-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J0hsggMHUytwe6JS0YVzuV/5eSdS4J1hlBM8GmijwSz9bUHBdMsG1xzKzIxN1DZI mEphoGo1PZwXqbbXDN01yg== 0001012895-99-000207.txt : 19990825 0001012895-99-000207.hdr.sgml : 19990825 ACCESSION NUMBER: 0001012895-99-000207 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19990810 ITEM INFORMATION: FILED AS OF DATE: 19990824 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEXON TECHNOLOGIES INC CENTRAL INDEX KEY: 0001065189 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 870502701 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-24721 FILM NUMBER: 99698200 BUSINESS ADDRESS: STREET 1: 1401 BROOK DRIVE CITY: DOWNERS GROVE STATE: IL ZIP: 60515 BUSINESS PHONE: 6309166196 FORMER COMPANY: FORMER CONFORMED NAME: REXFORD INC DATE OF NAME CHANGE: 19980630 8-K 1 CURRENT REPORT ON FORM 8-K

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

August 10, 1999

(Date of Report: Date of earliest event reported)

LEXON TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter.)

Delaware 02474 87-0502701

______________________ _________________ _______________________

(State or other jurisdiction (Commission File Number) (IRS Employer ID No.)

of incorporation)

1401 Brook Drive, Downers Grove, Illinois 60515

________________________________________

(Address of principal executive office)

Registrant's telephone number, including area code: (630) 916-6196

-------------------

REXFORD, INC.

7777 East Main Street, Suite 201, Scottsdale, AZ 85251

(Former name or former address, if changed since last report)

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ITEM 5. OTHER EVENTS

On August 10, 1999, the Registrant entered into a borrowing ("Borrowing") from Miller Capital Corporation, Stephen A. McConnell, Jock Patton and Dickerson Wright (collectively "Lender") in the principal amount of $750,000, with proceeds to be applied to general working capital purposes, and repayment secured by a pledge of the Registrant's revenues, accounts receivable, assets, technology, patents and trademark rights. The Borrowing includes a sale of 75,000 shares of common stock to the Lender for the purchase price of $100 and issuance of stock purchase warrants for the purchase of up to 75,000 shares of Registrant's common stock, all pursuant to a Securities Purchase Agreement, Promissory Notes, Security and Pledge Agreement, Warrants to Purchase Common Stock and other documents necessary to evidence the purchase of securities, loan and security interest of Lender.

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS

A. None

B. None

C. Exhibits

4.01 Securities Purchase Agreement

4.02 Promissory Notes

4.03 Warrants to Purchase Common Stock

4.04 Security and Pledge Agreement

4.05 Continuing Guaranty; and

4.06 Stock Pledge and Security Agreement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized.

LEXON TECHNOLOGIES, INC.

______________________________

/s/ John B. McLean, Chief Financial Officer

EX-4.01 2 SECURITIES PURCHASE AGREEMENT

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Exhibit 4.01

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this "Agreement") is made as of the 10^th day of August, 1999, by and among LEXON TECHNOLOGIES, INC., a Delaware corporation, as seller (the "Company"), and MILLER CAPITAL CORPORATION ("Miller"), STEPHEN A McCONNELL ("McConnell"), JOCK PATTON ("Patton") and DICKERSON WRIGHT ("Wright") as purchasers (collectively, the "Purchasers").

AGREEMENT:

Company and Purchasers agree as follows:

1. Purchase and Sale of Securities.

a. Securities Purchased. The Company hereby sells and each of the Purchasers hereby buys (i) a Promissory Note (each individually a "Note" and collectively the "Notes") due December 10, 1999 (or earlier upon the occurrence of certain events described therein) made by the Company, which Notes are in the original principal amount of Two Hundred Fifty Thousand Dollars ($250,000) each in the case of the Notes purchased by Miller and Wright or One Hundred Twenty Five Thousand Dollars ($125,000) in the case of the Notes purchased by McConnell and Patton, (ii) a five-year Warrant to Purchase Common Stock (each individually a "Warrant" and collectively the "Warrants") entitling each Purchaser to purchase an aggregate of Twenty Five Thousand (25,000) shares, in the case of Miller and Wright, or Twelve Thousand Five Hundred Shares (12,500) shares, in the case of McConnell and Patton, of the common stock (the "Common Stock") of the Company, at an exercise price of Two Dollars and Fifty Cents ($2.50) per share, subject to adjustments as provided therein, and (iii) in the case of Miller and Wright, Twenty Five Thousand (25,000) shares of Common Stock each or, in the case of McConnell and Patton, Twelve Thousand Five Hundred (12,500) shares of Common Stock each. Forms of the Notes and the Warrants are attached hereto as Exhibits "A" and "B" respectively, and together with the Common Stock are sometimes collectively referred to herein as the "Securities."

b. Purchase Price. The purchase price of the Note and the Warrant purchased by each Purchaser shall be an amount equal to the original principal amount of the Note purchased by such Purchaser. The purchase price for the Common Stock shall be $.0013333 per share. Notwithstanding the foregoing, the aggregate proceeds received by the Company in respect of the purchase of the Securities shall be reduced by any amounts payable to the Purchasers in respect of the transactions contemplated hereby (including, without limitation, the fees set forth in section 7(i) hereof).

2. Representations and Warranties of Purchaser. Each Purchaser represents and warrants to the Company that (i) such Purchaser is acquiring the Securities for his or its own account for investment purposes only and not with a view to the distribution or sale of such

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Securities within the meaning of the Securities Act (as defined herein), (ii) such Purchaser is an "accredited investor," as such term is defined in Rule 501 promulgated under the Securities Act, (iii) such Purchaser has read this Agreement and the annual financial statements of the Company for its most recently completed fiscal year, together with any available quarterly financial statements of the Company for quarterly periods subsequent to the end of the Company's most recently completed fiscal year (collectively, the "Supplemental Information") and is capable of evaluating and understanding this Agreement, including all Exhibits hereto, and the Supplemental Information, (iv) such Purchaser has been provided with all information such Purchaser has requested from the Company and has been afforded the opportunity to ask questions and receive answers concerning the terms and conditions of the offering and the Supplemental Information, (v) such Purchaser understands the significant risks involved with an investment in the Securities, (vi) such Purchaser understands that the Securities have not been and will not be registered under the Securities Act or registered or qualified under any state securities or blue sky laws and that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act and applicable state securities and blue sky laws or an exemption from such registration is available, and (vii) such Purchaser understands that no federal or state agency has passed upon the Securities or made any finding or determination as to the fairness of the investment or any recommendation or endorsement of the Securities. As used herein, "Securities Act" shall mean the Securities Act of 1933, as amended, and any similar or successor Federal statute, and the rules and regulations promulgated thereunder, all as the same shall be in effect at any applicable time.

3. Representations and Warranties of the Company. The Company represents and warrants to each of the Purchasers that:

a. Organization and Authority of the Company. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to own or hold under lease the property it purports to own or hold under lease and to conduct its business as presently conducted. The Company has all requisite power and authority to execute and deliver this Agreement, the Securities and all other documents and agreements contemplated hereby and thereby, and to perform the provisions hereof and thereof. The Company has all necessary corporate power and authority to enter into this Agreement, the Securities and any other documents or agreements contemplated hereby or thereby, and to perform its obligations hereunder and thereunder. Each of this Agreement, the Securities and any other documents or agreements contemplated hereby or thereby has been duly authorized, executed and delivered by, and each is the valid and binding obligation of, the Company, enforceable in accordance with its terms, except as may be limited by applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws or by legal or equitable principles relating to or limiting creditors' rights generally. Neither the execution and delivery of this Agreement, the Securities and all other documents and agreements contemplated hereby and thereby, nor the performance of the Company's obligations hereunder and thereunder, will violate any provision of the Company's articles of incorporation or bylaws or violate or result in a breach of or default under any contract, indenture, mortgage or other agreement of any kind

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whatsoever to which the Company is a party or by which it or its property is or may be bound.

b. Capital Stock. The authorized capital stock of the Company consists of 100,000,000 shares of $.001 par value common stock (the "Common Stock"). As of the date of this Agreement, 11,500,000 shares of Common Stock are issued and outstanding. Except as set forth on Exhibit "C", the Company has no outstanding capital stock or other securities convertible into or exchangeable for any of its capital stock or any right to subscribe for or to purchase, or any options for the purchase of, or any agreement providing for the issuance of, any of its capital stock or any securities convertible into or exchangeable for any of its capital stock.

c. Application of Proceeds. The Company shall use the net proceeds for general working capital (it being acknowledged that a portion of the proceeds may be used by the Company to pay fees and expenses related to the transactions contemplated by this Agreement).

d. Business, Properties and Other Information Regarding the Company. The Company has delivered to each Purchaser the Supplemental Information. As applicable, and at the respective dates thereof, the Supplemental Information does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Since December 31, 1998, there has been no material adverse change in the business, prospects, condition (financial or otherwise) or operations of the Company. Except as described in the Supplemental Information, the Company does not know of any fact that materially affects adversely or will materially affect adversely the business, business prospects, operations of the Company on a consolidated basis, or the ability of the Company to perform its obligations under this Agreement and the Securities.

e. Litigation; Observance of Statutes, Regulations and Orders. There are no material actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any property of the Company in any court or before any arbitrator of any kind or before or by any governmental body which, if determined adversely to the Company, could reasonably be expected to materially and adversely affect the business, prospects, properties, condition (financial or otherwise) or operations of the Company. The Company is not in violation of any statute or other rule or regulation of any governmental body, the violation of which could reasonably be expected to materially and adversely affect the business, prospects, properties, condition (financial or otherwise) or operations of the Company.

f. Title to Property. Except for personal property under lease, the Company has good and merchantable title to all of its material personal property. The Company has full and undisturbed possession under all leases necessary in any material respect for the operation of its business.

g. Taxes. The Company has filed all tax returns that are required to have been filed in any jurisdiction, and has paid all taxes shown to be due and payable on such returns. The Company is not aware of any proposed material tax assessment against it. To the knowledge of

<PAGE> 4

the Company, none of its tax returns are currently under audit by any governmental body.

h. Compliance with Laws and Other Obligations of the Company. The consummation of the transactions contemplated by this Agreement and the Securities, and the execution, delivery and performance of the terms and provisions of this Agreement and the Securities, will not (i) contravene or result in any breach of, or constitute a default under, or result in the creation of any lien in respect of any property of the Company under any loan, credit agreement, corporate charter, bylaws or other material agreement or instrument to which the Company is a party or by which any property of the Company is bound, (ii) violate any provision of any statute or other rule or regulation of any governmental body applicable to the Company, the violation of which, in any such case, would materially and adversely affect the business, prospects, properties, condition (financial or otherwise) or operations of the Company.

i. Governmental Authorizations. No consent, approval or authorization of, or registration, filing or declaration with, any governmental body is required for the validity of the execution and delivery or for the performance by the Company of this Agreement or the Securities.

j. Licenses, Permits, etc. The Company possesses all material licenses, permits, franchises, authorizations, patents, copyrights, trademarks and trade names or rights thereto, required to conduct its business substantially as now conducted and as currently proposed to be conducted, without known conflict, after due inquiry, with the rights of others.

k. Financial Statements. Each of the financial statements included in the Supplemental Information is consistent with the books and records of the Company and is complete and accurate in all material respects. Since March 31, 1999, there have been no material changes in the consolidated assets, liabilities or financial position of the Company.

4. Acknowledgment of Receipt and Review of Supplemental Information. Each Purchaser acknowledges that he or it has received copies of, and has reviewed in their entirety, the documents constituting the Supplemental Information.

5. Prepayment.

a. Option Prepayment. Upon notice to the holder thereof, the Company, at its option, may prepay any Note in whole or in part at any time, in each case together with accrued interest, if any, through the date of prepayment and any required Prepayment Fee (as described in Section 5(c) below. Upon any prepayment of a portion of the principal amount of any Note, the holder of such Note, at its option, may require the Company to make and deliver, at the expense of the Company (other than transfer taxes, if any), upon surrender of such Note, a new Note payable in the principal amount of the surrendered Note then remaining unpaid, dated as of the date to which interest has been paid on the unpaid principal amount of the surrendered Note.

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b. Mandatory Prepayment. Upon the occurrence of the closing of any debt or equity financing transaction or series of related debt or equity financing transactions which results in net proceeds to the Company in an aggregate amount greater than or equal to $750,000 (a "Repayment Event"), the entire principal amount of each Note outstanding at such time, together with accrued interest through the date of repayment and any required Prepayment Fee (as described in Section 5(c) below), shall be due and payable in full.

c. Prepayment Fee. Upon the repayment of all or a portion of any Note prior to December 10, 1999 (whether as a result of optional prepayment at the election of Borrower, the occurrence a Repayment Event, or otherwise), the Company agrees to pay, as additional compensation to the holder of such Note, a prepayment fee in an amount equal to the amount of interest that would otherwise accrue under such Note (notwithstanding such prepayment) on the principal amount thereof so repaid from the date of repayment through and including December 10, 1999 (such amount, a "Prepayment Fee"). Any Prepayment Fee will be due and payable immediately upon such full or partial prepayment, and any overdue Prepayment Fee shall bear interest at the rate applicable to overdue interest under such Note.

6. Financial Information.

a. Quarterly and Annual Reports. As long as any of the Securities remains outstanding, within sixty (60) days after the end of each fiscal quarter, and within ninety (90) days of the end of each fiscal year of the Company, the Company will furnish to the Purchasers either (i) a copy of each of the Company's quarterly and annual report required to be filed by the Company with the Securities and Exchange Commission (the "SEC"), or (ii) if the Company is not subject to the periodic reporting requirements under the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder, unaudited financial information consisting of at least a balance sheet and a statement of results of operations. In the event the Company's financial statements are audited by an independent accounting firm, the Company will provide a copy of such audit report to the Purchasers within a reasonable time of receiving such report.

b. Request by Purchasers. As long as any of the Securities remain outstanding, each of the Purchasers and such Purchaser's respective authorized agents shall have the right to review any and all books and records of the Company and to copy the same and make excerpts therefrom, and to inspect the property and assets of the Company, at all times on 24 hours notice to the Company. The Company shall, and shall cause its employees, agents and advisors to, cooperate fully with the Purchasers in any such review or inspection.

7. Miscellaneous.

a. Notices. All notices and other communication provided for in this Agreement shall be in writing and delivered, telecopied or mailed, registered or certified, addressed as follows:

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(i) if to the Company:

LEXON Technologies, Inc.

1401 Brook Drive

Downer's Grove, Illinos 60515

Attn: Steven J. Peskaitis

with a copy to:

Rieck and Crotty

55 West Monroe Street

Suite 3390

Chicago, Illinois 60603

Attn: Thomas W. Rieck

(ii) if to the Purchasers:

Miller Capital Corporation

4909 East McDowell Road

Phoenix, AZ 85008

Attn: Rudy R. Miller

and

Stephen A McConnell

6700 E. Solano Drive

Paradise Valley, Arizona 85253

and

Jock Patton

5430 East Arcadia Lane

Phoenix, Arizona 85018

and

Dickerson Wright

14366 Twisted Branch Road

Poway, California 92064

<PAGE> 7

with a copy to:

Squire, Sanders & Dempsey L.L.P.

Two Renaissance Square

40 North Central Avenue, Suite 2700

Phoenix, Arizona 85004-4441

Attention: Christopher D. Johnson

Any notice or communication shall be deemed to have been given when delivered, telecopied or mailed as aforesaid.

b. Successors and Assigns. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.

c. Further Assurances. The Company shall take such actions and execute and deliver such instruments as any Purhaser may reasonably request (at the expense of the Company) to further perfect, evidence or consummate the transactions contemplated by this Agreement.

d. Waiver. A waiver on the part of any party hereto of any term, provision or condition of this Agreement or breach thereof shall not constitute a precedent, nor bind either party hereto to a waiver of any other term, provision or condition of this Agreement or any other or succeeding breach of the same or any other term, provision or condition thereof.

e. Amendments. This Agreement shall not be modified, amended or otherwise changed without the written agreement of each of the parties hereto.

f. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

g. Entire Agreement. This Agreement (including all exhibits hereto) contains the entire understanding between the parties relating to its subject matter and supersedes all prior agreements, understandings, representations and statements, oral or written.

h. Severability. If any one or more of the provisions contained in this Agreement, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

i. Payment of Fees. The Company agrees to pay each of the Purchasers a funding fee in an amount equal to three percent (3%) of the initial principal amount of each Note, such funding fee to be due and payable in full at closing. The Company agrees to pay or reimburse each of the Purchasers for legal fees and expenses incurred in connection with the preparation

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and negotiation of this Agreement, the Note, the Warrant and the other documents, instruments and agreements executed in connection with the transactions contemplated hereby (not to exceed $2,500 in the aggregate for legal fees and expenses). In addition, in the event of a breach or threatened breach the Company agrees to pay or reimburse each of the Purchasers for all reasonable costs and expenses incurred in connection with enforcing this Agreement, the Note, the Warrant or any other document, instrument or agreement executed in connection with the transactions contemplated hereby (including without limitation reasonable legal fees and expenses).

j. Additional Information. The Company agrees to provide each of the Purchasers, upon the request of any Purchaser, with copies of any periodic reports, registration statements or other documents filed by the Company with the SEC after the date hereof and, subject to applicable securities laws, with such other information as any Purchaser may reasonably request from time to time concerning the business, prospects, condition (financial or otherwise) or operations of the Company.

k. Notice of Defaults. The Company shall provide the Purchasers prompt written notice if the President or any Vice President of the Company shall become aware of (i) the occurrence of any breach or default under or any event or condition which with notice or the lapse of time or both would constitute a breach of or default under this Agreement, the Note, the Warrant or any other document or instrument executed in connection with the transactions contemplated hereby, or (ii) the occurrence of any event or condition which would constitute a "Default", an "Event of Default" or any equivalent term under any other loan agreement, credit agreement, promissory note, mortgage, indenture or other agreement or instrument evidencing or relating to indebtedness to which the Company is or may become a party (as any such document from time to time amended, restated or otherwise modified) (all such events and conditions shall constitute an "Event of Default" under this Agreement).

l. Governing Law. This Agreement and the Note shall be governed by and construed in accordance with the laws of the State of Arizona, without regard to conflict of law principles.

m. Return of Payments. The Company expressly agrees that to the extent that it makes a payment or payments under the Note and such payment or payments, or any part thereof, are subsequently invalidated, declared to be fraudulent or preferential, set aside or are required to be repaid to a trustee, receiver or any other party under any bankruptcy act, state or federal law, common law or equitable cause, then to the extent of such payment or payments, the obligations of the Company under the Note intended to be satisfied by such payment or payments shall be revived and continued in full force and effect as if said payment or payments had not been made.

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IN WITNESS WHEREOF, the parties hereto have executed this Securities Purchase Agreement on the date above first written.

LEXON TECHNOLOGIES, INC., a Delaware corporation

By____________________________

Title__________________________

MILLER CAPITAL CORPORATION, on behalf of itself and the other Purchasers

By____________________________

Title__________________________

EX-4.02 3 PROMISSORY NOTES

EXHIBIT 4.02

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER THE ACT AND SUCH LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION THEREFROM.

LEXON TECHNOLOGIES, INC.

PROMISSORY NOTE

$250,000 Phoenix, Arizona

August 10, 1999

FOR VALUE RECEIVED, the undersigned, LEXON TECHNOLOGIES, INC., a Delaware corporation (the "Company"), hereby promises to pay to MILLER CAPITAL CORPORATION the principal sum of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) (or so much thereof as shall not have been prepaid) on the earlier to occur of a Repayment Event (as defined herein) or December 10, 1999, with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal hereof at the rate of eighteen percent (18%) per annum from the date hereof, payable monthly in advance on the 10^th of each calendar month, commencing August 10, 1999 until said principal shall have been paid in full and to pay interest (so computed) at the rate of eighteen percent (18%) per annum on any overdue principal and, to the extent permitted by applicable law, on any interest overdue (without regard to any applicable grace period), until the same shall be paid in full. Payments of principal and interest are to be made to Miller Capital Corporation, at 4909 East McDowell Road, Phoenix Arizona 85008, in lawful money of the United States of America.

This Note is issued pursuant to the Securities Purchase Agreement dated as of even date herewith between the Company, the purchasers named therein and is also secured by and entitled to the benefits of that certain Security and Pledge Agreement dated as of the date hereof (the "Security Agreement") by the Company in favor of the secured parties named therein, that certain Continuing Guarantee dated as of the date hereof by Steven J. Peskaitis in favor of the beneficiaries named therein, and that certain Stock Pledge and Security Agreement dated as of the date hereof (the "Pledge Agreement") by Steven J. Peskaitis in favor of the secured parties named therein.

Upon the occurrence of the closing of any debt or equity financing transaction or series of related debt or equity financing transactions which results in net proceeds to the Company in an aggregate amount greater than or equal to $750,000 (a "Repayment Event"), the entire principal amount of this Note, together with accrued interest through the date of repayment, shall be due and payable in full. As provided in said Securities Purchase Agreement, this Note is subject to optional prepayment at any time prior to the scheduled maturity date of December 10, 1999; provided, however, that upon any repayment of this Note prior to December 10, 1999 (whether as a result of optional prepayment at the election of Borrower, upon the occurrence of a Repayment Event or otherwise), the Company agrees to pay, as additional compensation to the holder hereof, a prepayment fee in an amount equal to the amount of interest that would otherwise accrue under this Note (notwithstanding such prepayment) on the principal amount hereof so prepaid from the date of prepayment through and including December 10, 1999. Any prepayment fee will be due and payable immediately upon such full or partial prepayment, and any overdue prepayment fee shall bear interest at the rate applicable to overdue interest hereunder.

This Note and the rights, interests and benefits hereof, may not be sold, transferred, pledged, assigned, conveyed or otherwise disposed of by the holder, except by will or the laws of descent and distribution, or with the consent of the Company, which consent shall not be unreasonably withheld. Any purported sale, transfer, pledge, assignment, conveyance or other attempt to dispose of this Note or the rights, interests and benefits hereof, other than as provided above, is null and void.

If an Event of Default (as defined in the Securities Purchase Agreement) shall occur, the principal of this Note and all accrued and unpaid interest may be declared by the holder of this Note to be due and payable without notice.

The Company waives demand, diligence, presentment for payment, protest and demand, notice of extension, dishonor, protest, demand and nonpayment of this Note. Notwithstanding any contrary provision of this Note, the Company shall not at any time be required to pay interest or other sums under or in connection with this Note in amounts which exceed the maximum amounts permitted to be contracted for under applicable law. If, as a result of any circumstances whatsoever, the Company shall be required by the terms hereof to pay interest or other sums under or in connection with this Note in amounts which exceed the maximum amounts permitted to be contracted for under applicable law, the obligations to be fulfilled by the Company under or in connection with this Note shall be reduced to the amounts permissible under applicable law.

This Note shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles.

LEXON TECHNOLOGIES, INC., a Delaware corporation

By____________________________

Title__________________________

LEXON TECHNOLOGIES, INC.

PROMISSORY NOTE

$250,000 Phoenix, Arizona

August 10, 1999

FOR VALUE RECEIVED, the undersigned, LEXON TECHNOLOGIES, INC., a Delaware corporation (the "Company"), hereby promises to pay to DICKERSON WRIGHT the principal sum of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) (or so much thereof as shall not have been prepaid) on the earlier to occur of a Repayment Event (as defined herein) or December 10, 1999, with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal hereof at the rate of eighteen percent (18%) per annum from the date hereof, payable monthly in advance on the 10^th of each calendar month, commencing August 10, 1999 until said principal shall have been paid in full and to pay interest (so computed) at the rate of eighteen percent (18%) per annum on any overdue principal and, to the extent permitted by applicable law, on any interest overdue (without regard to any applicable grace period), until the same shall be paid in full. Payments of principal and interest are to be made to Dickerson Wright, 14366 Twisted Branch Road, Poway, California 92064, in lawful money of the United States of America.

This Note shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles.

LEXON TECHNOLOGIES, INC., a Delaware corporation

By____________________________

Title__________________________

LEXON TECHNOLOGIES, INC.

PROMISSORY NOTE

$125,000 Phoenix, Arizona

August 10, 1999

FOR VALUE RECEIVED, the undersigned, LEXON TECHNOLOGIES, INC., a Delaware corporation (the "Company"), hereby promises to pay to STEPHEN A McCONNELL the principal sum of ONE HUNDRED TWENTY FIVE THOUSAND DOLLARS ($125,000) (or so much thereof as shall not have been prepaid) on the earlier to occur of a Repayment Event (as defined herein) or December 10, 1999, with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal hereof at the rate of eighteen percent (18%) per annum from the date hereof, payable monthly in advance on the 10^th of each calendar month, commencing August 10, 1999 until said principal shall have been paid in full and to pay interest (so computed) at the rate of eighteen percent (18%) per annum on any overdue principal and, to the extent permitted by applicable law, on any interest overdue (without regard to any applicable grace period), until the same shall be paid in full. Payments of principal and interest are to be made to Stephen A McConnell, 6700 East Solano Drive, Paradise Valley, Arizona 85253, in lawful money of the United States of America.

This Note shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles.

LEXON TECHNOLOGIES, INC., a Delaware corporation

By____________________________

Title__________________________

LEXON TECHNOLOGIES, INC.

PROMISSORY NOTE

$125,000 Phoenix, Arizona

August 10, 1999

FOR VALUE RECEIVED, the undersigned, LEXON TECHNOLOGIES, INC., a Delaware corporation (the "Company"), hereby promises to pay to JOCK PATTON the principal sum of ONE HUNDRED TWENTY FIVE THOUSAND DOLLARS ($125,000) (or so much thereof as shall not have been prepaid) on the earlier to occur of a Repayment Event (as defined herein) or December 10, 1999, with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal hereof at the rate of eighteen percent (18%) per annum from the date hereof, payable monthly in advance on the 10^th of each calendar month, commencing August 10, 1999 until said principal shall have been paid in full and to pay interest (so computed) at the rate of eighteen percent (18%) per annum on any overdue principal and, to the extent permitted by applicable law, on any interest overdue (without regard to any applicable grace period), until the same shall be paid in full. Payments of principal and interest are to be made to Jock Patton, 5430 East Arcadia Lane, Phoenix, Arizona 850018, in lawful money of the United States of America.

This Note shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles.

LEXON TECHNOLOGIES, INC., a Delaware corporation

By____________________________

Title__________________________

EX-4.03 4 WARRANTS THIS SECURITY AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGIS

EXHIBIT 4.03

THIS SECURITY AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR THE SHARES ISSUABLE HEREUNDER MAY BE SOLD OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER THE ACT AND SUCH LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION THEREFROM.

LEXON TECHNOLOGIES, INC.

WARRANT TO PURCHASE COMMON STOCK

This certifies that, for value received, STEPHEN A McCONNELL (the "Holder") is entitled to subscribe for and purchase up to Twelve Thousand Five Hundred (12,500) shares (subject to adjustment from time to time pursuant to the provisions of Section 5 hereof) of fully paid and nonassessable Common Stock (as defined below) of LEXON TECHNOLOGIES, INC., a Delaware corporation (the "Company"), at the Warrant Price (as defined in Section 2 hereof), subject to the provisions and upon the terms and conditions hereinafter set forth.

As used herein, the term "Common Stock" shall mean the Company's presently authorized common stock, $.001 par value, and any stock into or for which such Common Stock may hereafter be converted or exchanged.

1. Term of Warrant. The purchase right represented by this Warrant is exercisable, in whole or in part, at any time during the period beginning on the date hereof and ending on the fifth (5^th) anniversary of the date hereof.

2. Warrant Price. The initial exercise price of this Warrant is TWO AND 50/100 DOLLARS ($2.50) per share, subject to adjustment from time to time pursuant to the provisions of Section 5 hereof (the "Warrant Price").

3. Method of Exercise; Payment; Issuance of New Warrant; Exercise. Subject to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the Holder hereof, in whole or in part, by the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit A duly executed) at the principal office of the Company and by the payment to the Company of an amount equal to the then applicable Warrant Price per share multiplied by the number of shares then being purchased either (i) by cash, cashier's check or wire transfer, (ii) by cancellation by the Holder of indebtedness of the Company to the Holder, (iii) through the written election of the Holder to use the In-the-money Value of the Warrant to effectuate a cashless exercise of the Warrant, or (iv) by a combination of (i), (ii) and/or (iii). For purposes of clause (iii) above, the "In-the-money Value of the Warrant" is calculated by multiplying the number of shares as to which the Warrant is being exercised by an amount equal to (A) the Market Value for the Common Stock on the trading day immediately prior to the date of exercise, minus (B) the then applicable Warrant Price per share. The number of shares of Common Stock issuable to the Holder or the designee of the Holder upon a cashless exercise pursuant to such clause (iii) shall equal the In-the-money Value divided by the Market Value of the Common Stock on the trading day immediately prior to the date of exercise. For purposes hereof, the "Market Value" of the Common Stock shall be the last reported trading price of the Common Stock if traded on a recognized securities exchange or over-the-counter market or, if not traded on such an exchange or market, the fair market value per share of Common Stock as determined by the Board of Directors of the Company in its good faith judgment. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder hereof or the designee of the Holder hereof as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. In the event of any exercise of this Warrant, certificates for the shares of stock so purchased shall be delivered to the Holder hereof or the designee of the Holder hereof within 15-days thereafter and, unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of the shares, if any, with respect to which this Warrant shall not then have been exercised, shall also be issued to the Holder hereof within such 15-day period. The Holder may provide notice to the Company by facsimile of any exercise of the Warrant pursuant to clause (iii) above and such exercise shall be effective on the date such facsimile is received; provided, that such facsimile must be received by the Company not later than 3:00 p.m. eastern time in order for such exercise to be effective on such date; and provided, further, that the Holder shall deliver the original Warrant and notice of exercise to the Company within two (2) business days of such facsimile notice.

4. Stock Fully Paid; Reservation of Shares. All Common Stock that may be issued upon the exercise of this Warrant will, upon issuance, be fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof. The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, the full number of shares of Common Stock then deliverable upon exercise of this Warrant.

5. Adjustment to Warrant Price. The Warrant Price shall be subject to adjustment from time to time as follows:

(a) For purposes of this Section 5, the following definitions shall apply:

(i) "Options" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire either Common Stock or Convertible Securities.

(ii) "Original Issue Date" shall mean the date hereof.

(iii) "Convertible Securities" shall mean securities convertible into or exchangeable for Common Stock.

(iv) "Additional Shares of Common Stock" shall mean all shares of Common Stock issued (or, pursuant to Section 5(c), deemed to be issued) by the Company after the Original Issue Date other than shares of Common Stock issued (or, pursuant to Section 5(c), deemed to be issued):

(1) to officers, directors and employees of, and consultants to the Company to be designated and approved by the Board of Directors pursuant to any stock option or incentive plan (provided that the number of shares issuable under any such plan from time to time shall not exceed ten percent (10%) of the number of issued and outstanding shares of Common Stock);

(2) pursuant to clause (f), (g) or (h) of this Section 5; or

(3) upon the exercise of Options issued prior to the Original Issue Date; or

(4) by way of dividend or other distributions on securities referred to in clauses (1), (2) and (3) hereof.

(b) No adjustment in the Warrant Price shall be made in respect of the issuance of Additional Shares of Common Stock unless the consideration per share for an Additional Share of Common Stock issued or deemed to be issued by the Company is less than the Warrant Price in effect on the date of, and immediately prior to, such issuance.

(i) Except as otherwise provided in Sections 5(a)(iv)(1)-(4) and 5(b), in the event the Company at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of any holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares (as set forth in the instrument relating thereto without regard to any provisions contained therein for a subsequent adjustment of such number) of Common Stock issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time such Option or Convertible Security, as the case may be, is issued or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that in any such case in which additional shares of Common Stock are deemed to be issued:

(1) no further adjustment in the Warrant Price or the number of shares issuable upon exercise of this Warrant shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities;

(2) if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase or decrease in the consideration payable to the Company, or increase or decrease in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the Warrant Price and the number of shares issuable upon exercise of this Warrant as computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities;

(3) upon the expiration of any such Options or any rights of conversion or exchange under such Convertible Securities which shall not have been exercised, the Warrant Price and the number of shares issuable upon exercise of this Warrant as computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon such expiration, be recomputed as if:

(A) in the case of Convertible Securities or Options for Common Stock, the only additional shares of Common Stock issued were shares of Common Stock, if any, actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities, and the consideration received therefor was the consideration actually received by the Company for the issue of all such Options, whether or not exercised, plus the consideration actually received by the Company upon such exercise, or for the issue of all such Convertible Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the Company upon such conversion or exchange, and

(B) in the case of Options for Convertible Securities, only the Convertible Securities, if any, actually issued upon the exercise thereof were issued at the time of issue of such Options and the consideration received by the Company for the Additional Shares of Common Stock deemed to have been then issued was the consideration actually received by the Company for the issue of all such Options, whether or not exercised, plus the consideration received by the Company upon the issue of the Convertible Securities with respect to which such Options were actually exercised;

(4) no readjustment pursuant to clause (2) or (3) above shall have the effect of increasing the Warrant Price to a price that is greater than (i) the Warrant Price on the original adjustment date, or (ii) the Warrant Price that would have resulted from any issuance of Additional Shares of Common Stock between the original adjustment date and such readjustment date; and

(5) in the case of any Options which expire by their terms not more than 30 days after the date of issue thereof, no adjustment of the Warrant Price or the number of shares issuable upon exercise of this Warrant shall be made until the expiration or exercise of all such Options.

(d) In the event the Company shall, at any time on or prior to the third (3^rd) anniversary of the date of this Warrant, issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 5(c)) without consideration or for a consideration per share less than an amount equal to the Warrant Price in effect on the date of, and immediately prior to such issue, except in the case of any issuance of Additional Shares of Common Stock subject to clause (f), (g) or (h) hereof, then and in such event, the Warrant Price shall be decreased, concurrently with such issue, to the amount of the consideration per share received by the Company for such Additional Shares of Common Stock.

(e) For purposes of this Section 5, the consideration received by the Company for the issue of any Additional Shares of Common Stock shall be computed as follows:

(i) Such consideration shall:

(1) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Company prior to amounts paid or payable for accrued interest or accrued dividends and prior to any commissions or expenses paid by the Company;

(2) insofar as it consists of property other than cash, be computed at the fair value thereof at the time of such issue, as determined in good faith by the Board of Directors; and

(3) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (1) and (2) above, as determined in good faith by the Board of Directors.

(ii) The consideration per share received by the Company for Additional Shares of Common Stock deemed to have been issued pursuant to Section 5(c)(i), relating to Options and Convertible Securities, shall be determined by dividing:

(1) the total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Option or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities by

(2) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities.

(f) In the event of any reorganization, merger, consolidation, reclassification, recapitalization, combination or exchange involving the Common Stock, or if the outstanding shares of Common Stock shall be subdivided by stock split, stock dividends or otherwise, into a greater or lesser number of shares of Common Stock, the Warrant Price then in effect and the number of shares of Common Stock issuable upon exercise of this Warrant shall, concurrently with the effectiveness of such event, be appropriately adjusted to reflect such event.

(g) In the event the Company at any time or from time to time makes or fixes a record date for the determination of holders of Common Stock entitled to receive any distribution (excluding any repurchases of securities by the Company not made on a pro-rata basis from all holders of any class of the Company's securities) payable in property or in securities of the Company other than shares of Common Stock, and other than as otherwise adjusted in this Section 5, then and in each such event the Holder of this Warrant shall receive at the time of such distribution, the amount of property or the number of securities of the Company that he would have received had his Warrant been converted into Common Stock on the date of such event.

(h) If the Common Stock issuable upon exercise of the Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares provided for above), the right to acquire each share of Common Stock issuable on exercise of the Warrant shall thereafter be converted into the number of shares of stock or other securities or property to which a holder of the number of shares of Common Stock deliverable upon such conversion shall have been entitled upon such reorganization or reclassification. In any such event, effective provision shall be made, in the articles of incorporation of the resulting or surviving corporation or otherwise, so that the provisions set forth herein for the protection of the exercise rights of the Warrant shall thereafter be applicable to any such other shares of stock, other securities, cash or property deliverable upon exercise of the Warrant or other convertible stock or securities received by the holders in place thereof, and any such resulting or surviving corporation shall expressly assume the obligation to deliver, upon the exercise of the Warrant, such shares, other securities, cash or property or other convertible stock or securities received by the Holder in place thereof, shall be entitled to receive pursuant to the provisions hereof, and to make provision for the protection of the Warrant exercise rights as above provided.

(i) The Company will not, by amendment of this Warrant or its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Section 5 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of the Warrant against impairment.

(j) No adjustment in the number of shares of Common Stock issuable upon exercise of the Warrant shall be required unless such adjustment would require an increase or decrease of at least 1/100th of a share; provided, however, that any adjustment which by reason hereof is not required to be made shall be carried forward and taken into account in any subsequent adjustment.

(k) Notwithstanding any other provision of this Section 5, other than adjustments made pursuant to Section 5(f) or 5(h), no adjustment made pursuant to this Section 5 shall result in an increase in the Warrant Price.

6. Notice of Adjustments. Whenever any adjustment is required to be made as provided in Section 5, the Company shall promptly notify the Holder, describing in reasonable detail the adjustment and method of calculation used.

7. Fractional Shares. In the sole discretion of the Company, instead of any fraction of a share which would otherwise be issuable upon exercise of the Warrant, the Company shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the market price per share of Common Stock (as reasonably determined by the Board of Directors of the Company), at the close of business on the date of exercise.

8. Compliance with the Act. The Holder of this Warrant, by acceptance hereof, agrees that this Warrant and the shares of Common Stock to be issued upon exercise hereof are being acquired for investment and that it will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the Act or any state securities laws.

9. No Transfer of Warrant. This Warrant and the rights, interests and benefits hereof, may not be sold, transferred, pledged, assigned, conveyed or otherwise disposed of by the Holder, except by will or the laws of descent and distribution or with the consent of the Company, which consent shall not be unreasonably withheld. Any purported sale, transfer, pledge, assignment, conveyance or other attempt to dispose of this Warrant, or the rights, interests or benefits hereof, other than as provided above, is null and void.

10. Notice to Holder. This Warrant is issued pursuant to the Securities Purchase Agreement dated as of even date herewith between the Company and the purchaser named therein. The Warrant is referred to in said Securities Purchase Agreement, by the terms of which agreement the Holder hereof, by his acceptance hereof, agrees to be bound, in each case to the extent provided in said agreement.

11. Registration Rights.

(a) Piggyback Registration Rights. If at any time prior to this Warrant's expiration date the Company shall decide to file a registration statement under the Securities Act of 1933 covering shares of its Common Stock (other than a registration statement on Form S-4, Form S-14 or a comparable form), 60 days prior thereto the Company shall give written notice to the Holder of its intention to file such registration statement. Within 30 days of such notice, the Holder shall notify the Company in writing of the number of shares of Common Stock owned as a consequence of exercise of this Warrant that it wishes included in any such registration statement. Thereafter, the Company shall include the Holders' shares in the shares covered by the registration statement unless the managing underwriter of any such offering shall certify, in writing, that, in its judgment, the inclusion of the Holders' shares would have a material adverse effect on the offering and jeopardize the Company's ability to raise capital in the offering; provided, that if shares held by any other holders of Common Stock (excluding shares offered by or for the account of the Company) are included in such offering, then the Holder's shares shall be included on a pro rata basis with the shares of all such other holders of Common Stock. If shares of Common Stock owned as a consequence of the exercise of this Warrant are included in any such offering, the Holder shall not be responsible for any expenses of the offering other than any underwriting discount or commission attributable to the shares of Common Stock offered by it.

(b) Opinions and Other Documents. If the Holder participates in any offering as described in this Section 11, it will provide the Company with such opinions of counsel and other documents covering such legal and other matters as the Company reasonably may request.

(c) Indemnification of Holder. In the event of any registration with respect to any shares of Common Stock issued pursuant to exercise of this Warrant, the Company will indemnify and hold harmless the Holder whose shares are being registered and each person, if any, who controls such Holder against any losses, claims, damages or liabilities to which the holder or such controlling person may be subject under the Securities Act of 1933 insofar as such losses, claims, damages or liabilities arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any such registration statement or arise out of or are based upon the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but the Company shall not be liable for any loss, claim, damage or liability based on or arising out of written information furnished by such Holder specifically for use in the registration statement.

(d) Indemnification of Company. Any Holder requesting that shares of Common Stock acquired upon exercise of Warrants be registered shall indemnify and hold harmless the Company, each of its directors, each of its officers, and each person, if any, who controls the Company, against any losses, claims, damages or liabilities to which the Company or any such director, officer or controlling person may be subject under the Securities Act of 1933 insofar as such losses, claims, damages or liabilities arise out of or are based upon any untrue or alleged untrue statement of any material fact contained in the registration statement or arise out of or are based upon the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in the registration statement in reliance upon written information furnished by such Holder specifically for use in the preparation of such registration statement.

12. Miscellaneous.

(a) No Rights as Shareholder. No Holder of this Warrant shall be entitled to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of stock to par value, consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the shares purchasable upon the exercise hereof shall have become deliverable, as provided herein.

(b) Replacement. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement, or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at the Holder's expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor.

(c) Notice. Any notice given to either party under this Warrant shall be in writing, and any notice hereunder shall be deemed to have been given when delivered or telecopied or, if mailed, when mailed, if sent registered or certified, addressed to the Company at its principal executive offices and to the Holder at its address set forth in the Company's books and records or at such other address as the Holder may have provided to the Company in writing.

(d) Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles.

IN WITNESS WHEREOF, this Warrant is executed as of the 10^th day of August, 1999.

LEXON TECHNOLOGIES, INC., a Delaware corporation

By:

Title:

EXHIBIT A

NOTICE OF EXERCISE

TO: LEXON TECHNOLOGIES, INC.

1. The undersigned hereby elects to purchase ____________ shares of Common Stock of LEXON TECHNOLOGIES, INC. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full in accordance with the provisions of the following section of the attached Warrant:

___ Section 3(i)

___ Section 3(ii)

___ Section 3(iii) [The number of shares of Common Stock issuable is _____________ shares based on a Warrant Price of $___ per share and the Market Value for the Common Stock on ________, 19__ of $_____ per share]

____ Section 3(iv) [Please provide details by supplemental letter]

2. Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below:

(Name)

(Address)

3. The undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned will not offer, sell or otherwise dispose of any such shares except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any state securities law.

Signature

LEXON TECHNOLOGIES, INC.

WARRANT TO PURCHASE COMMON STOCK

This certifies that, for value received, JOCK PATTON (the "Holder") is entitled to subscribe for and purchase up to Twelve Thousand Five Hundred (12,500) shares (subject to adjustment from time to time pursuant to the provisions of Section 5 hereof) of fully paid and nonassessable Common Stock (as defined below) of LEXON TECHNOLOGIES, INC., a Delaware corporation (the "Company"), at the Warrant Price (as defined in Section 2 hereof), subject to the provisions and upon the terms and conditions hereinafter set forth.

5. Adjustment to Warrant Price. The Warrant Price shall be subject to adjustment from time to time as follows:

(a) For purposes of this Section 5, the following definitions shall apply:

(i) "Options" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire either Common Stock or Convertible Securities.

(ii) "Original Issue Date" shall mean the date hereof.

(iii) "Convertible Securities" shall mean securities convertible into or exchangeable for Common Stock.

(2) pursuant to clause (f), (g) or (h) of this Section 5; or

(3) upon the exercise of Options issued prior to the Original Issue Date; or

(4) by way of dividend or other distributions on securities referred to in clauses (1), (2) and (3) hereof.

(e) For purposes of this Section 5, the consideration received by the Company for the issue of any Additional Shares of Common Stock shall be computed as follows:

(i) Such consideration shall:

(2) insofar as it consists of property other than cash, be computed at the fair value thereof at the time of such issue, as determined in good faith by the Board of Directors; and

11. Registration Rights.

12. Miscellaneous.

(d) Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles.

IN WITNESS WHEREOF, this Warrant is executed as of the 10^th day of August, 1999.

LEXON TECHNOLOGIES, INC., a Delaware corporation

By:

Title:

EXHIBIT A

NOTICE OF EXERCISE

TO: LEXON TECHNOLOGIES, INC.

___ Section 3(i)

___ Section 3(ii)

____ Section 3(iv) [Please provide details by supplemental letter]

2. Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below:

(Name)

(Address)

Signature

LEXON TECHNOLOGIES, INC.

WARRANT TO PURCHASE COMMON STOCK

This certifies that, for value received, MILLER CAPITAL CORPORATION (the "Holder") is entitled to subscribe for and purchase up to Twenty Five Thousand (25,000) shares (subject to adjustment from time to time pursuant to the provisions of Section 5 hereof) of fully paid and nonassessable Common Stock (as defined below) of LEXON TECHNOLOGIES, INC., a Delaware corporation (the "Company"), at the Warrant Price (as defined in Section 2 hereof), subject to the provisions and upon the terms and conditions hereinafter set forth.

5. Adjustment to Warrant Price. The Warrant Price shall be subject to adjustment from time to time as follows:

(a) For purposes of this Section 5, the following definitions shall apply:

(i) "Options" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire either Common Stock or Convertible Securities.

(ii) "Original Issue Date" shall mean the date hereof.

(iii) "Convertible Securities" shall mean securities convertible into or exchangeable for Common Stock.

(2) pursuant to clause (f), (g) or (h) of this Section 5; or

(3) upon the exercise of Options issued prior to the Original Issue Date; or

(4) by way of dividend or other distributions on securities referred to in clauses (1), (2) and (3) hereof.

(e) For purposes of this Section 5, the consideration received by the Company for the issue of any Additional Shares of Common Stock shall be computed as follows:

(i) Such consideration shall:

(2) insofar as it consists of property other than cash, be computed at the fair value thereof at the time of such issue, as determined in good faith by the Board of Directors; and

11. Registration Rights.

12. Miscellaneous.

(d) Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles.

IN WITNESS WHEREOF, this Warrant is executed as of the 10^th day of August, 1999.

LEXON TECHNOLOGIES, INC., a Delaware corporation

By:

Title:

EXHIBIT A

NOTICE OF EXERCISE

TO: LEXON TECHNOLOGIES, INC.

___ Section 3(i)

___ Section 3(ii)

____ Section 3(iv) [Please provide details by supplemental letter]

2. Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below:

(Name)

(Address)

Signature

LEXON TECHNOLOGIES, INC.

WARRANT TO PURCHASE COMMON STOCK

This certifies that, for value received, DICKERSON WRIGHT (the "Holder") is entitled to subscribe for and purchase up to Twenty Five Thousand (25,000) shares (subject to adjustment from time to time pursuant to the provisions of Section 5 hereof) of fully paid and nonassessable Common Stock (as defined below) of LEXON TECHNOLOGIES, INC., a Delaware corporation (the "Company"), at the Warrant Price (as defined in Section 2 hereof), subject to the provisions and upon the terms and conditions hereinafter set forth.

5. Adjustment to Warrant Price. The Warrant Price shall be subject to adjustment from time to time as follows:

(a) For purposes of this Section 5, the following definitions shall apply:

(i) "Options" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire either Common Stock or Convertible Securities.

(ii) "Original Issue Date" shall mean the date hereof.

(iii) "Convertible Securities" shall mean securities convertible into or exchangeable for Common Stock.

(2) pursuant to clause (f), (g) or (h) of this Section 5; or

(3) upon the exercise of Options issued prior to the Original Issue Date; or

(4) by way of dividend or other distributions on securities referred to in clauses (1), (2) and (3) hereof.

(e) For purposes of this Section 5, the consideration received by the Company for the issue of any Additional Shares of Common Stock shall be computed as follows:

(i) Such consideration shall:

(2) insofar as it consists of property other than cash, be computed at the fair value thereof at the time of such issue, as determined in good faith by the Board of Directors; and

11. Registration Rights.

12. Miscellaneous.

(d) Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law principles.

IN WITNESS WHEREOF, this Warrant is executed as of the 10^th day of August, 1999.

LEXON TECHNOLOGIES, INC., a Delaware corporation

By:

Title:

EXHIBIT A

NOTICE OF EXERCISE

TO: LEXON TECHNOLOGIES, INC.

___ Section 3(i)

___ Section 3(ii)

____ Section 3(iv) [Please provide details by supplemental letter]

2. Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below:

(Name)

(Address)

Signature

EX-4.04 5 SECURITY AND PLEDGE AGREEMENT

Exhibit 4.04

SECURITY AND PLEDGE AGREEMENT

This SECURITY AND PLEDGE AGREEMENT (this "Security Agreement") is entered into and effective as of August 10, 1999 by and among LEXON TECHNOLOGIES, INC., a Delaware corporation (the "Borrower"), and MILLER CAPITAL CORPORATION, STEPHEN A McCONNELL, JOCK PATTON and DICKERSON WRIGHT (collectively, the "Lenders").

Background

The following is a mutual statement by the parties of certain factual matters which form the basis of this Security Agreement.

A. Securities Purchase Agreement. The Borrower and the Lenders have entered into a Securities Purchase Agreement concurrently with the execution of this Security Agreement (the Securities Purchase Agreement"), pursuant to which (among other things) the Lenders have agreed to make certain loans to Borrower, which loans are evidenced by four separate promissory notes dated as of even date hereof, two of which are in the original principal amount of $250,000.00 and two of which are in the original principal amount of $125,000.00 (collectively, the "Notes").

B. Security Interest. The Lenders are willing to enter into the Securities Purchase Agreement and the transactions contemplated thereby upon the condition that the Borrower grants to and creates in favor of the Lenders security interests in certain property of the Borrower as security for (i) the reimbursement of all amounts owing to the Lenders pursuant to the Securities Purchase Agreement, the Notes, this Security Agreement and all other documents and instruments executed in connection with the transactions contemplated thereby and (ii) the Borrower's performance of, and compliance with, all of the terms, covenants, conditions, stipulations and agreements contained in the Securities Purchase Agreement, the Notes, this Security Agreement and all other documents and instruments executed in connection with the transactions contemplated thereby (collectively, the "Secured Obligations"). Terms used herein which are defined in the Securities Purchase Agreement shall have the meanings set forth in the Securities Purchase Agreement, unless the context hereof otherwise clearly requires.

Statement of Agreement

For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto covenant and agree as follows:

Section 1. Creation of Security Interests. As security for the Secured Obligations, the Borrower agrees that there now are or will be duly executed and filed and recorded in all appropriate state and local offices all documents necessary to grant and create in favor of the Lenders a security interest under the Uniform Commercial Code in and to the following, whether now owned or hereafter acquired by the Borrower, which security interest is hereby granted (the property described in this Section 1 is hereinafter collectively referred to as the "Collateral"):

(i) All accounts, general intangibles, instruments, documents and chattel paper (including all accounts receivable, notes, drafts, lease agreements and security agreements), and all goods, if any, represented thereby, whether now existing or hereafter acquired or created from time to time in the course of the Borrower's business;

(ii) All inventory now owned or hereafter acquired, including all goods held for sale or lease in Borrower's business, as now or hereafter conducted, and all materials, work in process and finished goods used or to be consumed in Borrower's business (whether or not the inventory is represented by warehouse receipts or bills of lading or has been or may be placed in transit or delivered to a public warehouse);

(iii) All equipment now owned or hereafter acquired, including all furniture, fixtures, furnishings, vehicles (whether titled or non-titled), machinery, materials and supplies, wherever located, together with all parts, accessories, attachments, additions thereto or replacements therefor;

(iv) All instruments, documents and chattel paper now held by or hereafter delivered to Lenders, together with all property rights and security interests evidenced thereby, all increases thereof (including, without limitation, stock dividends), all profits therefrom and all transformations thereof;

(v) All tax refund claims, all policies or certificates of insurance covering any of the Collateral, all contracts, agreements or rights of indemnification, guaranty or surety relating to any of the Collateral, and all claims, awards, loss payments, proceeds and premium refunds that may become payable with respect to any such policies, certificates, contracts, agreements or rights;

(vi) All ledger cards, invoices, delivery receipts, worksheets, books of accounts, statements, correspondence, customer lists, files, journals, ledgers and records in any form, written or otherwise, related to any of the Collateral;

(vii) All tradenames, trademarks and service marks (subject to any franchise or license agreements relating thereto);

(viii) All claims for loss or damage to or in connection with any of the Collateral, all other claims in any form for the payment of money, including tort claims, and all rights with

respect to such claims and all proceeds thereof;

(ix) All accessions to any of the Collateral; and

(x) All products and proceeds of the Collateral, in any form, including all proceeds received, due or to become due from any sale, exchange or other disposition of any of the Collateral, whether such proceeds are cash or noncash in nature or are represented by checks, drafts, notes or other instruments for the payment of money.

Section 2. Lenders Has Rights and Remedies of a Secured Party. In addition to all rights and remedies given to the Lenders by this Security Agreement, the Lenders shall have all the rights and remedies of a secured party under the Uniform Commercial Code of the State of Arizona.

Section 3. Provisions Applicable to the Collateral. The parties agree that the following provisions shall be applicable to the Collateral during the term of this Security Agreement:

(a) Chief Executive Offices; Books and Records.

(i) Borrower will keep accurate and complete books and records concerning the Collateral.

(ii) Borrower represents and warrants that its chief executive office is located at the address set forth below its signature hereto. The Borrower will not move its chief executive office except to such new locations as it may establish in accordance with paragraph (iv) below.

(iii) The only original books of account and records of the Borrower relating to all accounts of the Borrower are, and will continue to be, kept at its chief executive office. The locations where such books of account and records are kept will not be changed except in accordance with paragraph (iv) below.

(iv) Borrower shall not establish any new locations for its chief executive office or for the places where such books of account and records are kept until (A) it shall have given to the Lenders written notice of its intention so to do, clearly describing each such new location and providing such other information in connection therewith as the Lenders may reasonably request and (B), with respect to each such new location, it shall have taken such action, satisfactory to the Lenders (including without limitation all action required by section hereof) as may be necessary to maintain the security interest of the Lenders granted hereunder at all times fully perfected and in full force and effect.

(v) Borrower shall not invoice an account debtor or maintain its records in any name other than its own proper corporate name.

(f) Inspection. The Lenders and their respective authorized agents shall have the right to review any and all books and records of the Borrower concerning the Collateral and to copy the same and make excerpts therefrom, and to inspect the Collateral, at all times on 24 hours notice to the Borrower. The Borrower shall, and shall cause its employees, agents and advisors to, cooperate fully with the Lenders in any such review or inspection.

(g) Borrower's Right to Collect Accounts. Notwithstanding the security interest in the Accounts granted hereunder, the Borrower shall have the right to collect the Accounts at its own cost and expense until such time as the Lenders shall have notified the Borrower pursuant to paragraph (d) below that it has revoked such right.

(h) Collection of Accounts by Lenders. If an Event of Default shall have occurred and be continuing, the Lenders shall have the right at any time (i) to revoke the right of the Borrower to collect its Accounts pursuant to paragraph (c) above by written notice to the Borrower to such effect, (ii) to take over and direct collection of the Accounts of the Borrower, (iii) to give notice of the Lenders' security interest in the Accounts to any or all of the account debtors or makers obligated to the Borrower thereon, (iv) to direct such account debtors to make payment of the Accounts directly to the Lenders (and at the request of the Lenders, the Borrower shall indicate on all billings to account debtors that payments thereon are to be made to the Lenders), and (v) to take control of the Accounts of the Borrower and the Proceeds thereof and to take possession of all of the Borrower's books and records relating thereto, with full power and authority in the name of the Lenders or of the Borrower to enforce, collect, sue for, receive, compromise, settle and receipt for any and all of the Accounts. If any Account becomes evidenced by a promissory note or other instrument for the payment of money, and there is, prior to payment thereof, an Event of Default or Default, the Borrower will at the Lenders' request deliver any such instrument to the Lenders duly endorsed to the order of the Lenders as additional Collateral under this Security Agreement. It is understood and agreed by the Borrower that the Lenders shall have no liability whatsoever to the Borrower under this paragraph (d) except for its own gross negligence of willful misconduct.

(i) Funds in Collateral Accounts; Control. All cash Proceeds received by the Lenders from the Borrower pursuant to paragraph (d) above or by the Lenders directly from account debtors pursuant to paragraph (d) above shall be held by or on behalf of the Lenders as further security for the Secured Obligations. The Lenders shall have sole dominion and control over all such funds and such funds may be withdrawn only by or at the direction of the Lenders.

(j) Account Verification. The Lenders may at any time, with prior notice to the Borrower, verify with any account debtor of the Borrower the status of any accounts payable by such account debtor. Prior to the occurrence of an Event of Default, no request for verification shall be made in the name of the Lenders or shall disclose the purpose of such request. The Borrower from time to time will execute and deliver such instruments and take all such action as the Lenders may reasonably request in order to effectuate the purpose of this paragraph (f).

(k) Notice of Adverse Change. The Borrower will immediately notify the Lenders of any material adverse effect on the Borrower resulting from the inability to collect any Account.

(l) Location of Collateral. The Borrower represents and warrants that, with respect to the items of Collateral described in Section 1 of this Security Agreement, the location is accurately and completely set forth in Schedule 1 hereto. The Borrower shall not remove any such Collateral from such location without the prior written consent of the Lenders.

Section 4. Preservation and Protection of Security Interests. The Borrower will faithfully preserve and protect the Lenders' security interest in its respective Collateral and will, at its own cost and expense, cause such security interest to be perfected and continued perfected so long as the Secured Obligations or any portion thereof are outstanding and unpaid, and for such purpose the Borrower will from time to time at the request of the Lenders file or record, or cause to be filed or recorded, such instruments, documents and notices, including without limitation, financing statements and continuation statements, as the Lenders may deem necessary or advisable from time to time in order to perfect and continue perfected said security interests. The Borrower will do all such other acts and things and will execute and deliver all such other instruments and documents, including without limitation further security agreements, pledges, endorsements, assignments and notices, as the Lenders may deem necessary or advisable from time to time in order to perfect and preserve the priority of said security interest as a perfected first lien security interest in the Collateral prior to the rights of any other secured party or lien creditor except as otherwise permitted herein. The Lenders, and their respective officers, employees and authorized agents, or any of them, are hereby irrevocably appointed the attorneys-in-fact of the Borrower to do all acts and things which the Lenders may deem necessary or advisable to preserve, perfect and continue perfected the Lenders' security interest in the Collateral, including without limitation the signing of financing, continuation or other similar statements and notices on behalf of the Borrower.

Section 5. Application of Moneys. Except as otherwise provided herein, if an Event of Default shall have occurred and be continuing, all moneys which the Lenders shall receive upon realization of the security or otherwise may be applied by or at the direction of the Lenders in the following manner:

(a) First, to the payment or reimbursement of all reasonable advances, expenses and disbursements of the Lenders (including, without limitation, the reasonable fees and disbursements of its counsel and agents) incurred in connection with the administration and enforcement of, or the preservation of any rights under, this Security Agreement or in the collection of the obligations of the Borrower under the Securities Purchase Agreement or the Notes; and

(b) Second, to be applied in any manner desired by the Lenders to the satisfaction of the Secured Obligations.

Section 6. Certain Representations and Covenants. The Borrower agrees, from and after the date of this Security Agreement and until payment in full of the Secured Obligations, as follows:

(c) Title and Liens. It has and will have good and marketable title to the Collateral from time to time owned or acquired by it, free and clear of all liens, encumbrances, pledges and security interests, and the security interests of the Lenders in the Collateral are perfected lien security interests, prior to the rights of any other secured party or lien creditor. The Borrower will defend its title to the Collateral against the claims and demands of all persons whomsoever.

(d) Negative Pledge. It will not, other than with the prior written consent of the Lenders, (i) grant or create or permit to exist any lien, encumbrance, pledge or security interest on, or in, any of the Collateral except under circumstances where the Borrower has taken immediate action to stay or set aside such levy or attachment and such action is pending or has been finally resolved in favor of the Borrower and the Borrower has remained in control and possession of such Collateral, (ii) permit any levy or attachment to be made against any of the Collateral, or (iii) file any financing statement or mortgage or deed of trust with respect to any of the Collateral, except financing statements and mortgages and deeds of trust in favor of the Lenders.

(e) Risk of Loss; Insurance. Risk of loss of, damage to, or destruction of, the Collateral is on the Borrower to the extent that the Borrower now or hereafter owns or acquires such Collateral. If the Borrower fails to effect and keep in full force and effect insurance covering the Collateral as may be required by the Security Documents, or fails to pay the premiums thereon when due, the Lenders may do so for the account of the Borrower and add the cost thereof to the Secured Obligations. The Borrower hereby assigns and sets over unto the Lenders all moneys which may become payable on account of such insurance, including without limitation any return or unearned premiums which may be due upon cancellation of any such insurance, and directs the insurers to pay the Lenders any amount so due. The Lenders, its officers, employees and authorized agents are hereby irrevocably appointed the attorneys-in-fact of the Borrower to endorse any draft or check which may be payable to the Borrower in order to collect the proceeds of such insurance or any return or unearned premiums. Any balance of insurance proceeds remaining in the possession of the Lenders after payment in full of the Secured Obligations shall be paid to the Borrower or its order.

(f) Care of Collateral by Lenders. The Lenders shall be deemed to have exercised reasonable care in the custody and preservation of such of the Collateral as may be in the Lenders' possession if the Lenders take such action for that purpose as the Borrower owning such Collateral shall request in writing, provided that such requested action shall not, in the judgment of the Lenders, impair the Lenders' security interest in such Collateral or its rights in, or the value of, such Collateral, and provided further that such written request is received by the Lenders in sufficient time to permit the Lenders to take the requested action.

Section 7. Events of Default. If any one or more of the following events shall occur and be continuing or shall exist:

(a) Any representation or warranty herein made by the Borrower shall prove to have been false or misleading in any material respect as of the time made or furnished; or

(b) The Borrower shall default in the due observation or performance of any of the covenants or agreements of the Borrower contained in this Security Agreement and such default shall not be remedied within a period of 10 days after written notice thereof to the Borrower from any of the Lenders; or

(c) An Event of Default (as that term is defined in the Securities Purchase Agreement) shall occur and be continuing or shall exist;

then in any such event, the Lenders shall have such rights and remedies in respect of the Collateral or any part thereof as are provided by the Uniform Commercial Code and such other rights and remedies in respect thereof which it may have at law or in equity or under this Security Agreement, including without limitation the right to enter any premises where any Collateral is located and take possession of the same without demand or notice and without prior judicial hearing or legal proceedings, which the Borrower hereby expressly waives, and to sell all or any portion of the Collateral at public or private sale without prior notice to the Borrower except as otherwise required by law (and if notice is required by law, after ten days' prior written notice) at such place or places and at such time or times and in such manner and upon such terms, whether for cash or on credit, as the Lenders in its sole discretion may determine. Upon any such sale of any of the Collateral, the Lenders may purchase all or any of the Collateral being sold, free from any equity or right of redemption. The Lenders shall apply the proceeds of any such sale to the obligations of the Borrower as provided in Section 5 hereof. If such Proceeds are insufficient to pay the amounts required by law, the Borrower shall be liable for any deficiency in the amount so realized from the Collateral.

In addition, in any such event, the Borrower shall promptly upon demand by the Lenders assemble its Collateral and make it available to the Lenders at a place to be designated by the Lenders which shall be reasonably convenient to the Lenders. The right of the Lenders under this Section to have the Collateral assembled and made available to it is of the essence of this Security Agreement and the Lenders may, at their election, enforce such right by an action in equity for specific performance.

The Borrower, to the extent that it has any right, title or interest in any of the Collateral, waives and releases any right to require the Lenders to collect any of the Secured Obligations from any other of the Collateral under any theory of marshalling of assets, or otherwise, and specifically authorizes the Lenders to apply any of the Collateral against any of the Secured Obligations in any manner that the Lenders may determine.

Section 8. Amendments, Waivers. The provisions of this Security Agreement may from time to time be waived, modified or amended only pursuant to a written instrument duly executed by each of the Lenders.

Section 9. Defeasance. Upon payment in full of the Secured Obligations, this Security Agreement shall terminate and be of no further force and effect; and in such event, the Lenders will, at the expense of the Borrower, redeliver and reassign the Collateral to the Borrower and take all action necessary to terminate the security interests of the Lenders in the Collateral. Until such time, however,

this Security Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

Section 10. Miscellaneous. The provisions in Section 7 of the Securities Purchase Agreement shall be applicable to this Security Agreement as though set forth herein in full.

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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed and delivered this Security Agreement as of the day and year first above written.

LEXON TECHNOLOGIES, INC., a Delaware corporation

By:

Title:

MILLER CAPITAL CORPORATION, on behalf of itself and the other Lenders

By:

Title:

SCHEDULE 1

Location of Collateral

Location: 1401 Brook Drive

Downers Grove, Illinois 60515

EX-4.05 6 CONTINUING GUARANTY

EXHIBIT 4.05

CONTINUING GUARANTY

The undersigned (hereinafter referred to as "Guarantor") hereby requests and authorizes MILLER CAPITAL CORPORATION, STEPHEN A McCONNELL, JOCK PATTON and DICKERSON WRIGHT (hereinafter collectively referred to as the "Lenders") to extend credit to LEXON TECHNOLOGIES, INC., a Delaware corporation (hereinafter referred to as "Debtor"), and in consideration of the granting of such credit by Lenders to Debtor, Guarantor agrees as follows:

1. The words "indebtedness" and "credit" are used herein in their most comprehensive sense and include any and all advances, debts, obligations and liabilities, including interest thereon, of Debtor heretofore, now or hereafter made (including without limitation that certain loan in the aggregate amount of $750,000 of even date herewith, $250,000 of which was made by Miller Capital Corporation, $125,000 of which was made by Steven A McConnell, $125,000 of which was made by Jock Patton and $250,000 of which was made by Dickerson Wright), incurred or created, with or without notice to Guarantor, whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, whether assumed by Debtor's successors or assigns by operation of law or otherwise, and whether Debtor is liable individually or jointly with others, and whether recovery upon any such indebtedness or credit is or hereafter becomes barred by any statute of limitations or is or hereafter becomes otherwise unenforceable.

2. Credit may be granted from time to time at the request of Debtor and without further authorization from or notice to Guarantor, even though Debtor's financial condition may have deteriorated since the date hereof. If Debtor is a corporation or a partnership, Lenders need not inquire into the power of Debtor or the authority of its officers, directors, partners or agents acting or purporting to act in its behalf. Each credit heretofore or hereafter granted to Debtor shall be considered to have been granted at the special instance and request of Guarantor and in consideration of and in reliance upon this Guaranty.

3. Guarantor hereby unconditionally guarantees and promises to pay each of the Lenders or the order of any thereof any and all indebtedness of Debtor to any such Lender and to perform any and all obligations of Debtor under the terms of any agreement or instrument evidencing, securing or executed in connection with any such indebtedness ("Credit Documents"). The liability of Guarantor shall not at any time exceed the sum of $750,000.00, plus the interest thereon in accordance with the Credit Documents and the costs, attorneys' fees and other expenses provided for in Paragraph 15 hereof. Lenders may permit Debtor's indebtedness to exceed any maximum liability without impairing the obligations of Guarantor hereunder. No payments made by or on behalf of Guarantor to Lenders shall reduce any such maximum liability unless written notice to that effect is received by Lenders at or prior to the time such payment is made. If Guarantor has executed more than one guarantee of the indebtedness of Debtor to Lenders, the guarantees shall be cumulative.

4. Either before or after revocation hereof and in such manner, upon such terms and at such times as it considers best and with or without notice to Guarantor, Lenders may alter, compromise, accelerate, extend or change the time or manner for the payment of any indebtedness hereby guaranteed, increase or reduce the rate of interest thereon, release or add any one or more guarantors or endorsers, accept additional or substituted security therefor, or release or subordinate any security therefor. No exercise or nonexercise by any of the Lenders of any right hereby given it, no dealing by any of the Lenders with Debtor or any other person, and no change, impairment or suspension of any right or remedy of any of the Lenders shall in any way affect any of the obligations of Guarantor hereunder or any security furnished by Guarantor or give Guarantor any recourse against Lenders.

5. In addition to all liens upon and all rights of offset given to Lenders by law against any property of Debtor or of Guarantor, Guarantor hereby grants a security interest in all property of Guarantor now or hereafter in the possession of or on deposit with any of the Lenders, whether held in a general or special account or for safekeeping or otherwise. Each such security interest may be exercised without demand upon or notice to Guarantor, shall continue in full force unless specifically waived or released by Lenders in writing and shall not be considered waived by any conduct of Lenders or by any failure of Lenders to exercise any right of offset or to enforce any such security interest or by any neglect or delay in so doing.

6. Guarantor waives and agrees not to assert or take advantage of (a) any right to require Lenders to proceed against Debtor or any other person, firm or corporation or to proceed against or exhaust any security held by it at any time or to pursue any other remedy in its power; (b) the defense of the statute of limitations in any action hereunder or for the collection of any indebtedness or the performance of any obligation guaranteed hereby; (c) any defense that may arise by reason of the incapacity, lack of authority, death or disability of, or revocation hereof by, any other or others or the failure of Lenders to file or enforce a claim against the estate (either in administration, bankruptcy, or other proceedings) of any other or others; (d) demand, protest and notice of any kind including, without limiting the generality of the foregoing, notice of the existence, creation or incurring of new or additional indebtedness or of any action or non-action on the part of Debtor, any of the Lenders, any endorser, creditor of Debtor or Guarantor under this or any other instrument, or any other person whomsoever, in connection with any obligation or evidence of indebtedness hereby guaranteed; (e) any defense based upon an election of remedies by Lenders, including without limitation, an election to proceed by nonjudicial rather than judicial foreclosure, which election destroys or otherwise impairs subrogation rights of Guarantor or the right of Guarantor to proceed against Debtor for reimbursement, or both; (f) any defense or right based upon the fair value deficiency protections; and (g) any defense or right based upon the acceptance by any of the Lenders or an affiliate thereof of a deed in lieu of foreclosure, without extinguishing the indebtedness, even if such acceptance destroys, alters or otherwise impairs subrogation rights of Guarantor or the right of Guarantor to proceed against Debtor for reimbursement, or both.

7. Guarantor, by execution hereof, represents to Lenders that the relationship between Guarantor and Debtor is such that Guarantor has access to all relevant facts and information concerning the indebtedness and Debtor and that Lenders can rely upon Guarantor having such access. Guarantor waives and agrees not to assert any duty on the part of Lenders to disclose to Guarantor any facts that Lenders may now or hereafter know about Debtor, regardless of whether Lenders have reason to believe that any such facts materially increase the risk beyond that which Guarantor intends to assume, or have reason to believe that such facts are unknown to Guarantor, or have a reasonable opportunity to communicate such facts to Guarantor. Guarantor is fully responsible for being and keeping informed of the financial condition of Debtor and all circumstances bearing on the risk of non-payment of the indebtedness guaranteed hereby.

8. Until all indebtedness of Debtor to Lenders has been paid in full, even though such indebtedness is in excess of the liability of Guarantor, Guarantor shall have no right of subrogation and waives any right to enforce any remedy which Lenders now or may hereafter have against Debtor and any benefit of and any right to participate in any security now or hereafter held by Lenders.

9. Except as otherwise provided in this paragraph, all existing or future indebtedness of Debtor to Guarantor is hereby subordinated to all indebtedness hereby guaranteed and, without the prior written consent of all of the Lenders, shall not be paid or withdrawn in whole or in part nor will Guarantor accept any payment of or on account of any such indebtedness while this Guaranty is in effect. At Lenders' request, Debtor shall pay to Lenders all or any part of subordinated indebtedness and any capital which Guarantor is entitled to withdraw. Each payment by Debtor to Guarantor in violation of this paragraph shall be received in trust for Lenders and shall be paid to the Lenders immediately on account of the indebtedness of Debtor to Lenders. No such payment shall reduce or affect in any manner Guarantor's liability under any of the provisions of this Guaranty. Guarantor reserves the right to receive from Debtor payment of any salary for personal services at the same monthly rate as that at which Guarantor has been paid during the preceding twelve months, it being expressly understood that such amount shall not be subordinated to the indebtedness guaranteed hereby.

10. Guarantor will file all claims against Debtor in any bankruptcy or other proceeding in which the filing of claims is required by law upon any indebtedness of Debtor to Guarantor and shall concurrently assign to Lenders all of Guarantor's rights thereunder. If Guarantor does not file any such claim, each of the Lenders, as Guarantor's attorney-in-fact, is hereby authorized to do so in Guarantor's name or, in Lenders' discretion, to assign the claim and to cause proof of claim to be filed in the name of Lenders' nominee. In all such cases, whether in administration, bankruptcy or otherwise, the person or persons authorized to pay such claims shall pay to Lenders the full amount thereof and, to the full extent necessary for the purpose, Guarantor hereby assigns to Lenders all of Guarantor's rights to any and all such payments or distributions to which Guarantor would otherwise be entitled. If the amount so paid is greater than the guaranteed indebtedness then outstanding, Lenders will pay the amount of the excess to the person entitled thereto.

11. With or without notice to Guarantor, any or all of the Lenders, in its or their sole discretion and at any time and from time to time either before or after delivery of any notice of revocation hereunder and in such manner and upon such terms as it considers fit, may (a) apply any or all payments or recoveries from Debtor, from Guarantor or from any other guarantors under this or any other instrument or realized from any security, in such manner and order or priority as Lenders elect, to any indebtedness of Debtor to Lenders, whether or not such indebtedness is guaranteed hereby or is otherwise secured or is due at the time of such application; and (b) refund to Debtor any payment received by Lenders upon any indebtedness hereby guaranteed and payment of the amount refunded shall be fully guaranteed hereby. Any recovery realized from any other guarantors under this or any other instrument shall be first credited upon that portion of the indebtedness of Debtor to Lenders which exceeds Guarantor's maximum liability, if any, hereunder.

12. The amount of Guarantor's liability and all rights, powers and remedies of Lenders hereunder and under the Credit Documents and any other agreement now or at any time hereafter in force between Lenders and Guarantor shall be cumulative and not alternative, and such rights, powers and remedies shall be in addition to all rights, powers and remedies given to Lenders by law.

13. Guarantor's obligations hereunder are independent of the obligations of Debtor and, in the event of any default hereunder, a separate action or actions may be brought and prosecuted against Guarantor whether action is brought against Debtor or whether Debtor is joined by any such action or actions. Lenders may maintain successive actions for other defaults. Lenders' rights hereunder shall not be exhausted by the exercise of any of their rights or remedies or by any such action or by any number of successive actions until and unless all indebtedness and obligations hereby guaranteed have been paid and fully performed.

14. This is a Continuing Guaranty and Guarantor agrees that it shall remain in full force until and unless Guarantor delivers to each of the Lenders written notice that it has been revoked as to credit granted subsequent to the effective time of revocation as herein provided. Delivery of such notice shall not affect any of Guarantor's obligations hereunder with respect to credit granted prior to the effective date of such revocation, nor shall it affect any of the obligations of any other guarantors for the credit granted to Debtor.

15. Guarantor agrees to pay to Lenders without demand reasonable attorneys' fees and all costs and other expenses which Lenders expend or incur in collecting or compromising any indebtedness of Debtor, in protecting Lenders' security under the Credit Documents or in enforcing this Guaranty against Guarantor or any other guarantors of any indebtedness hereby guaranteed whether or not suit is filed, including, without limitation, attorney's fees, costs and other such expenses incurred in any bankruptcy proceeding. Guarantor warrants and represents that it is fully authorized by law to execute this Guaranty.

16. This Guaranty shall benefit Lenders, their respective successors and assigns, including the assignees of any indebtedness hereby guaranteed, and binds Guarantor's heirs and personal representatives. This Guaranty is assignable by any or all of Lenders with respect to all or any portion of the indebtedness and obligations guaranteed hereunder, and, when so assigned, Guarantor shall be liable to the assignees under this Guaranty without in any manner affecting Guarantor's liability hereunder with respect to any indebtedness or obligations retained by any of the Lenders. No delegation or assignment of this Guaranty by Guarantor shall be of any force or effect or release Guarantor from any obligation hereunder.

17. No provision of this Guaranty or right of Lenders hereunder can be waived, nor can Guarantor be released from his obligations hereunder, except by a writing duly executed by each of the Lenders prejudiced in any manner by such waiver or release. Should any one or more provisions of this Guaranty be determined to be illegal or unenforceable, all other provisions nevertheless shall be governed by and construed in accordance with the laws of Arizona, and Guarantor agrees to submit to the jurisdiction of the courts of Arizona.

18. If more than one Guarantor signs this Guaranty, the obligation of all such Guarantors shall be joint and several. When the context and construction so require, all words used in the singular shall be deemed to have been used in the plural and the masculine shall include the feminine and neuter. Any married person who signs this Guaranty agrees that recourse may be had against separate property for all obligations under this Guaranty.

19. Except as provided in any other written agreement now or at any time hereafter in force between all of the Lenders and Guarantor, this Guaranty shall constitute the entire agreement of Guarantor with Lenders with respect to the subject matter hereof and no representation, understanding, promise or condition concerning the subject matter hereof shall be binding upon Lenders unless expressed herein. Any notice to Guarantor shall be considered to have been duly given when delivered personally or forty-eight hours after being mailed, postage prepaid, to the address set forth below or to such other address as Guarantor may from time to time designate to Lenders in writing.

20. The undersigned Guarantor hereby acknowledges the receipt of a true copy of this Guaranty.

21. This Guaranty is secured by a Stock Pledge and Security Agreement of even date herewith by Guarantor in favor of Lenders.

[SIGNATURES ON NEXT PAGE]

GUARANTY AMOUNT $750,000.00

Executed by the Guarantor on August 10, 1999.

Signature of Guarantor Address

_______________________________

Steven J. Peskaitis

_________________________________

EX-4.06 7 STOCK PLEDGE AND SECURITY AGREEMENT Exhibit 4

Exhibit 4.06

STOCK PLEDGE AND SECURITY AGREEMENT

This STOCK PLEDGE AND SECURITY AGREEMENT ("Agreement") dated as of the 10^th day of August, 1999, made by Steven J. Peskaitis (the "Pledgor"), in favor of Miller Capital Corporation, Stephen A McConnell, Jock Patton and Dickerson Wright (collectively, the "Secured Parties"), in connection with the Loan Agreement, the Note and the Guarantee (each as hereinafter defined).

RECITALS

A. LEXON Technologies, Inc., a Delaware corporation (the "Company"), is executing that certain Promissory Note dated the date hereof made in favor of Miller Capital Corporation in the original principal amount of $250,000, that certain Promissory Note dated the date hereof made in favor of Stephen A McConnell in the original principal amount of $125,000, that certain Promissory Note dated the date hereof made in favor of Jock Patton in the original principal amount of $125,000, and that certain Promissory Note dated the date hereof made in favor of Dickerson Wright in the original principal amount of $250,000 (collectively, the "Notes"), which Notes evidence certain loans made by the Secured Parties to the Company (the "Loans"), as set forth in that certain Securities Purchase Agreement dated the date hereof (the "Purchase Agreement") among the Company and the Secured Parties.

B. The Pledgor is the owner of one million five hundred thousand (1,500,000) shares (the "Pledged Shares") of common stock, $.001 par value, the Company, as further described in Schedule A attached hereto and incorporated herein by reference.

C. As a condition to the Secured Parties extending the Loans to the Company, the Pledgor has agreed to execute that certain guarantee dated the date hereof in favor of Miller Capital Corporation, Stephen A McConnell, Jock Patton and Dickerson Wright (the "Guarantee") and to pledge the Pledged Shares as security for the performance of the Pledgor's obligations under the Guarantee and the Company's obligations under the Notes.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and in order to induce the Secured Parties to extend the Loans to, or for the benefit of, the Company, the Pledgor hereby agrees with the Secured Parties as follows:

Section 1. Pledge, Assignment and Grant of Security. The Pledgor hereby assigns and pledges to the Secured Parties, and hereby grants to the Secured Parties, a first priority security interest in, all of Pledgor's right, title and interest in and to the Pledged Shares and the certificates representing the Pledged 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 Pledged Shares and the proceeds of the foregoing (collectively, the "Collateral").

Section 2. Security for Obligations. This Agreement secures the payment and performance of all obligations of the Pledgor now or hereafter arising under the Guarantee and all obligations of the Company now or hereafter existing under the Notes, the Purchase Agreement and any of the other documents, instruments and agreements executed in connection with the transactions contemplated thereby, whether monetary or otherwise (collectively, the "Obligations"). Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts which constitute part of the Obligations and would be owed by the Pledgor to the Secured Parties under the Guarantee or by Company to the Secured Parties under the Note but for the fact that they are unenforceable or not allowable owing to the existence of any bankruptcy, reorganization, or similar proceedings involving the Company or the Pledgor. For purposes of this Agreement, "Event of Default" shall mean the meaning ascribed thereto in the Purchase Agreement.

Section 3. Delivery of Collateral. All certificates or instruments representing or evidencing the Collateral shall be delivered to and held by or on behalf of the Secured Parties 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 Secured Parties. The Secured Parties shall have the right, upon the occurrence of an Event of Default and with notice to the Pledgor, to transfer to or to register in the name of the Secured Parties or their respective nominees any or all of the Collateral, subject to the revocable rights specified in Section 6(a).

Section 4. Representations and Warranties. The Pledgor represents and warrants to the Secured Parties as follows:

(a) The Pledgor is the legal and beneficial owner of the Collateral free and clear of all liens, encumbrances and other charges except for the security interest created by this Agreement. The Pledgor is not aware of any effective financing statement or other document similar in effect covering all or any part of the Collateral that is on file in any recording office, except such as may have been filed in favor of the Secured Parties relating to this Agreement.

(b) No consent of any other person or entity and no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required (i) for the pledge by the Pledgor of the Collateral pursuant to this Agreement, for the grant by the Pledgor of the assignment and security interest granted hereby, or for the execution, delivery, or performance of this Agreement by the Pledgor; (ii) for the perfection or maintenance of the pledge, assignment, and security interest contemplated by this Agreement; or (iii) for the exercise by the Secured Parties of the voting or other rights provided for in this Agreement or the remedies in respect of the Collateral pursuant to this Agreement (except as may be required in connection with the disposition of any portion of the Collateral by laws affecting the offering and sale of securities generally).

Section 5. Further Assurances.

(a) The Pledgor, from time to time, at the expense of the Company, shall promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that any or all of the Secured Parties may reasonably request, in order to perfect and protect any pledge, assignment or security interest granted or purported to be granted hereby or to enable any or all of the Secured Parties to exercise and enforce its or their rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, the Pledgor will execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as any or all of the Secured Parties may reasonably request, in order to perfect and preserve the pledge, assignment, and security interest granted or purported to be granted hereby.

(b) The Pledgor hereby authorizes the Secured Parties to file one or more financing or continuation statements, and amendments thereto, relating to all or any part of the Collateral without the signature of the Pledgor where permitted by law. A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by applicable law.

(c) The Pledgor will furnish to the Secured Parties from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as any or all of the Secured Parties may reasonably request, all in reasonable detail.

Section 6. Voting Rights; Dividends; Etc.

(a) So long as no Event of Default shall have occurred and no event which, with the giving of notice or the lapse of time, or both, would become an Event of Default shall have occurred and be continuing:

(i) the Pledgor shall be entitled to exercise or refrain from exercising any and all voting and other consensual rights pertaining to the Collateral or any part thereof for any purpose not inconsistent with the terms of this Agreement; and

(ii) the Pledgor shall be entitled to receive and retain any and all dividends and interest paid in respect of the Collateral; provided, however, that any and all

(A) dividends and interest 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, any Collateral,

(B) dividends and other distributions paid or payable in cash in respect of any Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus, or paid-in-surplus, and

(C) cash paid, payable, or otherwise distributed in respect of principal of, or in redemption of, or in exchange for, any Collateral, shall be, and shall be forthwith delivered to the Secured Parties to hold as Collateral and shall, if received by the Pledgor, be received in trust for the benefit of the Secured Parties, be segregated from the other property or funds of the Pledgor, and be forthwith delivered to the Secured Parties as Collateral in the same form as so received (with any necessary endorsement or assignment).

(b) Upon the occurrence of an Event of Default, or upon the occurrence and during the continuation of an event which, with the giving of notice or the lapse of time, or both, would become an Event of Default:

(i) all rights of the Pledgor to exercise or refrain from exercising the voting and other consensual rights which the Pledgor would otherwise be entitled to exercise pursuant to Section 6(a)(i) and to receive the dividends and interest payments which the Pledgor would otherwise be authorized to receive and retain pursuant to Section 6(a)(ii) shall cease, and all such rights shall thereupon become vested in the Secured Parties who shall thereupon have the sole right to exercise or refrain from exercising such voting and other consensual rights and to receive and hold as Collateral such dividends and interest payments; and

(ii) all dividends and interest payments which are received by the Pledgor contrary to the provisions of this Section 6(b) shall be received in trust for the benefit of the Secured Parties, shall be segregated from other funds of the Pledgor and shall be forthwith paid over to the Secured Parties as Collateral in the same form as so received (with any necessary endorsement or assignment).

Section 7. Transfers and Other Liens. The Pledgor shall not (i) sell, assign (by operation of law or otherwise), or otherwise dispose of, or grant any option with respect to, any of the Collateral or (ii) create or permit to exist any mortgage, pledge, assignment, lien, charge or encumbrance of any kind upon or with respect to all or any portion of the Collateral, except for the security interest under this Agreement.

Section 8. Secured Parties Appointed Attorney-in-Fact. The Pledgor hereby irrevocably constitutes and appoints each of the Secured Parties as the Pledgor's attorney-in-fact, with full power of substitution and full authority in the place and stead of the Pledgor and in the name of the Pledgor or otherwise, after and during the continuation of any Event of Default, to take any action and to execute any instrument which any or all of the Secured Parties may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation:

(a) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in connection with the Collateral;

(b) to receive, endorse, and collect any drafts or other instruments, documents, and chattel paper, in connection therewith; and

(c) to file any claims or take any action or institute any proceedings which the Secured Parties may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of the Secured Parties with respect to any of the Collateral.

The Pledgor acknowledges that the constitution and appointment of the Secured Parties as attorney-in-fact pursuant to this Section 8 are so long as any of the Obligations remain outstanding, coupled with an interest and irrevocable.

Section 9. Secured Parties May Perform. If the Pledgor fails to perform any obligation contained herein, the Secured Parties, at Pledgor's expense, may perform, or cause performance of, such obligation.

Section 10. The Secured Parties' Duties. Powers conferred on the Secured Parties hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral in their possession and the accounting for monies actually received by them hereunder, the Secured Parties shall have no duty as to any Collateral, as to ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders, or other matters relative to any Collateral, whether or not the Secured Parties have or are deemed to have knowledge of such matters, or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. The Secured Parties shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in their possession if such Collateral is accorded treatment substantially equal to that which the Secured Parties accords their own respective property.

Section 11. Remedies. If any Event of Default shall have occurred:

(a) The Secured Parties may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code in effect in the State of Arizona at that time (the "Code") (whether or not the Code applies to the affected Collateral), and also may (i) require the Pledgor to, and the Pledgor shall at its expense and upon request of the Secured Parties forthwith, assemble all or any part of the Collateral as directed by the Secured Parties and make it available to the Secured Parties at a place to be designated by the Secured Parties which is reasonably convenient to the Secured parties and the Pledgor, and (ii) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Secured Parties' offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Secured Parties may deem commercially reasonable. To the extent notice of sale shall be required by law, the Pledgor acknowledges that 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 Secured Parties shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Secured Parties 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.

(b) Any cash held by the Secured Parties as Collateral and all cash proceeds received by the Secured Parties in respect of any sale of, collection from, or other realization upon all or any part of the Collateral may, in the discretion of the Secured Parties, be held by the Secured Parties as Collateral for, and/or then or any time thereafter be applied (after payment of any amounts payable to the Secured Parties pursuant to this Agreement) in whole or in part by the Secured Parties against, all or any part of the Obligations in such order as the Secured Parties shall elect. Any surplus of such cash or cash proceeds held by the Secured Parties and remaining after payment in full of all the Obligations shall be paid over to the Pledgor or to whomsoever may be lawfully entitled to receive such surplus.

Section 12. Amendments; Etc. No amendment, modification, termination, or waiver of any provision of this Agreement, and no consent to any departure by the Pledgor from any term or provision hereof, shall in any event be effective unless the same shall be in writing and signed by the Secured Parties, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

Section 13. Addresses for Notices. All notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, and facsimile transmissions) and mailed or transmitted or delivered, to the respective parties at their respective addresses as set forth below:

(i) if to the Pledgor:

Steven J. Peskaitis

c/o LEXON Technologies, Inc.

1401 Brook Drive

Downer's Grove, Illinos 60515

Attn: Steven J. Peskaitis

with a copy to:

Rieck and Crotty

55 West Monroe Street

Suite 3390

Chicago, Illinois 60603

Attn: Thomas W. Rieck

(ii) if to the Secured Parties:

Miller Capital Corporation

4909 East McDowell Road

Phoenix, AZ 85008

Attn: Rudy R. Miller

and

Stephen A McConnell

6700 E. Solano Drive

Paradise Valley, Arizona 85253

and

Jock Patton

5430 East Arcadia Lane

Phoenix, Arizona 85018

and

Dickerson Wright

14366 Twisted Branch Road

Poway, California 92064

with a copy to:

Squire, Sanders & Dempsey L.L.P.

Two Renaissance Square

40 North Central Avenue, Suite 2700

Phoenix, Arizona 85004-4441

Attention: Christopher D. Johnson

or, as to any party, at such other address as shall be designated by such party in a written notice to the other parties. All such notices and other communications shall be effective when deposited in the mails or delivered to the telegraph company, or sent, answer back received, respectively.

Section 14. Continuing Security Interest; Assignments Under Note. This Agreement shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until the full payment and/or performance of the Obligations and the full payment of all other amounts payable under this Agreement, the Guarantee and/or the Note; (b) be binding upon the Pledgor and his heirs and personal representatives; and (c) inure to the benefit of, and be enforceable by, the Secured Parties and their successors, transferees, and assigns. Without limiting the generality of the foregoing clause (c), the Secured Parties may assign or otherwise transfer all or any portion of their respective rights and obligations under the Notes to any other person or entity, and such other person or entity shall thereupon become vested with all the benefits in respect thereof granted to the Secured Parties herein or otherwise. Upon the full payment and/or performance of the Obligations and the full payment all other amounts payable under this Agreement, the Guarantee and the Note, the security interest granted hereby shall terminate and all rights of the Secured Parties hereunder with respect to the Collateral shall revert to the Pledgor. Upon any such termination, the Secured Parties will, at the Pledgor's expense, execute and deliver to the Pledgor such documents as the Pledgor shall reasonably request to evidence such termination.

Section 15. Governing Law; Terms. This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona (other than laws in respect of conflict of laws). Unless otherwise defined herein or in the Note, terms used in the Code are used herein as therein defined.

Section 16. Return of Payments. The Pledgor expressly agrees that to the extent that the Company makes a payment or payments under any or all of the Notes, or to the extent that the Pledgor makes a payment or payment under the Guarantee, or to the extent that any or all of the Secured Parties exercises its rights hereunder in respect of the Collateral, and any such payment or payments or exercise of rights hereunder in respect of the Collateral, or any part thereof, are subsequently invalidated, declared to be fraudulent or preferential, set aside or are required to be repaid to a trustee, receiver or any other party under any bankruptcy act, state or federal law, common law or equitable cause, then to the extent of such payment or payments or exercise of rights hereunder in respect of the Collateral, the obligations of the Company under the Note intended to be satisfied by such payment or payments or exercise of rights hereunder in respect of the Collateral, or the obligations of the Pledgor under the Guarantee intended to be satisfied by such payment or payments or exercise of rights hereunder in respect of the Collateral, shall be revived and continued in full force and effect as if said payment or payments had not been made.

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IN WITNESS WHEREOF, the Pledgor has executed and delivered this Agreement as of the date first above written.

______________________________

Steven J. Peskaitis

STATE OF )

) ss.

County of )

The foregoing instrument was acknowledged before me this ___ day of August, 1999, by Steven J. Peskaitis, an individual.

_______________________________

Notary Public

My Commission Expires:

____________________

Schedule A

PLEDGED SHARES

Attached to and forming a part of that certain Stock Pledge and Security Agreement, by Steven J. Peskaitis, as Pledgor, in favor of Miller Capital Corporation, Stephen A McConnell, Jock Patton and Dickerson Wright, as Secured Parties.

Registered Owner: Steven J. Peskaitis

Issuer: LEXON Technologies, Inc., a Delaware corporation

Class of Stock: Common Stock, $.001 par value

Certificate Number: ________

Number of Shares: 1,500,000

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