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Exhibit No. 10.58
Form of Note Purchase Agreement between the
Company and the Purchasers of 10% Convertible
Notes (Exhibits and Schedules Omitted).
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NOTE PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made this ___ day of April 1998,
between Consolidated Capital of North America, Inc., a Colorado corporation (the
"Company") and the entities set forth on Schedule I hereto (hereinafter referred
to collectively as the "Purchasers" and individually a "Purchaser").
RECITAL
WHEREAS, the Company has authorized the issuance and sale of the
Company's 10% Convertible Notes up to an aggregate principal amount of
$5,000,000 having the terms set forth in Exhibit A attached hereto (the
"Notes"); and
WHEREAS, each Purchaser desires to purchase the Notes set forth on
Schedule I hereto.
NOW, THEREFORE, in consideration of the foregoing and of the terms and
conditions contained in this Agreement, the Company and each 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) each
Purchaser shall purchase from the Company and the Company shall sell to each
Purchaser the Notes set forth on Schedule I hereto.
2. CLOSING.
2.1 Date of Closing. The closing of the purchase and sale of the
Notes (the "Closing") shall take place on April __, 1998 or such other day as
agreed to by the parties (the "Closing Date").
2.2 Items to be Delivered to Purchaser. The following shall be
delivered by the Company to each Purchaser on the Closing Date:
(a) the Notes purchased by such Purchaser;
(b) a legal opinion of counsel to the Company covering the due
execution, delivery and binding effect of this Agreement and the Notes;
and
(c) 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 and the Notes.
2.3 Items to be Delivered to the Company. The following shall be
delivered by each Purchaser to the Company on the Closing Date:
(a) The purchase price set forth on Schedule I by wire transfer
to the account designated by 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 Notes (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 Notes 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 50,000,000 shares of Common Stock, par value $.0001
per share, 17,975,756 shares of which are issued and outstanding and
10,000,000 shares of Preferred Stock, par value $.01 per share, of
which the following Preferred Shares are authorized, issued and
outstanding: 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, 200 shares issued and outstanding. The shares of common stock
issuable upon conversion of the Notes (the "Conversion Shares") and the
shares of common stock issuable in lieu of cash interest payments on
the Notes (the "Interest Shares" and together with the Conversion
Shares, the "Shares") have been duly and validly authorized and
reserved for issuance and, when issued and delivered in accordance with
the terms of this Agreement, will be duly and validly issued, fully
paid and non-assessable. All outstanding securities of the Company that
are convertible into Common Shares of the Company, and all securities
of the Company that have registration rights, are set forth on Schedule
3.1(d) attached hereto.
(e) SEC Documents. The Company has furnished each Purchaser
with a true and complete copy of the Company's Report on Form 8-K filed
on January 27, 1998, as amended on
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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 3, 1998 and the Company's Form 10-KSB for the fiscal
year ended December 31, 1997 (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 its 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 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 Notes 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
Notes and the Shares as contemplated by this Agreement.
3.2 Representations and Warranties of the Purchasers. Each
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 such 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 have all their questions regarding the Company
satisfactorily answered.
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(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 has received from the Company,
and is relying on, no representations (except as set forth in
this Agreement) or projections with respect to the Company's
business and prospects.
(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.
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4. REGISTRATION RIGHTS.
4.1 Registration of Shares. (a) The Company shall prepare and file
with the SEC a registration statement as soon as practical, which registration
statement shall include the Shares, and shall thereafter use its best efforts to
have such registration statement declared effective within 90 days after the
Closing Date (the "Target Date") and remain effective until the earlier of the
date on which all the Shares are sold or two years after the Closing Date (the
"Effective Period"). The Company shall prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective throughout the Effective Period and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of the Shares covered by such registration statement whenever the Purchaser
shall desire to sell or otherwise dispose of the same.
(b) If a registration statement covering all Shares is not
effective by the Target Date, the Company shall pay to the Purchasers
as liquidated damages an aggregate amount equal to one and one half
percent (1 1/2%) of the total purchase price of the Notes for each
thirty (30) day period following the Target Date until such time as the
registration statement is declared effective. The payment set forth
above shall be pro-rated daily as to any period of less than thirty
(30) days. Such payment shall be made to each Purchaser by cashier's
check or wire transfer in immediately available funds to such account
as shall be designated in writing by the Purchaser and shall be paid
irrespective of the amount of Shares held by Purchaser on the Target
Date and thereafter.
(c) If the effectiveness of the Registration Statement is
suspended or a current prospectus meeting the requirements of Section
10 of the Act is not available for delivery by the Purchaser for a
period of more than thirty (30) days (either referred to herein as a
"suspension"), the Company shall pay to the Purchasers as liquidated
damages an aggregate amount equal to one and one half percent (1 1/2%)
of the total purchase price of the Notes for each thirty (30) day
period following the initial thirty (30) days of the suspension. Such
amounts shall be pro-rated daily and paid to each Purchaser by
cashier's check or wire transfer in immediately available funds to such
account as shall be designated in writing by the Purchaser.
(d) Any amount payable pursuant to the foregoing provisions
shall be delivered on or before the fifth (5th) day following the end
of the calendar month in which such payment or delivery obligation
arose.
(e) The Company shall file a request for acceleration of
effectiveness of the registration statement within five days after it
has received a no review/no further comment determination from the SEC.
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 second anniversary of this Agreement proposes or is required to register
any of its shares or other equity securities for public sale for cash under the
Securities Act (other than on Forms S-4 or S-8 or similar registration forms),
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 the 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 the
Purchaser or Shares obtainable upon conversion of the Note and requested to be
registered under the Securities Act and any applicable
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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".
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 Purchaser shall furnish to the Company such information
regarding the Shares held and the intended method of disposition thereof and
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
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supplementing of such registration statement or
prospectus or for additional information; and
(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 or based upon (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
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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
(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.
4.7 Indemnification of the Company. Each Purchaser agrees to
indemnify and hold harmless the Company, each underwriter for the offering, and
each of their officers and directors and agents and each other person, if any,
who controls the Company and underwriter within the meaning of Section 15
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of the Securities Act against any and all such losses, liabilities, claims,
damages and expenses as are indemnified against by the Company under Section 4.6
above; provided, however, that such indemnification by Purchaser hereunder shall
be limited to any losses, liabilities, claims, damages, or expenses to the
extent caused by any untrue statement of a material fact or omission of a
material fact (required to be stated therein or necessary to make statements
therein not misleading), if any made (or in settlement of any litigation
effected with the written consent of such sellers, alleged to have been made) in
any preliminary prospectus, the registration statement or prospectus or any
amendment or supplement thereof or in any application or other document in
reliance upon, and in conformity with, written information furnished in respect
of such seller by or on behalf of such seller expressly for use in any
preliminary prospectus, the registration statement or prospectus or any
amendment or supplement thereof or in any such application or other document or
arising out of any action or inaction of such seller in implementing such
registered offering. Notwithstanding the foregoing, the indemnification
obligation of each Purchaser shall not exceed the purchase price of the Notes
paid by such Purchaser. In case any action shall be brought against the Company,
or any other person so indemnified, in respect of which indemnity may be sought
against any seller, such seller shall have the rights and duties given to the
Company, and each other person so indemnified shall have the rights and duties
given to the Purchaser, by the provisions of Section 4.6. The person indemnified
agrees to notify the sellers promptly after the assertion of any claim against
the person indemnified in connection with the sale of securities.
4.8 Contribution. If the indemnification provided for in Sections
4.6 and 4.7 above are unavailable or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of
the indemnified party, on one hand, and such indemnifying party, on the other
hand, in connection with the statements or omissions which resulted in such
losses, claims, damages, or liabilities (or actions in respect thereof). The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
indemnified party, on one hand, or such indemnifying party, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. No person who has
committed fraudulent misrepresentation (within the meaning of the Securities
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof referred to above in this Section shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
5. MISCELLANEOUS.
5.1 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
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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. The Purchaser shall not 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. The Company may, as a condition to disclosing any
non-public information hereunder, require the Purchaser's advisors and
representatives to enter into a confidentiality agreement in form
reasonably satisfactory to the Company and the Purchaser.
(c) Nothing herein shall require the Company to disclose
non-public information to the 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 a public offering, to money managers or to securities
analysts, provided, however, that notwithstanding anything herein to
the contrary, the Company will, as hereinabove provided, immediately
notify the advisors and representatives of the Purchaser and, if any,
underwriters, of any event or the existence of any circumstance
(without any obligation to disclose the specific event or circumstance)
of which it becomes aware, constituting non-public information (whether
or not requested of the Company specifically or generally during the
course of due diligence by such persons or entities), which, if not
disclosed in the prospectus included in the Registration Statement
would cause such prospectus to include a material misstatement or to
omit a material fact required to be stated therein in order to make the
statements, therein, in light of the circumstances in which they were
made, not misleading. Nothing herein shall be construed to mean that
such persons or entities other than the Purchaser (without the written
consent of the Purchaser prior to disclosure of such information) may
not obtain non-public information in the course of conducting due
diligence in accordance with the terms of this Agreement and nothing
herein shall prevent any such persons or entities from notifying the
Company of their opinion that based on such due diligence by such
persons or entities, that a Registration Statement contains an untrue
statement of a material fact or omits a material fact required to be
stated in the Registration Statement or necessary to make the
statements contained therein, in light of the circumstances in which
they were made, nor misleading.
5.2 Legends. To the extent applicable, each note, certificate or
other document evidencing the Notes to be purchased and sold pursuant to this
Agreement and any Shares issued shall be endorsed with the legends set forth
below, and the Purchaser on behalf of itself and each holder of the Notes
covenants that, except to the extent such restrictions are waived by the
Company, it shall not transfer the Notes or Shares without complying with the
restrictions on transfer described in the legends endorsed on such note or
certificate:
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(a) The following legend under the Securities Act:
"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."
(b) If required by the authorities of any state in connection
with the issuance or sale of the Note or the Shares, the legend
required by such state authority.
5.3 Costs and Expenses. The Company and each Purchaser shall bear
their own costs and expenses in connection with the preparation, execution and
delivery of this Agreement and the Notes.
5.4 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.
5.5 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.
5.6 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.
5.7 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.
5.8 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 each 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.
5.9 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
13
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:
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 Purchasers: To the address set forth on Schedule I hereto
5.10 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.
5.11 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 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 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 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.
14
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/ Xxxxxx X. Xxxxxxx
---------------------------
Xxxxxx X. Xxxxxxx
Secretary and Treasurer
[PURCHASERS]
By:
