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EXHIBIT 10.97
THIS AGREEMENT ("Agreement") is made as of this 11th day of
January 1999, between CONSOLIDATED CAPITAL OF NORTH AMERICA,
INC., a Colorado corporation (the "Company") and SECURITY INCOME
TRUST, L. P. (the "Purchaser").
RECITAL
WHEREAS, the Company has authorized the issuance and sale of
the Company's 18% Note in the principal amount of $1,250,000
having the terms set forth in Exhibit A attached hereto (the
"Note"); and
WHEREAS, the Purchaser desires to purchase, and the Company
desires to issue, the Note on the terms set forth in this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the
terms and conditions contained in this Agreement, the Company and
the Purchaser agree as follows:
1. PURCHASE AND SALE OF NOTES. Subject to the terms and
conditions contained in this Agreement, at the Closing (as
hereinafter defined) the Purchaser shall purchase from the
Company and the Company shall sell to the Purchaser the Note for
the sum of $1,250,000 (the "Loan Amount"). As further
consideration, the Company shall issue to the Purchaser 1,000,000
shares of the Common Stock of the Company, par value $0.0001 per
share (the "Common Stock").
2. CLOSING.
2.1 Closing Date. The closing of the purchase and sale of
the Note (the "Closing") shall take place simultaneously with the
acquisition by the Company's subsidiary of the assets of Toledo
Pickling and Steel Sales, Inc. (the "TPSS Acquisition") or on
such other day as agreed to by the parties (the "Closing Date").
2.2 Items to be Delivered at Closing. The following shall
be delivered on the Closing Date:
(a) The Note shall be delivered by the Company to the
Purchaser;
(b) The Common Stock shall be delivered by the Company
to the Purchaser;
(c) A legal opinion of counsel to the Company
acceptable to the Purchaser shall be delivered to the
Purchaser;
(d) A certificate of the secretary or an assistant
secretary of the Company certifying (i) an attached complete
and correct copy of its articles of incorporation, (ii) an
attached complete and correct copy of its bylaws, and (iii)
an attached complete and correct copy of resolutions duly
adopted by its board of directors authorizing the execution,
delivery and performance of this Agreement, the Note and the
issuance of the Common Stock shall be delivered by the
Company; and
(e) The purchase price shall be delivered by the
Purchaser by wire transfer to the account of the Company.
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3. REPRESENTATIONS AND WARRANTIES.
3.1 Representations and Warranties of the Company.
The Company represents and warrants that as of the date of this
Agreement:
(a) Existence. The Company is a corporation duly
organized and in good standing under the laws of the State
of Colorado and is duly qualified to do business and is in
good standing in all states where such qualification is
necessary, except for those jurisdictions in which the
failure to qualify would not, in the aggregate, have a
material adverse effect on the Company's financial
condition, results of operations or business.
(b) Authority. The execution and delivery by the
Company of this Agreement and the Note (i) are within the
Company's corporate powers; (ii) are duly authorized by the
Company's board of directors; (iii) are not in contravention
of the terms of the Company's certificate of incorporation
or bylaws; (iv) are not in contravention of any law or laws;
(v) except for the filing of a Form D Notice with the
Securities and Exchange Commission and any exemption filing
related thereto which may be required pursuant to applicable
state securities or "blue sky" laws, do not require any
governmental consent, registration or approval; (vi) do not
contravene any contractual or governmental restriction
binding upon the Company; and (vii) will not result in the
imposition of any lien, charge, security interest or
encumbrance upon any property of the Company under any
existing indenture, mortgage, deed of trust, loan or credit
agreement or other material agreement or instrument to which
the Company is a party or by which the Company or any of the
Company's property may be bound or affected.
(c) Binding Effect. This Agreement and the Note have
been duly authorized, executed and delivered by the Company
and constitute the valid and legally binding obligation of
the Company, enforceable in accordance with their respective
terms, subject to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(d) Capitalization. The authorized capital stock of
the Company consists of 200,000,000 shares of Common Stock,
par value $.0001 per share, 47,984,384 shares of which are
issued and outstanding as of December 28, 1998 and
10,000,000 shares of Preferred Stock, par value $.01 per
share, of which the following Preferred Shares were
authorized, issued and outstanding as of December 28, 1998:
Series A Preferred Shares, par value $1.00 per share,
authorized 1,000,000 shares, 744,000 shares issued and
outstanding; Series B Preferred Shares, par value $1.00 per
share, authorized 1,000,000 shares, 449,000 shares issued
and outstanding; Series C Preferred Shares, stated value
$10,000 per share, authorized 200 shares, 0 shares issued
and outstanding; Series D Preferred Shares, stated value of
$10,000 per share, authorized 350 shares, 0 shares issued
and outstanding; and Series E Preferred Shares, stated value
$10,000 per share, authorized 140 shares, 0 shares issued
and outstanding. The shares of Common Stock issuable
pursuant to this Agreement (the "Initial Shares") and any
shares of common stock which may be issued upon extension of
the Maturity Date of the Note (the "Extension Shares") (the
Initial Shares and the Extension Shares collectively, the
"Shares") are not subject to preemption rights and have been
duly and validly authorized and reserved for issuance and,
when issued and delivered in accordance with the terms of
this Agreement and the Note, will be duly and validly
issued, fully paid and non-assessable and shall be free of
any and all encumbrances, claims, security interests or any
other rights or interests of third parties whatsoever.
(e) SEC Documents. The Company has furnished the
Purchaser with a true and complete copy of the Company's
Report on Form 8-K filed on January 27, 1998, as amended on
January 29, 1998 and March 27, 1998, Report on Form 8-K
filed on January 28, 1998 as amended on January 29, 1998,
Report on Form 8-K filed on March 18, 1998, Report on Form 8-
K filed on May 1, 1998, Report on Form 8-K filed on August
5, 1998, Report on Form 8-K filed on September 18, 1998,
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the Company's Form 10-KSB for the fiscal year ended December
31, 1997, Form 10-QSB for the quarterly period ended March
31, 1998, Form 10-QSB for the quarterly period ended June
30, 1998, Form 10-QSB for the quarter ended September 30,
1998 and the Registration Statement on Form SB-2 (No. 333-
60761) and the Proxy Statement dated October 16, 1998 (the
"Disclosure Documents"). Except as disclosed in the
Disclosure Documents, since December 31, 1997 the Company
has not incurred any material liability except in the
ordinary course of its business consistent with past
practice and there has not been any change in the business,
financial condition or results of operations of the Company
which has had a material adverse effect on the Company.
Since January 1, 1997, the Company has filed with the
Securities and Exchange Commission (the "SEC") all documents
required to be filed pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder. As of their respective
filing dates, the Disclosure Documents complied in all
material respects with the requirements of the Exchange Act,
and the rules and regulations of the SEC thereunder
applicable to such Disclosure Documents, and the Disclosure
Documents did not contain any untrue statement of a material
fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made,
not misleading. The financial statements of the Company
included in the Disclosure Documents (the "Financial
Statements") comply as to form in all material respects with
applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto. The
Financial Statements are accurate, complete and have been
prepared in accordance with the books and records of the
Company and in accordance with generally accepted accounting
principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto
and fairly present (subject, in the case of the unaudited
statements, to normal, recurring audit adjustments that are
not material) the consolidated financial position of the
Company as at the dates thereof and the consolidated results
of its operations and cash flows for the periods then ended.
(f) Litigation. There is neither pending nor, to the
Company's knowledge and belief, threatened any action, suit,
proceeding or claim, or any basis therefor, to which the
Company is or may be named as a party or its property is or
may be subject other than routine litigation in the ordinary
course of business or which calls into question any of the
transactions contemplated by this Agreement.
(g) Securities Matters. Subject to the accuracy of
the representations of the Purchaser set forth in Section
3.2 hereof, the offer, sale and issuance of the Note and the
Shares as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act of 1933 as
amended (the "Securities Act"). The Company has complied
and will comply with all applicable state "blue sky" or
securities laws in connection with the offer, sale and
issuance of the Note and the Shares as contemplated by this
Agreement.
(h) Conflict with Other Agreements; Approvals. The
execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will
not, conflict with or (i) result in any violation of, or
default (with or without notice of lapse of time, or both)
under, or giver rise to a right of termination, cancellation
or acceleration of any obligation or the loss of a material
benefit under, or the creation of a lien, pledge, security
interest or other encumbrance on assets (any such conflict,
violation, default, right of termination, cancellation or
acceleration, loss or creation, a "Violation") pursuant to
any provision of the Articles of Incorporation or By-laws or
any organizational document of the Company or (ii) result in
any Violation of any loan or credit agreement, note,
mortgage, indenture, lease benefit plan or other agreement,
obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to the Company or its
properties or assets. No consent, approval, order or
authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or
other governmental authority or instrumentality, domestic or
foreign (a "Governmental Entity") or any other third party
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is required by or with respect to the Company in connection
with the execution and delivery of this Agreement by the
Company or the consummation by the Company of the
transactions contemplated hereby.
3.2 Representations and Warranties of each Purchaser.
The Purchaser represents and warrants that as of the date of the
execution of this Agreement:
(a) Authorization. This Agreement constitutes a valid
and legally binding obligation of the Purchaser.
(b) Investment Representations (i) The Purchaser has
received and reviewed the Company's Disclosure Documents and
the Purchaser or the Purchaser's designated representatives
have concluded a satisfactory due diligence investigation of
the Company and have had an opportunity to review the
documents provided by the Company and to have all of their
questions related thereto satisfactorily answered.
(ii) The Purchaser acknowledges that the Notes and the
Shares are speculative and involve a high degree of risk and
the Purchaser represents that it is able to sustain the loss
of the entire amount of its investment.
(iii) The Purchaser (or its members and/or
officers) has previously invested in unregistered securities
and has sufficient financial and investing expertise to
evaluate and understand the risks of the Notes and the
Shares.
(iv) The Purchaser is not relying on any
representations and warranties with respect to the Company
except as set forth in this Agreement.
(v) The Purchaser is an "accredited investor" within
the meaning of Regulation D under the Securities Act.
(vi) The Purchaser is acquiring the Notes and the
Shares for investment purposes only without intent to
distribute the same, and acknowledges that the Notes and the
Shares have not been registered under the Securities Act and
applicable state securities laws, and accordingly,
constitute "restricted securities" for purposes of the
Securities Act and such state securities laws.
(vii) The Purchaser acknowledges that it will not
be able to transfer the Notes and the Shares except upon
compliance with the registration requirements of the
Securities Act, and applicable state securities laws, or
exemptions therefrom.
(viii) The certificates and/or instruments
evidencing the Notes and the Shares will contain a legend to
the foregoing effect.
4. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
4.1 Demand Registration Right. The Company agrees that on
or after thirty (30) days from the Closing Date it will, within
thirty (30) days of the Purchaser's written request for such and
at the Company's cost, file a Registration Statement under the
Securities Act to cause the Initial Shares to become registered
thereunder for resale by the Purchaser (the "Registration
Statement") and the Company agrees that it will use its best
efforts to cause such Registration Statement to be declared
effective as soon as possible. The Purchaser shall have one such
demand registration right.
4.2 Participation in Registered Offerings ("Piggyback
Rights" for Shares). If the Company at any time after the date
of this Agreement and prior to the third anniversary of the
Closing Date proposes or is required to register any of its
shares or other equity securities for public sale for cash under
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the Securities Act (other than on Forms S-4 or S-8), it will at
each such time or times give written notice to the Purchaser of
its intention to do so. Upon the written request of any
Purchaser given within twenty (20) days after receipt of any such
notice, the Company shall use its best efforts to cause to be
included in such registration any Shares held by such Purchaser
and requested to be registered under the Securities Act and any
applicable state securities laws; provided, that if the managing
underwriter advises that less than all of the shares to be
registered should be offered for sale so as not materially and
adversely to affect the price or salability of the offering being
registered by the Company, the Purchaser but not the Company to
the extent it desires to include shares for its own account)
shall reduce the number of its shares to be included in the
registration statement as required by the underwriter to the
extent requisite to permit the sale or other disposition (in
accordance with the intended method of disposition thereof as
aforesaid) by the prospective seller or sellers of the securities
so registered. The registration requested pursuant to this
Section 4.2 is referred to herein as the "Piggyback Registration"
and shall be in addition to the Registration Rights set forth in
Section 4.1 hereto.
4.3 Obligations of the Purchaser. It shall be a condition
precedent to the obligation of the Company to register any Shares
pursuant to this Section 4 that the Purchaser shall furnish to
the Company such information regarding the Shares held and the
intended method of disposition thereof and any other information
concerning the Purchaser as the Company shall reasonably request
and as shall be required in connection with the registration
statement to be filed by the Company. If after a registration
statement becomes effective the Company advises the Purchaser
that the Company considers it appropriate to amend or supplement
the applicable registration statement, the Purchaser shall
suspend further sales of the Shares until the Company advises the
Purchaser that such registration statement has been amended or
supplemented.
4.4 Registration Proceedings. Whenever the Company is
required by the provisions of this Section 4 to effect the
registration of the Shares under the Securities Act, the Company
shall:
(i) Prepare and file with the SEC a registration
statement with respect to such securities and use its best
efforts to cause such registration statement to become and
remain effective;
(ii) Prepare and file with the SEC such amendments to
such registration statement and supplements to the
prospectus contained therein as may be necessary to keep
such registration statement effective;
(iii) Furnish to the Purchaser and to the
underwriters of the securities being registered such
reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus and such other
documents as such underwriters may reasonably request in
order to facilitate the public offering of such securities;
(iv) Use its best efforts to register or qualify the
securities covered by such registration statement under such
state securities or Blue Sky Laws of such jurisdictions as
the Purchaser may reasonably request within twenty (20) days
following the original filing of such registration
statement, except that the Company shall not for any purpose
be required to execute a general consent to service of
process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so
qualified;
(v) Notify the Purchaser, promptly after it shall
receive notice thereof, of the time when such registration
statement has become effective or a supplement to any
prospectus forming a part of such registration statement has
been filed;
(vi) Notify the Purchaser promptly of any request by
the SEC for the amending or supplementing of such
registration statement or prospectus or for additional
information; and
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(vii) Prepare and promptly file with the SEC and
promptly notify the Purchaser of the filing of such
amendment or supplement to such registration statement or
prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities
Act, any event shall have occurred as the result of which
any such prospectus or any other prospectus as then in
effect would include an untrue statement of a material fact
or omit to state any material fact necessary to make the
statements therein, in light of the circumstances in which
they were made, not misleading. Notwithstanding any
provision herein to the contrary, the Company shall not be
required to amend, supplement, or update a prospectus
contained in any registration statement if to do so would
result in an unduly burdensome expense to the Company.
4.5 Expenses. With respect to the inclusion of the Shares
in a registration statement pursuant to this Section 4, all
registration expenses, fees, costs and expenses of and incidental
to such registration, inclusion and public offering in connection
therewith shall be borne by the Company; provided, however, that
the Purchaser shall bear its own professional fees and pro rata
share of the underwriting discount and commissions. The fees,
costs and expenses of registration to be borne by the Company
shall include, without limitation, all registration, filing,
printing expenses, fees and disbursements of counsel and
accountants for the Company, fees and disbursements of counsel
for the underwriter or underwriters of such securities (if the
Company and/or selling security holders are required to bear such
fees and disbursements), and all legal fees and disbursements and
other expenses of complying with state securities or Blue Sky
Laws of any jurisdiction in which the securities to be offered
are to be registered or qualified.
4.6 Indemnification of the Holder. Subject to the
conditions set forth below, in connection with any registration
of the Shares pursuant to this Section 4, the Company agrees to
indemnify and hold harmless the Purchaser, any underwriter for
the Company or acting on behalf of the Purchaser and each person,
if any, who controls the Purchaser, within the meaning of Section
15 of the Securities Act, as follows:
(i) Against any and all loss, claim, damage and
expense whatsoever arising out of, based upon or resulting
from (including, but not limited to, any and all expense
whatsoever reasonably incurred in investigating, preparing
or defending any litigation, commenced or threatened, or any
claim whatsoever based upon) any untrue or alleged untrue
statement of a material fact contained in any preliminary
prospectus (if used prior to the effective date of the
registration statement), the registration statement or the
prospectus (as from time to time amended and supplemented),
or in any application or other document executed by the
Company or based upon written information furnished by the
Company filed in any jurisdiction in order to qualify the
Company's securities under the securities laws thereof, or
the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or any other violation of
applicable federal or state statutory or regulatory
requirements or limitations relating to action or inaction
by the Company in the course of preparing, filing, or
implementing such registered offering; provided, however,
that the indemnity agreement contained in this section shall
not apply to any loss, claim, damage, liability or action
arising out of or based upon any untrue or alleged untrue
statement or omission made in reliance upon and in
conformity with any information furnished in writing to the
Company by or on behalf of the Purchaser expressly for use
in connection therewith or arising out of any action or
inaction of the Purchaser;
(ii) Subject to the proviso contained in Subsection (i)
above, against any and all loss, liability, claim, damage
and expense whatsoever to the extent of the aggregate amount
paid in settlement of any litigation, commenced or
threatened, or of any claim whatsoever based upon any untrue
statement or omission (including, but not limited to, any
and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any such
litigation or claim) if such settlement is effected with the
written consent of the Company; and
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(iii) In no case shall the Company be liable under
this indemnity agreement with respect to any claim made
against such seller, underwriter or any such controlling
person unless the Company shall be notified, by letter or by
facsimile confirmed by letter, of any action commenced
against such persons, promptly after such person shall have
been served with the summons or other legal process giving
information as to the nature and basis of the claim. The
failure to so notify the Company, if prejudicial in any
material respect to the Company's ability to defend such
claim, shall relieve the Company from its liability to the
indemnified person under this Section 4, but only to the
extent that the Company was prejudiced. The failure to so
notify the Company shall not relieve the Company from any
liability which it may have otherwise than on account of
this indemnity agreement. The Company shall be entitled to
participate at its own expense in the defense of any suit
brought to enforce any such claim, but if the Company elects
to assume the defense, such defense shall be conducted by
counsel chosen by it, provided such counsel is reasonably
satisfactory to the sellers or controlling persons,
defendants in any suit so brought. In the event the Company
elects to assume the defense of any such suit and retain
such counsel, the sellers, underwriter or controlling
persons, defendants in the suit, shall, after the date they
are notified of such election, bear the fees and expenses of
any counsel thereafter retained by them, as well as any
other expenses thereafter incurred by them in connection
with the defense thereof; provided, however, that if the
sellers, underwriter or controlling persons reasonably
believe that there may be available to them any defense or
counterclaim different than those available to the Company
or that representation of such sellers, underwriters or
controlling persons by counsel for the Company presents a
conflict of interest for such counsel, then such sellers,
underwriter and controlling person shall be entitled to
defend such suit with counsel of their own choosing and the
Company shall bear the fees, expenses and other costs of
such separate counsel.
5. MISCELLANEOUS.
5.1 Indemnity Obligations of the Purchaser. The Purchaser
hereby agrees to indemnify, defend and hold the Company and any
director, officer, employee or representative of the Company (the
"Company Indemnified Parties") harmless from, and to reimburse
the Company Indemnified Parties for, any and all losses, damages,
deficiencies, liabilities, obligations, actions, claims, suits,
proceedings, demands, assessments, judgments, recoveries, fees,
penalties, interest, costs and expenses (including, without
limitation, out-of-pocket expenses, reasonable investigation
expenses and reasonable fees and disbursements of accountants and
counsel) of any nature whatsoever arising out of, based upon or
resulting from (i) any breach of any representation and warranty
of such Purchaser which is contained in this Agreement; or (ii)
any breach or nonfulfillment of, or any failure to perform, any
of the covenants, agreements or undertakings of the Purchaser
which are contained in or made pursuant to the terms and
conditions of this Agreement. Notwithstanding the foregoing, the
indemnification obligation of the Purchaser shall not exceed the
purchase price of the Notes paid by the Purchaser .
5.2 Indemnity Obligations of the Company. The Company
hereby agrees to indemnify, defend and hold the Purchaser and any
director, officer, employee or representative of the Purchaser
(the "Purchaser Indemnified Parties") harmless from, and to
reimburse the Purchaser Indemnified Parties for, any and all
losses, damages, deficiencies, liabilities, obligations, actions,
claims, suits, proceedings, demands, assessments, judgments,
recoveries, fees penalties, interest, costs and expenses
(including, without limitation, out-of-pocket expenses,
reasonable investigation expenses and reasonable fees and
disbursements of accountants and counsel) of any nature
whatsoever arising out of, based upon or resulting from (i) any
breach of any representation and warranty of the Company which is
contained in this Agreement; or (ii) any breach or nonfulfillment
of, or any failure to perform, any of the covenants, agreements
or undertakings of the Company which are contained in or made
pursuant to the terms and conditions of this Agreement.
Notwithstanding the foregoing, the indemnification obligation of
the Company shall not exceed the purchase price of the Note.
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5.3 Notification of Claims. In the event of the
occurrence of an event which any party asserts constitutes a
claim for which indemnification may be sought hereunder, such
party shall provide the indemnifying party with prompt notice of
such event and shall make available to the indemnifying party
information material to the claim which is in the possession of
the indemnified party. If such event involves the claim of any
third party, the indemnifying party shall have the right to elect
to join in the defense, settlement, adjustment or compromise of
any such third-party claim, and to employ counsel to assist such
indemnifying party in connection with the handling of such claim,
at the sole expense of the indemnifying party, and no such claim
shall be settled, adjusted or compromised, or the defense thereof
terminated, without the prior consent of the indemnifying party
unless and until the indemnifying party shall have failed, after
the lapse of a reasonable period of time, but in no event more
than 30 days after written notice to it of the third-party claim,
to join in the defense, settlement, adjustment or compromise of
the same. An indemnified party's failure to give timely notice
in connection with any third-party claim shall not constitute a
defense (in part or in whole) to any claim for indemnification by
such party except and only to the extent that the indemnifying
party is actually materially prejudiced by such delay. If so
desired by the indemnifying party such party may elect, at such
party's sole expense, to assume control of the defense,
settlement, adjustment or compromise of any third-party claim,
insofar as such claim relates to the liability of the
indemnifying party before entering into any settlement,
adjustment or compromise of such claim, or ceasing to defend
against such claim, and provided, further, that the indemnified
party shall have the right at its own expense, to be represented
by counsel of its own choosing and with whom counsel for the
indemnifying party shall confer on connection with such defense,
settlement, adjustment or compromise or ceasing to defend against
each claim.
5.4 [Intentionally Omitted].
5.5 Confidentiality. (a) The Purchaser agrees to keep
confidential any and all non-public information delivered or made
available to the Purchaser by the Company except for disclosures,
as necessary, made by the Purchaser to the Purchaser's officers,
directors, employees, agents, counsel and accountants each of
whom shall be notified by the Purchaser of this confidentiality
covenant and for whom the Purchaser shall be liable in the event
of any breach of this covenant by any such individual or
individuals; provided, however, that nothing herein shall prevent
the Purchaser from disclosing such information (a) upon the order
of any court or administrative agency, (b) upon the request or
demand of any regulatory agency or authority having jurisdiction
over the Purchaser, (c) which has been publicly disclosed or (d)
to any of its members provided that any such members agree in
writing (with a copy provided to the Company) to be bound by
confidentiality provisions in form and substance substantially as
are contained herein. In the event of a mandatory disclosure as
described in clause (a) and/or (b) of the preceding sentence, the
Purchaser shall promptly notify the Company in writing of any
applicable order, request or demand for such information,
cooperate with the Company if and to the extent that the Company
elects to seek an appropriate protective order or other relief
from such order, request, or demand, and disclose only the
minimal amount of information ultimately required to be
disclosed. No Purchaser shall use for its own benefit, nor
permit any other person to use for such person's benefit, any of
the Company's non-public information including, without
limitation, in connection with the purchase and/or sale of the
Company's securities.
(b) The Company shall in no event disclose non-public
information to the Purchaser, advisors to or representatives of
the Purchaser unless prior to disclosure of such information the
Company marks such information as "Non-Public Information -
Confidential" and provides the Purchaser, such advisors and
representatives with the opportunity to accept or refuse to
accept such non-public information for review.
(c) Nothing herein shall require the Company to disclose
non-public information to any Purchaser or its advisors or
representatives, and the Company represents that it does not
disseminate non-public information to any Purchasers who purchase
stock in the Company in any offering, to money managers or to
securities analysts.
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5.6 [Intentionally Omitted].
5.7 Legends. To the extent applicable, the Note and any
Shares issued shall be endorsed with the legend set forth below,
and the Purchaser covenants that, except to the extent such
restrictions are waived by the Company, it shall not transfer the
Note or Shares without complying with the restrictions on
transfer described in the legends endorsed on such note or
certificate:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH
RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY AND
ITS COUNSEL AND FROM ATTORNEYS REASONABLY ACCEPTABLE TO
THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS
NOT REQUIRED."
5.8 Assignability; Successors. The provisions of this
Agreement shall inure to the benefit of and be binding upon the
permitted successors and assigns of the parties hereto.
5.9 Survival. All agreements, covenants, representations
and warranties made by the Company or by the Purchaser herein
shall survive the execution and delivery of this Agreement.
5.10 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
ACCORDING TO THE LAWS OF THE STATE OF COLORADO WITHOUT GIVING
EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAWS.
5.11 Counterparts: Headings. This Agreement may be executed
in several counterparts, each of which shall be deemed an
original, but such counterparts shall together constitute but one
and the same agreement. The descriptive headings in this
Agreement are inserted for convenience of reference only and
shall not affect the construction of this Agreement.
5.12 Entire Agreement, Amendments. This Agreement and the
Exhibits contain the entire understanding of the parties with
respect to the subject matter hereof, and supersede all other
representations and understandings, oral or written, with respect
to the subject matter hereof. No amendment, modification,
alteration, or waiver of the terms of this Agreement or consent
required under the terms of this Agreement shall be effective
unless made in a writing, which makes specific reference to this
Agreement and which has been signed by the Company and the
Purchaser. Any such amendment, modification, alteration, waiver
or consent shall be effective only in the specific instance and
for the specific purpose for which given.
5.13 Notices. All communications or notices required or
permitted by this Agreement shall be in writing and shall be
deemed to have been given or made when delivered in hand,
deposited in the mail, or sent by facsimile, with confirmation
(if sent by facsimile on a non-business day, receipt shall be
deemed to have occurred on the next succeeding business day).
Communications or notices shall be delivered personally or by
certified or registered mail, postage, or by facsimile and
addressed as follows, unless and until either of such parties
notifies the other in accordance with this Section of a change of
address:
10
if to the Company Consolidated Capital of North America, Inc.
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Att: Secretary
Tel: (000) 000-0000
Fax: (000) 000-0000
with copies to: Xxxxxxxxx, Xxxxxx & Xxxxxx
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Att: Xxxxxx X. Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
if to the Purchaser: Security Income Trust, L.P.
c/o American National Security, Inc.
00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Att: Secretary
Tel: (000) 000-0000
Fax: (000) 000-0000
5.14 Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
5.15 Maximum Interest. It is expressly stipulated and
agreed to be the intent of the Company and the Purchaser at all
times to comply with the applicable law governing the maximum
rate of interest payable on or in connection with all
indebtedness and transactions hereunder (or applicable United
States federal law to the extent that it permits the Purchaser to
contract for, charge, take, reserve or receive a greater amount
of interest). If the applicable law is ever judicially
interpreted so as to render usurious any amount of money or
other consideration called for hereunder, or contracted for,
charged, taken, reserved or received with respect to any loan or
advance hereunder, or if acceleration of the maturity of the Note
results in the Company's having paid any interest in excess of
that permitted by law, then it is the Company's and the
Purchaser's express intent that all excess cash amounts
theretofore collected by the Purchaser be credited on the
principal balance of the Note (or if the Note has been or would
thereby be paid in full, refunded to the Company), and the
provisions of this Agreement immediately be deemed reformed and
the amounts thereafter collectible hereunder reduced, without the
necessity of the execution of any new document, so as to comply
with the applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder. The right to
accelerate the maturity of the Note does not include the right to
accelerate any interest which has not otherwise accrued on the
date of such acceleration, and the Purchaser does not intend to
collect any unearned interest in the event of acceleration.
11
IN WITNESS WHEREOF, this Agreement has been duly executed as of
the day and year first above written.
CONSOLIDATED CAPITAL
OF NORTH AMERICA, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Xxxxxxx X. Xxxxxx
President and Chief Operating Officer
SECURITY INCOME TRUST, L.P.
By: AMERICAN NATIONAL
SECURITY MANAGEMENT, L.P.
General Partner
By: AMERICAN NATIONAL
SECURITY, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx, Treasurer and
Chief Financial Officer
