10-Q

Form 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(mark one)
	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2001.
	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from   N/A   to   N/A  .

Commission File Number:   0-497

NZ Corporation
(Exact name of registrant as specified in its charter)

Arizona	43-0433090
(State or other jurisdiction of incorporation or organization)	( I.R.S. Employer Identification No.)

333 N. 44th Street, Suite 420, Phoenix, Arizona	85008
(Address of principal executive offices)	(Zip Code)

602/952-8836
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                Yes   X           No        

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, no par value	6,816,936
Class	Outstanding at May 4, 2001

TABLE OF CONTENTS

Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Cash Flows
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART II - OTHER INFORMATION
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
EX-3.2
EX-10.1

NZ Corporation and Subsidiaries FORM 10-Q

			Unaudited
Consolidated Balance Sheets			March 31,			December 31,
(in thousands, except share data)			2001			2000
Assets
		Properties, net	$	42,846		$	42,376
		Commercial real estate loans, net		35,102			34,521
		Receivables		5,319			5,868
		Investments in joint ventures		6,811			6,688
		Cash and cash equivalents		2,262			2,983
		Other		732			774
Total assets			$	93,072		$	93,210
Liabilities and Shareholders’ Equity
		Notes payable and lines of credit	$	24,118		$	25,189
		Accounts payable and accrued liabilities		1,801			1,082
		Deferred income taxes		3,220			3,319
		Deferred revenue		7,570			7,927
		Total liabilities		36,709			37,517
Non-controlling interests				39			44
Commitments and contingencies
Shareholders’ equity:
		Preferred stock, no par value; 10,000,000 shares authorized; none issued
		Common stock, no par value; 30,000,000 shares authorized; 6,925,636 shares issued		35,341			35,341
	Treasury stock, at cost, 108,700 and 89,200 shares			(527	)		(451	)
	Retained earnings			21,510			20,759
		Total shareholders’ equity		56,324			55,649
Total liabilities and shareholders’ equity			$	93,072		$	93,210

See accompanying Notes to Condensed Consolidated Financial Statements.

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NZ Corporation and Subsidiaries FORM 10-Q

Consolidated Statements of Income (Unaudited)
Three months ended March 31,
(in thousands, except per share data)				2001		2000
Revenue:
	Property sales			$	615	$	3,368
	Property rentals				977		876
	Commercial real estate lending				1,258		1,469
	Investment income				140		129
	Other				148		208
					3,138		6,050
Expenses:
	Cost of property sales				151		1,850
	Rental property				473		530
	General and administrative				563		659
	Interest				548		623
	Depreciation, depletion and amortization				210		212
					1,945		3,874
Income Before Joint Ventures, Non-controlling
		Interests and Income Taxes			1,193		2,176
Equity in earnings of joint ventures					13		—
Non-controlling interests					5		(18	)
Income Before Income Taxes					1,211		2,158
Income taxes					460		840
Net Income				$	751	$	1,318
Net income per Share of Common Stock
			Basic	$	0.11	$	0.19
			Diluted	$	0.11	$	0.19
Weighted Average Number of Common Shares
			Basic		6,820		6,912
			Diluted		6,820		6,915

See accompanying Notes to Condensed Consolidated Financial Statements.

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NZ Corporation and Subsidiaries FORM 10-Q

Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31,
(in thousands)			2001			2000
Cash Flows provided by (used in) Operating Activities:
Net income			$	751		$	1,318
Non-cash items included above:
		Depreciation, depletion and amortization		210			212
		Deferred revenue		(284	)		193
		Deferred income taxes		(99	)		(630	)
		Equity in losses (earnings) from joint ventures		(13	)		—
		Non-controlling interests		(5	)		18
Net change in:
		Receivables		239			73
		Properties under development		(673	)		(307	)
		Other properties		95			1,483
		Other assets		42			35
		Accounts payable and accrued liabilities		719			1,507
Net cash provided by operating activities				982			3,902
Cash Flows provided by (used in) Investing Activities:
		Additions to properties		(102	)		(6	)
		Contributions to joint ventures		(110	)		(500	)
		Collections of principal on commercial real estate loans		1,243			9,081
		Additions to commercial real estate loans		(1,587	)		(12,851	)
Net cash (used in) investing activities				(556	)		(4,276	)
Cash Flows provided by (used in) Financing Activities:
		Proceeds from debt		300			10,990
		Payments of debt		(1,371	)		(8,904	)
		Purchase of treasury stock		(76	)		(144	)
Net cash provided by (used in) financing activities				(1,147	)		1,942
Net increase (decrease) in cash and cash equivalents				(721	)		1,568
Cash and cash equivalents at beginning of period				2,983			3,661
Cash and cash equivalents at end of period			$	2,262		$	5,229
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
	Interest (net of amount capitalized)		$	562		$	569
	Income taxes			28			294
SUPPLEMENTAL DISCLOSURES OF NON-CASH OPERATING ACTIVITIES
	Discount on early redemption of bond		$	310

See accompanying Notes to Condensed Consolidated Financial Statements.

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NZ Corporation and Subsidiaries FORM 10-Q

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.	In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all normal, recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The accompanying statements do not include all disclosures considered necessary for a fair presentation in conformity with generally accepted accounting principles. Therefore, it is recommended that the accompanying statements be read in conjunction with the consolidated financial statements appearing in the Company’s 2000 annual report on Form 10-K.
2.	The results of operations for the three months ended March 31, 2001 and 2000, are not necessarily comparable and may not be indicative of the results which may be expected for future quarters or future years.
3.	The Company’s consolidated financial statements include the accounts of NZ Corporation, its wholly-owned subsidiaries, Bridge Financial Corporation (“BFC”), NZ Properties, Inc., NZ Development Corporation, NZU, Inc. and Great Vacations International, Inc., and investees over 50% owned. The income and equity portion of a consolidated entity which is not 100% owned by us is shown as non-controlling interest on our statements of income and consolidated balance sheets.
4.	Certain prior period amounts have been reclassified for comparative purposes.
5.	Basic earnings per share is determined by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is determined by dividing net income by the weighted average number of common shares and dilutive potential common shares (which reflect the effect of in-the-money stock options) outstanding for the period.
6.	On April 3, 2001, the Company made a loan to its largest shareholder. The approved amount of the loan is $8,000,000. As of April 30, 2001, $4,750,000 had been funded. The term of the loan is for six months at an interest rate of 20%. The loan is secured by stock the shareholder owns in our Company and repayment is guaranteed by one of the Company’s directors. The transaction was considered and approved by the disinterested members of the Board of Directors.
7.	On January 1, 2001, the Company adopted SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” SFAS No. 133 establishes accounting and reporting standards requiring that all derivative instruments, including certain derivative instruments embedded in other contracts, be recorded on the balance sheet as either an asset or liability measured at its fair value. SFAS No. 133 requires that changes in derivative’s fair value be

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	recognized in current earnings unless specific hedge accounting criteria are met. Currently, the Company does not use derivative instruments nor did the Company’s evaluation identify any embedded derivatives in other contracts. Upon adoption of SFAS No. 133 there was no material effect on the financial position or results of operations of the Company.
8.	The Company is engaged in three operating segments; Real Estate, Short-term Commercial Real Estate Lending and Other Business. The Short-term Commercial Real Estate Lending segment is primarily conducted through BFC.

Reconciliation of Segment Information to Consolidated Amounts

      Management evaluates the performance of each segment based on income before income taxes and identifiable assets. Income before income taxes includes allocations of corporate overhead expenses. Identifiable assets include assets employed in the generation of income for each segment.

      Information for the Company’s reportable segments reconciles to the Company’s consolidated totals as follows:

REVENUES (UNAUDITED):

	Three months ended
	March 31,
(in thousands)	2001		2000
Real Estate	$	1,356	$	3,969
Short-term Commercial Real Estate Lending		1,645		1,893
Other		137		188
Consolidated total	$	3,138	$	6,050

INCOME BEFORE INCOME TAXES (UNAUDITED):

	Three months ended
	March 31,
(in thousands)	2001		2000
Real Estate	$	525	$	1,391
Short-term Commercial Real Estate Lending		568		593
Other		118		174
Income before income taxes	$	1,211	$	2,158

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IDENTIFIABLE ASSETS:

	Unaudited
	March 31,		December 31,
(in thousands)	2001		2000
Real Estate	$	41,988	$	42,799
Short-term Commercial Real Estate Lending		50,272		49,608
Other		812		803
Consolidated total	$	93,072	$	93,210

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Results of Operations

      Consolidated discussions represent data of the Company as presented in the Consolidated Statements of Income. Segment discussions represent data as reported by segment in Note 8 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this report.

Consolidated

      For the three months ended March 31, 2001, net income was $751,000 ($0.11 per share) compared to $1,318,000 ($0.19 per share) for the same period in 2000. Pre-tax earnings from property sales declined 69% from $1,518,000 in 2000 to $464,000 in 2001. The decrease is primarily due to one bulk land sale in the 2000 period with no comparable sale in the 2001 period. Operating income from property rentals increased 46% from $346,000 in 2000 to $504,000 in 2001. The increase is primarily due to a lower vacancy rate in 2001 than 2000 for the industrial buildings. The increase in operating income from property rentals is partially offset by an operating loss with respect to real estate owned and operated due to a foreclosure. The operating loss for the property in 2001 is $34,000 compared to an operating loss in 2000 of $143,000. The operating loss associated with this property is included in the Commercial real estate lending segment.

      General and administrative expense declined 14% from $659,000 in 2000 to $563,000 in 2001. The decline is primarily due to a decrease of approximately $70,000 in consulting fees and a decrease of approximately $60,000, due to a smaller staff size in 2001 than in 2000. These decreases were partially offset by increases in other costs.

      The managed loan portfolio of Bridge Financial Corporation (“BFC”), a wholly-owned subsidiary of the Company, stood at $49.8 million as of March 31, 2001, of which $11.5 million was participated with other lenders and $35.1 million (net of an allowance for bad debts of $.6 million and undisbursed loan proceeds of $.3 million) was recorded in the Company’s books in “Commercial real estate loans, net” and $2.3 million was recorded in “Investments in joint ventures”. This compares to a March 31, 2000 managed portfolio of $64.5 million of which $28.5 million was participated with other lenders and $30.6 million (net of an allowance for bad debts of $.6 million and undisbursed loan proceeds of $1.2 million) was recorded in the Company’s books in “Commercial real estate loans, net” and $3.6 million was recorded in “Investments in joint ventures.” As of April 30, 2001 the managed portfolio was $47.8 million of which $6.8 million was participated and $37.8 million (net of an allowance for bad debts of $.6 million and undisbursed loan proceeds of $.3 million) was recorded in the Company’s books in “Commercial real estate loans, net” and $2.3 million was recorded in “Investments in joint ventures”.

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Real Estate Segment

      Income before income taxes decreased 62% from $1,391,000 in the first quarter of 2000 to $525,000 in the first quarter of 2001. The decrease is primarily attributable to a decline in property sales. The decrease in identifiable assets from $42,799,000 at December 31, 2000 to $41,988,000 at March 31, 2001 is primarily due to a decrease in receivables from the repayment of a bond.

Short-term Commercial Real Estate Lending Segment

      Revenues declined 12% from $1,893,000 in the first quarter of 2000 to $1,645,000 in the first quarter of 2001. The decline is primarily attributable to a decrease of approximately $40,000 from real estate owned and a decrease of approximately $210,000 from lending revenues. Income after allocations declined slightly from $593,000 in the first quarter of 2000 to $568,000 in the first quarter of 2001. The decrease is primarily due to decreased revenues partially offset by decreased general and administrative costs.

Liquidity and Capital Resources

      We expect to generate cash from the sale of our remaining real estate assets. Cash will also be generated from principal repayments on maturing loans in the Company’s existing loan portfolio and collections from property rentals. In addition, the Company now uses and intends to continue to use participants or other joint funding sources on certain real estate loans. Further, the Company has lines of credit with non-bank commercial lenders and a commercial bank from which it can fund loans.

      The Company continually reviews the best available use of the cash raised from sales of real estate and mineral assets. Evaluation of the strategic alternatives available to the Company may result in acquisitions, merger, or investment in lines of business in which the Company is not currently engaged. The Company is not a party to any binding agreements representing the acquisition of, merger with, or investment in, new businesses or lines of business. The strategic alternatives available to the Company if it is holding a substantial amount of its net worth in cash should be significant, perhaps allowing the Company to participate in sectors that have demonstrated more growth potential than real estate lending.

      The Company intends to negotiate additional or modified lines of credit, as business circumstances require. The Company’s goal in these negotiations will be to improve the effectiveness and cost of available capital and to obtain lines of credit of a size appropriate for the Company’s expected needs. A principal outcome of the Company’s discussions with potential lenders will be to determine how rapidly the Company will be able to grow its commercial real estate lending business. The terms of any new or changed financing arrangement will likely have a material effect upon the Company’s margins in its lending business and on the size of the managed loan portfolio. If the Company is not successful in negotiating such financing, the principal effect will be slower growth in the Company’s lending business, with the pace of growth

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in the near term being determined at least in significant part by the timing of the Company’s sales of existing real estate assets.

      Our most significant single identifiable land holding is 136 acres of partially developed land located in Yavapai County near Sedona, Arizona, known as the “Seven Canyons Project.” We have begun development work on the project in order to meet certain regulatory deadlines for the completion of work that is under the jurisdiction of the United States Army Corps of Engineers. For the period ended March 31, 2001, the Company invested approximately $650,000 in development costs. The property is currently in escrow. The sale is scheduled to close on or before May 30, 2001. The buyer is contractually obligated to reimburse us for all development expenditures from January 1, 2001 through the date of closing. Except in the case of a breach of the sales agreement by the Company, the buyer has only limited rights, in certain specific circumstances, to cancel the purchase prior to closing. If the sale doesn’t close, the Company will incur approximately $8,000,000 of development costs to complete the work that is currently in progress.

      On April 3, 2001, BFC made a loan to the largest shareholder of the Company. The maximum approved amount of the loan is $8,000,000. As of April 30, 2001, $4,750,000 had been funded. BFC is obligated to fund up to an additional $3,250,000 under the loan agreement. The term of the loan is for six months at an interest rate of 20%. The loan is secured by stock the shareholder owns in the Company and is guaranteed by one of the Company’s directors. The current collateral for the loan is 1,799,083 shares of NZ stock. Once the outstanding loan balance exceeds $5,000,000, the borrower is required to pledge a sufficient number of additional shares to maintain a 75% loan to value ratio. In the event of a default, BFC could exercise its foreclosure rights under the loan agreement and obtain ownership of the collateral, the Company’s stock. This foreclosure would have the effect of a stock repurchase. The aggregate repurchase price would equal the loan amount at the time of default. The price per share for such de facto repurchase would be at an effective price of not more than $2.78 per share. On April 30, 2001 the closing price of the Company’s stock as reported by the American Stock Exchange was $3.95. BFC would also have contractual rights to collect from the guarantor in the event of a default.

      The Company has receivables for four subordinate tax-exempt municipal bonds related to the sale of four apartment complexes in New Mexico, which the Company previously owned. The bonds pay interest semi-annually and have terms ranging from 15 to 30 years from the date of issue. In the first quarter 2001, the Company received a discounted amount from the early redemption of one of the bonds. The Company received $210,000 as repayment for the bond. The face value of the bond was $520,000. The discount has no effect on the Company’s results of operations because revenue recognition on the bond was fully deferred. Negotiations are continuing with the debtor to restructure or repay the remaining bonds. Another bond is projected to repay a discounted amount in the second quarter of 2001. The Company believes that the other two bonds will also be repaid at a discount in the future. The effect of repayment at a discount on all the remaining bonds is expected to be similar to the effect of the repayment that was received in the first quarter. Interest on the remaining three bonds is current as of March 31, 2001. Due to the uncertain outcome of the negotiations and because the debtor has told the Company not to expect regular payments of interest, the bonds remain on non-accrual status.

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Interest payments are therefore recognized as interest income when they are received.

      For the three months ended March 31, 2001, the Company’s operating activities provided $982,000 of net cash flows, its investing activities used $556,000 of net cash flows and financing activities used $1,147,000 of net cash flows.

      The Company currently has a $13 million partially secured line of credit from a commercial bank, of which $10 million is a revolving line for general corporate purposes, and $3 million of which is a back-up facility for a letter of assurance the bank has provided to Yavapai County, Arizona, in connection with development costs for the Seven Canyons Project. The line bears interest at the prime rate and expires July 17, 2001. At March 31, 2001 there was an outstanding balance of $6,275,000. As of April 30, 2001 the line had an outstanding balance of $8,275,000. This loan contains financial covenants which require the Company to maintain a specified minimum ratio of net notes receivable (as defined) to the outstanding loan balance; a specified maximum ratio of debt to net worth; and a specified minimum tangible net worth. At March 31, 2001 the Company was in compliance with these financial covenants.

      BFC has a $10,000,000 warehouse line of credit with a large non-bank commercial lender to finance certain portions of BFC’s real estate lending activities. The line bears interest at rates ranging from 30-day LIBOR plus 250 basis points to 30-day LIBOR plus 300 basis points and expires August 31, 2001. As amounts are drawn, the line will be secured by certain loan assets of the Company. At March 31, 2001 and April 30, 2001 the line had an outstanding balance of $2,737,500. This loan contains financial covenants which require BFC to maintain a minimum tangible net worth, a specified maximum ratio of debt to tangible net worth, and a specified minimum liquidity. At March 31, 2001, BFC was in compliance with these financial covenants. The line of credit is guaranteed by the Company.

      Additionally, BFC has a revolving $20,000,000 warehouse line of credit with a different large non-bank commercial lender to finance certain portions of BFC’s real estate lending activities. As amounts are drawn, the line will be secured by certain loan assets of the Company. The line bears interest at 30-day LIBOR plus 475 basis points and expires October 1, 2001. At March 31, 2001 and April 30, 2001 there was no outstanding balance. This loan contains financial covenants that require BFC to maintain a minimum tangible net worth and a minimum interest coverage ratio. At March 31, 2001 BFC was in compliance with these financial covenants. The line of credit is guaranteed by the Company.

      In addition to bank lines, the Company may seek qualified joint venture partners to finance large real estate development projects or loans to the extent that the Company actually engages in such projects or loans in the future. The use of joint venture partners provides a source of capital, reduces the Company’s risk by sharing it with another party, and gives the Company access to expertise that it might not otherwise have for particular projects.

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PART II - OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a)	Exhibit 3.2	Amended and restated By-Laws of the Registrant (composite incorporates all changes in effect as of April 25, 2001).
	Exhibit 10.1	Related party loan agreement dated April 3, 2001.
(b)	No reports on Form 8-K were filed during the quarter ended March 31, 2001.

SIGNATURES

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

NZ Corporation

/s/ Jerome L. Joseph

Controller and Treasurer

(Principal Financial Officer)

/s/ R. Randy Stolworthy

President and Chief Executive Officer

(Principal Executive Officer)

Date: May 10, 2001

12 EX-3.2 2 p65056ex3-2.txt EX-3.2 1 EXHIBIT 3.2 Amended and Restated By-Laws AMENDED AND RESTATED BYLAWS (COMPOSITE INCORPORATING ALL CHANGES IN EFFECT AS OF APRIL 25, 2001, PLUS NAME CHANGE TO NZ CORPORATION) OF NZ CORPORATION I. REFERENCES TO CERTAIN TERMS AND CONSTRUCTION 1.01. Certain References. Any reference herein made to law will be deemed to refer to the law of the State of Arizona, including any applicable provision of Chapters 1 through 17 of Title 10 of the Arizona Revised Statutes, or any successor statue, as from time to time amended and in effect (sometimes referred to herein as the "Arizona Business Corporation Act"). Any reference herein made to the Corporation's Articles will be deemed to refer to its Articles of Incorporation and all amendments thereto as at any given time on file with the Arizona Corporation Commission. Except as otherwise required by law and subject to any procedures established by the Corporation pursuant to Arizona Revised Statutes Section 723, the term "shareholder" as used herein shall mean one who is a holder of record of shares of the Corporation. References to specific sections of law herein made shall be deemed to refer to such sections, or any comparable successor provision, as from time to time amended and in effect. 1.02. Seniority. The law and the Articles (in that order of precedence) will in all respects be considered senior and superior to these Bylaws, with any inconsistence to be resolved in favor of the law and such Articles (in that order of precedence), and with these Bylaws to be deemed automatically amended from time to time to eliminate any such inconsistency which may then exist. 1.03. Computation of Time. The time during which an act is required to be done, including the time for the giving of any required notice herein, shall be computed by excluding the first day or hour, as the case may be, and including the last day or hour. II. OFFICES 2.01. Principal Office. The principal office of the Corporation shall be located at any place either within or outside the State of Arizona as designated in the Corporation's most current Annual Report filed with the Arizona Corporation Commission or in any other document executed and delivered to the Arizona Corporation Commission for filing. If a principal office is not so designated, the principal office of the Corporation shall mean the known place of business of the Corporation. The Corporation may have such other offices, either within or without the State of Arizona, as the Board of Directors may designate or as the business of the Corporation may require from time to time. 2.02. Known Place of Business. A known place of business of the Corporation shall be located within the State of Arizona and may be, but need not be, the address of the statutory agent of the Corporation. The Corporation may change its known place of business from time to time in accordance with the relevant provisions of the Arizona Business Corporation Act. 2 III. SHAREHOLDERS 3.01. Annual Shareholder Meeting. The annual meeting of the shareholders shall be held at such time and place, either within or without the State of Arizona, as shall be fixed by the Board of Directors or, in the absence of action by the Board, as set forth in the notice given or waiver signed with respect to such meeting pursuant to Section 3.03 below, for the purpose of electing directors and for the transaction of such other business as may properly come before the meeting. If any annual meeting is for any reason not held on the date determined as aforesaid; a deferred annual the day fixed for the annual meeting shall be a legal holiday in the State of Arizona such meeting shall be held on the next succeeding business day. 3.02. Special Shareholder Meetings. Special meetings of the shareholders may be held whenever and wherever, either within or without the State of Arizona, called for by or at the direction of the Chairman of the Board, the President, or the Board of Directors. 3.03. Notice of Shareholders Meetings. (a) Required Notice. Notice stating the place, day and hour of any annual or special shareholders meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting by or at the direction of the person or persons calling the meeting, to each shareholder entitled to vote at such meeting and to any other shareholder entitled to receive notice of the meeting by law or the Articles. Notices to shareholders shall be given in accordance with, and shall be deemed to be effective at the time and in the manner described in, Arizona Revised Statutes Section 10-141. If no designation is made of the place at which an annual or special meeting will be held in the notice for such meeting, the place of the meeting will be at the principal place of business of the Corporation. (b) Adjourned Meeting. If any shareholders meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time, and place, if the new date, time, and place is announced at the meeting before adjournment. But if a new record date for the adjourned meeting is fixed or must be fixed in accordance with law or these Bylaws, then notice of the adjourned meeting shall be given to those persons who are shareholders as of the new record date and who are entitled to such notice pursuant to Section 3.03(a) above. (c) Waiver of Notice. Any shareholder may waive notice of a meeting (or any notice of any other action required to be given by the Arizona Business Corporation Act, the Corporation's Articles, or these Bylaws), at any time before, during, or after the meeting or other action, by a writing signed by the shareholder entitled to the notice. Each such waiver shall be delivered to the Corporation for inclusion in the minutes or filing with the corporate records. Under certain circumstances, a shareholder's attendance at a meeting may constitute a waiver of notice, unless the shareholder takes certain actions to preserve his/her objections as described in the Arizona Business Corporation Act. (d) Contents of Notice. The notice of each special shareholders' meeting shall include a description of the purpose or purposes for which the meeting is called. Except as required by law, this section 3.03(d), or the Corporation's Articles, the notice of an annual shareholders' meeting need not include a description of the purpose or purposes for which the meeting is called. 3.04. Fixing of Record Date. For the purpose of determining shareholders of any voting group entitled to notice of or to vote at any meeting of shareholders, or shareholders entitled to receive any distribution or dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may fix in advance a date as the record date. Such record date shall not be more than seventy (70) days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If no record date is so fixed by the Board of Directors, the 3 record date for the determination of shareholders shall be as provided in the Arizona Business Corporation Act. When a determination of shareholders entitled to notice of or to vote at any meeting of shareholders has been made as provided in this Section, such determination shall apply to any adjournment thereof, unless the Board of Directors fixes a new record date, which it must do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. 3.05. Shareholder List. The Corporation shall make a complete record of the shareholders entitled to notice of each meeting of shareholders thereof, arranged in alphabetical order, listing the address and the number of shares held by each. The list shall be arranged by voting group and within each voting group by class or series of shares. The shareholder list shall be available for inspection by any shareholder, beginning two (2) business days after notice of the meeting is given for which the list was prepared and continuing through the meeting. The list shall be available at the Corporation's principal office or at another place identified in the meeting notice in the city where the meeting is to be held. Failure to comply with this section shall not affect the validity of any action taken at the meeting. 3.06. Shareholder Quorum and Voting Requirements. (a) If the Articles or the Arizona Business Corporation Act provide for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group. (b) If the Articles or the Arizona Business Corporation Act provide for voting by two (2) or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately. (c) Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the Articles or the Arizona Business Corporation Act provide otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter. (d) Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting, unless a new record date is or must be set for that adjourned meeting. (e) If a quorum exists, action on a matter (other than the election of directors) by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless the Articles or the Arizona Business Corporation Act require a greater number of affirmative votes. (f) Voting will be by ballot on any question as to which any person demands a ballot vote prior to the time the voting begins entitled to vote on such question; otherwise, a voice vote will suffice. No ballot or change of vote will be accepted after the polls have been declared closed following the ending of the announced time for voting. 3.07. Manner of Bringing Business Before Meetings. (a) At any annual or special meeting of shareholders only such business shall be conducted as shall have been properly brought before the meeting. In order to be properly brought before the meeting, such business must be a proper subject for shareholder action and must have been (i) specified in the written notice of the meeting (or any supplement thereto) given to shareholders 4 who were shareholders on the record date for such meeting by or at the direction of the Board of Directors, (ii) brought before the meeting at the direction of the Board of Directors or the Chairman of the meeting, selected as provided in Section 3.12 hereof, or (iii) specified in a written notice given by or on behalf of a shareholder who was a shareholder on the record date for such meeting entitled to vote thereat or a duly authorized proxy for such shareholder, in accordance with Section 3.07(b) and (c) hereof. (b) A shareholder notice referred to in Section 3.07(a)(iii) hereof must be delivered personally to, or mailed to and received at, the principal executive office of the Corporation, addressed to the attention of the Secretary, not more than ten (10) days after the date of the initial notice referred to in Section 3.07(a)(i) hereof, in the case of business to be brought before a special meeting of shareholders, and not less than thirty (30) days prior to the anniversary date of the initial notice referred to in Section 3.07(a)(i) hereof with respect to the previous year's annual meeting, in the case of business to be brought before an annual meeting of shareholders. (c) A shareholder notice referred to in Section 3.07(a)(iii) hereof shall set forth: (i) a full description of each item of business proposed to be brought before the meeting and the reasons for conducting such business at such meeting; (ii) the name and address of the person proposing to bring such business before the meeting; (iii) the class and number of shares held of record, held beneficially, and represented by proxy by such person as of the record date for the meeting, if such date has been made publicly available, or as of a date not later than thirty (30) days prior to the delivery of the initial notice referred to in Section 3.07(a)(i) hereof, if the record date has not been made publicly available; (iv) if any item of business involves a nomination for director, all information regarding each such nominee that would be required to be set forth in a definitive proxy statement filed with the Securities and Exchange Commission pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, or any successor thereto, and the written consent of each such nominee to serve if elected; (v) any material interest of such shareholder in the specified business; (vi) whether or not such shareholder is a member of any partnership, limited partnership, syndicate, or other group pursuant to any agreement, arrangement, relationship, understanding, or otherwise, whether or not in writing, organized in whole or in part for the purpose of acquiring, owning, or voting shares of the Corporation; and (vii) all other information that would be required to be filed with the Securities and Exchange Commission, if, with respect to the business proposed to be brought before the meeting, the person proposing such business was a participant in a solicitation subject to Section 14 of the Securities Exchange Act of 1934, as amended, or any successor thereto. No business shall be brought before any meeting of the shareholders of the Corporation otherwise than as provided in this Section 3.07. (d) Notwithstanding the provisions of this Section 3.07, the Board of Directors shall not be obligated to include information as to any shareholder nominee for director or any other shareholder proposal in any proxy statements or other communication sent to shareholders. (e) The Chairman of the meeting may, if the facts warrant, determine that any proposed item of business was not brought before the meeting in accordance with the provisions of this Section 3.07, and if he or she should so determine, he or she shall so declare to the meeting and the defective item of business shall be disregarded. 5 3.08. Proxies. At all meetings of shareholders, a shareholder may vote in person or by proxy duly executed in writing by the shareholder or the shareholder's duly authorized attorney-in-fact. Such proxy shall comply with law and shall be filed with the Secretary of the Corporation or other person authorized to tabulate votes before or at the time of the meeting. No proxy shall be valid after eleven (11) months from the date of its execution unless otherwise provided in the proxy. The burden of proving the validity of any undated, irrevocable, or otherwise contested proxy at a meeting of the shareholders will rest with the person seeking to exercise the same. A facsimile appearing to have been transmitted by a shareholder or by such shareholder's duly authorized attorney-in-fact may be accepted as a sufficiently written and executed proxy. 3.09. Voting of Shares. Unless otherwise provided in the Articles or the Arizona Business Corporation Act, each outstanding share entitled to vote shall be entitled to one (1) vote upon each matter submitted to a vote at a meeting of shareholders. 3.10. Voting for Directors. Unless otherwise provided in the Articles, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present at the time of such vote. As provided by law, shareholders shall be entitled to cumulative voting in the election of directors. 3.11. Election Inspectors. The Board of Directors, in advance of any meeting of the shareholders, may appoint an election inspector or inspectors to act at such meeting (and at any adjournment thereof). If an election inspector or inspectors are not so appointed, the chairman of the meeting may, or upon request of any person entitled to vote at the meeting will, make such appointment. If any person appointed as an inspector fails to appear or to act, a substitute may be appointed by the chairman of the meeting. If appointed, the election inspector or inspectors (acting through a majority of them if there be more than one) will determine the number of shares outstanding, the authenticity, validity, and effect of proxies, the credentials of persons purporting to be shareholders or persons named or referred to in proxies, and the number of shares represented at the meeting in person and by proxy; will receive and count votes, ballots, and consents and announce the results thereof; will hear and determine all challenges and questions pertaining to proxies and voting; and, in general, will perform such acts as may be proper to conduct elections and voting with complete fairness to all shareholders. No such election inspector need be a shareholder of the Corporation. 3.12. Organization and Conduct of Meetings. Each meeting of the shareholders will be called to order and thereafter chaired by the Chairman of the Board of Directors if there is one, or, if not, or if the Chairman of the Board is absent or so requests, then by the President, or if both the Chairman of the Board and the President are unavailable, then by such other officer of the Corporation or such shareholder as may be appointed by the Board of Directors. The Corporation's Secretary or in his or her absence, an Assistant Secretary will act as secretary of each meeting of the shareholders. If neither the Secretary nor an Assistant Secretary is in attendance, the chairman of the meeting may appoint any person (whether a shareholder or not) to act as secretary for the meeting. After calling a meeting to order, the chairman thereof may require the registration of all shareholders intending to vote in person and the filing of all proxies with the election inspector or inspectors, if one or more have been appointed (or, if not, with the secretary of the meeting). After the announced time for such filing of proxies has ended, no further proxies or changes, substitutions, or revocations of proxies will be accepted. If directors are to be elected, a tabulation of the proxies so filed will, if any person entitled to vote in such election so requests, be announced at the meeting (or adjournment thereof) prior to the closing of the election polls. Absent a showing of bad faith on his or her part, the chairman of a meeting will, among other things, have absolute authority to fix the period of time allowed for the registration of shareholders and the filing of proxies, to determine the order of business to be conducted at such meeting, and to establish reasonable rules for expediting the business of the meeting and preserving the orderly conduct thereof (including any informal, or question and answer portions thereof). 6 3.13. Shareholder Approval of Ratification. The Board of Directors may submit any contract or act for approval or ratification of the shareholders at a duly constituted meeting of the shareholders. Except as otherwise required by law, if any contract or act so submitted is approved or ratified by a majority of the votes cast thereon at such meeting, the same will be valid and as binding upon the Corporation and all of its shareholders as it would be if it were the act of its shareholders. 3.14. Informalities and Irregularities. All informalities or irregularities in any call or notice of a meeting of the shareholders or in the areas of credentials, proxies, quorums, voting, and similar matters, will be deemed waived if no objection is made at the meeting. 3.15. Shareholder Action by Written Consent. Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if one (1) or more consents in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof. The consents shall be delivered to the Corporation for inclusion in the minutes or filing with the corporate record. Action taken by consent is effective when the last shareholder signs the consent, unless the consent specifies a different effective date, except that if, by law, the action to be taken requires that notice be given to shareholders who are not entitled to vote on the matter, the effective date shall not be prior to ten (10) days after the Corporation shall give such shareholders written notice of the proposed action, which notice shall contain or be accompanied by the same material that would have been required if a formal meeting had been called to consider the action. Consent signed under this section has the effect of a meeting vote and may be described as such in any document. IV. BOARD OF DIRECTORS 4.01. General Powers. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of, the Board of Directors. 4.02. Number, Tenure, and Qualification of Directors. Unless otherwise provided in the Articles of Incorporation, the authorized number of directors shall be neither less than five (5) nor more than nine (9). The number of directors in office from time to time shall be within the limits specified above, as prescribed from time to time by resolution adopted by either the shareholders or the Board of Directors. The Board of Directors shall consist of Class A Directors and Class B Directors. The Class A directors shall be elected for a term of two years at the annual meeting of shareholders of the Corporation held in every odd numbered year. The Class B directors shall be elected for a term of two years at the annual meeting of shareholders of the Corporation held in every even numbered year. When an even number of directors has been set by the Board of Directors, there shall be an even number of Class A directors and Class B directors. When an odd number of directors has been set by the Board of Directors, there shall be one more Class B director than there are Class A directors. All directors of the Corporation shall be shareholders of the Corporation and no person who has attained the age of seventy (70) years shall be eligible for election or appointment to the Board of Directors. 4.03. Regular Meetings of the Board of Directors. A regular annual meeting of the Board of Directors is to be held as soon as practicable after the adjournment of each annual meeting of the shareholders, either at the place of the shareholders meeting or at such other place as the directors elected at the shareholders meeting may have been informed of at or prior to the time of their election. Additional regular meetings may be held at regular intervals at such places and at such times as the Board of Directors may determine. 7 4.04. Special Meetings of the Board of Directors. Special meetings of the Board of Directors may be held whenever and wherever called for by the Chairman of the Board or, at the request of three members of the Board of Directors, by the Secretary. 4.05. Notice of, and Waiver of Notice for, Directors Meetings. No notice need be given of regular meetings of the Board of Directors. Notice of the time and place of any special directors meeting shall be given at least 48 hours prior thereto. Notice shall be given in accordance with and shall be deemed to be effective at the time and in the manner described in Arizona Revised Statutes Section 10-141. Any director may waive notice of any meeting and any adjournment thereof at any time before, during, or after it is held. Except as provided in the next sentence below, the waiver must be in writing, signed by the director entitled to the notice, and filed with the minutes or corporate records. The attendance of a director at or participation of a director in a meeting shall constitute a waiver of notice of such meeting, unless the director at the beginning of the meeting (or promptly upon his/her arrival) objects to holding the meeting or transacting business at the meeting, and does not thereafter vote for or assent to action taken at the meeting. 4.06. Director Quorum. A majority of the number of directors prescribed according to Section 4.02 above, or if no number is so prescribed, the number in office immediately before the meeting begins, shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, unless the Articles require a greater number. 4.07. Directors, Manner of Acting. (a) If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present shall be the act of the Board of Directors unless the Articles require a greater percentage. (b) Unless the Articles provide otherwise, any or all directors may participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting. (c) A director who is present at a meeting of the Board of Directors or a committee of the Board of Directors when corporate action is taken is deemed to have assented to the action taken unless: (1) the director objects at the beginning the meeting (or promptly upon his/her arrival) to holding it or transacting business at the meeting; or (2) his/her dissent or abstention from the action taken is entered in the minutes of the meeting; or (3) he/she delivers written notice of his/her dissent or abstention to the presiding officer of the meeting before its adjournment or to the Corporation before 5:00 p.m. on the next business day after the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken. 4.08. Director Action Without a Meeting. Unless the Articles provide otherwise, any action required or permitted to be taken by the Board of Directors at a meeting may be taken without a meeting if the action is taken by unanimous written consent of the Board of Directors as evidenced by one (1) or more written consents describing the action taken, signed by each director and filed with the minutes or corporate records. Action taken by consent is effective when the last director signs the consent, unless the consent specifies a different effective date. A signed consent has the effect of a meeting vote and may be described as such in any document. 4.09. Removal of Directors by Shareholders. The shareholders may remove one (1) or more directors at a meeting called for that purpose if notice has been given that a purpose of the meeting is such removal. The removal may be with or without cause unless the Articles provide that directors 8 may only be removed with cause. If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in a shareholder vote to remove him. If less than the entire Board of Directors is to be removed, a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against the director's removal. 4.10. Board of Director Vacancies. (a) Unless the Articles provide otherwise, if a vacancy occurs on the Board of Directors, including a vacancy resulting from an increase in the number of directors, either the shareholders or the Board of Directors may fill the vacancy. (b) If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders. (c) A vacancy that will occur at a specific later date (by reason of resignation effective at a later date) may be filled before the vacancy occurs, but the new director may not take office until the vacancy occurs. (d) The term of a director elected to fill a vacancy expires at the next shareholders meeting at which directors are elected. 4.11. Director Compensation. Unless otherwise provided in the Articles by resolution of the Board of Directors, each director may be paid his/her expenses, if any, of attendance of each meeting of the Board of Directors or any committee thereof, and may be paid a stated salary as director or a fixed sum for attendance at each meeting of the Board of Directors or any committee thereof, or both. No such payment shall preclude any director from serving the Corporation in any capacity and receiving compensation therefor. 4.12. Director Committees. (a) Creation of Committees. In addition to the committees set forth in this Article IV and unless the Articles provide otherwise, the Board of Directors may create one (1) or more other committees and appoint members of the Board of Directors to serve on them. Each committee shall have one (1) or more members, who serve at the pleasure of the Board of Directors. (b) Selection of Members. The creation of a committee and appointment of members to it shall be approved by the greater of (1) a majority of all the directors in office when the action is taken or (2) the number of directors required by the Articles to take such action. (c) Required Procedures. Sections 4.03 through 4.08 of this Article IV, which govern meetings, action without meetings, notice and waiver of notice, and quorum and voting requirements of the Board of Directors, apply to committees and their members. (d) Authority. Unless limited by the Articles, each committee may exercise those aspects of the authority of the Board of Directors which the Board of Directors confers upon such committee in the resolution creating the committee, provided, however, that a committee may not: (1) authorize distributions; (2) approve or propose to shareholders action that requires shareholder approval under the Arizona Business Corporation Act; (3) fill vacancies on the Board of Directors or on any of its committees; (4) amend the Articles of Incorporation without shareholder action as provided by law; (5) adopt, amend or repeal these Bylaws; (6) approve a plan of merger not requiring shareholder approval; (7) authorize or approve reacquisition of shares, except according to a formula or method prescribed by the Board of Directors; (8) authorize or approve the issuance or sale or contract for sale of shares or determine the designation and relative rights, preferences, and limitations of a class or series of shares, 9 except within limits specifically prescribed by the Board of Directors; or (9) fix the compensation of directors for serving on the Board of Directors or any committee of the Board of Directors. 4.13. Executive Committee. The Board of Directors shall appoint an executive committee, consisting of at least three directors, including the Chairman of the Board, who shall be the Chairman of the Committee. The committee shall have and exercise all lawfully delegable powers of the Board of Directors while the Board is not in session, except as such delegation of powers may be limited from time to time by resolution of the Board of Directors. 4.14. Audit Committee. The Board of Directors shall appoint an audit committee, consisting of at least two directors, provided, however, that directors who are also officers of the Corporation shall not be eligible for membership on the committee. The audit committee shall: (a) recommend the auditors; (b) review the overall scope of the audit and the final opinion of the external auditors; (c) review the financial and accounting policies and procedures used by the Corporation; (d) approve the organization and procedures of the internal accounting and auditing departments; (e) prepare a report of the Board of Directors; (f) assure compliance with ethical standards. 4.15. Compensation and Nominating Committee. The Board of Directors shall appoint a compensation and benefits committee, consisting of a least two non-officer directors. The committee shall recommend to the Board candidates for membership on the Board of Directors, and shall be empowered to make recommendations to the Board of Directors concerning the following: a) employees' salaries and bonuses; b) the company's Restricted Stock Plan; c) the company's Incentive Bonus Plan; d) all other company compensation and benefit plans. 4.16. Retirement Plan Administrative Committee. The Board of Directors shall appoint an administrative committee consisting of three individuals to establish and maintain the Corporation's funding policy for its Retirement Plan and Trust for Salaried Employees, the Corporation's 401(k) Plan and to act as fiduciary there under. Individuals may be eligible for membership on the administrative committee without being directors or officers of the Corporation. 4.17. Director Resignations. Any director or committee member may resign from his or her office at any time by written notice delivered to the Board of Directors, the Chairman of the Board, or the Corporation at its known place of business. Any such resignation will be effective upon its receipt unless some later time is therein fixed, and then from that time. The acceptance of a resignation will not be required to make it effective. V. OFFICERS 5.01. Number of Officers. The officers of the Corporation shall be a President, a Secretary, and a Treasurer, each of whom shall be appointed by the Board of Directors. Such other officers and assistant officers as may be deemed necessary, including any Vice Presidents, may be appointed by the Board of Directors. If specifically authorized by the Board of Directors, an officer may appoint one (1) or more other officers or assistant officers. The same individual may simultaneously hold more than one (1) office in the Corporation. 10 5.02. Appointment and Term of Office. The officers of the Corporation shall be appointed by the Board of Directors for a term as determined by the Board of Directors. The designation of a specified term grants to the officer no contract rights, and the Board of Directors can remove the officer at any time prior to the termination of such term. If no term is specified, an officer of the Corporation shall hold office until he or she resigns, dies, or until he or she is removed in the manner provided by law or in Section 5.03 of this Article V. The regular election or appointment of officers will take place at each annual meeting of the Board of Directors, but elections of officers may be held at any other meeting of the Board. 5.03. Resignation and Removal of Officers. An officer may resign at any time by delivering written notice to the Corporation at its known place of business. A resignation is effective when the notice is delivered unless the notice specifies a later effective date or event. Any officer may be removed by the Board of Directors at any time, with or without cause. Such removal shall be without prejudice to the contract rights, if any, of the person so removed. Appointment of an officer shall not of itself create contract rights. 5.04. Duties of Officers. Officers of the Corporation shall have authority to perform such duties as may be prescribed from time to time by law, in these Bylaws, or by the Board of Directors, the President, or the superior officer of any such officer. Each officer of the Corporation (in the order designated herein or by the Board) will be vested with all of the powers and charged with all of the duties of his or her superior officer in the event of such superior officer's absence, death, or disability. 5.05. Bonds and Other Requirements. The Board of Directors may require any officer to give a bond to the Corporation (with sufficient surety and conditioned for the faithful performance of the duties of his or her office) and to comply with such other conditions as may from time to time be required of him or her by the Board of Directors. 5.06. Chairman of The Board. The Chairman shall be appointed by the Board of Directors and shall preside at all meetings of the shareholders and of the Board of Directors. He shall have such other powers and perform such other duties as may be assigned to him by the Board of Directors. Unless he also serves as the Chief Executive Officer, the Chairman shall not be considered an employee of the Corporation. 5.07. Chief Executive Officer. The Chief Executive Officer shall be appointed by the Board of Directors and shall be responsible for the general supervision of the business and property of the Corporation. He shall possess the same power as the president to sign all documents authorized by the Board of Directors, unless restricted by law. In the absence of the Chairman, the Chief Executive Officer shall preside at meetings of the shareholders and the Board. He shall have the power, subject to the authority of the Board of Directors, to appoint and discharge all officers (except those required by these Bylaws to be appointed by the Board), employees, and agents; to define their duties, and to fix their compensation, provided that any compensation over $50,000 per year must first be approved by the Board. In the absence of the Chairman, or the President, or both, the Chief Executive Officer shall undertake those duties and responsibilities, if so directed by the Board. The Chief Executive Officer shall have such other powers and responsibilities as may be assigned to him by the Board. 5.08. President. Unless otherwise specified by resolution of the Board of Directors, the President, subject to the control of the Board of Directors, shall supervise and control all of the business and affairs of the Corporation and the performance by all of its other officers of their respective duties and in general shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time. The President shall, when present, and in the absence of a Chairman of the Board and the Chief Executive Officer, preside at all meetings of the shareholders and of the Board of Directors. The President will be a proper officer to sign on behalf of the Corporation any deed, bill of sale, assignment, option, mortgage, pledge, note, bond, evidence of indebtedness, application, consent (to service of process or otherwise), agreement, indenture, contract, or 11 other instrument, except in each such case where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed. The President may represent the Corporation at any meeting of the shareholders or members of any other Corporation, association, partnership, joint venture, or other entity in which the Corporation then holds shares of capital stock or has an interest, and may vote such shares of capital stock or other interest in person or by proxy appointed by him or her, provided that the Board of Directors may from time to time confer the foregoing authority upon any other person or persons. 5.09. Chief Operating Officer. Unless otherwise specified by resolution of the Board of Directors, the Chief Operating Officer, subject to control of the Board of Directors, shall supervise and control all of the business and affairs of the Corporation and the performance by all of its other officers of their respective duties and in general shall perform all duties incident to the office of Chief Operating Officer and such other duties as may be prescribed by the President or the Board of Directors from time to time. The Chief Operating Officer shall, when present, and in the absence of the Chairman of the Board, the Chief Executive Officer, and President, preside at all meetings of the shareholders and of the Board of Directors. The Chief Operating Officer will be a proper officer to sign on behalf of the Corporation any deed, bill of sale, assignment, option, mortgage, pledge, note, bond, evidence of indebtedness, application, consent (to service of process or otherwise), agreement, indenture, contract, or other instrument, except in each such case where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed. The Chief Operating Officer shall have such other powers and responsibilities as may be assigned to him by the President or the Board of Directors. 5.10. The Vice President. If appointed, in the absence of the President or in the event of his/her death or disability, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated at the time of their election, or in the absence of any such designation, then in the order of their appointment) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. If there is no Vice President or in the event of the death or disability of all Vice Presidents, then the Treasurer shall perform such duties of the President in the event of his or her absence, death, or disability. Each Vice President will be a proper officer to sign on behalf of the Corporation any deed, bill of sale, assignment, option, mortgage, pledge, note, bond, evidence of indebtedness, application, consent (to service of process or otherwise), agreement, indenture, contract, or other instrument, except in each such case where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed. Any Vice President may represent the Corporation at any meeting of the shareholders or members of any other Corporation, association, partnership, joint venture, or other entity in which the Corporation then holds shares of capital stock or has an interest, and may vote such shares of capital stock or other interest in person or by proxy appointed by him or her, provided that the Board of Directors may from time to time confer the foregoing authority upon any other person or persons. A Vice President shall perform such other duties as from time to time may be assigned to him/her by the President or by the Board of Directors. 5.11. The Secretary. The Secretary shall: (a) keep the minutes of the proceedings of the shareholders and of the Board of Directors and any committee of the Board of Directors and all unanimous written consents of the shareholders, Board of Directors, and any committee of the Board of Directors in one (1) or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records and of any seal of the Corporation; (d) when requested or required, authenticate any records of the Corporation; (e) keep a register of the address of each shareholder which shall be furnished to the Secretary by such shareholder; and (f) in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him/her by the President or by the Board of Directors. Except as may otherwise be specifically provided in a resolution of the Board of Directors, the 12 Secretary will be a proper officer to take charge of the Corporation's stock transfer books and to compile the voting record pursuant to Section 3.05 above, and to impress the Corporation's seal, if any, on any instrument signed by the President, any Vice President, or any other duly authorized person, and to attest to the same. In the absence of the Secretary, a secretary pro tempore may be chosen by the directors or shareholders as appropriate to perform the duties of the Secretary. 5.12. The Treasurer. The Treasurer shall: (a) have charge and custody of and be responsible for all funds and securities of the Corporation; (b) receive and give receipts for moneys due payable to the Corporation from any source whatsoever, and deposit all such moneys in the name of the Corporation in such bank, trust companies, or other depositories as shall be selected by the Board of Directors or any proper officer; (c) keep full and accurate accounts of receipts and disbursements in books and records of the Corporation; and (d) in general perform all of the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him/her by the President or by the Board of Directors. The Treasurer will render to the President, the directors, and the shareholders at proper times and account of all his or her transactions as Treasurer and of the financial condition of the Corporation. The Treasurer shall be responsible for preparing and filing such financial reports, financial statements, and returns as may be required by law. 5.13. Assistant Secretaries and Assistant Treasurers. The Assistant Secretaries and the Assistant Treasurers, when authorized by the Board of Directors, may sign with the President or a Vice President certificates for shares of the Corporation, the issuance of which shall have been authorized by a resolution of the Board of Directors. The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors. 5.14. Salaries. The salaries of the officers of the Corporation may be fixed from time to time by the Board of Directors or (except as to the President's own) left to the discretion of the President. No officer will be prevented from receiving a salary by reason of the fact that he or she is also a director of the Corporation. 5.15. Additional Appointments. In addition to the officers contemplated in this Article V, the Board of Directors may appoint other agents of the Corporation with such authority to perform such duties as may be prescribed from time to time by the Board of Directors. VI. EXECUTION OF DOCUMENTS 6.01. Contracts, Etc. All contracts, conveyances, leases or other corporate instruments shall be executed on behalf of the Corporation by the Chairman of the Board, by the President, the Executive Vice President, the Sr. Vice President, or by such other officer or officers of the Corporation to whom the Chairman of the Board, the President or the Board of Directors may delegate such authority, subject to the following: (a) No loan greater than $1,000,000 shall be contracted on behalf of the Corporation unless authorized by the Board of Directors. (b) No real property of the Corporation may be sold for more than $1,000,000, nor exchanged for other property valued at more than $1,000,000 unless authorized by the Board of Directors. (c) A capital expenditure in excess of $1,000,000 for any one purpose or project shall be authorized by the Board of Directors. (d) In matters of auction bidding for property or property rights, no bids totaling over $1,000,000 per auction shall be made without the authorization of the Board of Directors. 13 The Chairman or President shall report to the Board the total capital expenditures, the total dollar amount of sales or exchanges, and the total dollar amount of auction bids made, which did not require Board approval. Notwithstanding the foregoing provisions of Section 6.01, Board approval shall not be required in connection with capital contributions and loans by the Corporation to its wholly-owned subsidiaries. The Chairman or the President shall report to the Board such information concerning the transactions between the Corporation and its wholly owned subsidiaries, as the Board shall from time to time request. 6.02. Proxies. Unless otherwise provided by resolution of the Board of Directors, the Chairman of the Board may in the name and on behalf of the Corporation appoint any attorney or attorneys, agent or agents of the Corporation (who may be or include himself or herself), in the name and on behalf of the Corporation to cast the votes which the Corporation may be entitled to cast as a shareholder or otherwise in any other Corporation any of whose shares or other securities may be held by the Corporation, at meetings of the holders of the shares or other securities of such other Corporation, or to consent in writing to any action by such other Corporation, may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and may execute or cause to be executed in the name of, on behalf of, and under the corporate seal of, the Corporation all written proxies or other instruments as may be necessary or proper to evidence the appointment of such attorneys and agents. VII. CERTIFICATES FOR SHARES AND THEIR TRANSFER 7.01. Certificates for Shares. (a) Content. Certificates representing shares of the Corporation shall, at a minimum, state on their face the name of the issuing Corporation and that it is formed under the laws of the State of Arizona, the name of the person to whom issued, and the number and class of shares and designation of the series, if any, the certificate represents. Such certificates shall be signed (either manually or by facsimile to the extent allowable by law) by one or more officers of the Corporation, as determined by the Board of Directors, or, if no such determination is made, by any of the Chairman of the Board (if any), the President, any Vice President, the Secretary, or the Treasurer of the Corporation, and may be sealed with a corporate seal or a facsimile thereof. Each certificate for shares shall be consecutively numbered or otherwise identified and will exhibit such information as may be required by law. If a supply of un-issued certificates bearing the facsimile signature of a person remains when that person ceases to hold the office of the Corporation indicated on such certificates, they may still be countersigned, registered, issued, and delivered by the Corporation's transfer agent and/or registrar thereafter, as though such person had continued to hold the office indicated on such certificate. (b) Legend as to Class or Series. If the Corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences, and limitations determined for each series (and the authority of the Board of Directors to determine variations for future series) shall be summarized on the front or back of each certificate. Alternatively, each certificate may state conspicuously on its front or back that the Corporation will furnish the shareholder this information on request in writing and without charge. (c) Shareholder List. The name and address of the person to whom shares are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the Corporation. 14 (d) Lost Certificates. In the event of the loss, theft, or destruction of any certificate representing shares of the Corporation or of any predecessor Corporation, the Corporation may issue (or, in the case of any such shares as to which a transfer agent and/or registrar have been appointed, may direct such transfer agent and/or registrar to countersign, register, and issue) a new certificate, and cause the same to be delivered to the registered owner of the shares represented thereby; provided that such owner shall have submitted such evidence showing the circumstances of the alleged loss, theft, or destruction, and his, her, or its ownership of the certificate, as the Corporation considers satisfactory, together with any other facts that the Corporation considers pertinent; and further provided that, if so required by the Corporation, the owner shall provide a bond or other indemnity in form and amount satisfactory to the Corporation (and to its transfer agent and/or registrar, if applicable). 7.02 Registration of the Transfer of Shares. Registration of the transfer of shares of the Corporation shall be made only on the stock transfer books of the Corporation. In order to register a transfer, the record owner shall surrender the shares to the Corporation for cancellation, properly endorsed by the appropriate person or persons with reasonable assurances that the endorsements are genuine and effective. Unless the Corporation has established a procedure by which a beneficial owner of shares held by a nominee is to be recognized by the Corporation as the owner, the Corporation will be entitled to treat the registered owner of any share of the capital stock of the Corporation as the absolute owner thereof and, accordingly, will not be bound to recognize any beneficial, equitable, or other claim to, or interest in, such share on the part of any other person, whether or not it has notice thereof, except as may expressly be provided by applicable law. 7.03. Shares Without Certificates. The Board of Directors may authorize the issuance of un-certificated shares by the Corporation and may prescribe procedures for the issuance and registration of transfer thereof and with respect to such other matters as the Board of Directors shall deem necessary or appropriate. VIII. INDEMNIFICATION OF DIRECTORS AND OFFICERS 8.01. Indemnification. Unless otherwise provided by these Bylaws, the Corporation shall hold harmless and indemnify each of its directors and officers ("indemnities") to the fullest extent permitted by Arizona law. 8.02. Effect of Repeal. No repeal or amendment of this Article shall diminish indemnities' right to indemnification for acts taken before the date of repeal or amendment. IX. DISTRIBUTIONS 9.01. Distributions. Subject to such restrictions or requirements as may be imposed by applicable law or the Corporation's Articles or as may otherwise be binding upon the Corporation, the Board of Directors may from time to time declare, and the Corporation may pay or make, dividends or other distributions to its shareholders. X. CORPORATE SEAL 10.01 Corporate Seal. The Board of directors may provide for a corporate seal of the Corporation that will have inscribed thereon any designation including the name of the Corporation, Arizona as the state of incorporation, the year of incorporation, and the words, "Corporate Seal." XI. EXEMPTION 15 11.01. Exemption From The Arizona Corporate Takeover Act. The Corporation, pursuant to the provisions of ARS 10-1211(A)(2) and 10-1223(A)(2), and pursuant to the approval of the shareholders on May 10, 1991, has chosen to exempt itself from the provisions of ARS 10-1211 through 10-1223, concerning Control Share Acquisitions and Business Combinations. This amendment does not apply to any "control share acquisition" as defined in ARS 10-1201(9) made on or before May 10, 1991, or to any "business combination" as defined in ARS 10-1201(10) whose "share acquisition date" as defined in ARS 10-1201(14) is on or before May 10, 1991. XII. AMENDMENTS 12.01 Amendments. The Corporation's Board of Directors may amend or repeal the Corporation's Bylaws unless: (a) the Articles or the Arizona Business Corporation Act reserve this power exclusively to the shareholders in whole or part; or (b) the shareholders in adopting, amending, or repealing a particular Bylaw provide expressly that the Board of Directors may not amend or repeal that Bylaw. The Corporation's shareholders may amend or repeal the Corporation's Bylaws even though the Bylaws may also be amended or repealed by its Board of Directors. EX-10.1 3 p65056ex10-1.txt EX-10.1 1 EXHIBIT 10.1 Related party loan agreement LOAN AGREEMENT DATE: April 3, 2001 LENDER: BRIDGE FINANCIAL CORPORATION an Arizona corporation Attention: R. Randy Stolworthy 333 North 44th Street, Suite 420 Phoenix, Arizona 85008 Facsimile Number (602) 952-8769 BORROWER: SUN NZ, LLC an Arizona limited liability company Attention: William Pope 2525 East Camelback Road, Suite 888 Phoenix, Arizona 85016 Facsimile Number (602) 852-5599 BACKGROUND: A. Borrower, whose federal tax identification number is 86-0760026, has applied to Lender for a loan ("Loan") in the principal amount of Eight Million and No/100 Dollars ($8,000,000). B. To secure payment of the Loan and the performance of all obligations of Borrower to Lender under this Loan Agreement ("Agreement") and the other Loan Documents (as defined in this Agreement), Borrower shall give Lender the following: (i) a first lien against up to 2,985,583 shares of no par value common stock ("Pledged Stock") in NZ Corporation ("Corporation"), which Pledged Stock is owned by Borrower; and (ii) an unconditional guaranty ("Guaranty") from William Pope and Linda Pope, husband and wife ("Guarantors"). AGREEMENT: Borrower agrees to borrow from Lender and Lender, in reliance upon the representations and warranties from Borrower as set forth in this Agreement, agrees to make the Loan to Borrower, subject to the terms and conditions set forth in this Agreement. SECTION 1 AMOUNT AND GENERAL TERMS OF THE LOAN 1.1 LOAN AMOUNT. The amount of the Loan ("Loan Amount") shall be Eight Million and No/100 Dollars ($8,000,000). 1.2 INTEREST. Interest ("Interest") on the unpaid balance of the Loan shall be at a rate ("Rate") of twenty percent (20%) per annum. During any Event of Default (as defined in this Agreement), the Rate shall be increased an additional eight percent (8%) per annum ("Default Rate") from the date of an Event 2 of Default if Borrower does not cure an Event of Default as provided in the Note (as defined in this Agreement). The Interest shall be calculated on the basis of a 360 day year and 30 day month, and if not paid by the 10th day of each month the due and unpaid Interest shall be compounded effective on the first (1st) day of each such month. 1.3 TERM. The term ("Term") of the Loan shall be for a period of six (6) months from the Closing (as defined in this Agreement) of the Loan. 1.4 MULTIPLE ADVANCES. The Loan will be funded in two or more advances. The first ("First Advance") shall not exceed Five Million and No/100 Dollars and the subsequent advances ("Subsequent Advances") shall not exceed Three Million and No/100 Dollars ($3,000,000) in the aggregate. Interest on the amount advanced shall commence on the date of each advance. The First Advance shall be paid at the Closing (as defined in this Agreement), and Subsequent Advances shall be paid within three (3) days after Borrower gives Lender notice of its request for the Subsequent Advances, but in no event shall any of the Subsequent Advances be funded prior to April 18, 2001. At the closing of the First Advance Borrower shall pledge 1,799,083 shares which shall be deemed sufficient to support the full five million & NO/100 Dollar advance. At the Closing of the Subsequent Advances, Borrower shall pledge a sufficient number of shares of the Pledged Stock to provide a seventy five percent (75%) loan to value based upon the Bid Price (as defined in this subsection). "Bid Price" shall be the closing bid price on the American Stock Exchange for the Pledged Stock on the last business day prior to the date of the First Advance and each of the Subsequent Advances. For example, if Lender advances $900,000 to Borrower at a time when the Bid Price is $1.00 per share, Borrower shall pledge 1,200,000 shares of the Pledged Stock. 1.5 PAYMENTS. Interest shall be payable quarterly in arrears commencing on the first day of the third month following the Closing, it being understood that the first payment may include a partial month. All unpaid Interest and principal shall be paid at the end of the Term. 1.6 LATE CHARGE. Borrower shall pay Lender a late charge of ten percent (10%) of any payment not received by Lender within ten (10) days after said payment is due, including the unpaid balance of the Loan at the end of the Term. 1.7 ACCOUNT SERVICING. At the Closing the Loan shall be serviced by Lender. The costs to establish and maintain the servicing account shall be paid by Borrower, and the costs shall be what are customarily charged for account servicing in Maricopa County, Arizona. The following shall apply in connection with the servicing: (a) A payment shall be deemed to have been paid to Lender as of the date the payment is processed by Lender as long as Borrower's check is honored by Borrower's bank. Borrower acknowledges that the processing of funds by Lender shall be performed in the ordinary course of Lender's business and that the time involved in the processing may vary depending upon the administrative workload of Lender. Any payment received by Lender shall be conditionally accepted by Lender until such time as the processing of the payment is completed. (b) Payments shall be applied in the order received by Lender and as provided in the Note (as defined in this Agreement). (c) Borrower shall make payments to Lender as required by the Note and other Loan Documents without the need for a notice from Lender to Borrower that any payment is due. (d) In addition to a statement for a full payoff of the unpaid balance of the Loan, Lender shall give Borrower a statement showing the account activity as requested by Borrower, but not more than two (2) times during the Term. 3 1.8 PREPAYMENT. Borrower shall have the right to prepay the Loan in whole or in part without penalty at any time subject to five (5) days notice to Lender of such prepayment. 1.9 DISBURSEMENTS. Lender shall deduct at the Closing the following ("Disbursements") which shall be charged to Borrower: 1.9.1 Lender's Expenses. All fees and costs paid and incurred by Lender in connection with the negotiation, investigation, evaluation, processing and closing of the Loan, including, but not limited to, attorneys' fees of Lender and any other fees and costs in connection with the Loan that are not specifically referenced in this Agreement ("Lender's Expenses"). 1.9.2 Financial Liens. Any financing or similar liens against the Pledged Stock. 1.9.3 Balance. The balance of the First Advance to Borrower. 1.10 PROMISSORY NOTE. The Loan shall be evidenced by a promissory note ("Note") from Borrower to Lender in the form and content attached to this Agreement as Exhibit A. 1.11 SECURITY FOR NOTE. Borrower's obligations under the Note shall be secured and otherwise documented by the execution, delivery and perfection of the following instruments and documents: 1.11.1 Guaranty. The Guaranty from the Guarantors in the form and content attached to this Agreement as Exhibit B. 1.11.2 Stock Certificate and Assignment. The stock certificate for the Pledged Stock ("Stock Certificate") and a separate assignment of the stock certificate ("Stock Certificate Assignment") in the form and content attached to this Agreement as Exhibit C. 1.11.3 Pledge and Assignment. A pledge of stock and collateral assignment and security agreement ("Pledge and Assignment") of the Pledged Stock in the form and content attached to this Agreement as Exhibit D. 1.11.4 Financing Statement. Uniform Commercial Code Financing Statement in connection with the security interest granted to Lender under the Stock Pledge and Assignment ("Financing Statement") in the form and content attached to this Agreement as Exhibit E. 1.11.5 Transfer Agent Letter. A letter from Lender and Borrower to American Stock Transfer & Trust Company, the transfer agent for the common stock of the Corporation ("Transfer Agent Letter"), in the form and content attached to this Agreement as Exhibit F. The Stock Certificate, Stock Certificate Assignment, Pledge and Assignment, Financing Statement and Transfer Agent Letter shall be executed and delivered at the time of both the First Advance and any Subsequent Advances. 1.12 OTHER DOCUMENTS. 4 If requested by Lender, Borrower and Guarantors shall execute and deliver to Lender such other documents or instruments ("Other Documents") as are required to reflect the terms and provisions of this Agreement and to perfect and protect Lender's lien against the Pledged Stock. 1.13 LOAN DOCUMENTS. This Agreement, the documents and instruments described in the Sections above captioned "Promissory Note", "Security for Note" and "Other Documents" shall be collectively referred to in this Agreement as the "Loan Documents." 1.14 NO ESCROW. There will not be an escrow for the Loan. 1.15 CLOSING. The portion of the First Advance not deducted by Lender shall be disbursed by Lender as provided in this Agreement when all terms and conditions of the Agreement have or will be performed to the satisfaction of Lender; provided, however, that said date shall not be later than April 9, 2001("Closing"), unless a later date is approved by Lender and Borrower. SECTION 2 REPRESENTATIONS AND WARRANTIES Borrower hereby represents and warrants to Lender as of the date of this Agreement as follows: 2.1 ORGANIZATION OF BORROWER. Borrower is a limited liability company, duly formed and validly existing under the laws of the state of Arizona; Borrower and the person or entity signing for it have the requisite power and authority to enter into and execute the Loan Documents; and Borrower has the requisite power and authority to carry out all of the provisions thereof, transact the business in which it is engaged, and perform under all of the terms and provisions of the Loan Documents. 2.2 ORGANIZATION OF MANAGING MEMBER OF BORROWER. The managing member of Borrower is Sun NMA, Inc., an Arizona corporation ("Managing Member"). The Managing Member is duly formed and validly existing under the laws of the state of Arizona; the Managing Member's federal tax identification number is 86-0760025; the Managing Member and the person or entity signing for it have the requisite power and authority to enter into and execute the Loan Documents; and the Managing Member has the requisite power and authority to carry out all of the provisions thereof, transact the business in which it is engaged, and perform under all of the terms and provisions of the Loan Documents. 2.3 EXECUTION AND DELIVERY OF LOAN DOCUMENTS. The execution and delivery of the Loan Documents by Borrower and the consummation of the transaction that is the subject of this Agreement: (i) have been duly authorized by all actions required or necessary under the terms and provisions of all applicable governing instruments, laws or otherwise; (ii) create legal, valid and binding obligations of Borrower, subject to or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws relating to or affecting the rights of creditors generally and to general principles of equity; and, (iii) do not conflict with or result in the violation of any valid regulation, order, writ, judgment, injunction or decree of any court or governmental or municipal instrumentality, or in the breach of or default under any indenture, contract, agreement or other instrument to which Borrower is a party or by which its assets may be bound. 2.4 JUDGMENTS AND LITIGATION. There are not any outstanding or unpaid judgments or arbitration awards against Borrower or any of the Pledged Stock and there are not any actions, suits or proceedings pending or, to the knowledge of Borrower, threatened against the Borrower or any of the Pledged Stock or adversely affecting Borrower's ability to perform under the Loan Documents in any court or before any governmental or quasi-governmental body, and, to the knowledge of Borrower, Borrower and the Pledged Stock are not subject to any default or violation with respect to any valid rule, regulation, statute, law, ordinance, order, writ, judgment, decree, code, requirement or order of any court or other governmental or municipal department, commission, board, bureau, agency or instrumentality. 5 2.5 CRIMINAL MATTERS. Borrower, and to Borrower's knowledge, Guarantors and the owners of Borrower and Guarantors, are not the subject of a criminal investigation, indictment or conviction, including any by or relating to the United States Internal Revenue Service. 2.6 BANKRUPTCY MATTERS. Borrower, and to Borrower's knowledge, Guarantors and the owners of Borrower and Guarantors, are not the subject of a voluntary or involuntary bankruptcy proceeding within the last seven (7) years. 2.7 TITLE TO THE PLEDGED STOCK. Borrower has and shall have at the Closing good and marketable title to the Pledged Stock free and clear of all liens, charges, claims, options, encumbrances and other matters. 2.8 LIENS. Borrower has not made any contract or arrangement of any kind which has given rise to, or the performance of which by the other party thereto, would give rise to, a lien or claim of lien of any kind whatsoever against any of the Pledged Stock for which payment in full has not been arranged out of the Funds. 2.9 NO ADJUSTMENT. Each obligation and the indebtedness created under the Loan Documents is free from any claim by Borrower for credit, deduction, allowance, dispute, defense, set-off or counterclaim. 2.10 THIRD PARTY CONSENT. Borrower has acquired the consent, approval or authorization of all third parties (including any governmental authority) necessary to enter into, execute and deliver the Loan Documents and perform the acts and obligations required or contemplated thereby. 2.11 COMMISSIONS OR FEES. Borrower has not employed or retained any broker or finder or incurred liability for any brokerage fees, commissions or finder's fees in connection with the Loan, and Borrower hereby agrees to indemnify Lender against any claims for brokerage fees or commissions and to pay all expenses incurred by Lender in connection with the defense of any action or proceeding brought by any person or entity to collect any such brokerage fees or commissions, including, but not limited to attorneys' fees and costs, and Lender hereby expressly rejects any obligation to pay any such commission or fee in connection with the Loan. 2.12 ACCURACY OF DOCUMENTS. All Documents and Information (as defined in this Agreement) furnished or to be furnished to Lender in support of or in connection with the Loan materially, accurately and fully set forth (or, as the case may be, will set forth) the facts contained or purported to be contained therein. 2.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as otherwise provided in the Loan Documents, the foregoing Representations and Warranties and all representations and warranties set forth in any of the Loan Documents shall survive until the obligations of Borrower to Lender shall have been fully performed. SECTION 3 AFFIRMATIVE COVENANTS OF BORROWER Borrower covenants and agrees with Lender that during the term of this Agreement and so long as any obligation remains owing to Lender by Borrower under the Loan Documents: 3.1 REMOVAL OF LIENS. Except as otherwise allowed in this Agreement, in the event that any lien or encumbrance, which could be superior to the lien of Lender is filed against the Pledged Stock, within 6 thirty (30) days from the date that Borrower receives notice of same, Borrower shall have such lien released or bonded-over in a manner acceptable to Lender; provided, however, that Borrower may contest in good faith the validity or amount of any such lien or encumbrance by appropriate proceedings provided by law, including payment thereof under protest, if required, upon furnishing to Lender a cash deposit or other security in an amount and in form satisfactory to Lender, which deposit or other security shall be returned to the party depositing the same upon final payment by Borrower of said lien or encumbrance; provided further, that upon final determination (which, in the case of a judgment, shall mean a final judgment not subject to appeal or further appeal) with respect to any such contested lien or encumbrance, Borrower will promptly pay any sums found to be due by it thereon. 3.2 ACCESS TO BORROWER'S BOOKS AND RECORDS AND THE PROPERTY. Borrower shall permit and hereby authorizes Lender or its agents, at all reasonable times during normal business hours, subject to 24 hours verbal notice, to have unrestricted access to and to copy its records, books of account, ledgers, journals, contracts, subcontracts, bills and statements relating to the Pledged Stock, including any supporting or related vouchers or other instruments. If Lender so requires, such records, books, vouchers or other documents shall be made available at Borrower's office to an accountant of Lender's choice for audit, examination, inspection or duplication. 3.3 SERVICES TO BENEFIT LENDER. All inspections and other services rendered by or on behalf of Lender, whether or not paid by Borrower, shall be rendered solely for the protection and benefit of Lender, and Borrower shall not be entitled to claim any loss or damage against any of Lender's independent contractors, agents or employees for failure to properly discharge their duties to Lender. 3.4 LOAN DOCUMENTS. Each and every term and provision of the Loan Documents shall become and be covenants and agreements under this Agreement. 3.5 PROHIBITED ACTS. Borrower shall not do the following without the consent of Lender: 3.5.1 Transfer, assign or convey part or all of the Pledged Stock. 3.5.2 Use part or all of the Pledged Stock or any interest in the Borrower as collateral for a loan or other credit facility. 3.5.3 Allow any change in the ownership and control of Borrower or of any organization or entity owning an interest in Borrower, except any caused by the death of an individual. 3.5.4 Cause the Pledged Stock to become subject to any voting trust or similar arrangement. 3.5.5 Give a proxy to vote the Pledged Stock to any party other than Lender. 3.6 EXECUTORY CONTRACTS. Notwithstanding any provision to the contrary in this Agreement, Borrower shall have the right to enter into one or more contracts for the sale or refinancing of the Pledged Stock, if the sale or refinancing will result in the repayment of the indebtedness due Lender and the release of the Pledged Stock upon the consummation of such transaction. SECTION 4 CONDITIONS PRECEDENT TO THE LOAN Lender shall not be obligated to make the Loan unless the following conditions precedent ("Conditions") shall have been satisfied as determined by Lender in its sole discretion before the Closing (or sooner as provided in this Section): 7 4.1 TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations and warranties made by Borrower in the Loan Documents shall be correct in all material respects on and as of the date of this Agreement and as of the date of the Closing with the same effect as though they had been made on and as of the date of the Closing. 4.2 NO EVENT OF DEFAULT. There shall exist no condition, event or act that would constitute an Event of Default hereunder and no condition, event or act which, with the giving of notice or lapse of time, or both, as specified in this Agreement, would constitute an Event of Default hereunder. 4.3 DOCUMENTS AND INFORMATION. If not already delivered or a different delivery is not specified, Borrower shall deliver to Lender on or before the Closing true and correct copies of the following ("Documents and Information"): 4.3.1 Organizational Documents. The articles of organization and operating agreement of Borrower and the Articles of Incorporation and By-Laws of the Managing Member, including any amendments, and any other documents and information to show the existence and authority of Borrower and the Managing Member. 4.3.2 Financial Statements. The following financial statements and information for Borrower: (a) Balance sheet and profit and loss statement for the year ending December 31, 2000. (b) By June 1, 2001, interim balance sheet and profit and loss statement through February 28, 2001. 4.3.3 Other. Any other documents and information requested by Lender to Borrower in writing. 4.4 SEARCHES. Lender shall obtain or be given appropriate reports to show that there are not (a) any outstanding financing statements against the Pledged Stock; (b) any pending lawsuits or judgments against Borrower and the Managing Member or any of their affiliates in connection with the Pledged Stock; or (c) any pending criminal prosecutions or convictions against Borrower and the Managing Member or any of their affiliates. 4.5 LEGAL OPINION. Borrower shall cause its outside legal counsel, who shall be licensed in the State of Arizona and shall otherwise be acceptable to Lender, to give Lender a legal opinion in the form and content attached to this Agreement as Exhibit G. 4.6 LOAN DOCUMENTS. Borrower shall deliver to Lender, the Loan Documents and such other documents required or that may be requested by Lender to give effect to this Agreement, all of which shall be fully executed and, where required, appropriately acknowledged and delivered. 4.7 REIMBURSEMENT OF EXPENSES. Lender shall have been reimbursed for its paid and incurred Lender's Expenses in connection with the Loan, which amount Lender is hereby authorized to deduct and/or disburse from the Loan Amount. 4.8 WAIVER. 8 Lender, in its sole discretion, may waive any of the conditions precedent set forth herein, as all of the said conditions are established for Lender's benefit. The waiver of any condition or conditions shall be by written instrument and shall not constitute a waiver of any other condition or conditions. Lender's closing of the Loan shall indicate that Lender has received all of the documents and information required by Lender or that the requirement has been waived. SECTION 5 DEFAULTS AND REMEDIES 5.1 EVENT OF DEFAULT The existence or occurrence of any one or more of the following events shall constitute an event of default under the Loan Documents ("Event of Default"): 5.1.1 Nonpayment. Borrower's failure to make any payments required under the Loan Documents. 5.1.2 Nonperformance of Obligations. Borrower's breach of, or failure to perform, any other obligations under the Loan Documents. 5.1.3 Impairment of Security. Borrower's failure to remove, insure or bond over any lien, encumbrance or other matter affecting the title to the Pledged Stock as required in this Agreement. 5.1.4 Misrepresentations of Fact. Willful or negligent misrepresentations of material fact by Borrower in any document submitted to Lender in support of the Loan or in connection with the Loan Documents. 5.1.5 Bankruptcy or Insolvency. Borrower being insolvent by being unable to pay debts when due or by having liabilities in excess of assets; or Borrower committing an act of bankruptcy, making a general assignment for the benefit of creditors, or the filing by or against Borrower of a voluntary or involuntary petition in bankruptcy or for the appointment of a receiver (and any involuntary petition is not dismissed within 60 days from the filing thereof); or if there commences under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, proceedings affecting the Pledged Stock or for the composition, extension, arrangement or adjustment of any of their respective obligations; or if Borrower's business is discontinued as a going concern or is suspended; or if a writ of attachment, execution, or any similar process is issued or levied against any significant part of Borrower's property that is not released, stayed, bonded or vacated within a reasonable time after its issue or levy; or if Lender shall deem itself insecure with respect to Borrower's performance of any of its obligations to Lender hereunder or otherwise. 5.1.6 Failure to Comply with Laws and Governmental Authorities. Borrower's failure to cure promptly any violation of any law or regulation in connection with the Pledged Stock; or Borrower's failure to comply promptly with any provision of any notice, issued by or filed in any department of any governmental authority having jurisdiction over Borrower or the Pledged Stock, of any requirement or any law or regulation having any effect on or relation to the Pledged Stock; or Borrower's failure to furnish to Lender, immediately and without demand, a true copy of any notice or other document received by or available to Borrower disclosing any such requirement or violation of any such law or regulation, or otherwise bearing upon Borrower's compliance thereunder. In this regard, "promptly" shall be deemed to mean within thirty (30) days after the giving of written notification to Borrower of the existence of such violation or notice or other document or, where such cure or compliance cannot be fully effected within thirty (30) days, then the commencement of the action to cure or comply within the same thirty (30) days. 5.1.7 Decline of Pledged Stock Value. 9 For five (5) consecutive trading days the Bid Price of the Pledged Stock falls below a price per share that is necessary to maintain a seventy five percent (75%) loan to value and Borrower does not pledge sufficient additional shares of Pledged Stock to provide the 75% loan to value. 5.2 REMEDIES. During an Event of Default, Lender shall have the right to exercise any and all remedies available to it, both at law and in equity, subject to Lender giving Borrower ten (10) days written notice for a monetary Event of Default and thirty (30) days written notice for a non-monetary Event of Default; provided, however, that Borrower shall have a reasonable amount of time after the thirty (30) days for a non-monetary Event of Default, if the Event of Default cannot be cured within thirty (30) days and Borrower commences a cure within the thirty (30) days and diligently prosecutes the cure until it is completed. SECTION 6 MISCELLANEOUS 6.1 AMENDMENT. This Agreement may not be modified in any respect except by an amendment signed in writing by Lender and Borrower. 6.2 SEVERABILITY. In the event any provision of this Agreement is illegal, invalid or unenforceable, such provisions shall not affect the validity of the remainder hereof. 6.3 STANDARD OF APPROVAL. Where, within this Agreement, the approval or satisfaction of Lender is required or permitted, or Lender's consent may be granted or withheld, and no standard for the exercise of Lender's discretion is otherwise specified, Lender shall not unreasonably withhold its satisfaction, approval or consent. 6.4 CALCULATION OF TIME PERIODS. Unless otherwise expressly provided in this Agreement, all time periods shall be in calendar days, but in all instances, the last day for performance shall be a business day if the last calendar day is not a business day. 6.5 ASSIGNABILITY. Borrower shall not assign this Agreement. Lender shall have the right to sell and assign all rights, title and interest herein, without reservation or restriction. 6.6 WAIVER OF DEFAULTS. The waiver by Lender of any breach or Event of Default by Borrower under any of the terms of any of the Loan Documents shall not be deemed to be a waiver of any subsequent breach or Event of Default on the part of Borrower under the Loan Documents. The acceptance by Lender of a partial amount of a payment due from Borrower to Lender under this Agreement shall not constitute a waiver of the requirement of Borrower to make a full payment to Lender and it shall not constitute a waiver by Lender of the time of the essence provision of this Agreement. 6.7 TIME OF THE ESSENCE. Time is of the essence of this Agreement and each and all of its provisions. 6.8 NOTICES. Any notices or other communications which any party may be required, or may desire, to give, unless otherwise specified, shall be in writing and shall be (i) hand-delivered, effective upon receipt, (ii) transmitted by facsimile, effective upon receipt, with the original mailed the same date by first class mail, postage prepaid, (iii) sent by United States Express Mail or by private overnight courier, effective upon receipt, or (iv) served by certified mail, postage prepaid, return receipt requested and addressed to such party at the address set forth above, or to such other address(es) or addressee(s) as the party to be served with notice may have furnished in writing to the other party, effective three (3) days after mailing. 10 6.9 BENEFIT AND BINDING EFFECT. This Agreement shall inure to the benefit of and be binding upon the parties and their representatives, successors, and assigns. 6.10 ATTORNEYS' FEES. In the event of litigation with respect this Agreement or the Loan Documents, the prevailing party as determined by the Court, shall be entitled to recover from the non-prevailing party its costs, expenses and fees, including reasonable attorneys' fees, as determined by the Court. 6.11 GOVERNING LAW. This Agreement, its construction, validity and effect, shall be governed and construed by and in accordance with the laws of the State of Arizona. 6.12 DEFINED TERMS AND MARGINAL HEADINGS. Words used herein shall include the plural as well as the singular when required. Words used in masculine gender include the feminine and neuter. The marginal headings and titles to the paragraphs of this Agreement are not a part of this Agreement and shall have no effect upon the construction or interpretation of any part hereof. 6.13 CONSISTENCY OF DOCUMENTS. The other Loan Documents are not intended to supersede the provisions of this Agreement, but shall be construed as supplemental thereto. In the event of any inconsistency between the provisions of the other Loan Documents and this Agreement, or in the event the provision in the other Loan Documents are not as complete or clear as this Agreement, this Agreement shall control. This Agreement shall survive the execution, recording and filing of the Loan Documents. 6.14 COUNTERPARTS. This Agreement can be signed in counterpart. 6.15 ENTIRE AGREEMENT. This Agreement shall constitute the entire agreement of the parties and any prior or contemporaneous verbal or written understanding or agreement between the parties shall be superseded by this Agreement. However, the other Loan Documents that are used in connection with the Loan shall be valid and enforceable according to their provisions, subject to this Agreement controlling over any inconsistency. 11 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above. BRIDGE FINANCIAL CORPORATION SUN NZ, LLC By: /s/ R. Randy Stolworthy By: Sun NMA, Inc. ------------------------- an Arizona corporation R. Randy Stolworthy Its Managing Member President By: /s/ William Pope ------------------------------ William Pope, President Exhibits A, B, C, D, E, F and G are attached. 12 EXHIBIT A PROMISSORY NOTE DATE: April 3, 2001 MAKER: SUN NZ, LLC an Arizona limited liability company Attention: William Pope 2525 East Camelback Road, Suite 888 Phoenix, Arizona 85016 Facsimile Number (602) 852-5599 PAYEE: BRIDGE FINANCIAL CORPORATION an Arizona corporation Attention: R. Randy Stolworthy 333 North 44th Street, Suite 420 Phoenix, Arizona 85008 Facsimile Number (602) 952-8769 ORIGINAL PRINCIPAL AMOUNT Eight Million and No/100 Dollars ($8,000,000) OF LOAN: FOR VALUE RECEIVED, Maker promises and agrees to pay to Payee, or order, at the mailing address of Payee, or at such other place as the holder hereof ("Holder") may from time-to-time designate, the principal sum of Eight Million and No/100 Dollars ($8,000,000) with Interest (as defined in this Note) commencing as provided herein on the unpaid amount of said sum at the Base Rate (as defined herein) or the Default Rate (as defined herein), whichever is applicable, as follows: 1. MULTIPLE ADVANCES. The principal amount of this Promissory Note ("Note") shall be paid by Payee to or for the benefit of Maker in multiple advances. Interest shall commence on the date of each advance, and the advances shall be paid by Payee to Maker pursuant to the terms and conditions of that certain Loan Agreement dated April 3, 2001 between Maker and Payee. 2. INTEREST RATE. a. Commencing on the date of this Note, and so long as no Event of Default (as defined herein) exists, the unpaid balance of this Note shall accrue interest ("Interest") at the rate of twenty percent (20%) per annum ("Base Rate"). b. During any Event of Default under this Note or any security for this Note, the unpaid balance of this Note shall accrue Interest at the rate of twenty eight percent (28%) per annum ("Default Rate"). Interest shall accrue at the Default Rate from the date of an Event of Default, without notice to Maker, if Borrower does not cure an Event of Default as provided in this Note. 13 c. The Interest provided herein shall be calculated on the basis of a 360-day year/30-day month and if not paid as provided below by the tenth (10th) day of each month, the due and unpaid Interest shall be compounded effective on the first (1st) day of each such month. 3. PAYMENTS. a. Quarterly payments of Interest only on the unpaid principal balance of this Note at the Base Rate shall be paid on July 1, 2001 and on October 1, 2001. b. If not sooner paid, all accrued and unpaid Interest and all unpaid principal of this Note shall be paid on October 3, 2001("Maturity Date"). 4. LATE PAYMENT CHARGE. Maker shall pay to Holder a late charge ("Late Payment Charge") equal to ten percent (10%) of any payment not received by the Holder within ten (10) days after said payment is due, including the unpaid balance of this Note as of the Maturity Date. 5. REASONABLENESS OF CHARGES. Maker acknowledges that upon the occurrence of an Event of Default, the damages to the Holder would be extremely difficult to ascertain, including the Holder's lost profit and loss of use of the funds evidenced hereby and expenses incurred in connection with such default, and that the accrual of Interest at the Default Rate and the Late Payment Charge are reasonable estimates of the loss to the Holder incurred by virtue of an Event of Default. 6. LEGAL LIMITS. a. Maker agrees to an effective rate of interest which is the rate stated herein plus any additional rate of interest resulting from any other payments in the nature of interest, including without limitation, any loan fees or other charges to the extent that such charges may be deemed includable in interest for any purpose. b. All agreements between Maker and Payee are hereby expressly limited so that in no event whatsoever, whether by reason of deferment in accordance with this Note or under any agreement or by virtue of acceleration or maturity of the loan evidenced by this Note, or otherwise, shall the amount paid or agreed to be paid to Payee for the loan, use, forbearance or detention of the money to be loaned under this Note or to compensate Payee for damages to be suffered by reason of a late payment or default under this Note, exceed the maximum permissible under applicable law. If, from any circumstances whatsoever, fulfillment of any provision of this Note, or of any provision in the security for this Note at the time performance of such provision shall be due, shall involve exceeding the limit of validity prescribed by law, from the date of this Note, the obligations to be fulfilled shall be reduced to the limit of such validity. This provision shall never be superseded or waived and shall control every other provision of all agreements between Maker and Payee. 7. PREPAYMENT. The unpaid principal balance of this Note may be prepaid in whole or in part without penalty at any time upon five (5) days prior written notice to the Holder. 8. FORM OF PAYMENTS. Principal and Interest shall be payable in lawful money of the United States of America in immediately available funds. 9. CREDITING OF PAYMENTS. Each payment hereunder shall be credited first to accrued Interest and then to principal. 10. EVENTS OF DEFAULT AND REMEDIES. 14 a. The existence or occurrence of either one or both of the following events shall constitute an event of default ("Event of Default") under this Note: (i) The failure by Maker to make any payment of principal, Interest, Late Payment Charge or any other cost or expense due under this Note in accordance with the terms of this Note; or, (ii) The occurrence of any event of default under any security for this Note, including the Pledge (as defined herein). b. Upon the occurrence of any Event of Default and the failure of Maker to cure such default within ten (10) days after notice thereof if monetary and within thirty (30) days after notice thereof if non-monetary (unless the Event of Default cannot be cured within thirty (30) days and Maker commences a cure within the thirty (30) days and diligently prosecutes the cure until it is complete, in which event, Maker shall have a reasonable amount of time after the thirty (30) days to cure a non-monetary default): (i) the entire unpaid principal balance, any unpaid Interest, and any other amounts owing under this Note shall, at the option of the Holder and without further notice or demand of any kind to Maker or any other person, immediately become due and payable; and, (ii) the Holder shall have and may exercise any and all rights and remedies available at law or in equity and also any and all rights and remedies provided in any security for this Note. c. The remedies of the Holder, as provided in this Note and in any security for this Note, shall be cumulative and concurrent, and may be pursued singularly, successively or together, at the sole discretion of the Holder, and may be exercised as often as occasion therefor shall arise. No act of omission or commission of the Holder, including specifically any failure to exercise any right, remedy or recourse, shall be deemed to be a waiver or release of any right, remedy or recourse, such waiver or release to be effected only through a written document executed by the Holder. A waiver or release with reference to any one event shall not be construed as continuing, as a bar to, or as a waiver or release of, any subsequent right, remedy or recourse as to a subsequent event. 11. SECURITY. This Note is secured by, among other things, and is entitled to the benefits of, a stock pledge and security agreement ("Pledge") dated the date of this Note. The provisions of the Pledge are incorporated herein by reference as if set forth in full, and the covenants and conditions of this Note shall control if there is a conflict between them and the covenants and conditions contained in the Pledge. 12. ATTORNEYS' FEES. In the Event of Default under this Note or in the event the Holder seeks legal advice in order to enforce the provisions of this Note after an Event of Default, Maker agrees to pay a reasonable sum to Holder for Holder's attorneys' fees. If any action is brought to enforce or interpret the provisions of this Note, the prevailing party shall be entitled to a reasonable sum for attorneys' fees. 13. GOVERNING LAW AND SEVERABILITY. This Note is made pursuant to, and shall be construed, governed and enforced under the laws of the State of Arizona. If any provision of this Note or any security for this Note is construed or interpreted by a court of competent jurisdiction to be void, invalid or unenforceable, such decision shall affect only those provisions so construed or interpreted and shall not affect the remaining provisions of this Note or any security for this Note. 14. TIME OF ESSENCE. Time is of the essence of this Note. 15. PAYMENT WITHOUT OFFSET. Principal and Interest shall be paid without deduction or offset. 16. CALENDAR DAYS. Unless otherwise provided in this Note to the contrary, calendar days, and not business days, shall be used in calculating any time periods set forth in this Note. 17. NOTICES. Any notices which any party may be required, or may desire, to give, unless otherwise specified, shall be in writing and shall be (i) hand-delivered, effective upon receipt, 15 (ii) transmitted by telecopier, effective upon receipt, with the original mailed the same date by first class mail, postage prepaid, (iii) sent by United States Express Mail or by private overnight courier, effective upon receipt, or (iv) served by certified mail, postage prepaid, return receipt requested and addressed to such party at the address set forth above, or to such other address(es) or addressee(s) as the party to be served with notice may have furnished in writing to the other party, effective three (3) days after mailing. 18. ASSIGNMENT. Payee or any other Holder of this Note may assign all or a portion of its rights, title and interest in this Note and security to any person, firm, corporation or other entity without the consent of Maker. 19. RELATIONSHIP. The relationship of the parties hereto is that of borrower and lender and it is expressly understood and agreed that nothing contained in this Note or in any security for this Note shall be interpreted or construed to make Maker and Payee partners, joint venturers or participants in any other legal relationship except for borrower and lender. 20. WAIVER. Except as otherwise expressly provided to the contrary in this Note, the Pledge or other loan documents relating to this Note, Maker for itself and for its successors, transferees and assigns and all guarantors, endorsers and signers, hereby waives all valuation and appraisement privileges, presentment and demand for payment, protest, notice of protest and nonpayment, dishonor and notice of dishonor, bringing of suit, lack of diligence or delays in collection or enforcement of this Note and notice of the intention to accelerate, the release of any party liable, the release of any security for this Note, the taking of any additional security and any other indulgence or forbearance. Maker agrees that this Note and any or all payments coming due hereunder may be extended or renewed from time to time without in any way affecting or diminishing Maker's liability under this Note. The acceptance by Holder of a partial amount of a payment due from Maker to Holder under this Note shall not constitute a waiver of the requirement of Maker to make a full payment to Holder, and it shall not constitute a waiver by Holder of the time of the essence provision of this Note. 21. HEADINGS. The subject headings of the paragraphs of this Note are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions. IN WITNESS WHEREOF, Maker has executed this Note as of the date set forth above. 16 MAKER: SUN NZ, LLC By: Sun NMA, Inc. an Arizona corporation Its Managing Member By: ------------------------------- William Pope, President 17 EXHIBIT B UNCONDITIONAL GUARANTY DATE: April 3, 2001 GUARANTOR: WILLIAM POPE and LINDA POPE husband and wife LENDER: BRIDGE FINANCIAL CORPORATION an Arizona corporation Attention: R. Randy Stolworthy 333 North 44th Street, Suite 420 Phoenix, Arizona 85008 Facsimile Number (602) 952-8769 BORROWER: SUN NZ, LLC an Arizona limited liability company Attention: William Pope 2525 East Camelback Road, Suite 888 Phoenix, Arizona 85016 Facsimile Number (602) 852-5599 ORIGINAL PRINCIPAL Eight Million and No/100 Dollars ($8,000,000) AMOUNT OF evidenced by that certain Promissory Note of even INDEBTEDNESS date herewith between Lender, as Payee, and Borrower, GUARANTEED: as Maker (the "Note") FOR VALUABLE CONSIDERATION, Guarantor unconditionally guarantees and promises to pay to Lender, or order, on demand, in lawful money of the United States, any and all obligations of Borrower to Lender, under and by virtue of the Note and the other loan documents related to the Note. The obligations hereunder are joint and several, and independent of the obligations of Borrower, and a separate action or actions may be brought and prosecuted against Guarantor regardless of whether an action is brought against Borrower or whether Borrower is joined in any such action or actions; and Guarantor waives the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Each Guarantor expressly agrees that recourse may be made against the marital community and the separate property of each Guarantor and in such order and manner as Lender may elect. The provisions of any law or regulation are waived to the extent they require spouses to be sued jointly for satisfaction of any debt or obligation first from community property and second from sole and separate property. Guarantor authorizes Lender, without notice or demand and without affecting its liability hereunder, from time to time to (a) renew, compromise, extend, accelerate or otherwise change the time for payment of or the terms of the Note or any part thereof, increase the amount or the rate of interest of the Note, or shorten the term of the Note; (b) take and hold security for the payment of this Guaranty of the obligations guaranteed, and exchange, enforce, waive and release any such security; (c) apply such security and direct the order or manner of sale thereof as Lender in its discretion may determine; and (d) release or substitute any one or more of the endorsers of Guarantor. Lender may without notice assign this Guaranty in whole or in part. 18 Guarantor waives any right to require Lender to (a) proceed against Borrower; (b) proceed against or exhaust any security held from Borrower; or (c) pursue any other remedy in Lender's power whatsoever, and any laws or regulations to the contrary are hereby waived. Guarantor waives any defense arising by reason of any disability or other defense of Borrower or by reason of the cessation from any cause whatsoever of the liability of Borrower. Guarantor also waives (a) all diligence in collection or protection of or realization on the Note, on any obligation under the Guaranty or on any security for the Note; (b) any and all suretyship defenses and defenses in the nature thereof; (c) any rights for a homestead exemption; and (d) any defenses based upon release of collateral, failure to perfect a lien on the collateral, failure to maintain a lien on the collateral, the release of Borrower, the modification of the Note without Guarantor's consent or notice of Lender's acceptance of this Guaranty. Until all obligations of Borrower to Lender under the Note shall have been paid in full, Guarantor shall have no right of subrogation, and waive any right to enforce any remedy which Lender now has or may hereafter have against Borrower, and waive any benefit of and any right to participate in any security now or hereafter held by Lender. Guarantor waives all presentments, demands for performance, notice of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Guaranty and of the existence, creation or incurring of new or additional obligations. No delay on the part of Lender in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise by Lender of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy; nor shall any modification or waiver of any of the provisions of this Guaranty be binding on Lender except as expressly set forth in writing, duly signed and delivered on behalf of Lender. No action of Lender permitted hereunder shall in any way affect or impair the rights of Lender and the obligations of Guarantor under this Guaranty. Guarantor represents and warrants to Lender that: (a) The execution, delivery and performance by Guarantor of this Guaranty does not and will not conflict with or contravene any law, rule, regulation, judgment, order or decree of any government, governmental instrumentality or court having jurisdiction over Guarantor or Guarantor's activities or properties or conflict with, or result in any default under any agreement or instrument of any kind to which Guarantor is a party or by which Guarantor or Guarantor's properties may be bound or affected; (b) Neither the execution and delivery by Guarantor of this Guaranty nor the performance by Guarantor hereunder require the consent, approval, order or authorization of, or registration with, or the giving of notice to any governmental authority, domestic or foreign; (c) This Guaranty has been duly executed and delivered by Guarantor and constitutes a legal, valid and binding obligation of Guarantor enforceable against Guarantor in accordance with its terms; (d) There is no action, litigation or other proceeding pending or, to Guarantor's best knowledge, threatened against Guarantor before any court, arbitrator or administrative agency which may have an adverse effect on Guarantor's assets, businesses, or financial condition or which would prevent, hinder or jeopardize Guarantor's performance under this Guaranty. (e) Guarantor is fully familiar with all of the covenants, terms and conditions of the Note and related documents and have reviewed such documents personally and with counsel; (f) The financial statements (including the notes thereto) and other financial information of any person or entity provided to Lender in support of Guarantor's application for the Loan are materially true, correct and complete, and present fairly the financial condition and the results of operations of the persons set forth in such financial statements in accordance with generally accepted accounting principles. There have not been any material adverse changes in the 19 condition, affairs or prospects, financial or otherwise, of any person or company whose financial condition is reflected in any of the aforesaid financial statements since the date of such financial statements; and Guarantor is unaware of any facts or circumstances which might give rise to any such material adverse change. In the event Guarantor becomes aware of any such material change, either before or after any disbursement by Lender, Guarantor shall notify Lender in writing immediately after Guarantor becomes aware of such facts or circumstances. (g) Except as may be set forth in the written financial statements presented by Guarantor to Lender, Guarantor is not a party to any contract, agreement, indenture or instrument or subject to any restriction which individually or in the aggregate require any obligations of Guarantor to be performed as of the date hereof or as a result of executing this Guaranty, which might adversely affect Guarantor's financial condition or businesses, or which would in any way jeopardize the ability of Guarantor to perform hereunder; and (h) Guarantor was not induced to give this Guaranty by the fact that there are or may be other guarantors either to this Guaranty or otherwise. It is understood that this Guaranty is not being given in consideration of any such other guaranty, and, in this regard, Lender may, at its discretion, take, receive, accept, sue upon, release or compromise any such other guaranty of the Note obtained or which may be obtained from any other person or entity, without affecting this Guaranty or impairing any rights which Lender may have under this Guaranty. Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and no such prohibition or unenforceability shall invalidate or render unenforceable such provision in any other jurisdiction. Any property assigned, pledged or hypothecated as security for this Guaranty shall be deemed to secure all obligations of Borrower to Lender to the same extent as if the same were Borrower's property and given as security by Borrowers therefor. Any obligations of Borrower now or hereafter held by or payable to Guarantor are hereby subordinated to the obligations of Borrower to Lender; and such obligations of Borrower to Guarantor if Lender so requests shall be collected, enforced and received by Guarantor as trustees for Lender and be paid over to Lender on account of the obligations of Borrower to Lender but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty. Unless and until there is an Event of Default under the Note and other loan documents related to the Note, Guarantor shall have the right to receive payments under the obligations of Borrower to Guarantor in the ordinary course of business. Where the Borrower is an entity, it is not necessary for Lender to inquire into the powers of Borrower or the officers, directors, partners, members or agents acting or purporting to act on its behalf, and any obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder. Guarantor agrees to pay a reasonable attorneys' fee and all other costs and expenses which may be incurred by Lender in the enforcement of this Guaranty. In all cases where there is more than one Guarantor, then all words used herein in the singular shall be deemed to have been used in the plural where the context and construction so require. 20 If this Guaranty requires more than one signature, this Guaranty may be signed in counterpart and, together, the counterpart Guaranties shall constitute a single Guaranty. This Guaranty shall remain in full force and effect until the expiration of any time periods within which a bankruptcy court can order the disgorgement of payments made by Borrower to Lender under the Note or related documents. This Guaranty is made pursuant to, and shall be construed, governed and enforced under the laws of the State of Arizona. IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty as of the date set forth above. GUARANTOR: ----------------------------------- William Pope ----------------------------------- Linda Pope 21 STOCK CERTIFICATE ASSIGNMENT For Value Received, SUN NZ, LLC, an Arizona limited liability company, does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona corporation, 137,079 shares of no par value common stock ("Pledged Stock") in NZ Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is represented by Certificate Number 11842, and Sun NZ, LLC does hereby irrevocably constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the books of the Corporation with full power of substitution. DATED April 3, 2001. SUN NZ, LLC By: Sun NMA, Inc. an Arizona corporation Its Managing Member By:_____________________________ William Pope, President 22 STOCK CERTIFICATE ASSIGNMENT For Value Received, SUN NZ, LLC, an Arizona limited liability company, does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona corporation, 124,617 shares of no par value common stock ("Pledged Stock") in NZ Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is represented by Certificate Number 13448, and Sun NZ, LLC does hereby irrevocably constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the books of the Corporation with full power of substitution. DATED April 3, 2001. SUN NZ, LLC By: Sun NMA, Inc. an Arizona corporation Its Managing Member By:_____________________________ William Pope, President 23 STOCK CERTIFICATE ASSIGNMENT For Value Received, SUN NZ, LLC, an Arizona limited liability company, does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona corporation, 150,787 shares of no par value common stock ("Pledged Stock") in NZ Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is represented by Certificate Number 17547, and Sun NZ, LLC does hereby irrevocably constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the books of the Corporation with full power of substitution. DATED April 3, 2001. SUN NZ, LLC By: Sun NMA, Inc. an Arizona corporation Its Managing Member By:_____________________________ William Pope, President 24 STOCK CERTIFICATE ASSIGNMENT For Value Received, SUN NZ, LLC, an Arizona limited liability company, does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona corporation, 455,175 shares of no par value common stock ("Pledged Stock") in NZ Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is represented by Certificate Number 17661, and Sun NZ, LLC does hereby irrevocably constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the books of the Corporation with full power of substitution. DATED April 3, 2001. SUN NZ, LLC By: Sun NMA, Inc. an Arizona corporation Its Managing Member By:_____________________________ William Pope, President 25 STOCK CERTIFICATE ASSIGNMENT For Value Received, SUN NZ, LLC, an Arizona limited liability company, does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona corporation, 331,731 shares of no par value common stock ("Pledged Stock") in NZ Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is represented by Certificate Number 18117, and Sun NZ, LLC does hereby irrevocably constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the books of the Corporation with full power of substitution. DATED April 3, 2001. SUN NZ, LLC By: Sun NMA, Inc. an Arizona corporation Its Managing Member By:_____________________________ William Pope, President 26 STOCK CERTIFICATE ASSIGNMENT For Value Received, SUN NZ, LLC, an Arizona limited liability company, does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona corporation, 433,829 shares of no par value common stock ("Pledged Stock") in NZ Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is represented by Certificate Number 18871, and Sun NZ, LLC does hereby irrevocably constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the books of the Corporation with full power of substitution. DATED April 3, 2001. SUN NZ, LLC By: Sun NMA, Inc. an Arizona corporation Its Managing Member By:_____________________________ William Pope, President 27 STOCK CERTIFICATE ASSIGNMENT For Value Received, SUN NZ, LLC, an Arizona limited liability company, does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona corporation, 165,865 shares of no par value common stock ("Pledged Stock") in NZ Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is represented by Certificate Number 18873, and Sun NZ, LLC does hereby irrevocably constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the books of the Corporation with full power of substitution. DATED April 3, 2001. SUN NZ, LLC By: Sun NMA, Inc. an Arizona corporation Its Managing Member By:___________________________ William Pope, President 28 EXHIBIT D Recorded at the Request of and when recorded, return to: Michael E. Tiffany, Esq. Tiffany & Bosco, P.A. 5th Floor Viad Tower 1850 N. Central Avenue Phoenix, AZ 85004-4546 STOCK PLEDGE AND SECURITY AGREEMENT DATE: ____________, 2001 PLEDGOR: SUN NZ, LLC an Arizona limited liability company Attention: William Pope 2525 East Camelback Road, Suite 888 Phoenix, Arizona 85016 Facsimile Number (602) 852-5599 PLEDGEE: BRIDGE FINANCIAL CORPORATION an Arizona corporation Attention: R. Randy Stolworthy 333 North 44th Street, Suite 420 Phoenix, Arizona 85008 Facsimile Number (602) 952-8769 LOAN: The indebtedness in the principal amount of Eight Million and No/100 Dollars ($8,000,000) evidenced by that certain promissory note (the "Note") dated the same date as this Stock Pledge and Security Agreement ("Pledge") executed by Pledgor as the maker and payable to Pledgee as the payee, and all extensions and renewals thereof. To induce Pledgee to make the Loan to Pledgor and as security for the repayment of the Note, Pledgor has agreed to pledge and assign to Pledgee all of its, right, title and interest in and to the following shares of no par value common stock ("Pledged Stock") in NZ Corporation, an Arizona corporation ("Corporation"): Pledged Stock Certificate Number 29 IT IS THEREFORE AGREED: 1. PLEDGE. For good and valuable consideration, receipt of which is acknowledged, Pledgor hereby grants a security interest to Pledgee in and to the Pledged Stock, duly endorsed in blank and herewith delivered to Pledgee. Pledgor appoints Pledgee its attorney-in-fact, with full power of substitution, to arrange for the transfer of the Pledged Stock on the books of the Corporation to the name of Pledgee. Pledgee shall hold the Pledged Stock as security for the repayment of the Note, and shall not encumber or dispose of the Pledged Stock except as allowed in this Pledge. 2. DIVIDENDS. During the term of this Pledge, all dividends and other amounts received by Pledgee as a result of its record ownership of the Pledged Stock shall be applied by it to the payment of the principal and interest on the Note. 3. VOTING RIGHTS. So long as Pledgor is not in default in the performance of any of the terms of this Pledge or in the payment of the principal or interest of the Note, Pledgor shall have the right to vote the Pledged Stock on all Corporation questions, and Pledgee shall execute proxies in favor of Pledgor to this end within ten (10) days of presentation by Pledgor. 4. REPRESENTATIONS. Pledgor warrants and represents that there are no restrictions upon the transfer of any of the Pledged Stock, and that Pledgor has the right to transfer the Pledged Stock free of any encumbrances and without obtaining the consents of the officers, directors or other shareholders of the Corporation. 5. ADJUSTMENTS. In the event that, during the term of this Pledge, any share dividend, reclassification, readjustment or other change is declared or made in the capital structure of the Corporation, all new, substituted and additional shares, or other securities, issued by reason of any such change shall be held by Pledgee under the terms of this Pledge in the same manner as the shares originally pledged hereunder. 6. WARRANTS AND RIGHTS. In the event that during the term of this Pledge, subscription warrants or any other rights or options shall be issued in connection with the Pledged Stock, such warrants, rights and options shall be immediately assigned by Pledgee to Pledgor, and if exercised by Pledgor all new shares or other securities so acquired by Pledgor shall be immediately assigned to Pledgee to be held under the terms of this Pledge in the same manner as the shares originally pledged hereunder. 7. PAYMENT OF NOTE. Upon payment at maturity of the unpaid principal and interest under the Note and all other documents in connection with the Note, Pledgee shall transfer to Pledgor all the Pledged Stock and all rights received by Pledgee as a result of its record ownership thereof. 30 8. DEFAULTS AND REMEDIES. Upon any event of default under this Pledge, Pledgee shall have the right to exercise any and all of the rights and remedies afforded to Pledgee by the Uniform Commercial Code or otherwise possessed by Pledgee under this Pledge and the Pledged Stock. In addition to the right to exercise any rights of a secured party upon default under the laws of the State of Arizona, Pledgee shall have the right, in its sole discretion, upon notice to Pledgor, to sell the remaining Pledged Stock, or any part thereof, at any public or private sale, at which Pledgee may be a purchaser, upon such terms as Pledgee shall deem appropriate. Any purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of Pledgor and Pledgor hereby waives all rights with respect to or in connection with the sale of the Pledged Stock which it now has or may in the future have under any applicable law. As an alternative to exercising the power of sale herein conferred upon it, Pledgee may institute an action or proceeding in any court of competent jurisdiction to foreclose on and to sell the Pledged Stock, or any part thereof, pursuant to a judgment, order or decree of such court. 9. LOAN AGREEMENT. This Pledge is made pursuant to that certain Loan Agreement dated April 3, 2001 between Pledgor as Borrower and Pledgee as Lender. The applicable provisions of the Loan Agreement are incorporated into this Pledge and, in the event of any missing provisions from this Pledge or any inconsistency between the provisions of the Loan Agreement and this Pledge, the Loan Agreement shall control. 10. GENERAL. Time is of the essence of this Pledge and this Pledge shall be for the benefit of and binding upon the parties hereto and their heirs, representatives, successors and assigns. This Pledge shall constitute the entire agreement between the parties regarding the subject of this Pledge and any amendments of this Pledge shall be in writing. The paragraph titles are not part of this Pledge and are for convenience only. Any notices which any party may be required, or may desire, to give, unless otherwise specified, shall be in writing and shall be (I) hand-delivered, effective upon receipt, (ii) transmitted by facsimile, effective upon receipt, with the original mailed the same date by first class mail, postage prepaid, (iii) sent by United States Express Mail or by private overnight courier, effective upon receipt, or (iv) served by certified mail, postage prepaid, return receipt requested and addressed to such party at the address set forth above, or to such other address(es) or addressee(s) as the party to be served with notice may have furnished in writing to the other party, effective three (3) days after mailing. This Pledge shall be construed, governed and enforced under the laws of the state of Arizona and the prevailing party in any dispute shall be entitled to attorneys' fees and costs. IN WITNESS WHEREOF the parties have executed this Pledge as of the date first written above. PLEDGEE: PLEDGOR: BRIDGE FINANCIAL CORPORATION SUN NZ, LLC By: By: Sun NMA, Inc. ----------------------------- an Arizona corporation R. Randy Stolworthy Its Managing Member President By: ----------------------------- William Pope, President 31 STATE OF ARIZONA ) ) ss. County of Maricopa ) The foregoing instrument was acknowledged before me this _____ day of _______, 2001, by R. Randy Stolworthy, in his capacity as President of BRIDGE FINANCIAL CORPORATION, an Arizona corporation, on behalf of the corporation. _______________________________________ Notary Public STATE OF ARIZONA ) ) ss. County of Maricopa ) The foregoing instrument was acknowledged before me this _____ day of _________, 2001, by William Pope, in his capacity as President of Sun NMA, Inc., an Arizona corporation, the Managing Member of SUN NZ, LLC, an Arizona limited liability company, on behalf of the company. _______________________________________ Notary Public 32 EXHIBIT E When Filed Return To: Michael E. Tiffany, Esq. Tiffany & Bosco, P.A. 1850 N. Central Ave., 5th Floor Phoenix, AZ 85004 UNIFORM COMMERCIAL CODE FINANCING STATEMENT Effective Date County and State of Transaction _____________, 2001 Maricopa County, Arizona DEBTOR (Name, Address and Zip Code) SECURED PARTY (Name, Address and Zip Code) SUN NZ, LLC BRIDGE FINANCIAL CORPORATION an Arizona limited liability company an Arizona corporation 2525 East Camelback Road, Suite 888 333 North 44th St., Suite 420 Phoenix, AZ 85016 Phoenix, AZ 85008 Assignee of Secured Party (Name, Address and Zip Code) Record Owner of Real Property, if Not Debtor (Name, Address and Zip Code) N/A N/A Counties Where Collateral is Located [ ] Products of Collateral are also covered [ ] Proceeds of Collateral are also covered Maricopa County Financing Statement covers the following types of property: ALL OF DEBTOR'S RIGHT, TITLE AND INTEREST IN AND TO ___________ SHARES OF NO PAR VALUE COMMON STOCK OF NZ CORPORATION, AN ARIZONA CORPORATION If collateral is timber to be cut, crops growing or to be grown, minerals or the like, accounts to be financed at the wellhead or minehead of the well or mine, or goods which are or are to become fixtures, the real property to which these are affixed or concerned is legally described: [ ] This financing statement is to be filed in the office where a mortgage on the real property would be recorded. This Financing Statement is filed or recorded without Debtor's signature to perfect a security interest in collateral which: [ ] Is already subject to a security interest in another jurisdiction when it was brought into the state or which Debtor changed location to this State; [ ] Are proceeds of the original collateral described above in which a security interest was perfected; [ ] Is no longer effective due to lapse of the original filing; [ ] Was acquired four months or less after Debtor has changed its name, identity or corporate structure. DEBTOR: SECURED PARTY: SUN NZ, LLC BRIDGE FINANCIAL CORPORATION By: Sun NMA, Inc., an Arizona corporation its Managing Member By: ______________________________ R. Randy Stolworthy, President By:______________________________ William Pope, President 33 EXHIBIT F (TRANSFER AGENT LETTER) BRIDGE FINANCIAL CORPORATION 333 NORTH 44TH STREET, SUITE 420 PHOENIX, ARIZONA 85008-6568 TELEPHONE:(602) 952-8836 FACSIMILE:(602) 952-8769 _________________, 2001 VIA CERTIFIED MAIL American Stock Transfer & Trust Company Attn: Paula Caroppoli 6201 15th Avenue, 3rd Floor Brooklyn, NY 11219 RE: PLEDGE OF NO PAR VALUE COMMON STOCK OF NZ CORPORATION Ladies and Gentlemen: You are hereby advised that Sun NZ, LLC, an Arizona limited liability company ("Borrower"), has pledged the following shares of no par value common stock ("Pledged Stock") of NZ Corporation, an Arizona corporation, to Bridge Financial Corporation, an Arizona corporation ("Lender"), which Pledged Stock is traded on the American Stock Exchange: Shares Certificate Number Enclosed is a copy of a Stock Pledge and Security Agreement ("Pledge") dated April ___, 2001 regarding the Pledged Stock. Please show in your records that the Pledged Stock is restricted and cannot be further pledged, assigned or transferred until you are advised in writing by the Lender and Borrower that the Pledged Stock has been released from the Pledge. 34 Although your acceptance of this letter is not necessary to perfect the notice given to you by this letter, for the records of the Lender, please confirm your acceptance of the above instructions by signing this letter where provided below and returning the accepted letter to the Lender at the address shown above. Thank you for your cooperation. Sincerely, BRIDGE FINANCIAL CORPORATION R. Randy Stolworthy, President APPROVED: SUN NZ, LLC an Arizona limited liability company By: Sun NMA, Inc. an Arizona corporation Its Managing Member By: _____________________________ William Pope, President ACCEPTED: AMERICAN STOCK TRANSFER & TRUST COMPANY By: _________________________________ Its: _________________________________ 35 EXHIBIT G April 3, 2001 Bridge Financial Corporation 333 N. 44th St., Suite 420 Phoenix, AZ 85008-6568 Ladies and Gentlemen: I am legal counsel for SUN NZ, LLC, an Arizona limited liability company ("Borrower") and Sun NMA, Inc., an Arizona corporation, the managing member of the Borrower ("Managing Member"). As such counsel, I have examined originals (or copies identified to my satisfaction as true copies of the originals) of the following documents dated April 3, 2001 ("Documents"): 1. Loan Agreement; 2. Promissory Note; 3. Unconditional Guaranty; 4. Stock Certificate Assignment; 5. Stock Pledge and Security Agreement ("Pledge"); 6. Uniform Commercial Code Financing Statement ("Financing Statement"); and 7. Transfer Agent Letter. I have also examined the Articles of Organization, Operating Agreement, Articles of Incorporation, Bylaws and other relevant organizational documents of the Borrower and Managing Member. In my examination, I have assumed the genuineness of all signatures and the authenticity of the Documents submitted to me as originals conforming to the originals of the Documents submitted to me as copies. I am an attorney licensed to practice in the State of Arizona, and accordingly, I do not express any opinion as to the laws or their effect in any jurisdiction other than the State of Arizona. The enforceability of the Documents and the rights and remedies of the parties thereunder, are subject to, and limited by: (1) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to creditors' rights generally; (2) availability of equitable remedies; and (3) future changes or interpretations to current laws, rules and regulations of the State of Arizona. Based upon and subject to the foregoing, it is my opinion that: 1. The Borrower is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Arizona. 2. The Managing Member is a corporation duly organized, validly existing and in good standing under the laws of the State of Arizona. 3. The Borrower and Managing Member have all the requisite power and authority to execute and deliver the Documents, and the Borrower has all of the requisite power and authority to perform under the Documents. 36 4. Upon execution and delivery of the Documents, the Documents shall be binding obligations of and enforceable against the Borrower according to their terms. 5. To my knowledge, the execution, delivery and performance under the Documents by Borrower do not violate the laws and regulations applicable to the Borrower and Managing Member. 6. To my knowledge, there is not any action, suit or proceeding, at law or in equity, either pending or threatened against the Borrower that would materially and adversely affect the ability of the Borrower to perform under the Documents. The words "my knowledge" mean the actual knowledge of John E. Olson as of the date of this letter without any independent investigation or inquiry to determine if my actual knowledge is true and correct. In rendering this opinion, I have relied upon the fact that the Pledge and Financing Statement will be properly recorded and filed for perfection of the liens created thereby. I have no information concerning and express no opinion on the priority of the security interest which will be perfected by the filing of the Financing Statement. However, to my knowledge, the Pledged Stock for the First Advance is not subject to any pledge and, at the time of each Subsequent Advance, the Pledged Stock for each Subsequent Advance shall not be subject to any pledge other than the ones created by each Pledge. This letter is limited to the above and is furnished by me as legal counsel for the Borrower and Managing Member to you solely for your benefit and with respect to the Documents. Sincerely, -------------------------------- John E. Olson, Esq. 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EX-3.2

   1
EXHIBIT 3.2
Amended and Restated By-Laws

                              AMENDED AND RESTATED
                                     BYLAWS
              (COMPOSITE INCORPORATING ALL CHANGES IN EFFECT AS OF
               APRIL 25, 2001, PLUS NAME CHANGE TO NZ CORPORATION)
                                       OF
                                 NZ CORPORATION

                 I. REFERENCES TO CERTAIN TERMS AND CONSTRUCTION

              1.01. Certain References. Any reference herein made to law will be
deemed to refer to the law of the State of Arizona, including any applicable
provision of Chapters 1 through 17 of Title 10 of the Arizona Revised Statutes,
or any successor statue, as from time to time amended and in effect (sometimes
referred to herein as the "Arizona Business Corporation Act"). Any reference
herein made to the Corporation's Articles will be deemed to refer to its
Articles of Incorporation and all amendments thereto as at any given time on
file with the Arizona Corporation Commission. Except as otherwise required by
law and subject to any procedures established by the Corporation pursuant to
Arizona Revised Statutes Section 723, the term "shareholder" as used herein
shall mean one who is a holder of record of shares of the Corporation.
References to specific sections of law herein made shall be deemed to refer to
such sections, or any comparable successor provision, as from time to time
amended and in effect.

              1.02. Seniority. The law and the Articles (in that order of
precedence) will in all respects be considered senior and superior to these
Bylaws, with any inconsistence to be resolved in favor of the law and such
Articles (in that order of precedence), and with these Bylaws to be deemed
automatically amended from time to time to eliminate any such inconsistency
which may then exist.

              1.03. Computation of Time. The time during which an act is
required to be done, including the time for the giving of any required notice
herein, shall be computed by excluding the first day or hour, as the case may
be, and including the last day or hour.

                                   II. OFFICES

              2.01. Principal Office. The principal office of the Corporation
shall be located at any place either within or outside the State of Arizona as
designated in the Corporation's most current Annual Report filed with the
Arizona Corporation Commission or in any other document executed and delivered
to the Arizona Corporation Commission for filing. If a principal office is not
so designated, the principal office of the Corporation shall mean the known
place of business of the Corporation. The Corporation may have such other
offices, either within or without the State of Arizona, as the Board of
Directors may designate or as the business of the Corporation may require from
time to time.

              2.02. Known Place of Business. A known place of business of the
Corporation shall be located within the State of Arizona and may be, but need
not be, the address of the statutory agent of the Corporation. The Corporation
may change its known place of business from time to time in accordance with the
relevant provisions of the Arizona Business Corporation Act.
   2
                                III. SHAREHOLDERS

              3.01. Annual Shareholder Meeting. The annual meeting of the
shareholders shall be held at such time and place, either within or without the
State of Arizona, as shall be fixed by the Board of Directors or, in the absence
of action by the Board, as set forth in the notice given or waiver signed with
respect to such meeting pursuant to Section 3.03 below, for the purpose of
electing directors and for the transaction of such other business as may
properly come before the meeting. If any annual meeting is for any reason not
held on the date determined as aforesaid; a deferred annual the day fixed for
the annual meeting shall be a legal holiday in the State of Arizona such meeting
shall be held on the next succeeding business day.

              3.02. Special Shareholder Meetings. Special meetings of the
shareholders may be held whenever and wherever, either within or without the
State of Arizona, called for by or at the direction of the Chairman of the
Board, the President, or the Board of Directors.

              3.03. Notice of Shareholders Meetings.

                     (a) Required Notice. Notice stating the place, day and hour
of any annual or special shareholders meeting shall be given not less than ten
(10) nor more than sixty (60) days before the date of the meeting by or at the
direction of the person or persons calling the meeting, to each shareholder
entitled to vote at such meeting and to any other shareholder entitled to
receive notice of the meeting by law or the Articles. Notices to shareholders
shall be given in accordance with, and shall be deemed to be effective at the
time and in the manner described in, Arizona Revised Statutes Section 10-141. If
no designation is made of the place at which an annual or special meeting will
be held in the notice for such meeting, the place of the meeting will be at the
principal place of business of the Corporation.

                     (b) Adjourned Meeting. If any shareholders meeting is
adjourned to a different date, time, or place, notice need not be given of the
new date, time, and place, if the new date, time, and place is announced at the
meeting before adjournment. But if a new record date for the adjourned meeting
is fixed or must be fixed in accordance with law or these Bylaws, then notice of
the adjourned meeting shall be given to those persons who are shareholders as of
the new record date and who are entitled to such notice pursuant to Section
3.03(a) above.

                     (c) Waiver of Notice. Any shareholder may waive notice of a
meeting (or any notice of any other action required to be given by the Arizona
Business Corporation Act, the Corporation's Articles, or these Bylaws), at any
time before, during, or after the meeting or other action, by a writing signed
by the shareholder entitled to the notice. Each such waiver shall be delivered
to the Corporation for inclusion in the minutes or filing with the corporate
records. Under certain circumstances, a shareholder's attendance at a meeting
may constitute a waiver of notice, unless the shareholder takes certain actions
to preserve his/her objections as described in the Arizona Business Corporation
Act.

                     (d) Contents of Notice. The notice of each special
shareholders' meeting shall include a description of the purpose or purposes for
which the meeting is called. Except as required by law, this section 3.03(d), or
the Corporation's Articles, the notice of an annual shareholders' meeting need
not include a description of the purpose or purposes for which the meeting is
called.

              3.04. Fixing of Record Date. For the purpose of determining
shareholders of any voting group entitled to notice of or to vote at any meeting
of shareholders, or shareholders entitled to receive any distribution or
dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors may fix in advance a date as the record
date. Such record date shall not be more than seventy (70) days prior to the
date on which the particular action requiring such determination of shareholders
is to be taken. If no record date is so fixed by the Board of Directors, the
   3
record date for the determination of shareholders shall be as provided in the
Arizona Business Corporation Act.

       When a determination of shareholders entitled to notice of or to vote at
       any meeting of shareholders has been made as provided in this Section,
       such determination shall apply to any adjournment thereof, unless the
       Board of Directors fixes a new record date, which it must do if the
       meeting is adjourned to a date more than one hundred twenty (120) days
       after the date fixed for the original meeting.

              3.05. Shareholder List. The Corporation shall make a complete
record of the shareholders entitled to notice of each meeting of shareholders
thereof, arranged in alphabetical order, listing the address and the number of
shares held by each. The list shall be arranged by voting group and within each
voting group by class or series of shares. The shareholder list shall be
available for inspection by any shareholder, beginning two (2) business days
after notice of the meeting is given for which the list was prepared and
continuing through the meeting. The list shall be available at the Corporation's
principal office or at another place identified in the meeting notice in the
city where the meeting is to be held. Failure to comply with this section shall
not affect the validity of any action taken at the meeting.

              3.06. Shareholder Quorum and Voting Requirements.

                     (a) If the Articles or the Arizona Business Corporation Act
provide for voting by a single voting group on a matter, action on that matter
is taken when voted upon by that voting group.

                     (b) If the Articles or the Arizona Business Corporation Act
provide for voting by two (2) or more voting groups on a matter, action on that
matter is taken only when voted upon by each of those voting groups counted
separately.

                     (c) Shares entitled to vote as a separate voting group may
take action on a matter at a meeting only if a quorum of those shares exists
with respect to that matter. Unless the Articles or the Arizona Business
Corporation Act provide otherwise, a majority of the votes entitled to be cast
on the matter by the voting group constitutes a quorum of that voting group for
action on that matter.

                     (d) Once a share is represented for any purpose at a
meeting, it is deemed present for quorum purposes for the remainder of the
meeting and for any adjournment of that meeting, unless a new record date is or
must be set for that adjourned meeting.

                     (e) If a quorum exists, action on a matter (other than the
election of directors) by a voting group is approved if the votes cast within
the voting group favoring the action exceed the votes cast opposing the action,
unless the Articles or the Arizona Business Corporation Act require a greater
number of affirmative votes.

                     (f) Voting will be by ballot on any question as to which
any person demands a ballot vote prior to the time the voting begins entitled to
vote on such question; otherwise, a voice vote will suffice. No ballot or change
of vote will be accepted after the polls have been declared closed following the
ending of the announced time for voting.

              3.07. Manner of Bringing Business Before Meetings.

                     (a) At any annual or special meeting of shareholders only
such business shall be conducted as shall have been properly brought before the
meeting. In order to be properly brought before the meeting, such business must
be a proper subject for shareholder action and must have been (i) specified in
the written notice of the meeting (or any supplement thereto) given to
shareholders
   4
who were shareholders on the record date for such meeting by or at the direction
of the Board of Directors, (ii) brought before the meeting at the direction of
the Board of Directors or the Chairman of the meeting, selected as provided in
Section 3.12 hereof, or (iii) specified in a written notice given by or on
behalf of a shareholder who was a shareholder on the record date for such
meeting entitled to vote thereat or a duly authorized proxy for such
shareholder, in accordance with Section 3.07(b) and (c) hereof.

                     (b) A shareholder notice referred to in Section
3.07(a)(iii) hereof must be delivered personally to, or mailed to and received
at, the principal executive office of the Corporation, addressed to the
attention of the Secretary, not more than ten (10) days after the date of the
initial notice referred to in Section 3.07(a)(i) hereof, in the case of business
to be brought before a special meeting of shareholders, and not less than thirty
(30) days prior to the anniversary date of the initial notice referred to in
Section 3.07(a)(i) hereof with respect to the previous year's annual meeting, in
the case of business to be brought before an annual meeting of shareholders.

                     (c) A shareholder notice referred to in Section
3.07(a)(iii) hereof shall set forth:

                             (i) a full description of each item of business
proposed to be brought before the meeting and the reasons for conducting such
business at such meeting;

                             (ii) the name and address of the person proposing
to bring such business before the meeting;

                             (iii) the class and number of shares held of
record, held beneficially, and represented by proxy by such person as of the
record date for the meeting, if such date has been made publicly available, or
as of a date not later than thirty (30) days prior to the delivery of the
initial notice referred to in Section 3.07(a)(i) hereof, if the record date has
not been made publicly available;

                             (iv) if any item of business involves a nomination
for director, all information regarding each such nominee that would be required
to be set forth in a definitive proxy statement filed with the Securities and
Exchange Commission pursuant to Section 14 of the Securities Exchange Act of
1934, as amended, or any successor thereto, and the written consent of each such
nominee to serve if elected;

                             (v) any material interest of such shareholder in
the specified business;

                             (vi) whether or not such shareholder is a member of
any partnership, limited partnership, syndicate, or other group pursuant to any
agreement, arrangement, relationship, understanding, or otherwise, whether or
not in writing, organized in whole or in part for the purpose of acquiring,
owning, or voting shares of the Corporation; and

                             (vii) all other information that would be required
to be filed with the Securities and Exchange Commission, if, with respect to the
business proposed to be brought before the meeting, the person proposing such
business was a participant in a solicitation subject to Section 14 of the
Securities Exchange Act of 1934, as amended, or any successor thereto.

       No business shall be brought before any meeting of the shareholders of
       the Corporation otherwise than as provided in this Section 3.07.

                     (d) Notwithstanding the provisions of this Section 3.07,
the Board of Directors shall not be obligated to include information as to any
shareholder nominee for director or any other shareholder proposal in any proxy
statements or other communication sent to shareholders.

                     (e) The Chairman of the meeting may, if the facts warrant,
determine that any proposed item of business was not brought before the meeting
in accordance with the provisions of this Section 3.07, and if he or she should
so determine, he or she shall so declare to the meeting and the defective item
of business shall be disregarded.
   5
              3.08. Proxies. At all meetings of shareholders, a shareholder may
vote in person or by proxy duly executed in writing by the shareholder or the
shareholder's duly authorized attorney-in-fact. Such proxy shall comply with law
and shall be filed with the Secretary of the Corporation or other person
authorized to tabulate votes before or at the time of the meeting. No proxy
shall be valid after eleven (11) months from the date of its execution unless
otherwise provided in the proxy. The burden of proving the validity of any
undated, irrevocable, or otherwise contested proxy at a meeting of the
shareholders will rest with the person seeking to exercise the same. A facsimile
appearing to have been transmitted by a shareholder or by such shareholder's
duly authorized attorney-in-fact may be accepted as a sufficiently written and
executed proxy.

              3.09. Voting of Shares. Unless otherwise provided in the Articles
or the Arizona Business Corporation Act, each outstanding share entitled to vote
shall be entitled to one (1) vote upon each matter submitted to a vote at a
meeting of shareholders.

              3.10. Voting for Directors. Unless otherwise provided in the
Articles, directors are elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum is present at
the time of such vote. As provided by law, shareholders shall be entitled to
cumulative voting in the election of directors.

              3.11. Election Inspectors. The Board of Directors, in advance of
any meeting of the shareholders, may appoint an election inspector or inspectors
to act at such meeting (and at any adjournment thereof). If an election
inspector or inspectors are not so appointed, the chairman of the meeting may,
or upon request of any person entitled to vote at the meeting will, make such
appointment. If any person appointed as an inspector fails to appear or to act,
a substitute may be appointed by the chairman of the meeting. If appointed, the
election inspector or inspectors (acting through a majority of them if there be
more than one) will determine the number of shares outstanding, the
authenticity, validity, and effect of proxies, the credentials of persons
purporting to be shareholders or persons named or referred to in proxies, and
the number of shares represented at the meeting in person and by proxy; will
receive and count votes, ballots, and consents and announce the results thereof;
will hear and determine all challenges and questions pertaining to proxies and
voting; and, in general, will perform such acts as may be proper to conduct
elections and voting with complete fairness to all shareholders. No such
election inspector need be a shareholder of the Corporation.

              3.12. Organization and Conduct of Meetings. Each meeting of the
shareholders will be called to order and thereafter chaired by the Chairman of
the Board of Directors if there is one, or, if not, or if the Chairman of the
Board is absent or so requests, then by the President, or if both the Chairman
of the Board and the President are unavailable, then by such other officer of
the Corporation or such shareholder as may be appointed by the Board of
Directors. The Corporation's Secretary or in his or her absence, an Assistant
Secretary will act as secretary of each meeting of the shareholders. If neither
the Secretary nor an Assistant Secretary is in attendance, the chairman of the
meeting may appoint any person (whether a shareholder or not) to act as
secretary for the meeting. After calling a meeting to order, the chairman
thereof may require the registration of all shareholders intending to vote in
person and the filing of all proxies with the election inspector or inspectors,
if one or more have been appointed (or, if not, with the secretary of the
meeting). After the announced time for such filing of proxies has ended, no
further proxies or changes, substitutions, or revocations of proxies will be
accepted. If directors are to be elected, a tabulation of the proxies so filed
will, if any person entitled to vote in such election so requests, be announced
at the meeting (or adjournment thereof) prior to the closing of the election
polls. Absent a showing of bad faith on his or her part, the chairman of a
meeting will, among other things, have absolute authority to fix the period of
time allowed for the registration of shareholders and the filing of proxies, to
determine the order of business to be conducted at such meeting, and to
establish reasonable rules for expediting the business of the meeting and
preserving the orderly conduct thereof (including any informal, or question and
answer portions thereof).
   6
              3.13. Shareholder Approval of Ratification. The Board of Directors
may submit any contract or act for approval or ratification of the shareholders
at a duly constituted meeting of the shareholders. Except as otherwise required
by law, if any contract or act so submitted is approved or ratified by a
majority of the votes cast thereon at such meeting, the same will be valid and
as binding upon the Corporation and all of its shareholders as it would be if it
were the act of its shareholders.

              3.14. Informalities and Irregularities. All informalities or
irregularities in any call or notice of a meeting of the shareholders or in the
areas of credentials, proxies, quorums, voting, and similar matters, will be
deemed waived if no objection is made at the meeting.

              3.15. Shareholder Action by Written Consent. Any action required
or permitted to be taken at a meeting of the shareholders may be taken without a
meeting if one (1) or more consents in writing, setting forth the action so
taken, shall be signed by all of the shareholders entitled to vote with respect
to the subject matter thereof. The consents shall be delivered to the
Corporation for inclusion in the minutes or filing with the corporate record.
Action taken by consent is effective when the last shareholder signs the
consent, unless the consent specifies a different effective date, except that
if, by law, the action to be taken requires that notice be given to shareholders
who are not entitled to vote on the matter, the effective date shall not be
prior to ten (10) days after the Corporation shall give such shareholders
written notice of the proposed action, which notice shall contain or be
accompanied by the same material that would have been required if a formal
meeting had been called to consider the action. Consent signed under this
section has the effect of a meeting vote and may be described as such in any
document.


                             IV. BOARD OF DIRECTORS

              4.01. General Powers. All corporate powers shall be exercised by
or under the authority of, and the business and affairs of the Corporation shall
be managed under the direction of, the Board of Directors.

              4.02. Number, Tenure, and Qualification of Directors. Unless
otherwise provided in the Articles of Incorporation, the authorized number of
directors shall be neither less than five (5) nor more than nine (9). The number
of directors in office from time to time shall be within the limits specified
above, as prescribed from time to time by resolution adopted by either the
shareholders or the Board of Directors. The Board of Directors shall consist of
Class A Directors and Class B Directors. The Class A directors shall be elected
for a term of two years at the annual meeting of shareholders of the Corporation
held in every odd numbered year. The Class B directors shall be elected for a
term of two years at the annual meeting of shareholders of the Corporation held
in every even numbered year. When an even number of directors has been set by
the Board of Directors, there shall be an even number of Class A directors and
Class B directors. When an odd number of directors has been set by the Board of
Directors, there shall be one more Class B director than there are Class A
directors. All directors of the Corporation shall be shareholders of the
Corporation and no person who has attained the age of seventy (70) years shall
be eligible for election or appointment to the Board of Directors.

              4.03. Regular Meetings of the Board of Directors. A regular annual
meeting of the Board of Directors is to be held as soon as practicable after the
adjournment of each annual meeting of the shareholders, either at the place of
the shareholders meeting or at such other place as the directors elected at the
shareholders meeting may have been informed of at or prior to the time of their
election. Additional regular meetings may be held at regular intervals at such
places and at such times as the Board of Directors may determine.
   7
              4.04. Special Meetings of the Board of Directors. Special meetings
of the Board of Directors may be held whenever and wherever called for by the
Chairman of the Board or, at the request of three members of the Board of
Directors, by the Secretary.

              4.05. Notice of, and Waiver of Notice for, Directors Meetings. No
notice need be given of regular meetings of the Board of Directors. Notice of
the time and place of any special directors meeting shall be given at least 48
hours prior thereto. Notice shall be given in accordance with and shall be
deemed to be effective at the time and in the manner described in Arizona
Revised Statutes Section 10-141. Any director may waive notice of any meeting
and any adjournment thereof at any time before, during, or after it is held.
Except as provided in the next sentence below, the waiver must be in writing,
signed by the director entitled to the notice, and filed with the minutes or
corporate records. The attendance of a director at or participation of a
director in a meeting shall constitute a waiver of notice of such meeting,
unless the director at the beginning of the meeting (or promptly upon his/her
arrival) objects to holding the meeting or transacting business at the meeting,
and does not thereafter vote for or assent to action taken at the meeting.

              4.06. Director Quorum. A majority of the number of directors
prescribed according to Section 4.02 above, or if no number is so prescribed,
the number in office immediately before the meeting begins, shall constitute a
quorum for the transaction of business at any meeting of the Board of Directors,
unless the Articles require a greater number.

              4.07. Directors, Manner of Acting.

                     (a) If a quorum is present when a vote is taken, the
affirmative vote of a majority of the directors present shall be the act of the
Board of Directors unless the Articles require a greater percentage.

                     (b) Unless the Articles provide otherwise, any or all
directors may participate in a regular or special meeting by, or conduct the
meeting through the use of, any means of communication by which all directors
participating may simultaneously hear each other during the meeting. A director
participating in a meeting by this means is deemed to be present in person at
the meeting.

                     (c) A director who is present at a meeting of the Board of
Directors or a committee of the Board of Directors when corporate action is
taken is deemed to have assented to the action taken unless: (1) the director
objects at the beginning the meeting (or promptly upon his/her arrival) to
holding it or transacting business at the meeting; or (2) his/her dissent or
abstention from the action taken is entered in the minutes of the meeting; or
(3) he/she delivers written notice of his/her dissent or abstention to the
presiding officer of the meeting before its adjournment or to the Corporation
before 5:00 p.m. on the next business day after the meeting. The right of
dissent or abstention is not available to a director who votes in favor of the
action taken.

              4.08. Director Action Without a Meeting. Unless the Articles
provide otherwise, any action required or permitted to be taken by the Board of
Directors at a meeting may be taken without a meeting if the action is taken by
unanimous written consent of the Board of Directors as evidenced by one (1) or
more written consents describing the action taken, signed by each director and
filed with the minutes or corporate records. Action taken by consent is
effective when the last director signs the consent, unless the consent specifies
a different effective date. A signed consent has the effect of a meeting vote
and may be described as such in any document.

              4.09. Removal of Directors by Shareholders. The shareholders may
remove one (1) or more directors at a meeting called for that purpose if notice
has been given that a purpose of the meeting is such removal. The removal may be
with or without cause unless the Articles provide that directors
   8
may only be removed with cause. If a director is elected by a voting group of
shareholders, only the shareholders of that voting group may participate in a
shareholder vote to remove him. If less than the entire Board of Directors is to
be removed, a director may not be removed if the number of votes sufficient to
elect the director under cumulative voting is voted against the director's
removal.

              4.10. Board of Director Vacancies.

                     (a) Unless the Articles provide otherwise, if a vacancy
occurs on the Board of Directors, including a vacancy resulting from an increase
in the number of directors, either the shareholders or the Board of Directors
may fill the vacancy.

                     (b) If the vacant office was held by a director elected by
a voting group of shareholders, only the holders of shares of that voting group
are entitled to vote to fill the vacancy if it is filled by the shareholders.

                     (c) A vacancy that will occur at a specific later date (by
reason of resignation effective at a later date) may be filled before the
vacancy occurs, but the new director may not take office until the vacancy
occurs.

                     (d) The term of a director elected to fill a vacancy
expires at the next shareholders meeting at which directors are elected.

              4.11. Director Compensation. Unless otherwise provided in the
Articles by resolution of the Board of Directors, each director may be paid
his/her expenses, if any, of attendance of each meeting of the Board of
Directors or any committee thereof, and may be paid a stated salary as director
or a fixed sum for attendance at each meeting of the Board of Directors or any
committee thereof, or both. No such payment shall preclude any director from
serving the Corporation in any capacity and receiving compensation therefor.

              4.12. Director Committees.

                     (a) Creation of Committees. In addition to the committees
set forth in this Article IV and unless the Articles provide otherwise, the
Board of Directors may create one (1) or more other committees and appoint
members of the Board of Directors to serve on them. Each committee shall have
one (1) or more members, who serve at the pleasure of the Board of Directors.

                     (b) Selection of Members. The creation of a committee and
appointment of members to it shall be approved by the greater of (1) a majority
of all the directors in office when the action is taken or (2) the number of
directors required by the Articles to take such action.

                     (c) Required Procedures. Sections 4.03 through 4.08 of this
Article IV, which govern meetings, action without meetings, notice and waiver of
notice, and quorum and voting requirements of the Board of Directors, apply to
committees and their members.

                     (d) Authority. Unless limited by the Articles, each
committee may exercise those aspects of the authority of the Board of Directors
which the Board of Directors confers upon such committee in the resolution
creating the committee, provided, however, that a committee may not: (1)
authorize distributions; (2) approve or propose to shareholders action that
requires shareholder approval under the Arizona Business Corporation Act; (3)
fill vacancies on the Board of Directors or on any of its committees; (4) amend
the Articles of Incorporation without shareholder action as provided by law; (5)
adopt, amend or repeal these Bylaws; (6) approve a plan of merger not requiring
shareholder approval; (7) authorize or approve reacquisition of shares, except
according to a formula or method prescribed by the Board of Directors; (8)
authorize or approve the issuance or sale or contract for sale of shares or
determine the designation and relative rights, preferences, and limitations of a
class or series of shares,
   9
except within limits specifically prescribed by the Board of Directors; or (9)
fix the compensation of directors for serving on the Board of Directors or any
committee of the Board of Directors.

              4.13. Executive Committee. The Board of Directors shall appoint an
executive committee, consisting of at least three directors, including the
Chairman of the Board, who shall be the Chairman of the Committee. The committee
shall have and exercise all lawfully delegable powers of the Board of Directors
while the Board is not in session, except as such delegation of powers may be
limited from time to time by resolution of the Board of Directors.

              4.14. Audit Committee. The Board of Directors shall appoint an
audit committee, consisting of at least two directors, provided, however, that
directors who are also officers of the Corporation shall not be eligible for
membership on the committee. The audit committee shall:

                     (a) recommend the auditors;

                     (b) review the overall scope of the audit and the final
                         opinion of the external auditors;

                     (c) review the financial and accounting policies and
                         procedures used by the Corporation;

                     (d) approve the organization and procedures of the internal
                         accounting and auditing departments;

                     (e) prepare a report of the Board of Directors;

                     (f) assure compliance with ethical standards.

              4.15. Compensation and Nominating Committee. The Board of
Directors shall appoint a compensation and benefits committee, consisting of a
least two non-officer directors. The committee shall recommend to the Board
candidates for membership on the Board of Directors, and shall be empowered to
make recommendations to the Board of Directors concerning the following:

                     a) employees' salaries and bonuses;
                     b) the company's Restricted Stock Plan;
                     c) the company's Incentive Bonus Plan;
                     d) all other company compensation and benefit plans.

              4.16. Retirement Plan Administrative Committee. The Board of
Directors shall appoint an administrative committee consisting of three
individuals to establish and maintain the Corporation's funding policy for its
Retirement Plan and Trust for Salaried Employees, the Corporation's 401(k) Plan
and to act as fiduciary there under. Individuals may be eligible for membership
on the administrative committee without being directors or officers of the
Corporation.

              4.17. Director Resignations. Any director or committee member may
resign from his or her office at any time by written notice delivered to the
Board of Directors, the Chairman of the Board, or the Corporation at its known
place of business. Any such resignation will be effective upon its receipt
unless some later time is therein fixed, and then from that time. The acceptance
of a resignation will not be required to make it effective.

                                   V. OFFICERS

              5.01. Number of Officers. The officers of the Corporation shall be
a President, a Secretary, and a Treasurer, each of whom shall be appointed by
the Board of Directors. Such other officers and assistant officers as may be
deemed necessary, including any Vice Presidents, may be appointed by the Board
of Directors. If specifically authorized by the Board of Directors, an officer
may appoint one (1) or more other officers or assistant officers. The same
individual may simultaneously hold more than one (1) office in the Corporation.
   10
              5.02. Appointment and Term of Office. The officers of the
Corporation shall be appointed by the Board of Directors for a term as
determined by the Board of Directors. The designation of a specified term grants
to the officer no contract rights, and the Board of Directors can remove the
officer at any time prior to the termination of such term. If no term is
specified, an officer of the Corporation shall hold office until he or she
resigns, dies, or until he or she is removed in the manner provided by law or in
Section 5.03 of this Article V. The regular election or appointment of officers
will take place at each annual meeting of the Board of Directors, but elections
of officers may be held at any other meeting of the Board.

              5.03. Resignation and Removal of Officers. An officer may resign
at any time by delivering written notice to the Corporation at its known place
of business. A resignation is effective when the notice is delivered unless the
notice specifies a later effective date or event. Any officer may be removed by
the Board of Directors at any time, with or without cause. Such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Appointment of an officer shall not of itself create contract rights.

              5.04. Duties of Officers. Officers of the Corporation shall have
authority to perform such duties as may be prescribed from time to time by law,
in these Bylaws, or by the Board of Directors, the President, or the superior
officer of any such officer. Each officer of the Corporation (in the order
designated herein or by the Board) will be vested with all of the powers and
charged with all of the duties of his or her superior officer in the event of
such superior officer's absence, death, or disability.

              5.05. Bonds and Other Requirements. The Board of Directors may
require any officer to give a bond to the Corporation (with sufficient surety
and conditioned for the faithful performance of the duties of his or her office)
and to comply with such other conditions as may from time to time be required of
him or her by the Board of Directors.

              5.06. Chairman of The Board. The Chairman shall be appointed by
the Board of Directors and shall preside at all meetings of the shareholders and
of the Board of Directors. He shall have such other powers and perform such
other duties as may be assigned to him by the Board of Directors. Unless he also
serves as the Chief Executive Officer, the Chairman shall not be considered an
employee of the Corporation.

              5.07. Chief Executive Officer. The Chief Executive Officer shall
be appointed by the Board of Directors and shall be responsible for the general
supervision of the business and property of the Corporation. He shall possess
the same power as the president to sign all documents authorized by the Board of
Directors, unless restricted by law. In the absence of the Chairman, the Chief
Executive Officer shall preside at meetings of the shareholders and the Board.
He shall have the power, subject to the authority of the Board of Directors, to
appoint and discharge all officers (except those required by these Bylaws to be
appointed by the Board), employees, and agents; to define their duties, and to
fix their compensation, provided that any compensation over $50,000 per year
must first be approved by the Board. In the absence of the Chairman, or the
President, or both, the Chief Executive Officer shall undertake those duties and
responsibilities, if so directed by the Board. The Chief Executive Officer shall
have such other powers and responsibilities as may be assigned to him by the
Board.

              5.08. President. Unless otherwise specified by resolution of the
Board of Directors, the President, subject to the control of the Board of
Directors, shall supervise and control all of the business and affairs of the
Corporation and the performance by all of its other officers of their respective
duties and in general shall perform all duties incident to the office of
President and such other duties as may be prescribed by the Board of Directors
from time to time. The President shall, when present, and in the absence of a
Chairman of the Board and the Chief Executive Officer, preside at all meetings
of the shareholders and of the Board of Directors. The President will be a
proper officer to sign on behalf of the Corporation any deed, bill of sale,
assignment, option, mortgage, pledge, note, bond, evidence of indebtedness,
application, consent (to service of process or otherwise), agreement, indenture,
contract, or
   11
other instrument, except in each such case where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
Bylaws to some other officer or agent of the Corporation, or shall be required
by law to be otherwise signed or executed. The President may represent the
Corporation at any meeting of the shareholders or members of any other
Corporation, association, partnership, joint venture, or other entity in which
the Corporation then holds shares of capital stock or has an interest, and may
vote such shares of capital stock or other interest in person or by proxy
appointed by him or her, provided that the Board of Directors may from time to
time confer the foregoing authority upon any other person or persons.

              5.09. Chief Operating Officer. Unless otherwise specified by
resolution of the Board of Directors, the Chief Operating Officer, subject to
control of the Board of Directors, shall supervise and control all of the
business and affairs of the Corporation and the performance by all of its other
officers of their respective duties and in general shall perform all duties
incident to the office of Chief Operating Officer and such other duties as may
be prescribed by the President or the Board of Directors from time to time. The
Chief Operating Officer shall, when present, and in the absence of the Chairman
of the Board, the Chief Executive Officer, and President, preside at all
meetings of the shareholders and of the Board of Directors. The Chief Operating
Officer will be a proper officer to sign on behalf of the Corporation any deed,
bill of sale, assignment, option, mortgage, pledge, note, bond, evidence of
indebtedness, application, consent (to service of process or otherwise),
agreement, indenture, contract, or other instrument, except in each such case
where the signing and execution thereof shall be expressly delegated by the
Board of Directors or by these Bylaws to some other officer or agent of the
Corporation, or shall be required by law to be otherwise signed or executed. The
Chief Operating Officer shall have such other powers and responsibilities as may
be assigned to him by the President or the Board of Directors.

              5.10. The Vice President. If appointed, in the absence of the
President or in the event of his/her death or disability, the Vice President (or
in the event there be more than one Vice President, the Vice Presidents in the
order designated at the time of their election, or in the absence of any such
designation, then in the order of their appointment) shall perform the duties of
the President, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the President. If there is no Vice President or in
the event of the death or disability of all Vice Presidents, then the Treasurer
shall perform such duties of the President in the event of his or her absence,
death, or disability. Each Vice President will be a proper officer to sign on
behalf of the Corporation any deed, bill of sale, assignment, option, mortgage,
pledge, note, bond, evidence of indebtedness, application, consent (to service
of process or otherwise), agreement, indenture, contract, or other instrument,
except in each such case where the signing and execution thereof shall be
expressly delegated by the Board of Directors or by these Bylaws to some other
officer or agent of the Corporation, or shall be required by law to be otherwise
signed or executed. Any Vice President may represent the Corporation at any
meeting of the shareholders or members of any other Corporation, association,
partnership, joint venture, or other entity in which the Corporation then holds
shares of capital stock or has an interest, and may vote such shares of capital
stock or other interest in person or by proxy appointed by him or her, provided
that the Board of Directors may from time to time confer the foregoing authority
upon any other person or persons. A Vice President shall perform such other
duties as from time to time may be assigned to him/her by the President or by
the Board of Directors.

              5.11. The Secretary. The Secretary shall: (a) keep the minutes of
the proceedings of the shareholders and of the Board of Directors and any
committee of the Board of Directors and all unanimous written consents of the
shareholders, Board of Directors, and any committee of the Board of Directors in
one (1) or more books provided for that purpose; (b) see that all notices are
duly given in accordance with the provisions of these Bylaws or as required by
law; (c) be custodian of the corporate records and of any seal of the
Corporation; (d) when requested or required, authenticate any records of the
Corporation; (e) keep a register of the address of each shareholder which shall
be furnished to the Secretary by such shareholder; and (f) in general perform
all duties incident to the office of Secretary and such other duties as from
time to time may be assigned to him/her by the President or by the Board of
Directors. Except as may otherwise be specifically provided in a resolution of
the Board of Directors, the
   12
Secretary will be a proper officer to take charge of the Corporation's stock
transfer books and to compile the voting record pursuant to Section 3.05 above,
and to impress the Corporation's seal, if any, on any instrument signed by the
President, any Vice President, or any other duly authorized person, and to
attest to the same. In the absence of the Secretary, a secretary pro tempore may
be chosen by the directors or shareholders as appropriate to perform the duties
of the Secretary.

              5.12. The Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the Corporation;
(b) receive and give receipts for moneys due payable to the Corporation from any
source whatsoever, and deposit all such moneys in the name of the Corporation in
such bank, trust companies, or other depositories as shall be selected by the
Board of Directors or any proper officer; (c) keep full and accurate accounts of
receipts and disbursements in books and records of the Corporation; and (d) in
general perform all of the duties incident to the office of Treasurer and such
other duties as from time to time may be assigned to him/her by the President or
by the Board of Directors. The Treasurer will render to the President, the
directors, and the shareholders at proper times and account of all his or her
transactions as Treasurer and of the financial condition of the Corporation. The
Treasurer shall be responsible for preparing and filing such financial reports,
financial statements, and returns as may be required by law.

              5.13. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretaries and the Assistant Treasurers, when authorized by the Board
of Directors, may sign with the President or a Vice President certificates for
shares of the Corporation, the issuance of which shall have been authorized by a
resolution of the Board of Directors. The Assistant Secretaries and Assistant
Treasurers, in general, shall perform such duties as shall be assigned to them
by the Secretary or the Treasurer, respectively, or by the President or the
Board of Directors.

              5.14. Salaries. The salaries of the officers of the Corporation
may be fixed from time to time by the Board of Directors or (except as to the
President's own) left to the discretion of the President. No officer will be
prevented from receiving a salary by reason of the fact that he or she is also a
director of the Corporation.

              5.15. Additional Appointments. In addition to the officers
contemplated in this Article V, the Board of Directors may appoint other agents
of the Corporation with such authority to perform such duties as may be
prescribed from time to time by the Board of Directors.

                           VI. EXECUTION OF DOCUMENTS

              6.01. Contracts, Etc. All contracts, conveyances, leases or other
corporate instruments shall be executed on behalf of the Corporation by the
Chairman of the Board, by the President, the Executive Vice President, the Sr.
Vice President, or by such other officer or officers of the Corporation to whom
the Chairman of the Board, the President or the Board of Directors may delegate
such authority, subject to the following:

                     (a) No loan greater than $1,000,000 shall be contracted on
behalf of the Corporation unless authorized by the Board of Directors.

                     (b) No real property of the Corporation may be sold for
more than $1,000,000, nor exchanged for other property valued at more than
$1,000,000 unless authorized by the Board of Directors.

                     (c) A capital expenditure in excess of $1,000,000 for any
one purpose or project shall be authorized by the Board of Directors.

                     (d) In matters of auction bidding for property or property
rights, no bids totaling over $1,000,000 per auction shall be made without the
authorization of the Board of Directors.
   13
       The Chairman or President shall report to the Board the total capital
       expenditures, the total dollar amount of sales or exchanges, and the
       total dollar amount of auction bids made, which did not require Board
       approval.

              Notwithstanding the foregoing provisions of Section 6.01, Board
approval shall not be required in connection with capital contributions and
loans by the Corporation to its wholly-owned subsidiaries. The Chairman or the
President shall report to the Board such information concerning the transactions
between the Corporation and its wholly owned subsidiaries, as the Board shall
from time to time request.

              6.02. Proxies. Unless otherwise provided by resolution of the
Board of Directors, the Chairman of the Board may in the name and on behalf of
the Corporation appoint any attorney or attorneys, agent or agents of the
Corporation (who may be or include himself or herself), in the name and on
behalf of the Corporation to cast the votes which the Corporation may be
entitled to cast as a shareholder or otherwise in any other Corporation any of
whose shares or other securities may be held by the Corporation, at meetings of
the holders of the shares or other securities of such other Corporation, or to
consent in writing to any action by such other Corporation, may instruct the
person or persons so appointed as to the manner of casting such votes or giving
such consent, and may execute or cause to be executed in the name of, on behalf
of, and under the corporate seal of, the Corporation all written proxies or
other instruments as may be necessary or proper to evidence the appointment of
such attorneys and agents.

                 VII. CERTIFICATES FOR SHARES AND THEIR TRANSFER

              7.01. Certificates for Shares.

                     (a) Content. Certificates representing shares of the
Corporation shall, at a minimum, state on their face the name of the issuing
Corporation and that it is formed under the laws of the State of Arizona, the
name of the person to whom issued, and the number and class of shares and
designation of the series, if any, the certificate represents. Such certificates
shall be signed (either manually or by facsimile to the extent allowable by law)
by one or more officers of the Corporation, as determined by the Board of
Directors, or, if no such determination is made, by any of the Chairman of the
Board (if any), the President, any Vice President, the Secretary, or the
Treasurer of the Corporation, and may be sealed with a corporate seal or a
facsimile thereof. Each certificate for shares shall be consecutively numbered
or otherwise identified and will exhibit such information as may be required by
law. If a supply of un-issued certificates bearing the facsimile signature of a
person remains when that person ceases to hold the office of the Corporation
indicated on such certificates, they may still be countersigned, registered,
issued, and delivered by the Corporation's transfer agent and/or registrar
thereafter, as though such person had continued to hold the office indicated on
such certificate.

                     (b) Legend as to Class or Series. If the Corporation is
authorized to issue different classes of shares or different series within a
class, the designations, relative rights, preferences, and limitations
applicable to each class and the variations in rights, preferences, and
limitations determined for each series (and the authority of the Board of
Directors to determine variations for future series) shall be summarized on the
front or back of each certificate. Alternatively, each certificate may state
conspicuously on its front or back that the Corporation will furnish the
shareholder this information on request in writing and without charge.

                     (c) Shareholder List. The name and address of the person to
whom shares are issued, with the number of shares and date of issue, shall be
entered on the stock transfer books of the Corporation.
   14
                     (d) Lost Certificates. In the event of the loss, theft, or
destruction of any certificate representing shares of the Corporation or of any
predecessor Corporation, the Corporation may issue (or, in the case of any such
shares as to which a transfer agent and/or registrar have been appointed, may
direct such transfer agent and/or registrar to countersign, register, and issue)
a new certificate, and cause the same to be delivered to the registered owner of
the shares represented thereby; provided that such owner shall have submitted
such evidence showing the circumstances of the alleged loss, theft, or
destruction, and his, her, or its ownership of the certificate, as the
Corporation considers satisfactory, together with any other facts that the
Corporation considers pertinent; and further provided that, if so required by
the Corporation, the owner shall provide a bond or other indemnity in form and
amount satisfactory to the Corporation (and to its transfer agent and/or
registrar, if applicable).

              7.02 Registration of the Transfer of Shares. Registration of the
transfer of shares of the Corporation shall be made only on the stock transfer
books of the Corporation. In order to register a transfer, the record owner
shall surrender the shares to the Corporation for cancellation, properly
endorsed by the appropriate person or persons with reasonable assurances that
the endorsements are genuine and effective. Unless the Corporation has
established a procedure by which a beneficial owner of shares held by a nominee
is to be recognized by the Corporation as the owner, the Corporation will be
entitled to treat the registered owner of any share of the capital stock of the
Corporation as the absolute owner thereof and, accordingly, will not be bound to
recognize any beneficial, equitable, or other claim to, or interest in, such
share on the part of any other person, whether or not it has notice thereof,
except as may expressly be provided by applicable law.

              7.03. Shares Without Certificates. The Board of Directors may
authorize the issuance of un-certificated shares by the Corporation and may
prescribe procedures for the issuance and registration of transfer thereof and
with respect to such other matters as the Board of Directors shall deem
necessary or appropriate.


                 VIII. INDEMNIFICATION OF DIRECTORS AND OFFICERS

              8.01. Indemnification. Unless otherwise provided by these Bylaws,
the Corporation shall hold harmless and indemnify each of its directors and
officers ("indemnities") to the fullest extent permitted by Arizona law.

              8.02. Effect of Repeal. No repeal or amendment of this Article
shall diminish indemnities' right to indemnification for acts taken before the
date of repeal or amendment.

                                IX. DISTRIBUTIONS

              9.01. Distributions. Subject to such restrictions or requirements
as may be imposed by applicable law or the Corporation's Articles or as may
otherwise be binding upon the Corporation, the Board of Directors may from time
to time declare, and the Corporation may pay or make, dividends or other
distributions to its shareholders.

                                X. CORPORATE SEAL

              10.01 Corporate Seal. The Board of directors may provide for a
corporate seal of the Corporation that will have inscribed thereon any
designation including the name of the Corporation, Arizona as the state of
incorporation, the year of incorporation, and the words, "Corporate Seal."

                                  XI. EXEMPTION
   15

              11.01. Exemption From The Arizona Corporate Takeover Act. The
Corporation, pursuant to the provisions of ARS 10-1211(A)(2) and 10-1223(A)(2),
and pursuant to the approval of the shareholders on May 10, 1991, has chosen to
exempt itself from the provisions of ARS 10-1211 through 10-1223, concerning
Control Share Acquisitions and Business Combinations. This amendment does not
apply to any "control share acquisition" as defined in ARS 10-1201(9) made on or
before May 10, 1991, or to any "business combination" as defined in ARS
10-1201(10) whose "share acquisition date" as defined in ARS 10-1201(14) is on
or before May 10, 1991.

                                 XII. AMENDMENTS

              12.01 Amendments. The Corporation's Board of Directors may amend
or repeal the Corporation's Bylaws unless:

                     (a)    the Articles or the Arizona Business Corporation Act
                            reserve this power exclusively to the shareholders
                            in whole or part; or

                     (b)    the shareholders in adopting, amending, or repealing
                            a particular Bylaw provide expressly that the Board
                            of Directors may not amend or repeal that Bylaw.

The Corporation's shareholders may amend or repeal the Corporation's Bylaws even
though the Bylaws may also be amended or repealed by its Board of Directors.

EX-10.1

   1
EXHIBIT 10.1
Related party loan agreement

                                 LOAN AGREEMENT

DATE:      April 3, 2001

LENDER:    BRIDGE FINANCIAL CORPORATION
           an Arizona corporation
           Attention: R. Randy Stolworthy
           333 North 44th Street, Suite 420
           Phoenix, Arizona 85008
           Facsimile Number (602) 952-8769


BORROWER:  SUN NZ, LLC
           an Arizona limited liability company
           Attention: William Pope
           2525 East Camelback Road, Suite 888
           Phoenix, Arizona 85016
           Facsimile Number (602) 852-5599

BACKGROUND:

              A. Borrower, whose federal tax identification number is
86-0760026, has applied to Lender for a loan ("Loan") in the principal amount of
Eight Million and No/100 Dollars ($8,000,000).

              B. To secure payment of the Loan and the performance of all
obligations of Borrower to Lender under this Loan Agreement ("Agreement") and
the other Loan Documents (as defined in this Agreement), Borrower shall give
Lender the following:

                     (i) a first lien against up to 2,985,583 shares of no par
              value common stock ("Pledged Stock") in NZ Corporation
              ("Corporation"), which Pledged Stock is owned by Borrower; and

                     (ii) an unconditional guaranty ("Guaranty") from William
              Pope and Linda Pope, husband and wife ("Guarantors").


AGREEMENT:

              Borrower agrees to borrow from Lender and Lender, in reliance upon
the representations and warranties from Borrower as set forth in this Agreement,
agrees to make the Loan to Borrower, subject to the terms and conditions set
forth in this Agreement.


                                    SECTION 1
                      AMOUNT AND GENERAL TERMS OF THE LOAN

              1.1    LOAN AMOUNT.

                     The amount of the Loan ("Loan Amount") shall be Eight
Million and No/100 Dollars ($8,000,000).

              1.2    INTEREST.

                     Interest ("Interest") on the unpaid balance of the Loan
shall be at a rate ("Rate") of twenty percent (20%) per annum. During any Event
of Default (as defined in this Agreement), the Rate shall be increased an
additional eight percent (8%) per annum ("Default Rate") from the date of an
Event
   2
of Default if Borrower does not cure an Event of Default as provided in the Note
(as defined in this Agreement). The Interest shall be calculated on the basis of
a 360 day year and 30 day month, and if not paid by the 10th day of each month
the due and unpaid Interest shall be compounded effective on the first (1st) day
of each such month.

              1.3    TERM.

                     The term ("Term") of the Loan shall be for a period of six
(6) months from the Closing (as defined in this Agreement) of the Loan.

              1.4    MULTIPLE ADVANCES.

                     The Loan will be funded in two or more advances. The first
("First Advance") shall not exceed Five Million and No/100 Dollars and the
subsequent advances ("Subsequent Advances") shall not exceed Three Million and
No/100 Dollars ($3,000,000) in the aggregate. Interest on the amount advanced
shall commence on the date of each advance. The First Advance shall be paid at
the Closing (as defined in this Agreement), and Subsequent Advances shall be
paid within three (3) days after Borrower gives Lender notice of its request for
the Subsequent Advances, but in no event shall any of the Subsequent Advances be
funded prior to April 18, 2001. At the closing of the First Advance Borrower
shall pledge 1,799,083 shares which shall be deemed sufficient to support the
full five million & NO/100 Dollar advance. At the Closing of the Subsequent
Advances, Borrower shall pledge a sufficient number of shares of the Pledged
Stock to provide a seventy five percent (75%) loan to value based upon the Bid
Price (as defined in this subsection). "Bid Price" shall be the closing bid
price on the American Stock Exchange for the Pledged Stock on the last business
day prior to the date of the First Advance and each of the Subsequent Advances.
For example, if Lender advances $900,000 to Borrower at a time when the Bid
Price is $1.00 per share, Borrower shall pledge 1,200,000 shares of the Pledged
Stock.

              1.5    PAYMENTS.

                     Interest shall be payable quarterly in arrears commencing
on the first day of the third month following the Closing, it being understood
that the first payment may include a partial month. All unpaid Interest and
principal shall be paid at the end of the Term.

              1.6    LATE CHARGE.

                     Borrower shall pay Lender a late charge of ten percent
(10%) of any payment not received by Lender within ten (10) days after said
payment is due, including the unpaid balance of the Loan at the end of the Term.

              1.7    ACCOUNT SERVICING.

                     At the Closing the Loan shall be serviced by Lender. The
costs to establish and maintain the servicing account shall be paid by Borrower,
and the costs shall be what are customarily charged for account servicing in
Maricopa County, Arizona. The following shall apply in connection with the
servicing:

                     (a) A payment shall be deemed to have been paid to Lender
              as of the date the payment is processed by Lender as long as
              Borrower's check is honored by Borrower's bank. Borrower
              acknowledges that the processing of funds by Lender shall be
              performed in the ordinary course of Lender's business and that the
              time involved in the processing may vary depending upon the
              administrative workload of Lender. Any payment received by Lender
              shall be conditionally accepted by Lender until such time as the
              processing of the payment is completed.

                     (b) Payments shall be applied in the order received by
              Lender and as provided in the Note (as defined in this Agreement).

                     (c) Borrower shall make payments to Lender as required by
              the Note and other Loan Documents without the need for a notice
              from Lender to Borrower that any payment is due.

                     (d) In addition to a statement for a full payoff of the
              unpaid balance of the Loan, Lender shall give Borrower a statement
              showing the account activity as requested by Borrower, but not
              more than two (2) times during the Term.
   3
              1.8    PREPAYMENT.

                     Borrower shall have the right to prepay the Loan in whole
or in part without penalty at any time subject to five (5) days notice to Lender
of such prepayment.

              1.9    DISBURSEMENTS.

                     Lender shall deduct at the Closing the following
("Disbursements") which shall be charged to Borrower:

                     1.9.1  Lender's Expenses.

                            All fees and costs paid and incurred by Lender in
connection with the negotiation, investigation, evaluation, processing and
closing of the Loan, including, but not limited to, attorneys' fees of Lender
and any other fees and costs in connection with the Loan that are not
specifically referenced in this Agreement ("Lender's Expenses").

                     1.9.2  Financial Liens.

                            Any financing or similar liens against the Pledged
Stock.

                     1.9.3  Balance. The balance of the First Advance to
                            Borrower.

              1.10   PROMISSORY NOTE.

                     The Loan shall be evidenced by a promissory note ("Note")
from Borrower to Lender in the form and content attached to this Agreement as
Exhibit A.

              1.11   SECURITY FOR NOTE.

                     Borrower's obligations under the Note shall be secured and
otherwise documented by the execution, delivery and perfection of the following
instruments and documents:

                     1.11.1 Guaranty.

                            The Guaranty from the Guarantors in the form and
content attached to this Agreement as Exhibit B.

                     1.11.2 Stock Certificate and Assignment.

                            The stock certificate for the Pledged Stock ("Stock
Certificate") and a separate assignment of the stock certificate ("Stock
Certificate Assignment") in the form and content attached to this Agreement as
Exhibit C.

                     1.11.3 Pledge and Assignment.

                            A pledge of stock and collateral assignment and
security agreement ("Pledge and Assignment") of the Pledged Stock in the form
and content attached to this Agreement as Exhibit D.

                     1.11.4 Financing Statement.

                            Uniform Commercial Code Financing Statement in
connection with the security interest granted to Lender under the Stock Pledge
and Assignment ("Financing Statement") in the form and content attached to this
Agreement as Exhibit E.


                     1.11.5 Transfer Agent Letter.

                            A letter from Lender and Borrower to American Stock
Transfer & Trust Company, the transfer agent for the common stock of the
Corporation ("Transfer Agent Letter"), in the form and content attached to this
Agreement as Exhibit F.

The Stock Certificate, Stock Certificate Assignment, Pledge and Assignment,
Financing Statement and Transfer Agent Letter shall be executed and delivered at
the time of both the First Advance and any Subsequent Advances.

              1.12   OTHER DOCUMENTS.
   4
                     If requested by Lender, Borrower and Guarantors shall
execute and deliver to Lender such other documents or instruments ("Other
Documents") as are required to reflect the terms and provisions of this
Agreement and to perfect and protect Lender's lien against the Pledged Stock.

              1.13   LOAN DOCUMENTS.

                     This Agreement, the documents and instruments described in
the Sections above captioned "Promissory Note", "Security for Note" and "Other
Documents" shall be collectively referred to in this Agreement as the "Loan
Documents."

              1.14   NO ESCROW.

                     There will not be an escrow for the Loan.

              1.15   CLOSING.

                     The portion of the First Advance not deducted by Lender
shall be disbursed by Lender as provided in this Agreement when all terms and
conditions of the Agreement have or will be performed to the satisfaction of
Lender; provided, however, that said date shall not be later than April 9,
2001("Closing"), unless a later date is approved by Lender and Borrower.


                                    SECTION 2
                         REPRESENTATIONS AND WARRANTIES

              Borrower hereby represents and warrants to Lender as of the date
of this Agreement as follows:

              2.1    ORGANIZATION OF BORROWER.

                     Borrower is a limited liability company, duly formed and
validly existing under the laws of the state of Arizona; Borrower and the person
or entity signing for it have the requisite power and authority to enter into
and execute the Loan Documents; and Borrower has the requisite power and
authority to carry out all of the provisions thereof, transact the business in
which it is engaged, and perform under all of the terms and provisions of the
Loan Documents.

              2.2    ORGANIZATION OF MANAGING MEMBER OF BORROWER.

                     The managing member of Borrower is Sun NMA, Inc., an
Arizona corporation ("Managing Member"). The Managing Member is duly formed and
validly existing under the laws of the state of Arizona; the Managing Member's
federal tax identification number is 86-0760025; the Managing Member and the
person or entity signing for it have the requisite power and authority to enter
into and execute the Loan Documents; and the Managing Member has the requisite
power and authority to carry out all of the provisions thereof, transact the
business in which it is engaged, and perform under all of the terms and
provisions of the Loan Documents.

              2.3    EXECUTION AND DELIVERY OF LOAN DOCUMENTS.

                     The execution and delivery of the Loan Documents by
Borrower and the consummation of the transaction that is the subject of this
Agreement: (i) have been duly authorized by all actions required or necessary
under the terms and provisions of all applicable governing instruments, laws or
otherwise; (ii) create legal, valid and binding obligations of Borrower, subject
to or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium
or other similar laws relating to or affecting the rights of creditors generally
and to general principles of equity; and, (iii) do not conflict with or result
in the violation of any valid regulation, order, writ, judgment, injunction or
decree of any court or governmental or municipal instrumentality, or in the
breach of or default under any indenture, contract, agreement or other
instrument to which Borrower is a party or by which its assets may be bound.

              2.4    JUDGMENTS AND LITIGATION.

                     There are not any outstanding or unpaid judgments or
arbitration awards against Borrower or any of the Pledged Stock and there are
not any actions, suits or proceedings pending or, to the knowledge of Borrower,
threatened against the Borrower or any of the Pledged Stock or adversely
affecting Borrower's ability to perform under the Loan Documents in any court or
before any governmental or quasi-governmental body, and, to the knowledge of
Borrower, Borrower and the Pledged Stock are not subject to any default or
violation with respect to any valid rule, regulation, statute, law, ordinance,
order, writ, judgment, decree, code, requirement or order of any court or other
governmental or municipal department, commission, board, bureau, agency or
instrumentality.
   5
              2.5    CRIMINAL MATTERS.

                     Borrower, and to Borrower's knowledge, Guarantors and the
owners of Borrower and Guarantors, are not the subject of a criminal
investigation, indictment or conviction, including any by or relating to the
United States Internal Revenue Service.

              2.6    BANKRUPTCY MATTERS.

                     Borrower, and to Borrower's knowledge, Guarantors and the
owners of Borrower and Guarantors, are not the subject of a voluntary or
involuntary bankruptcy proceeding within the last seven (7) years.

              2.7    TITLE TO THE PLEDGED STOCK.

                     Borrower has and shall have at the Closing good and
marketable title to the Pledged Stock free and clear of all liens, charges,
claims, options, encumbrances and other matters.

              2.8    LIENS.

                     Borrower has not made any contract or arrangement of any
kind which has given rise to, or the performance of which by the other party
thereto, would give rise to, a lien or claim of lien of any kind whatsoever
against any of the Pledged Stock for which payment in full has not been arranged
out of the Funds.

              2.9    NO ADJUSTMENT.

                     Each obligation and the indebtedness created under the Loan
Documents is free from any claim by Borrower for credit, deduction, allowance,
dispute, defense, set-off or counterclaim.

              2.10   THIRD PARTY CONSENT.

                     Borrower has acquired the consent, approval or
authorization of all third parties (including any governmental authority)
necessary to enter into, execute and deliver the Loan Documents and perform the
acts and obligations required or contemplated thereby.

              2.11   COMMISSIONS OR FEES.

                     Borrower has not employed or retained any broker or finder
or incurred liability for any brokerage fees, commissions or finder's fees in
connection with the Loan, and Borrower hereby agrees to indemnify Lender against
any claims for brokerage fees or commissions and to pay all expenses incurred by
Lender in connection with the defense of any action or proceeding brought by any
person or entity to collect any such brokerage fees or commissions, including,
but not limited to attorneys' fees and costs, and Lender hereby expressly
rejects any obligation to pay any such commission or fee in connection with the
Loan.

              2.12   ACCURACY OF DOCUMENTS.

                     All Documents and Information (as defined in this
Agreement) furnished or to be furnished to Lender in support of or in connection
with the Loan materially, accurately and fully set forth (or, as the case may
be, will set forth) the facts contained or purported to be contained therein.

              2.13   SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

                     Except as otherwise provided in the Loan Documents, the
foregoing Representations and Warranties and all representations and warranties
set forth in any of the Loan Documents shall survive until the obligations of
Borrower to Lender shall have been fully performed.


                                    SECTION 3
                        AFFIRMATIVE COVENANTS OF BORROWER

              Borrower covenants and agrees with Lender that during the term of
this Agreement and so long as any obligation remains owing to Lender by Borrower
under the Loan Documents:

              3.1    REMOVAL OF LIENS.

                     Except as otherwise allowed in this Agreement, in the event
that any lien or encumbrance, which could be superior to the lien of Lender is
filed against the Pledged Stock, within
   6
thirty (30) days from the date that Borrower receives notice of same, Borrower
shall have such lien released or bonded-over in a manner acceptable to Lender;
provided, however, that Borrower may contest in good faith the validity or
amount of any such lien or encumbrance by appropriate proceedings provided by
law, including payment thereof under protest, if required, upon furnishing to
Lender a cash deposit or other security in an amount and in form satisfactory to
Lender, which deposit or other security shall be returned to the party
depositing the same upon final payment by Borrower of said lien or encumbrance;
provided further, that upon final determination (which, in the case of a
judgment, shall mean a final judgment not subject to appeal or further appeal)
with respect to any such contested lien or encumbrance, Borrower will promptly
pay any sums found to be due by it thereon.

              3.2    ACCESS TO BORROWER'S BOOKS AND RECORDS AND THE PROPERTY.

                     Borrower shall permit and hereby authorizes Lender or its
agents, at all reasonable times during normal business hours, subject to 24
hours verbal notice, to have unrestricted access to and to copy its records,
books of account, ledgers, journals, contracts, subcontracts, bills and
statements relating to the Pledged Stock, including any supporting or related
vouchers or other instruments. If Lender so requires, such records, books,
vouchers or other documents shall be made available at Borrower's office to an
accountant of Lender's choice for audit, examination, inspection or duplication.

              3.3    SERVICES TO BENEFIT LENDER.

                     All inspections and other services rendered by or on behalf
of Lender, whether or not paid by Borrower, shall be rendered solely for the
protection and benefit of Lender, and Borrower shall not be entitled to claim
any loss or damage against any of Lender's independent contractors, agents or
employees for failure to properly discharge their duties to Lender.

              3.4    LOAN DOCUMENTS.

                     Each and every term and provision of the Loan Documents
shall become and be covenants and agreements under this Agreement.

              3.5    PROHIBITED ACTS.

                     Borrower shall not do the following without the consent of
Lender:

                     3.5.1  Transfer, assign or convey part or all of the
Pledged Stock.

                     3.5.2  Use part or all of the Pledged Stock or any interest
in the Borrower as collateral for a loan or other credit facility.

                     3.5.3  Allow any change in the ownership and control of
Borrower or of any organization or entity owning an interest in Borrower, except
any caused by the death of an individual.

                     3.5.4  Cause the Pledged Stock to become subject to any
voting trust or similar arrangement.

                     3.5.5  Give a proxy to vote the Pledged Stock to any party
other than Lender.

              3.6    EXECUTORY CONTRACTS.

                     Notwithstanding any provision to the contrary in this
Agreement, Borrower shall have the right to enter into one or more contracts for
the sale or refinancing of the Pledged Stock, if the sale or refinancing will
result in the repayment of the indebtedness due Lender and the release of the
Pledged Stock upon the consummation of such transaction.


                                    SECTION 4
                        CONDITIONS PRECEDENT TO THE LOAN

              Lender shall not be obligated to make the Loan unless the
following conditions precedent ("Conditions") shall have been satisfied as
determined by Lender in its sole discretion before the Closing (or sooner as
provided in this Section):
   7
              4.1    TRUTH OF REPRESENTATIONS AND WARRANTIES.

                     The representations and warranties made by Borrower in the
Loan Documents shall be correct in all material respects on and as of the date
of this Agreement and as of the date of the Closing with the same effect as
though they had been made on and as of the date of the Closing.

              4.2    NO EVENT OF DEFAULT.

                     There shall exist no condition, event or act that would
constitute an Event of Default hereunder and no condition, event or act which,
with the giving of notice or lapse of time, or both, as specified in this
Agreement, would constitute an Event of Default hereunder.

              4.3    DOCUMENTS AND INFORMATION.

                     If not already delivered or a different delivery is not
specified, Borrower shall deliver to Lender on or before the Closing true and
correct copies of the following ("Documents and Information"):

                     4.3.1  Organizational Documents.

                            The articles of organization and operating agreement
of Borrower and the Articles of Incorporation and By-Laws of the Managing
Member, including any amendments, and any other documents and information to
show the existence and authority of Borrower and the Managing Member.

                     4.3.2  Financial Statements.

                            The following financial statements and information
for Borrower:

                            (a) Balance sheet and profit and loss statement for
                     the year ending December 31, 2000.

                            (b) By June 1, 2001, interim balance sheet and
                     profit and loss statement through February 28, 2001.

                     4.3.3  Other.

                            Any other documents and information requested by
Lender to Borrower in writing.

              4.4    SEARCHES.

                     Lender shall obtain or be given appropriate reports to show
that there are not (a) any outstanding financing statements against the Pledged
Stock; (b) any pending lawsuits or judgments against Borrower and the Managing
Member or any of their affiliates in connection with the Pledged Stock; or (c)
any pending criminal prosecutions or convictions against Borrower and the
Managing Member or any of their affiliates.

              4.5    LEGAL OPINION.

                     Borrower shall cause its outside legal counsel, who shall
be licensed in the State of Arizona and shall otherwise be acceptable to Lender,
to give Lender a legal opinion in the form and content attached to this
Agreement as Exhibit G.

              4.6    LOAN DOCUMENTS.

                     Borrower shall deliver to Lender, the Loan Documents and
such other documents required or that may be requested by Lender to give effect
to this Agreement, all of which shall be fully executed and, where required,
appropriately acknowledged and delivered.

              4.7    REIMBURSEMENT OF EXPENSES.

                     Lender shall have been reimbursed for its paid and incurred
Lender's Expenses in connection with the Loan, which amount Lender is hereby
authorized to deduct and/or disburse from the Loan Amount.

              4.8    WAIVER.
   8
                     Lender, in its sole discretion, may waive any of the
conditions precedent set forth herein, as all of the said conditions are
established for Lender's benefit. The waiver of any condition or conditions
shall be by written instrument and shall not constitute a waiver of any other
condition or conditions. Lender's closing of the Loan shall indicate that Lender
has received all of the documents and information required by Lender or that the
requirement has been waived.


                                    SECTION 5
                              DEFAULTS AND REMEDIES

              5.1    EVENT OF DEFAULT

                     The existence or occurrence of any one or more of the
following events shall constitute an event of default under the Loan Documents
("Event of Default"):

                     5.1.1  Nonpayment.

                            Borrower's failure to make any payments required
under the Loan Documents.

                     5.1.2  Nonperformance of Obligations.

                            Borrower's breach of, or failure to perform, any
other obligations under the Loan Documents.

                     5.1.3  Impairment of Security.

                            Borrower's failure to remove, insure or bond over
any lien, encumbrance or other matter affecting the title to the Pledged Stock
as required in this Agreement.

                     5.1.4  Misrepresentations of Fact.

                            Willful or negligent misrepresentations of material
fact by Borrower in any document submitted to Lender in support of the Loan or
in connection with the Loan Documents.

                     5.1.5  Bankruptcy or Insolvency.

                            Borrower being insolvent by being unable to pay
debts when due or by having liabilities in excess of assets; or Borrower
committing an act of bankruptcy, making a general assignment for the benefit of
creditors, or the filing by or against Borrower of a voluntary or involuntary
petition in bankruptcy or for the appointment of a receiver (and any involuntary
petition is not dismissed within 60 days from the filing thereof); or if there
commences under any law relating to bankruptcy, insolvency, reorganization or
relief of debtors, proceedings affecting the Pledged Stock or for the
composition, extension, arrangement or adjustment of any of their respective
obligations; or if Borrower's business is discontinued as a going concern or is
suspended; or if a writ of attachment, execution, or any similar process is
issued or levied against any significant part of Borrower's property that is not
released, stayed, bonded or vacated within a reasonable time after its issue or
levy; or if Lender shall deem itself insecure with respect to Borrower's
performance of any of its obligations to Lender hereunder or otherwise.

                     5.1.6  Failure to Comply with Laws and Governmental
Authorities.

                            Borrower's failure to cure promptly any violation of
any law or regulation in connection with the Pledged Stock; or Borrower's
failure to comply promptly with any provision of any notice, issued by or filed
in any department of any governmental authority having jurisdiction over
Borrower or the Pledged Stock, of any requirement or any law or regulation
having any effect on or relation to the Pledged Stock; or Borrower's failure to
furnish to Lender, immediately and without demand, a true copy of any notice or
other document received by or available to Borrower disclosing any such
requirement or violation of any such law or regulation, or otherwise bearing
upon Borrower's compliance thereunder. In this regard, "promptly" shall be
deemed to mean within thirty (30) days after the giving of written notification
to Borrower of the existence of such violation or notice or other document or,
where such cure or compliance cannot be fully effected within thirty (30) days,
then the commencement of the action to cure or comply within the same thirty
(30) days.

                     5.1.7  Decline of Pledged Stock Value.
   9
                            For five (5) consecutive trading days the Bid Price
of the Pledged Stock falls below a price per share that is necessary to maintain
a seventy five percent (75%) loan to value and Borrower does not pledge
sufficient additional shares of Pledged Stock to provide the 75% loan to value.

              5.2    REMEDIES.

                     During an Event of Default, Lender shall have the right to
exercise any and all remedies available to it, both at law and in equity,
subject to Lender giving Borrower ten (10) days written notice for a monetary
Event of Default and thirty (30) days written notice for a non-monetary Event of
Default; provided, however, that Borrower shall have a reasonable amount of time
after the thirty (30) days for a non-monetary Event of Default, if the Event of
Default cannot be cured within thirty (30) days and Borrower commences a cure
within the thirty (30) days and diligently prosecutes the cure until it is
completed.


                                    SECTION 6
                                  MISCELLANEOUS

              6.1    AMENDMENT.

                     This Agreement may not be modified in any respect except by
an amendment signed in writing by Lender and Borrower.

              6.2    SEVERABILITY.

                     In the event any provision of this Agreement is illegal,
invalid or unenforceable, such provisions shall not affect the validity of the
remainder hereof.

              6.3    STANDARD OF APPROVAL.

                     Where, within this Agreement, the approval or satisfaction
of Lender is required or permitted, or Lender's consent may be granted or
withheld, and no standard for the exercise of Lender's discretion is otherwise
specified, Lender shall not unreasonably withhold its satisfaction, approval or
consent.

              6.4    CALCULATION OF TIME PERIODS.

                     Unless otherwise expressly provided in this Agreement, all
time periods shall be in calendar days, but in all instances, the last day for
performance shall be a business day if the last calendar day is not a business
day.

              6.5    ASSIGNABILITY.

                     Borrower shall not assign this Agreement. Lender shall have
the right to sell and assign all rights, title and interest herein, without
reservation or restriction.

              6.6    WAIVER OF DEFAULTS.

                     The waiver by Lender of any breach or Event of Default by
Borrower under any of the terms of any of the Loan Documents shall not be deemed
to be a waiver of any subsequent breach or Event of Default on the part of
Borrower under the Loan Documents. The acceptance by Lender of a partial amount
of a payment due from Borrower to Lender under this Agreement shall not
constitute a waiver of the requirement of Borrower to make a full payment to
Lender and it shall not constitute a waiver by Lender of the time of the essence
provision of this Agreement.

              6.7    TIME OF THE ESSENCE.

                     Time is of the essence of this Agreement and each and all
of its provisions.

              6.8    NOTICES.

                     Any notices or other communications which any party may be
required, or may desire, to give, unless otherwise specified, shall be in
writing and shall be (i) hand-delivered, effective upon receipt, (ii)
transmitted by facsimile, effective upon receipt, with the original mailed the
same date by first class mail, postage prepaid, (iii) sent by United States
Express Mail or by private overnight courier, effective upon receipt, or (iv)
served by certified mail, postage prepaid, return receipt requested and
addressed to such party at the address set forth above, or to such other
address(es) or addressee(s) as the party to be served with notice may have
furnished in writing to the other party, effective three (3) days after mailing.
   10
              6.9    BENEFIT AND BINDING EFFECT.

                     This Agreement shall inure to the benefit of and be binding
upon the parties and their representatives, successors, and assigns.

              6.10   ATTORNEYS' FEES.

                     In the event of litigation with respect this Agreement or
the Loan Documents, the prevailing party as determined by the Court, shall be
entitled to recover from the non-prevailing party its costs, expenses and fees,
including reasonable attorneys' fees, as determined by the Court.

              6.11   GOVERNING LAW.

                     This Agreement, its construction, validity and effect,
shall be governed and construed by and in accordance with the laws of the State
of Arizona.

              6.12   DEFINED TERMS AND MARGINAL HEADINGS.

                     Words used herein shall include the plural as well as the
singular when required. Words used in masculine gender include the feminine and
neuter. The marginal headings and titles to the paragraphs of this Agreement are
not a part of this Agreement and shall have no effect upon the construction or
interpretation of any part hereof.

              6.13   CONSISTENCY OF DOCUMENTS.

                     The other Loan Documents are not intended to supersede the
provisions of this Agreement, but shall be construed as supplemental thereto. In
the event of any inconsistency between the provisions of the other Loan
Documents and this Agreement, or in the event the provision in the other Loan
Documents are not as complete or clear as this Agreement, this Agreement shall
control. This Agreement shall survive the execution, recording and filing of the
Loan Documents.

              6.14   COUNTERPARTS.

                     This Agreement can be signed in counterpart.

              6.15   ENTIRE AGREEMENT.

                     This Agreement shall constitute the entire agreement of the
parties and any prior or contemporaneous verbal or written understanding or
agreement between the parties shall be superseded by this Agreement. However,
the other Loan Documents that are used in connection with the Loan shall be
valid and enforceable according to their provisions, subject to this Agreement
controlling over any inconsistency.
   11
              IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date set forth above.


BRIDGE FINANCIAL CORPORATION               SUN NZ, LLC


By: /s/ R. Randy Stolworthy                By:  Sun NMA, Inc.
    -------------------------              an Arizona corporation
     R. Randy Stolworthy                   Its Managing Member
     President

                                           By: /s/ William Pope
                                              ------------------------------
                                               William Pope, President




Exhibits A, B, C, D, E, F and G are attached.
   12
                                    EXHIBIT A

                                 PROMISSORY NOTE


       DATE:               April 3, 2001


       MAKER:              SUN NZ, LLC
                           an Arizona limited liability company
                           Attention: William Pope
                           2525 East Camelback Road, Suite 888
                           Phoenix, Arizona 85016
                           Facsimile Number (602) 852-5599


       PAYEE:              BRIDGE FINANCIAL CORPORATION
                           an Arizona corporation
                           Attention: R. Randy Stolworthy
                           333 North 44th Street, Suite 420
                           Phoenix, Arizona 85008
                           Facsimile Number (602) 952-8769

       ORIGINAL
       PRINCIPAL
       AMOUNT              Eight Million and No/100 Dollars ($8,000,000)
       OF LOAN:



              FOR VALUE RECEIVED, Maker promises and agrees to pay to Payee, or
order, at the mailing address of Payee, or at such other place as the holder
hereof ("Holder") may from time-to-time designate, the principal sum of Eight
Million and No/100 Dollars ($8,000,000) with Interest (as defined in this Note)
commencing as provided herein on the unpaid amount of said sum at the Base Rate
(as defined herein) or the Default Rate (as defined herein), whichever is
applicable, as follows:

              1.     MULTIPLE ADVANCES.

              The principal amount of this Promissory Note ("Note") shall be
paid by Payee to or for the benefit of Maker in multiple advances. Interest
shall commence on the date of each advance, and the advances shall be paid by
Payee to Maker pursuant to the terms and conditions of that certain Loan
Agreement dated April 3, 2001 between Maker and Payee.

              2.     INTEREST RATE.

                     a. Commencing on the date of this Note, and so long as no
Event of Default (as defined herein) exists, the unpaid balance of this Note
shall accrue interest ("Interest") at the rate of twenty percent (20%) per annum
("Base Rate").

                     b. During any Event of Default under this Note or any
security for this Note, the unpaid balance of this Note shall accrue Interest at
the rate of twenty eight percent (28%) per annum ("Default Rate"). Interest
shall accrue at the Default Rate from the date of an Event of Default, without
notice to Maker, if Borrower does not cure an Event of Default as provided in
this Note.
   13
                     c. The Interest provided herein shall be calculated on the
basis of a 360-day year/30-day month and if not paid as provided below by the
tenth (10th) day of each month, the due and unpaid Interest shall be compounded
effective on the first (1st) day of each such month.

              3.     PAYMENTS.

                     a. Quarterly payments of Interest only on the unpaid
principal balance of this Note at the Base Rate shall be paid on July 1, 2001
and on October 1, 2001.

                     b. If not sooner paid, all accrued and unpaid Interest and
all unpaid principal of this Note shall be paid on October 3, 2001("Maturity
Date").

              4.     LATE PAYMENT CHARGE. Maker shall pay to Holder a late
charge ("Late Payment Charge") equal to ten percent (10%) of any payment not
received by the Holder within ten (10) days after said payment is due, including
the unpaid balance of this Note as of the Maturity Date.

              5.     REASONABLENESS OF CHARGES. Maker acknowledges that upon the
occurrence of an Event of Default, the damages to the Holder would be extremely
difficult to ascertain, including the Holder's lost profit and loss of use of
the funds evidenced hereby and expenses incurred in connection with such
default, and that the accrual of Interest at the Default Rate and the Late
Payment Charge are reasonable estimates of the loss to the Holder incurred by
virtue of an Event of Default.

              6.     LEGAL LIMITS.

                     a. Maker agrees to an effective rate of interest which is
the rate stated herein plus any additional rate of interest resulting from any
other payments in the nature of interest, including without limitation, any loan
fees or other charges to the extent that such charges may be deemed includable
in interest for any purpose.

                     b. All agreements between Maker and Payee are hereby
expressly limited so that in no event whatsoever, whether by reason of deferment
in accordance with this Note or under any agreement or by virtue of acceleration
or maturity of the loan evidenced by this Note, or otherwise, shall the amount
paid or agreed to be paid to Payee for the loan, use, forbearance or detention
of the money to be loaned under this Note or to compensate Payee for damages to
be suffered by reason of a late payment or default under this Note, exceed the
maximum permissible under applicable law. If, from any circumstances whatsoever,
fulfillment of any provision of this Note, or of any provision in the security
for this Note at the time performance of such provision shall be due, shall
involve exceeding the limit of validity prescribed by law, from the date of this
Note, the obligations to be fulfilled shall be reduced to the limit of such
validity. This provision shall never be superseded or waived and shall control
every other provision of all agreements between Maker and Payee.

              7.     PREPAYMENT. The unpaid principal balance of this Note may
be prepaid in whole or in part without penalty at any time upon five (5) days
prior written notice to the Holder.

              8.     FORM OF PAYMENTS. Principal and Interest shall be payable
in lawful money of the United States of America in immediately available funds.

              9.     CREDITING OF PAYMENTS. Each payment hereunder shall be
credited first to accrued Interest and then to principal.

              10.    EVENTS OF DEFAULT AND REMEDIES.
   14
                     a. The existence or occurrence of either one or both of the
following events shall constitute an event of default ("Event of Default") under
this Note: (i) The failure by Maker to make any payment of principal, Interest,
Late Payment Charge or any other cost or expense due under this Note in
accordance with the terms of this Note; or, (ii) The occurrence of any event of
default under any security for this Note, including the Pledge (as defined
herein).

                     b. Upon the occurrence of any Event of Default and the
failure of Maker to cure such default within ten (10) days after notice thereof
if monetary and within thirty (30) days after notice thereof if non-monetary
(unless the Event of Default cannot be cured within thirty (30) days and Maker
commences a cure within the thirty (30) days and diligently prosecutes the cure
until it is complete, in which event, Maker shall have a reasonable amount of
time after the thirty (30) days to cure a non-monetary default): (i) the entire
unpaid principal balance, any unpaid Interest, and any other amounts owing under
this Note shall, at the option of the Holder and without further notice or
demand of any kind to Maker or any other person, immediately become due and
payable; and, (ii) the Holder shall have and may exercise any and all rights and
remedies available at law or in equity and also any and all rights and remedies
provided in any security for this Note.

                     c. The remedies of the Holder, as provided in this Note and
in any security for this Note, shall be cumulative and concurrent, and may be
pursued singularly, successively or together, at the sole discretion of the
Holder, and may be exercised as often as occasion therefor shall arise. No act
of omission or commission of the Holder, including specifically any failure to
exercise any right, remedy or recourse, shall be deemed to be a waiver or
release of any right, remedy or recourse, such waiver or release to be effected
only through a written document executed by the Holder. A waiver or release with
reference to any one event shall not be construed as continuing, as a bar to, or
as a waiver or release of, any subsequent right, remedy or recourse as to a
subsequent event.

              11.    SECURITY. This Note is secured by, among other things, and
is entitled to the benefits of, a stock pledge and security agreement ("Pledge")
dated the date of this Note. The provisions of the Pledge are incorporated
herein by reference as if set forth in full, and the covenants and conditions of
this Note shall control if there is a conflict between them and the covenants
and conditions contained in the Pledge.

              12.    ATTORNEYS' FEES. In the Event of Default under this Note or
in the event the Holder seeks legal advice in order to enforce the provisions of
this Note after an Event of Default, Maker agrees to pay a reasonable sum to
Holder for Holder's attorneys' fees. If any action is brought to enforce or
interpret the provisions of this Note, the prevailing party shall be entitled to
a reasonable sum for attorneys' fees.

              13.    GOVERNING LAW AND SEVERABILITY. This Note is made pursuant
to, and shall be construed, governed and enforced under the laws of the State of
Arizona. If any provision of this Note or any security for this Note is
construed or interpreted by a court of competent jurisdiction to be void,
invalid or unenforceable, such decision shall affect only those provisions so
construed or interpreted and shall not affect the remaining provisions of this
Note or any security for this Note.

              14.    TIME OF ESSENCE. Time is of the essence of this Note.

              15.    PAYMENT WITHOUT OFFSET. Principal and Interest shall be
paid without deduction or offset.

              16.    CALENDAR DAYS. Unless otherwise provided in this Note to
the contrary, calendar days, and not business days, shall be used in calculating
any time periods set forth in this Note.

              17.    NOTICES. Any notices which any party may be required, or
may desire, to give, unless otherwise specified, shall be in writing and shall
be (i) hand-delivered, effective upon receipt,
   15
(ii) transmitted by telecopier, effective upon receipt, with the original mailed
the same date by first class mail, postage prepaid, (iii) sent by United States
Express Mail or by private overnight courier, effective upon receipt, or (iv)
served by certified mail, postage prepaid, return receipt requested and
addressed to such party at the address set forth above, or to such other
address(es) or addressee(s) as the party to be served with notice may have
furnished in writing to the other party, effective three (3) days after mailing.

              18.    ASSIGNMENT. Payee or any other Holder of this Note may
assign all or a portion of its rights, title and interest in this Note and
security to any person, firm, corporation or other entity without the consent of
Maker.

              19.    RELATIONSHIP. The relationship of the parties hereto is
that of borrower and lender and it is expressly understood and agreed that
nothing contained in this Note or in any security for this Note shall be
interpreted or construed to make Maker and Payee partners, joint venturers or
participants in any other legal relationship except for borrower and lender.

              20.    WAIVER. Except as otherwise expressly provided to the
contrary in this Note, the Pledge or other loan documents relating to this Note,
Maker for itself and for its successors, transferees and assigns and all
guarantors, endorsers and signers, hereby waives all valuation and appraisement
privileges, presentment and demand for payment, protest, notice of protest and
nonpayment, dishonor and notice of dishonor, bringing of suit, lack of diligence
or delays in collection or enforcement of this Note and notice of the intention
to accelerate, the release of any party liable, the release of any security for
this Note, the taking of any additional security and any other indulgence or
forbearance. Maker agrees that this Note and any or all payments coming due
hereunder may be extended or renewed from time to time without in any way
affecting or diminishing Maker's liability under this Note. The acceptance by
Holder of a partial amount of a payment due from Maker to Holder under this Note
shall not constitute a waiver of the requirement of Maker to make a full payment
to Holder, and it shall not constitute a waiver by Holder of the time of the
essence provision of this Note.

              21.    HEADINGS. The subject headings of the paragraphs of this
Note are included for purposes of convenience only, and shall not affect the
construction or interpretation of any of its provisions.

              IN WITNESS WHEREOF, Maker has executed this Note as of the date
set forth above.
   16
                                   MAKER:

                                   SUN NZ, LLC

                                   By: Sun NMA, Inc.
                                       an Arizona corporation
                                       Its Managing Member



                                       By:
                                           -------------------------------
                                           William Pope, President
   17
                                    EXHIBIT B

                             UNCONDITIONAL GUARANTY


       DATE:               April 3, 2001

       GUARANTOR:          WILLIAM POPE and LINDA POPE
                           husband and wife

       LENDER:             BRIDGE FINANCIAL CORPORATION
                           an Arizona corporation
                           Attention: R. Randy Stolworthy
                           333 North 44th Street, Suite 420
                           Phoenix, Arizona 85008
                           Facsimile Number (602) 952-8769

       BORROWER:           SUN NZ, LLC
                           an Arizona limited liability company
                           Attention: William Pope
                           2525 East Camelback Road, Suite 888
                           Phoenix, Arizona 85016
                           Facsimile Number (602) 852-5599


       ORIGINAL
       PRINCIPAL           Eight Million and No/100 Dollars ($8,000,000)
       AMOUNT OF           evidenced by that  certain Promissory Note of even
       INDEBTEDNESS        date herewith between Lender, as Payee, and Borrower,
       GUARANTEED:         as Maker (the "Note")



              FOR VALUABLE CONSIDERATION, Guarantor unconditionally guarantees
and promises to pay to Lender, or order, on demand, in lawful money of the
United States, any and all obligations of Borrower to Lender, under and by
virtue of the Note and the other loan documents related to the Note.

              The obligations hereunder are joint and several, and independent
of the obligations of Borrower, and a separate action or actions may be brought
and prosecuted against Guarantor regardless of whether an action is brought
against Borrower or whether Borrower is joined in any such action or actions;
and Guarantor waives the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Each Guarantor expressly agrees
that recourse may be made against the marital community and the separate
property of each Guarantor and in such order and manner as Lender may elect. The
provisions of any law or regulation are waived to the extent they require
spouses to be sued jointly for satisfaction of any debt or obligation first from
community property and second from sole and separate property.

              Guarantor authorizes Lender, without notice or demand and without
affecting its liability hereunder, from time to time to (a) renew, compromise,
extend, accelerate or otherwise change the time for payment of or the terms of
the Note or any part thereof, increase the amount or the rate of interest of the
Note, or shorten the term of the Note; (b) take and hold security for the
payment of this Guaranty of the obligations guaranteed, and exchange, enforce,
waive and release any such security; (c) apply such security and direct the
order or manner of sale thereof as Lender in its discretion may determine; and
(d) release or substitute any one or more of the endorsers of Guarantor. Lender
may without notice assign this Guaranty in whole or in part.
   18
              Guarantor waives any right to require Lender to (a) proceed
against Borrower; (b) proceed against or exhaust any security held from
Borrower; or (c) pursue any other remedy in Lender's power whatsoever, and any
laws or regulations to the contrary are hereby waived. Guarantor waives any
defense arising by reason of any disability or other defense of Borrower or by
reason of the cessation from any cause whatsoever of the liability of Borrower.

              Guarantor also waives (a) all diligence in collection or
protection of or realization on the Note, on any obligation under the Guaranty
or on any security for the Note; (b) any and all suretyship defenses and
defenses in the nature thereof; (c) any rights for a homestead exemption; and
(d) any defenses based upon release of collateral, failure to perfect a lien on
the collateral, failure to maintain a lien on the collateral, the release of
Borrower, the modification of the Note without Guarantor's consent or notice of
Lender's acceptance of this Guaranty.

              Until all obligations of Borrower to Lender under the Note shall
have been paid in full, Guarantor shall have no right of subrogation, and waive
any right to enforce any remedy which Lender now has or may hereafter have
against Borrower, and waive any benefit of and any right to participate in any
security now or hereafter held by Lender. Guarantor waives all presentments,
demands for performance, notice of nonperformance, protests, notices of protest,
notices of dishonor, and notices of acceptance of this Guaranty and of the
existence, creation or incurring of new or additional obligations.

              No delay on the part of Lender in the exercise of any right or
remedy shall operate as a waiver thereof, and no single or partial exercise by
Lender of any right or remedy shall preclude other or further exercise thereof
or the exercise of any other right or remedy; nor shall any modification or
waiver of any of the provisions of this Guaranty be binding on Lender except as
expressly set forth in writing, duly signed and delivered on behalf of Lender.
No action of Lender permitted hereunder shall in any way affect or impair the
rights of Lender and the obligations of Guarantor under this Guaranty.

              Guarantor represents and warrants to Lender that:

              (a) The execution, delivery and performance by Guarantor of this
Guaranty does not and will not conflict with or contravene any law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court having jurisdiction over Guarantor or Guarantor's
activities or properties or conflict with, or result in any default under any
agreement or instrument of any kind to which Guarantor is a party or by which
Guarantor or Guarantor's properties may be bound or affected;

              (b) Neither the execution and delivery by Guarantor of this
Guaranty nor the performance by Guarantor hereunder require the consent,
approval, order or authorization of, or registration with, or the giving of
notice to any governmental authority, domestic or foreign;

              (c) This Guaranty has been duly executed and delivered by
Guarantor and constitutes a legal, valid and binding obligation of Guarantor
enforceable against Guarantor in accordance with its terms;

              (d) There is no action, litigation or other proceeding pending or,
to Guarantor's best knowledge, threatened against Guarantor before any court,
arbitrator or administrative agency which may have an adverse effect on
Guarantor's assets, businesses, or financial condition or which would prevent,
hinder or jeopardize Guarantor's performance under this Guaranty.

              (e) Guarantor is fully familiar with all of the covenants, terms
and conditions of the Note and related documents and have reviewed such
documents personally and with counsel;

              (f) The financial statements (including the notes thereto) and
other financial information of any person or entity provided to Lender in
support of Guarantor's application for the Loan are materially true, correct and
complete, and present fairly the financial condition and the results of
operations of the persons set forth in such financial statements in accordance
with generally accepted accounting principles. There have not been any material
adverse changes in the
   19
condition, affairs or prospects, financial or otherwise, of any person or
company whose financial condition is reflected in any of the aforesaid financial
statements since the date of such financial statements; and Guarantor is unaware
of any facts or circumstances which might give rise to any such material adverse
change. In the event Guarantor becomes aware of any such material change, either
before or after any disbursement by Lender, Guarantor shall notify Lender in
writing immediately after Guarantor becomes aware of such facts or
circumstances.

              (g) Except as may be set forth in the written financial statements
presented by Guarantor to Lender, Guarantor is not a party to any contract,
agreement, indenture or instrument or subject to any restriction which
individually or in the aggregate require any obligations of Guarantor to be
performed as of the date hereof or as a result of executing this Guaranty, which
might adversely affect Guarantor's financial condition or businesses, or which
would in any way jeopardize the ability of Guarantor to perform hereunder; and

              (h) Guarantor was not induced to give this Guaranty by the fact
that there are or may be other guarantors either to this Guaranty or otherwise.
It is understood that this Guaranty is not being given in consideration of any
such other guaranty, and, in this regard, Lender may, at its discretion, take,
receive, accept, sue upon, release or compromise any such other guaranty of the
Note obtained or which may be obtained from any other person or entity, without
affecting this Guaranty or impairing any rights which Lender may have under this
Guaranty.

              Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and no such prohibition or unenforceability shall
invalidate or render unenforceable such provision in any other jurisdiction.

              Any property assigned, pledged or hypothecated as security for
this Guaranty shall be deemed to secure all obligations of Borrower to Lender to
the same extent as if the same were Borrower's property and given as security by
Borrowers therefor.

              Any obligations of Borrower now or hereafter held by or payable to
Guarantor are hereby subordinated to the obligations of Borrower to Lender; and
such obligations of Borrower to Guarantor if Lender so requests shall be
collected, enforced and received by Guarantor as trustees for Lender and be paid
over to Lender on account of the obligations of Borrower to Lender but without
reducing or affecting in any manner the liability of Guarantor under the other
provisions of this Guaranty. Unless and until there is an Event of Default under
the Note and other loan documents related to the Note, Guarantor shall have the
right to receive payments under the obligations of Borrower to Guarantor in the
ordinary course of business.

              Where the Borrower is an entity, it is not necessary for Lender to
inquire into the powers of Borrower or the officers, directors, partners,
members or agents acting or purporting to act on its behalf, and any obligations
made or created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.

              Guarantor agrees to pay a reasonable attorneys' fee and all other
costs and expenses which may be incurred by Lender in the enforcement of this
Guaranty.

              In all cases where there is more than one Guarantor, then all
words used herein in the singular shall be deemed to have been used in the
plural where the context and construction so require.
   20
              If this Guaranty requires more than one signature, this Guaranty
may be signed in counterpart and, together, the counterpart Guaranties shall
constitute a single Guaranty.

              This Guaranty shall remain in full force and effect until the
expiration of any time periods within which a bankruptcy court can order the
disgorgement of payments made by Borrower to Lender under the Note or related
documents.

              This Guaranty is made pursuant to, and shall be construed,
governed and enforced under the laws of the State of Arizona.

              IN WITNESS WHEREOF, the undersigned Guarantor has executed this
Guaranty as of the date set forth above.

                                        GUARANTOR:



                                        -----------------------------------
                                        William Pope


                                        -----------------------------------
                                        Linda Pope

   21
                          STOCK CERTIFICATE ASSIGNMENT


         For Value Received, SUN NZ, LLC, an Arizona limited liability company,
does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona
corporation, 137,079 shares of no par value common stock ("Pledged Stock") in NZ
Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is
represented by Certificate Number 11842, and Sun NZ, LLC does hereby irrevocably
constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the
books of the Corporation with full power of substitution.

         DATED April 3, 2001.

                                       SUN NZ, LLC

                                       By:      Sun NMA, Inc.
                                                an Arizona corporation
                                                Its Managing Member



                                                By:_____________________________
                                                         William Pope, President
   22
                          STOCK CERTIFICATE ASSIGNMENT


         For Value Received, SUN NZ, LLC, an Arizona limited liability company,
does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona
corporation, 124,617 shares of no par value common stock ("Pledged Stock") in NZ
Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is
represented by Certificate Number 13448, and Sun NZ, LLC does hereby irrevocably
constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the
books of the Corporation with full power of substitution.

         DATED April 3, 2001.

                                       SUN NZ, LLC

                                       By:      Sun NMA, Inc.
                                                an Arizona corporation
                                                Its Managing Member



                                                By:_____________________________
                                                         William Pope, President
   23
                          STOCK CERTIFICATE ASSIGNMENT


         For Value Received, SUN NZ, LLC, an Arizona limited liability company,
does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona
corporation, 150,787 shares of no par value common stock ("Pledged Stock") in NZ
Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is
represented by Certificate Number 17547, and Sun NZ, LLC does hereby irrevocably
constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the
books of the Corporation with full power of substitution.

         DATED April 3, 2001.

                                       SUN NZ, LLC

                                       By:      Sun NMA, Inc.
                                                an Arizona corporation
                                                Its Managing Member



                                                By:_____________________________
                                                         William Pope, President
   24
                          STOCK CERTIFICATE ASSIGNMENT


         For Value Received, SUN NZ, LLC, an Arizona limited liability company,
does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona
corporation, 455,175 shares of no par value common stock ("Pledged Stock") in NZ
Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is
represented by Certificate Number 17661, and Sun NZ, LLC does hereby irrevocably
constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the
books of the Corporation with full power of substitution.

         DATED April 3, 2001.

                                       SUN NZ, LLC

                                       By:      Sun NMA, Inc.
                                                an Arizona corporation
                                                Its Managing Member



                                                By:_____________________________
                                                         William Pope, President
   25
                          STOCK CERTIFICATE ASSIGNMENT


         For Value Received, SUN NZ, LLC, an Arizona limited liability company,
does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona
corporation, 331,731 shares of no par value common stock ("Pledged Stock") in NZ
Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is
represented by Certificate Number 18117, and Sun NZ, LLC does hereby irrevocably
constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the
books of the Corporation with full power of substitution.

         DATED April 3, 2001.

                                    SUN NZ, LLC

                                    By:      Sun NMA, Inc.
                                             an Arizona corporation
                                             Its Managing Member



                                             By:_____________________________
                                                      William Pope, President
   26
                          STOCK CERTIFICATE ASSIGNMENT


         For Value Received, SUN NZ, LLC, an Arizona limited liability company,
does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona
corporation, 433,829 shares of no par value common stock ("Pledged Stock") in NZ
Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is
represented by Certificate Number 18871, and Sun NZ, LLC does hereby irrevocably
constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the
books of the Corporation with full power of substitution.

         DATED April 3, 2001.

                                      SUN NZ, LLC

                                      By:      Sun NMA, Inc.
                                               an Arizona corporation
                                               Its Managing Member



                                               By:_____________________________
                                                        William Pope, President
   27
                          STOCK CERTIFICATE ASSIGNMENT


         For Value Received, SUN NZ, LLC, an Arizona limited liability company,
does hereby assign and transfer to BRIDGE FINANCIAL CORPORATION, an Arizona
corporation, 165,865 shares of no par value common stock ("Pledged Stock") in NZ
Corporation, an Arizona corporation ("Corporation"), which Pledged Stock is
represented by Certificate Number 18873, and Sun NZ, LLC does hereby irrevocably
constitute and appoint Jerome L. Joseph to transfer the Pledged Stock on the
books of the Corporation with full power of substitution.

         DATED April 3, 2001.

                                       SUN NZ, LLC

                                       By:      Sun NMA, Inc.
                                                an Arizona corporation
                                                Its Managing Member



                                                By:___________________________
                                                   William Pope, President
   28
                                    EXHIBIT D

Recorded at the Request of
and when recorded, return to:
Michael E. Tiffany, Esq.
Tiffany & Bosco, P.A.
5th Floor Viad Tower
1850 N. Central Avenue
Phoenix, AZ 85004-4546

                                             STOCK PLEDGE AND SECURITY AGREEMENT


DATE:                      ____________, 2001


PLEDGOR:                   SUN NZ, LLC
                           an Arizona limited liability company
                           Attention: William Pope
                           2525 East Camelback Road, Suite 888
                           Phoenix, Arizona 85016
                           Facsimile Number (602) 852-5599


PLEDGEE:                   BRIDGE FINANCIAL CORPORATION
                           an Arizona corporation
                           Attention: R. Randy Stolworthy
                           333 North 44th Street, Suite 420
                           Phoenix, Arizona 85008
                           Facsimile Number (602) 952-8769


LOAN:                      The indebtedness in the principal amount of Eight
                           Million and No/100 Dollars ($8,000,000) evidenced by
                           that certain promissory note (the "Note") dated the
                           same date as this Stock Pledge and Security Agreement
                           ("Pledge") executed by Pledgor as the maker and
                           payable to Pledgee as the payee, and all extensions
                           and renewals thereof.


         To induce Pledgee to make the Loan to Pledgor and as security for the
repayment of the Note, Pledgor has agreed to pledge and assign to Pledgee all of
its, right, title and interest in and to the following shares of no par value
common stock ("Pledged Stock") in NZ Corporation, an Arizona corporation
("Corporation"):

         Pledged Stock                              Certificate Number
   29
         IT IS THEREFORE AGREED:

         1. PLEDGE. For good and valuable consideration, receipt of which is
acknowledged, Pledgor hereby grants a security interest to Pledgee in and to the
Pledged Stock, duly endorsed in blank and herewith delivered to Pledgee. Pledgor
appoints Pledgee its attorney-in-fact, with full power of substitution, to
arrange for the transfer of the Pledged Stock on the books of the Corporation to
the name of Pledgee. Pledgee shall hold the Pledged Stock as security for the
repayment of the Note, and shall not encumber or dispose of the Pledged Stock
except as allowed in this Pledge.

         2. DIVIDENDS. During the term of this Pledge, all dividends and other
amounts received by Pledgee as a result of its record ownership of the Pledged
Stock shall be applied by it to the payment of the principal and interest on the
Note.

         3. VOTING RIGHTS. So long as Pledgor is not in default in the
performance of any of the terms of this Pledge or in the payment of the
principal or interest of the Note, Pledgor shall have the right to vote the
Pledged Stock on all Corporation questions, and Pledgee shall execute proxies in
favor of Pledgor to this end within ten (10) days of presentation by Pledgor.

         4. REPRESENTATIONS. Pledgor warrants and represents that there are no
restrictions upon the transfer of any of the Pledged Stock, and that Pledgor has
the right to transfer the Pledged Stock free of any encumbrances and without
obtaining the consents of the officers, directors or other shareholders of the
Corporation.

         5. ADJUSTMENTS. In the event that, during the term of this Pledge, any
share dividend, reclassification, readjustment or other change is declared or
made in the capital structure of the Corporation, all new, substituted and
additional shares, or other securities, issued by reason of any such change
shall be held by Pledgee under the terms of this Pledge in the same manner as
the shares originally pledged hereunder.

         6. WARRANTS AND RIGHTS. In the event that during the term of this
Pledge, subscription warrants or any other rights or options shall be issued in
connection with the Pledged Stock, such warrants, rights and options shall be
immediately assigned by Pledgee to Pledgor, and if exercised by Pledgor all new
shares or other securities so acquired by Pledgor shall be immediately assigned
to Pledgee to be held under the terms of this Pledge in the same manner as the
shares originally pledged hereunder.

         7. PAYMENT OF NOTE. Upon payment at maturity of the unpaid principal
and interest under the Note and all other documents in connection with the Note,
Pledgee shall transfer to Pledgor all the Pledged Stock and all rights received
by Pledgee as a result of its record ownership thereof.
   30
         8. DEFAULTS AND REMEDIES. Upon any event of default under this Pledge,
Pledgee shall have the right to exercise any and all of the rights and remedies
afforded to Pledgee by the Uniform Commercial Code or otherwise possessed by
Pledgee under this Pledge and the Pledged Stock. In addition to the right to
exercise any rights of a secured party upon default under the laws of the State
of Arizona, Pledgee shall have the right, in its sole discretion, upon notice to
Pledgor, to sell the remaining Pledged Stock, or any part thereof, at any public
or private sale, at which Pledgee may be a purchaser, upon such terms as Pledgee
shall deem appropriate. Any purchaser at any such sale shall hold the property
sold absolutely free from any claim or right on the part of Pledgor and Pledgor
hereby waives all rights with respect to or in connection with the sale of the
Pledged Stock which it now has or may in the future have under any applicable
law. As an alternative to exercising the power of sale herein conferred upon it,
Pledgee may institute an action or proceeding in any court of competent
jurisdiction to foreclose on and to sell the Pledged Stock, or any part thereof,
pursuant to a judgment, order or decree of such court.

         9. LOAN AGREEMENT. This Pledge is made pursuant to that certain Loan
Agreement dated April 3, 2001 between Pledgor as Borrower and Pledgee as Lender.
The applicable provisions of the Loan Agreement are incorporated into this
Pledge and, in the event of any missing provisions from this Pledge or any
inconsistency between the provisions of the Loan Agreement and this Pledge, the
Loan Agreement shall control.

         10. GENERAL. Time is of the essence of this Pledge and this Pledge
shall be for the benefit of and binding upon the parties hereto and their heirs,
representatives, successors and assigns. This Pledge shall constitute the entire
agreement between the parties regarding the subject of this Pledge and any
amendments of this Pledge shall be in writing. The paragraph titles are not part
of this Pledge and are for convenience only. Any notices which any party may be
required, or may desire, to give, unless otherwise specified, shall be in
writing and shall be (I) hand-delivered, effective upon receipt, (ii)
transmitted by facsimile, effective upon receipt, with the original mailed the
same date by first class mail, postage prepaid, (iii) sent by United States
Express Mail or by private overnight courier, effective upon receipt, or (iv)
served by certified mail, postage prepaid, return receipt requested and
addressed to such party at the address set forth above, or to such other
address(es) or addressee(s) as the party to be served with notice may have
furnished in writing to the other party, effective three (3) days after mailing.
This Pledge shall be construed, governed and enforced under the laws of the
state of Arizona and the prevailing party in any dispute shall be entitled to
attorneys' fees and costs.

         IN WITNESS WHEREOF the parties have executed this Pledge as of the date
first written above.

PLEDGEE:                                    PLEDGOR:

BRIDGE FINANCIAL CORPORATION                SUN NZ, LLC


By:                                         By:      Sun NMA, Inc.
       -----------------------------                 an Arizona corporation
          R. Randy Stolworthy                  Its Managing Member
          President


                                            By:
                                                -----------------------------
                                                William Pope, President
   31
STATE OF ARIZONA      )
                      ) ss.
County of Maricopa    )

          The foregoing instrument was acknowledged before me this _____ day of
_______, 2001, by R. Randy Stolworthy, in his capacity as President of BRIDGE
FINANCIAL CORPORATION, an Arizona corporation, on behalf of the corporation.


                                      _______________________________________
                                      Notary Public



STATE OF ARIZONA            )
                            ) ss.
County of Maricopa          )

          The foregoing instrument was acknowledged before me this _____ day of
_________, 2001, by William Pope, in his capacity as President of Sun NMA, Inc.,
an Arizona corporation, the Managing Member of SUN NZ, LLC, an Arizona limited
liability company, on behalf of the company.


                                      _______________________________________
                                      Notary Public
   32
                                    EXHIBIT E

When Filed Return To:
Michael E. Tiffany, Esq.
Tiffany & Bosco, P.A.
1850 N. Central Ave., 5th Floor
Phoenix, AZ  85004


                                     UNIFORM
                                 COMMERCIAL CODE
                               FINANCING STATEMENT

                                                                
Effective Date                                                     County and State of Transaction
_____________, 2001                                                Maricopa County, Arizona
DEBTOR (Name, Address and Zip Code)                                SECURED PARTY (Name, Address and Zip Code)

SUN NZ, LLC                                                        BRIDGE FINANCIAL CORPORATION
an Arizona limited liability company                               an Arizona corporation
2525 East Camelback Road, Suite 888                                333 North 44th St., Suite 420
Phoenix, AZ 85016                                                  Phoenix, AZ 85008

Assignee of Secured Party (Name, Address and Zip Code)             Record Owner of Real Property, if Not Debtor
                                                                   (Name, Address and Zip Code)

                N/A                                                                  N/A

Counties Where Collateral is Located                               [ ]     Products of Collateral are also covered
                                                                   [ ]     Proceeds of Collateral are also covered
Maricopa County



Financing Statement covers the following types of property:

ALL OF DEBTOR'S RIGHT, TITLE AND INTEREST IN AND TO ___________ SHARES OF NO PAR
VALUE COMMON STOCK OF NZ CORPORATION, AN ARIZONA CORPORATION

If collateral is timber to be cut, crops growing or to be grown, minerals or the
like, accounts to be financed at the wellhead or minehead of the well or mine,
or goods which are or are to become fixtures, the real property to which these
are affixed or concerned is legally described:

[ ] This financing statement is to be filed in the office where a mortgage on
the real property would be recorded.

This Financing Statement is filed or recorded without Debtor's signature to
perfect a security interest in collateral which:

[ ] Is already subject to a security interest in another jurisdiction when it
was brought into the state or which Debtor changed location to this State;

[ ] Are proceeds of the original collateral described above in which a security
interest was perfected;

[ ] Is no longer effective due to lapse of the original filing;

[ ] Was acquired four months or less after Debtor has changed its name, identity
or corporate structure.

                                              
DEBTOR:                                          SECURED PARTY:

SUN NZ, LLC                                      BRIDGE FINANCIAL CORPORATION

By:  Sun NMA, Inc., an Arizona corporation
     its Managing Member                         By:   ______________________________
                                                       R. Randy Stolworthy, President
     By:______________________________
              William Pope, President


   33
                                    EXHIBIT F

                             (TRANSFER AGENT LETTER)




                          BRIDGE FINANCIAL CORPORATION
                        333 NORTH 44TH STREET, SUITE 420
                           PHOENIX, ARIZONA 85008-6568
                            TELEPHONE:(602) 952-8836
                            FACSIMILE:(602) 952-8769

                                                     _________________, 2001

VIA CERTIFIED MAIL

American Stock Transfer & Trust Company
Attn: Paula Caroppoli
6201 15th Avenue, 3rd Floor
Brooklyn, NY 11219

         RE:    PLEDGE OF NO PAR VALUE COMMON STOCK OF NZ CORPORATION

Ladies and Gentlemen:

         You are hereby advised that Sun NZ, LLC, an Arizona limited liability
company ("Borrower"), has pledged the following shares of no par value common
stock ("Pledged Stock") of NZ Corporation, an Arizona corporation, to Bridge
Financial Corporation, an Arizona corporation ("Lender"), which Pledged Stock is
traded on the American Stock Exchange:

         Shares                                      Certificate Number


Enclosed is a copy of a Stock Pledge and Security Agreement ("Pledge") dated
April ___, 2001 regarding the Pledged Stock.

         Please show in your records that the Pledged Stock is restricted and
cannot be further pledged, assigned or transferred until you are advised in
writing by the Lender and Borrower that the Pledged Stock has been released from
the Pledge.
   34
         Although your acceptance of this letter is not necessary to perfect the
notice given to you by this letter, for the records of the Lender, please
confirm your acceptance of the above instructions by signing this letter where
provided below and returning the accepted letter to the Lender at the address
shown above.

         Thank you for your cooperation.

                                               Sincerely,

                                               BRIDGE FINANCIAL CORPORATION



                                               R. Randy Stolworthy, President

APPROVED:

SUN NZ, LLC
an Arizona limited liability company

By:      Sun NMA, Inc.
         an Arizona corporation
         Its Managing Member


         By:    _____________________________
                William Pope, President


ACCEPTED:

AMERICAN STOCK TRANSFER & TRUST COMPANY


By:      _________________________________

Its:     _________________________________
   35
                                    EXHIBIT G

                                                          April 3, 2001

Bridge Financial Corporation
333 N. 44th St., Suite 420
Phoenix, AZ 85008-6568


Ladies and Gentlemen:

         I am legal counsel for SUN NZ, LLC, an Arizona limited liability
company ("Borrower") and Sun NMA, Inc., an Arizona corporation, the managing
member of the Borrower ("Managing Member"). As such counsel, I have examined
originals (or copies identified to my satisfaction as true copies of the
originals) of the following documents dated April 3, 2001 ("Documents"):

         1.       Loan Agreement;

         2.       Promissory Note;

         3.       Unconditional Guaranty;

         4.       Stock Certificate Assignment;

         5.       Stock Pledge and Security Agreement ("Pledge");

         6.       Uniform Commercial Code Financing Statement ("Financing
                  Statement"); and

         7.       Transfer Agent Letter.

I have also examined the Articles of Organization, Operating Agreement, Articles
of Incorporation, Bylaws and other relevant organizational documents of the
Borrower and Managing Member.

         In my examination, I have assumed the genuineness of all signatures and
the authenticity of the Documents submitted to me as originals conforming to the
originals of the Documents submitted to me as copies.

         I am an attorney licensed to practice in the State of Arizona, and
accordingly, I do not express any opinion as to the laws or their effect in any
jurisdiction other than the State of Arizona.

         The enforceability of the Documents and the rights and remedies of the
parties thereunder, are subject to, and limited by: (1) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally; (2) availability of
equitable remedies; and (3) future changes or interpretations to current laws,
rules and regulations of the State of Arizona.

         Based upon and subject to the foregoing, it is my opinion that:

         1. The Borrower is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Arizona.

         2. The Managing Member is a corporation duly organized, validly
existing and in good standing under the laws of the State of Arizona.

         3. The Borrower and Managing Member have all the requisite power and
authority to execute and deliver the Documents, and the Borrower has all of the
requisite power and authority to perform under the Documents.
   36
         4. Upon execution and delivery of the Documents, the Documents shall be
binding obligations of and enforceable against the Borrower according to their
terms.

         5. To my knowledge, the execution, delivery and performance under the
Documents by Borrower do not violate the laws and regulations applicable to the
Borrower and Managing Member.

         6. To my knowledge, there is not any action, suit or proceeding, at law
or in equity, either pending or threatened against the Borrower that would
materially and adversely affect the ability of the Borrower to perform under the
Documents.

The words "my knowledge" mean the actual knowledge of John E. Olson as of the
date of this letter without any independent investigation or inquiry to
determine if my actual knowledge is true and correct.

         In rendering this opinion, I have relied upon the fact that the Pledge
and Financing Statement will be properly recorded and filed for perfection of
the liens created thereby.

         I have no information concerning and express no opinion on the priority
of the security interest which will be perfected by the filing of the Financing
Statement. However, to my knowledge, the Pledged Stock for the First Advance is
not subject to any pledge and, at the time of each Subsequent Advance, the
Pledged Stock for each Subsequent Advance shall not be subject to any pledge
other than the ones created by each Pledge.

         This letter is limited to the above and is furnished by me as legal
counsel for the Borrower and Managing Member to you solely for your benefit and
with respect to the Documents.

                                               Sincerely,



                                               --------------------------------
                                               John E. Olson, Esq.