx.
------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx
Partners Resources, LLC
By:
---------------------------------
/s/ Xxxxx Xxxxxxxxx
------------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx
/s/ Xxxxxxx Xxxxx
------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxx Xxxxxxxxx
------------------------------------
Xxxxx Xxxxxxxxx
6
/s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxxx
PLEDGOR:
Online Processing, Inc.
By:
---------------------------------
AGENT:
KAUFMAN, FEINER, YAMIN, XXXXXX &
XXXXXXX LLP
By /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxx Xxxxxxxx
------------------------------------
Xxxxx Xxxxxxxx
7
EXHIBIT A
Secured Party CFS Shares
------------- ----------
to be issued upon default
-------------------------
Xxxxx Xxxxx 20,300
000 Xxxxxxx Xxxxxxxx #X
Xxx Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxx, Xx. 504
X.X. Xxx 000
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx 504
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxxx 504
0000 Xxxx Xxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Xxxxxxx X. Xxxx 504
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Partners Resources LLC 2,030
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxx Xxxxxxxxx 12,993
0 Xxx Xxxxxxxxx
Xxx Xxxx, Xxxx Xxxxxxx,
Xxxxxx Xxxxxxx
Xxxx Xxxxxx XX0000X, Xxxxxx Xxxxxxx
Xxxx X. Xxxxxxx 10,815
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxxxx Xxxxx 10,815
000 Xxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Xxxxx Xxxxxxxxx 2,604
00000 X. 00XX XXXXXX
XXXXXXXXXXX, XX. 00000
8
Xxxxxxxx X. Xxxxxx 3,864
0000 Xxxxx Xxxx Xxxxxxx
Townhouse 310
Lauderdale by the Xxx, XX 00000
Xxxxxxx X. Xxxxxxxxx 1,831
000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
9
OPTION AGREEMENT
This option agreement (the "Agreement") dated as of February 28, 2003,
is entered into by and between Online Processing, Inc., a Nevada corporation
(the "Company") and Xxxxx Xxxxxxxx ("Option Holder").
Recitals
--------
A. Option Holder is the owner of 410,000 shares of the Company's common
stock, par value $.001 (the "Shares").
B. The Company desires to grant Option Holder the option to sell the Shares
to the Company pursuant to the terms of this Agreement.
Now therefore, in consideration of the premise and the mutual promises and
covenants contained herein and subject specifically to the conditions hereof,
and intending to be legally bound thereby, the parties agree as follows:
1. Grant of Option.
-------------------
The Company hereby grants to the Option Holder, the right and option
(hereinafter called the Option), to require the Company to buy all or any part
of an aggregate of 410,000 Shares of the Company's common stock (such number
being subject to adjustment as provided in paragraph 6 hereof) on the terms and
conditions set forth herein.
2. Purchase Price.
------------------
The purchase price of the shares of the Common Stock covered by the Option
shall be $.61 per share (such price being subject to adjustment as provided in
paragraph 6 hereof).
3. Term of Option.
------------------
The term of this Option shall be three (3) years from the date of this
grant. Notwithstanding the foregoing, this Option shall immediately expire and
be of no further force and effect upon the exercise of all of the options
granted by Option Holder to those certain holders (the "Call Options"), copies
of which are attached hereto as Exhibit A.
4. Vesting.
-----------
The Options shall vest and become exercisable in full 366 days from the
date of this Agreement.
5. Payment.
-----------
The purchase price of the Shares as to which the Option shall be exercised
shall be paid in full by check, money order or wire transfer, at the option of
the Option Holder, to the address set forth in Section 8 and all such payments
shall be made payable to to:
T. Xxxx Xxxx & Associates, P.C.
Attorney IOLTA Account F/B/O
Xxxxx Xxxxxxxx
Compass Bank
Arlington, TX
ABA No. 000000000
Account No. 00000000
6. Changes in Capital Structure.
--------------------------------
If all or any portion of the Option shall be exercised subsequent to any
stock dividend, stock split-up, recapitalization, reclassification, merger,
consolidation, combination or exchange of shares, separation, reorganization, or
liquidation occurring after the date hereof, as a result of which shares of the
Company's common stock holdings shall be changed into the same or a different
number of shares of the same or another class or classes of stock, the price per
share to paid by the Company to the Option Holder upon exercise of the Option,
shall be appropriately adjusted so as to account for such change in the
Company's capital structure. In no event shall the Company be required to pay
more than $250,100 in the aggregate for the Shares, as adjusted, or shall the
Option Holder be paid less than $250,100 upon exercise of the full Option
granted herein.
7. Method of Exercising Option.
-------------------------------
Subject to the terms and conditions of this Option, the Option may be
exercised by written notice to the Company's Treasurer, in accordance with the
provisions of Section 8 herein, presented any time prior to termination of this
Option. The exercise date will be the date of the written notice to the
Treasurer. Such notice shall state the election to exercise the Option and the
number of Shares in respect of which it is being exercised and shall be signed
by the person or persons so exercising the Option. Accompanying such notice
shall be certificates representing such number of Shares of the common stock of
the Company as are then being sold to the Company pursuant to the exercise of
the Option, which certificates shall be duly endorsed or accompanied by duly
exercised stock powers transferring such Shares to the Company.
8. Notices.
-----------
All notices and other communications under this Agreement must be in
writing and will be deemed to have been given only if delivered in person or by
internationally recognized commercial courier service such as UPS or Federal
Express, as follows:
If to Option Holder, to:
Xxxxx Xxxxxxxx
X/X X. Xxxx Xxxx & Xxxxxxxxxx, X.X.
0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
with a copy which shall not constitute notice to:
Xxxxx X. Xxxxxxx, Esq.
Law Offices of Xxxxx X. Xxxxxxx, P.C.
000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
2
If to the Company to:
Communications Field Services, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Bothorpe
with a copy which shall not constitute notice to:
Xxxxxxx X. Xxxxxxxxx, Esq.
Kaufmann, Feiner, Yamin, Xxxxxx and Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
9. Disclaimer.
--------------
The Company will not advise Option Holder as to the tax consequences
resulting from the execution of the designated options. It is solely the
responsibility of the Option Holder to consult with the Option Holder's tax
and/or financial advisors regarding any financial or tax liabilities that may
result due to the execution of the designated Options.
3
