CURRENT REPORT FOR ISSUERS SUBJECT TO THE
1934 ACT REPORTING REQUIREMENTS
FORM 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Event: November 11, 2004
(date of earliest event reported)
NEXIA HOLDINGS, INC.
--------------------
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
033-22128D 84-1062062
(Commission File Number) (IRS Employer Identification Number)
268 West 400 South, Suite 300, Salt Lake City, Utah 84101
(Address of principal executive offices)
(801) 575-8073 (Registrant's telephone number, including area code)
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
On November 10 2004 the Company entered into an agreement with Joseph Corso,
Jr. wherein the Company agreed to sell to Mr. Corso 100,000 shares of its
recently designated Series C Preferred Stock in exchange for a cash payment
of $50,000. the Series C Preferred Stock has not been registered for sale
and the transaction was handled as private sale exempt from registration
under Section 4(2) of the Securities Act of 1993.
The Series C Preferred Stock is designated as having a par value of $0.001 per
share and designated as senior to the Common Stock of the Company. In the event
of liquidation the shares have a priority right to $5.00 per share in any
distribution as a result of liquidation. The Series C Preferred Stock hold no
voting rights.
On November 11, 2004 the Company issued a secured, convertible Debenture to
Joseph Corso, Jr. in the face amount of $200,000, bearing interest at the rate
of 24% per annum. The debenture is convertible into the common stock of the
Company at a conversion rate equal to 70% of the average bid price for the
common stock on the date of conversion. The debenture is to be secured by real
estate of the Company in an amount equal to the face value of the Debenture.
ITEM 9.01 Financial Statements and Exhibits The following exhibits are
included as part of this report:
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Exhibit No. Page No. Description
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A 3 Stock Purchase Agreement
B 9 Debenture
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated this 12th day of November, 2004.
Nexia Holdings, Inc.
/s/ Richard Surber
Richard Surber, President
EXHIBIT "A"
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is entered into this
8th day of November 2004 (AEffective Date@) by and between Joseph Corso, Jr.
("Corso"), a New York resident with a mailing address of ************
and Nexia Holdings, Inc. ("Nexia"), a Nevada corporation with principal
offices located at 268 West 400 South, Suite 300, Salt Lake City, Utah 84101.
WHEREAS, Corso desires to acquire from Nexia One Hundred Thousand
(100,000) shares of the Series C Preferred stock of Nexia (ANexia Shares@);
WHEREAS, Nexia desires to receive Fifty Thousand dollars ($50,000) in
exchange for the transfer of the Nexia Shares to Corso;
NOW, THEREFORE with the above being incorporated into and made a part
hereof for the mutual consideration set out herein and, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Exchange. Nexia will transfer One Hundred Thousand (100,000) shares
of the Series C Preferred stock of Nexia to Corso and Corso will pay the of
Fifty Thousand dollars ($50,000) to Nexia on or before the date five dates
after the execution of this Stock Purchase Agreement ("Agreement").;
2. Termination. This Agreement may be terminated at any time prior to the
Closing Date:
A. By Corso or Nexia:
(1) If there shall be any actual or threatened action or
proceeding by or before any court or any other governmental body which shall
seek to restrain, prohibit, or invalidate the transactions contemplated by
this Agreement and which, in the judgment of Nexia=s Board of Directors or
Corso and made in good faith and based upon the advice of legal counsel,
makes it inadvisable to proceed with the transactions contemplated by
this Agreement; or
(2) If the Closing shall have not occurred prior to December
1, 2004, or such later date as shall have been approved by parties hereto,
other than for reasons set forth herein.
B. By Corso:
(1) If Nexia shall fail to comply in any material
respect with any of its or their covenants or agreements contained in this
Agreement or if any of the representation or warranties of Nexia contained
herein shall be inaccurate in any material respect; or
C. By Nexia:
(1) If Corso shall fail to comply in any material respect
with any of his covenants or agreements contained in this Agreement or if
any of the representation or warranties of Corso contained herein shall be
inaccurate in any material respect;
In the event this Agreement is terminated pursuant to this Paragraph,
this Agreement shall be of no further force or effect, no obligation, right,
or liability shall arise hereunder, and each party shall bear its own costs
as well as the legal, accounting, printing, and other costs incurred in
connection with negotiation, preparation and execution of the Agreement
and the transactions herein contemplated.
3. Representations and Warranties of Nexia. Nexia hereby represents
and warrants that effective this date and the Closing Date, the representations
and warranties listed below are true and correct:
A Corporate Authority. Nexia has the full corporate power and
authority to enter into this Agreement and to carry out the transactions
contemplated by this Agreement. The Board of Directors of Nexia has duly
authorized the execution, delivery, and performance of this Agreement.
B. No Conflict With Other Instruments. The execution of this Agreement
will not violate or breach any document, instrument, agreement, contract, or
commitment material to the business of Nexia to which Nexia is a party and has
been duly authorized by all appropriated and necessary action.
C. Deliverance of Shares. As of the Closing Date, the Nexia Shares to
be delivered to Corso will be and constitute valid and legally issued shares
of Nexia, fully paid and non-assessable and equivalent in all respects to all
other issued and outstanding shares of Nexia Series C Preferred stock.
D. No Conflict with Other Instrument. The execution of this agreement
will not violate or breach any document, instrument, agreement, contract or
commitment material to Nexia.
4. Representations and Warranties of Corso. Corso hereby represents
and warrants that, effective this date and the Closing Date, the
representations and warranties listed below are true and correct.
A. Legal Authority. Corso has the full legal power and authority to
enter into this Agreement and to carry out the transactions contemplated
by this Agreement.
B. No Conflict With Other Instruments. The execution of this Agreement
will not violate or breach any document, instrument, agreement, contract, or
commitment material to the business of Corso to which Corso is a party and
has been duly authorized by all appropriated and necessary action.
5. Closing. The Closing as herein referred to shall occur upon such
date as the parties hereto may mutually agree upon, but is expected to be
on or before December 1, 2004.
At closing Nexia will deliver the Nexia Shares to Corso and Corso will
deliver to Nexia $50,000 in a cash payment.
6. Conditions Precedent of Nexia to Effect Closing. All obligations of
Nexia under this Agreement are subject to fulfillment prior to or as of the
Closing Date, of each of the following conditions:
A. The representations and warranties by or on behalf of Corso contained
in this Agreement or in any certificate or documents delivered to Nexia
pursuant to the provisions hereof shall be true in all material respects at
end as of the time of Closing as though such representations and warranties
were made at and as of such time.
B. Corso shall have performed and complied with all covenants, agreements
and conditions required by this Agreement to be performed or complied with
by her prior to or at the Closing.
C. All instruments and documents delivered to Nexia pursuant to the provisions
hereof shall be reasonably satisfactory to Nexia=s legal counsel.
7. Conditions Precedent of Corso to Effect Closing. All obligations of
Corso under this Agreement are subject to fulfillment prior to or as of the
date of Closing, of each of the following conditions:
A. The representations and warranties by or on behalf of Nexia contained
in this Agreement or in any certificate or documents delivered to Corso
pursuant to the provisions hereof shall be true in all material respects at
end as of the time of Closing as though such representations and warranties
were made at and as of such time.
B. Nexia shall have performed and complied with all covenants, agreements
and conditions required by this Agreement to be performed or complied with by
it prior to or at the Closing.
C. All instruments and documents delivered to Corso pursuant to the provisions
hereof shall be reasonably satisfactory to Corso=s legal counsel.
8. Damages and Limit of Liability. Each party shall be liable, for any
material breach of the representations, warranties, and covenants contained
herein which results in a failure to perform any obligation under this
Agreement, only to the extent of the expenses incurred in connection with
such breach or failure to perform Agreement.
9. Nature and Survival of Representations and Warranties.
All representations, warranties and covenants made by any party in this
Agreement shall survive the Closing hereunder. All of the parties hereto
are executing and carrying out the provisions of this Agreement in reliance
solely on the representations, warranties and covenants and agreements
contained in this Agreement or at the Closing of the transactions herein
provided for and not upon any investigation upon which it might have made
or any representations, warranty, agreement, promise, or information,
written or oral, made by the other party or any other person other than
as specifically set forth herein.
10. Indemnification Procedures. If any claim is made by a party which would
give rise to a right of indemnification under this paragraph, the party
seeking indemnification (Indemnified Party) will promptly cause notice
thereof to be delivered to the party from whom is sought (Indemnifying
Party). The Indemnified Party will permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting from the claims.
Counsel for the Indemnifying Party which will conduct the defense must be
approved by the Indemnified Party (whose approval will not be unreasonable
withheld), and the Indemnified Party may participate in such defense at the
expense of the Indemnified Party. The indemnifying Party will not in the
defense of any such claim or litigation, consent to entry of any judgment
or enter into any settlement without the written consent of the
Indemnified Party (which consent will not be unreasonably withheld). The
Indemnified Party will not, in connection with any such claim or litigation,
consent to entry of any judgment or enter into any settlement without the
written consent of the Indemnifying Party (which consent will not be
unreasonable withheld). The Indemnified Party will cooperate fully with
the Indemnifying Party and make available to the Indemnifying Party all
pertinent information under its control relating to any such claim or
litigation. If the Indemnifying Party refuses or fails to conduct the
defense as required in this Section, then the Indemnified Party may conduct
such defense at the expense of the Indemnifying Party and the approval of the
Indemnifying Party will not be required for any settlement or consent or
entry of judgment.
11. Default at Closing.
C. By Nexia:
(1) Notwithstanding the provisions hereof, if Nexia shall fail or refuse
to deliver any of the Nexia Shares, or shall fail or refuse to consummate the
transaction described in this Agreement prior to the Closing Date, such
failure or refusal shall constitute a default by Nexia and Corso at his
option and without prejudice to his rights against such defaulting party,
may either (a) invoke any equitable remedies to enforce performance hereunder
including, without limitation, an action or suit for specific performance,
or (b) terminate all of its obligations hereunder with respect to Nexia.
D. By Corso:
(1) Notwithstanding the provisions hereof, if Corso shall fail or
refuse to deliver any of the $50,000 purchase price, or shall fail or refuse
to consummate the transaction described in this Agreement prior to the Closing
Date, such failure or refusal shall constitute a default by Corso and Nexia
at its option and without prejudice to its rights against such defaulting
party, may either (a) invoke any equitable remedies to enforce performance
hereunder including, without limitation, an action or suit for specific
performance, or (b) terminate all of its obligations hereunder with
respect to Corso.
12. Costs and Expenses. Corso and Nexia shall bear their own costs and
expenses in the proposed exchange and transfer described in this Agreement.
Corso and Nexia have been represented by their own legal counsel in this
transaction, and shall pay the fees of its attorney, except as may be
expressly set forth herein to the contrary.
13. Notices. Any notice under this Agreement shall be deemed to have
been sufficiently given if sent by registered or certified mail, postage
prepaid, addressed as follows:
To Nexia: Nexia Holdings, Inc. To Corso:Joseph Corso, Jr.
268 West 400 South, #300 ************
Salt Lake City, UT 84101 ***************************
Telephone: (801) 575-8073 Telephone: (**************
Telefax: (801) 575-8092 Telefax: ( ***************
Attn: Richard Surber, President
14. Miscellaneous.
A. Further Assurances. At any time and from time to time, after the
effective date, each party will execute such additional instruments and
take such as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry
out the intent and purposes of this Agreement.
B. Waiver. Any failure on the part of any 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.
C. Headings. The section and subsection headings in this Agreement
are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
D. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
E. Rule 144 Legend. It is understood that the certificates
evidencing the shares transferred by Nexia will bear substantially the
following legends:
"The securities evidenced hereby have not been registered under the
Securities Act of 1933, as amended (the AAct@) nor qualified under the
securities laws of any states, and have been issued in reliance upon
exemptions from such registration and qualification for nonpublic offerings.
Accordingly, the sale, transfer, pledge, hypothecation, or other disposition
of any such securities or any interest therein may not be accomplished except
pursuant to an effective registration statement under the Act and
qualification under applicable State securities laws, or pursuant to an
opinion of counsel, satisfactory in form and substance to the Company to
the effect that such registration and qualification are not required.@
F. Governing Law. This Agreement was negotiated and is being
contracted for in the State of Utah, and shall be governed by the laws of
the State of Utah, notwithstanding any conflict-of-law provision to the
contrary.
G.Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties their respective heirs,
administrators, executors, successors, and assigns.
H.Entire Agreement. The Agreement contains the entire agreement between
the parties hereto and supersedes any and all prior agreements, arrangements
or understandings between the parties relating to the subject matter hereof.
No oral understandings, statements, promises or inducements contrary to the
terms of this Agreement exist. No representations, warranties covenants, or
conditions express or implied, other than is set forth here, have been
made by any party.
I. Severability. If any part of this Agreement is deemed to be unenforceable
the balance of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.
Joseph Corso, Jr., an individual resident of New York Nexia Holdings, Inc.
______/s/ Joseph Corso______ By:_Richard Surber_____
Joseph Corso, Jr. Richard D. Surber, President
EXHIBIT "B"
DEBENTURE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION
PROVIDED BY THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT") AND THIS DEBENTURE MAY
ONLY BE OFFERED OR SOLD PURSUANT TO REGISTRATION UNDER, OR AN EXEMPTION FROM,
THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
A-003 US $ 200,000
NEXIA HOLDINGS, INC.
24% SERIES A SENIOR SUBORDINATED CONVERTIBLE REDEEMABLE DEBENTURE DUE
November 1, 2007.
THIS DEBENTURE of Nexia Holdings, Inc., a corporation duly organized and
existing under the laws of Nevada ("Company"), designated as its 24% Series A
Senior Subordinated Convertible Redeemable Debenture Due November 1, 2007, in
an aggregate principal face amount of Two Hundred Thousand Dollars
(U.S. $200,000), which Debenture is being delivered at 100% of the face
amount of such Debenture.
FOR VALUE RECEIVED, the Company promises to pay to Joseph Corso, Jr.,
the registered holder hereof and his authorized successors and permitted
assigns ("Holder"), the aggregate principal face sum of Two Hundred Thousand
Dollars (U.S. $200,000) on or before November 1, 2007 ("Maturity Date"), and
to pay interest on the principal sum outstanding, at the rate of 24% per
annum commencing October 1, 2004 and due in full at the Maturity Date pursuant
to paragraph 4(b) herein. Accrual of the outstanding principal sum has been
made or duly provided for. The interest so payable will be paid to Mr. Corso
or any other person in whose name this Debenture is registered on the records
of the Company regarding registration and transfers of the Debentures
("Debenture Register"); provided, however, that the Company's obligation to
a transferee of this Debenture arises only if such transfer, sale or other
disposition is made in accordance with the terms and conditions of the
Securities Subscription Agreement dated as of October 1, 2004 between the
Company and Joseph Corso, Jr. ("Subscription Agreement"). The principal of,
and interest on, this Debenture are payable at the address last appearing on
the Debenture Register of the Company as designated in writing by the Holder
hereof from time to time. The Company will pay the outstanding principal due
upon this Debenture before or on the Maturity Date, less any amounts required
by law to be deducted or withheld, to the Holder of this Debenture by check
if paid more than 10 days prior to the Maturity Date or by wire transfer and
addressed to such Holder at the last address appearing on the Debenture
Register. The forwarding of such check or wire transfer shall constitute a
payment of outstanding principal hereunder and shall satisfy and discharge the
liability for principal on this Debenture to the extent of the sum represented
by such check or wire transfer. Interest and principal may be payable in
Common Stock (as defined below) pursuant to paragraph 4(b) herein.
This Debenture is subject to the following additional provisions:
1. The Debentures are issuable in denominations of Ten Thousand
Dollars (US$10,000) and integral multiples thereof. The Debentures are
exchangeable for an equal aggregate principal amount of debentures of
different authorized denominations, as requested by the Holders surrendering
the same, but not less than U.S. $10,000. No service charge will be made for
such registration or transfer or exchange, except that Holder shall pay any
tax or other governmental charges payable in connection therewith.
2. The Company shall be entitled to withhold from all payments any
amounts required to be withheld under the applicable laws.
3. This Debenture may be transferred or exchanged only in
compliance with the Securities Act of 1933, as amended ("Act") and applicable
state securities laws. Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the person in
whose name this Debenture is duly registered on the Company's Debenture
Register as the owner hereof for all other purposes, whether or not this
Debenture be overdue, and neither the Company nor any such agent shall be
affected or bound by notice to the contrary. Any Holder of this Debenture,
electing to exercise the right of conversion set forth in Section 4(a) hereof,
in addition to the requirements set forth in Section 4(a), and any
prospective transferee of this Debenture, are also required to give the
Company written confirmation that the Debenture is being converted
("Notice of Conversion") in the form annexed hereto as Exhibit 1.
4. (a) The Holder of this Debenture is entitled, at its option, at any
time one (1) year days following execution of this Agreement and delivery of
the Debenture hereof, to convert all or any amount over $5,000 of the
principal face amount of this Debenture then outstanding into shares of
Common Stock, $0.001 par value per share, of the Company ("Common Stock"),
at a conversion price ("Conversion Price") for each share of Common Stock
equal to 70% of the average closing bid price of the Common Stock as
reported on the National Association of Securities Dealers Electronic
Bulletin Board ("OTC Bulletin Board "), or other exchange upon which the
shares of the Company may be trading at the time of conversion, for the
three (3) trading days immediately preceding the date of receipt by the
Company of a Notice of Conversion ("Conversion Shares"). If the number of
resultant Conversion Shares would as a matter of law or pursuant to
regulatory authority require the Company to seek shareholder approval of such
issuance, the Company shall, as soon as practicable, take the necessary steps
to seek such approval. Such conversion(s) shall be limited in any three month
period to not more than one percent (1%) of the issued and outstanding shares
of the Common Stock of the Company. Such conversion shall be effectuated,
by the Company delivering the Conversion Shares to the Holder within 5
business days of receipt by the Company of the Notice of Conversion. Once
the Holder has received such Conversion Shares, the Holder shall surrender
the Debentures to be converted to the Company, executed by the Holder of this
Debenture evidencing such Holder's intention to convert this Debenture or
a specified portion hereof, and accompanied by proper assignment hereof in
blank. Accrued but unpaid interest shall be subject to conversion. No
fractional shares or script representing fractions of shares will be issued
on conversion, but the number of shares issuable shall be rounded up to the
nearest whole share.
(b) Interest at the rate of 24% per annum shall be paid,
at Holder's option, either in cash or by issuing Common Stock of the Company
on the same basis as set for conversion in subparagraph (a) immediately above.
(c) At any time after 120 days the Company shall have the
option to pay to the Holder 120% of the principal amount of the Debenture, in
full, to the extent conversion has not occurred pursuant to paragraph 4(a)
herein, or pay upon maturity if the Debenture is not converted. The Company
shall give the Holder 5 days written notice and the Holder during such 5 days
shall have the option to convert the Debenture or any part thereof into shares
of Common Stock at the Conversion Price set forth in paragraph 4(a) of this
Debenture.
(d) The Company agrees that within 90 days after the issuance
of the Debenture to grant to the holder hereof a secured interest in real
property owned by the Company with estimated equity of greater than $200,000,
which secured interest shall insure the full payment of this Debenture.
5. No provision of this Debenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
outstanding principal of, and interest on, this Debenture at the time, place,
and rate, and in the form, herein prescribed.
6. The Company hereby expressly waives demand and presentment for
payment, notice of non-payment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, and diligence in taking any
action to collect amounts called for hereunder and shall be directly and
primarily liable for the payment of all sums owing and to be owing hereto.
7. The Company agrees to pay all costs and expenses, including
reasonable attorneys' fees, which may be incurred by the Holder in collecting
any amount due under this Debenture.
8. If one or more of the following described "Events of Default"
shall occur and continue for 30 days, unless a different time frame is
noted below:
(a) The Company shall default in the payment of principal or interest on this
Debenture; or
(b) Any of the representations or warranties made by the Company herein,
or in any certificate or financial or other written statements heretofore or
hereafter furnished by or on behalf of the Company in connection with the
execution and delivery of this Debenture shall be false or misleading in
any material respect at the time made; or
(c) The Company shall fail to perform or observe, in any material respect,
any other covenant, term, provision, condition, agreement or obligation of the
Company under this Debenture and such failure shall continue uncured for a
period of ten (10) days after notice from the Holder of such failure; or
(d) The Company shall (1) become insolvent; (2) admit in writing its
inability to pay its debts generally as they mature; (3) make an assignment
for the benefit of creditors or commence proceedings for its dissolution;
(4) apply for or consent to the appointment of a trustee, liquidator or
receiver for the Company or for a substantial part of its property or business;
(5) file a petition for bankruptcy relief, consent to the filing of such
petition or have filed against it an involuntary petition for bankruptcy
relief, all under federal or state laws as applicable; or
(e) A trustee, liquidator or receiver shall be appointed for the Company
or for a substantial part of its property or business without its consent
and shall not be discharged within thirty (30) days after such appointment; or
(f) Any governmental agency or any court of competent jurisdiction at
the instance of any governmental agency shall assume custody or control of the
whole or any substantial portion of the properties or assets of the Company; or
(g) Any money judgment, writ or warrant of attachment, or similar process,
in excess of One Million ($1,000,000) Dollars in the aggregate shall be
entered or filed against the Company or any of its properties or other
assets and shall remain unpaid, unvacated, unbonded or unstayed for a
period of fifteen (15) days or in any event later than five (5) days
prior to the date of any proposed sale thereunder; or
(h) Bankruptcy, reorganization, insolvency or liquidation proceedings,
or other proceedings for relief under any bankruptcy law or any law for
the relief of debtors shall be instituted voluntarily by or involuntarily
against the Company; or
(i) The Company shall have its Common Stock delisted from the
over-the-counter market or other market or exchange on which the Common Stock
is or becomes listed or trading in the Common Stock shall be suspended for
more than 10 consecutive days; or
(j) The Company shall not deliver to the Buyer the Common Stock pursuant
to paragraph 4 herein within 5 business days.
Then, or at anytime thereafter, unless cured, and in each and every such case,
unless such Event of Default shall have been waived in writing by the
Holder (which waiver shall not be deemed to be a waiver of any
subsequent default) at the option of the Holder and in the Holder's
sole discretion, the Holder may consider this Debenture immediately due and
payable, without presentment, demand, protest or (further) notice of any
kind (other than notice of acceleration), all of which are hereby
expressly waived, anything herein or in any note or other instruments
contained to the contrary notwithstanding, and the Holder may
immediately, and without expiration of any period of grace, enforce any
and all of the Holder's rights and remedies provided herein or any other
rights or remedies afforded by law. 9. This Debenture represents a
prioritized obligation of the Company. However, no recourse shall be had
for the payment of the principal of, or the interest on, this Debenture,
or for any claim based hereon, or otherwise in respect hereof, against
any incorporator, shareholder, or director, as such, past, present or
future, of the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
10. In case any provision of this Debenture is held by a court of
competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if
possible, so that it is enforceable to the maximum extent possible, and the
validity and enforceability of the remaining provisions of this Debenture
will not in any way be affected or impaired thereby.
11. This Debenture and the agreements referred to in this
Debenture constitute the full and entire understanding and agreement between
the Company and the Holder with respect to the subject hereof. Neither this
Debenture nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the Company and the Holder.
12. If this Debenture becomes worn, defaced or mutilated but is
still substantially intact and recognizable, the Company or its agent may
issue a new Debenture in lieu hereof upon its surrender. Where the Holder
of this Debenture claims that the Debenture has been lost, destroyed or
wrongfully taken, the Company shall issue a new Debenture in place of the
original Debenture if the Holder so requests by written notice to the Company
actually received by the Company before it is notified that the Debenture
has been acquired by a bona fide purchaser and the Holder has delivered an
affidavit of the Holder setting forth the facts concerning such loss,
destruction or wrongful taking and such other information in such form with
such proof or verification as the Company may request.
13. In this Debenture, unless the context otherwise requires,
words in the singular number include the plural, and in the plural include the
singular, and words of the masculine gender include the feminine and the
neuter, and when the sense so indicates, words of the neuter gender may
refer to any gender. The numbers and titles of sections contained in the
Debenture are inserted for convenience of reference only, and they neither
form a part of this Debenture nor are they to be used in the construction
or interpretation hereof.
14. This Debenture shall be governed by and construed in accordance
with the laws of Utah applicable to contracts made and wholly to be performed
within the State of Utah and shall be binding upon the successors and
assigns of each party hereto. The Holder and the Company hereby mutually
waive trial by jury and consent to exclusive jurisdiction and venue in the
courts of the State of Utah. This Agreement may be executed in counterparts,
and the facsimile transmission of an executed counterpart to this Agreement
shall be effective as an original.
15. Where this Debenture authorizes or requires the payment of
money or the performance of a condition or obligation on a Saturday or Sunday
or a public holiday, or authorizes or requires the payment of money or the
performance of a condition or obligation within, before or after a period of
time computed from a certain date, and such period of time ends on a Saturday
or Sunday or a public holiday, such payment may be made or condition or
obligation performed on the next succeeding business day, and if the period
ends at a specified hour, such payment may be made or condition performed,
at or before the same hour of such next succeeding business day, with the
same force and effect as if made or performed in accordance with the terms
of this Debenture. Where time is extended by virtue of the provisions of this
Debenture, such extended time shall not be included in the computation of
interest. A Abusiness day@ shall mean a day on which banks are not required
or allowed to be closed.
IN WITNESS WHEREOF, the Company has caused this instrument to be duty
executed by an officer thereunto duly authorized.
Dated: October 1, 2004
Nexia Holdings, Inc.
By: /s/ Richard Surber
-----------------------------------------
Name: Richard Surber
-----------------------------------------
Title: President
Exhibit A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debenture.)
The undersigned hereby irrevocably elects, as of , 2005 to
convert $ of the Debentures into Shares of Common Stock (the "Shares")
of Nexia Holdings, Inc., or its successors (the "Company") according to the
conditions set forth in the Debenture dated October 1, 2004.
Date of Conversion
----------------------------------------------------
Applicable Conversion Price
-------------------------------------------
Number of Shares Issuable upon this conversion
-------------------------
Signature
/s/ Joseph Corso, Jr.
Address: ************
***********************
Phone: ************ Fax: ***************