<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 21, 1997
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
(Exact Name of Registrant as Specified in Its Charter)
Colorado 0-21821 93-0962072
- ------------------------------ ------------- --------------------
State or Other Jurisdiction Commission IRS Employer
of Incorporation or Organization File Number Identification No.
410 17th Street, Suite 400
Denver, Colorado 80202
- ------------------------------ --------
Address of Principal Executive Offices Zip Code
Registrant's telephone number, including area code: (303) 446-5926
---------------
5525 Erindale Dr., Suite 201, Colorado Springs, Colorado 80918
---------------------------------------------------------------------------
Former name of former address, if changed since last report
<PAGE> 2
Item 1. Changes in Control of Registrant
On January 21, 1997, Consolidated Land & Cattle Company, a wholly owned
subsidiary of Consolidated Capital of North America, Inc. (the "Registrant"),
merged with Angeles Acquisition Corp. ("Angeles Acquisition"), a company
privately held by Stone Pine Colorado, LLC ("Stone Pine") (the "Merger").
Prior to the Merger, Angeles Acquisition had acquired Angeles Metal Trim Co.
("Angeles Metal"), a privately-held company headquartered in Los Angeles,
California which fabricates and sells steel framing for commercial and
residential structures. A copy of the Angeles Metal Stock Purchase Agreement
dated as of January 15, 1997 is attached as Exhibit 2.1 hereto and incorporated
herein by reference and a copy of the Agreement and Plan of Merger dated
January 15, 1997 is attached as Exhibit 2.2 hereto and incorporated herein by
reference. In the Merger, the Registrant issued to Stone Pine 8,638,003 shares
of the Registrant's common stock. Immediately following the Merger, the
Registrant sold 5,496,911 shares of its common stock in a private transaction
exempt from registration under Regulation S of the Securities Act of 1933, as
amended (the "Share Issuance"). A copy of the form of Stock Purchase Agreement
dated January 16, 1997 is attached hereto as Exhibit 10.10 and incorporated
herein by reference. (See Item 9 hereof).
Upon completion of the Merger, the Registrant's current directors
resigned and were replaced by new directors designated by Stone Pine. With the
consummation of the Merger and the Share Issuance, there are 15,705,460 shares
of the Registrant's common stock outstanding, each of which entitles the holder
thereof to one vote on each matter which may come before a meeting of the
shareholders. As a result of these transactions, Stone Pine is the beneficial
owner of 55% of such common stock, which is the only issued and outstanding
class of securities issued by the Registrant.
Item 2. Acquisition or Disposition of Assets
See Item 1 above.
Item 7. Financial Statement Pro Forma Information and Exhibits
(a) and (b) Financial Statements and Pro Forma Financial Information
will be filed by Amendment within sixty (60) days of the date hereof.
(c) Exhibit 2.1. Angeles Metal Stock Purchase Agreement dated as of
January 15, 1997 (Exhibits and Schedules omitted).
Exhibit 2.2. Agreement and Plan of Merger dated January 16,
1997 (Exhibits and Schedules omitted).
Exhibit 10.10. Form of Stock Purchase Agreement dated January
16, 1997 (Exhibits and Schedules omitted).
2
<PAGE> 3
Item 9. Sales of Equity Securities Pursuant to Regulation S.
On January 21, 1997, the Registrant issued 5,496,911 shares of the
Registrant's common stock pursuant to an exemption from registration under
Regulation S of the Securities Act of 1933. The common stock was issued to
seven private investors who are not "U.S. Persons" (as defined in Rule 902(o)
of Regulation S). The Registrant issued 785,273 shares to each investor
pursuant to the terms of substantially identical Stock Purchase Agreements
which were executed by the parties on January 16, 1997 (a form of the Stock
Purchase Agreement is attached as Exhibit 10.10 hereto). The purchase price paid
by each purchaser was approximately $143,000.00. The common stock was issued
for cash. No underwriter was used and no underwriter discounts or commissions
were paid. The Registrant issued the common stock pursuant to Rule 903 of
Regulation S and qualifies for such an exemption based on the purchasers'
representations that they are not U.S. Persons as set forth in the
aforementioned Stock Purchase Agreements, and based on the following: the
Registrant is a Reporting Issuer (as defined in Rule 902(l) of Regulation S);
has not made any Directed Selling Efforts (as defined in Rule 902(b) of
Regulation S); has implemented Offering Restrictions (as defined in Rule 902(h)
of Regulation S); and has not made any offer or sale to any U.S. person or for
the account or benefit of any U.S. person.
Pursuant to the Stock Purchase Agreement with one of the investors
described above, such investor may nominate two directors to the Board of
Directors of the Registrant or, in the alternative, shall have the right to be
present at all Board meetings. As of the date hereof no such directors have
been nominated to the Board of Directors of the Registrant.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
By: /s/ Donald R. Jackson
---------------------------------------
Donald R. Jackson,
Chief Financial Officer,
Treasurer and Secretary
Date: January 23, 1997
3
<PAGE> 1
EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
DATED AS OF JANUARY 15, 1997
BY AND AMONG
ANGELES ACQUISITION COMPANY
A DELAWARE CORPORATION
AS BUYER
AND
ANGELES METAL TRIM COMPANIES
DBA
ANGELES METAL SYSTEMS, INC.
AND
CALIFORNIA BUILDING SYSTEMS INC.
- --------------------------------------------------------------------------------
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<TABLE>
<S> <C>
ARTICLE I SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Sale and Purchase of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
--------------------------
1.02 Payment of Purchase Price for the Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
-----------------------------------------
1.03 Down Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
------------
ARTICLE II THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.1. Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
- ---------------------------------------
Section 2.2. Sellers' Particular Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
- ----------------------------------------------------
ARTICLE III WARRANTIES AND REPRESENTATIONS OF SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1. Organization and Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-------------------------
3.2. Title to the Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-------------------
3.3. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-------------
3.4. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
------------
3.5 Minute Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
------------
3.6 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
--------------
3.7. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
--------------------
3.8. Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
------------
3.9 Litigation and Bankruptcy Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-------------------------------------
3.10 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-----
3.11 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-----
3.12. No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
-------------
3.13. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
-----
3.14. Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
---------
3.15. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
---------
</TABLE>
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<TABLE>
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3.16. Shareholders, Directors and Officers; Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 11
--------------------------------------------------
3.17 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
---------
3.18. Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
-------------------
3.19. Assets Necessary to Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
----------------------------
3.20. Business of Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
---------------------
3.21. Compliance with Other Instruments and Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
------------------------------------------
3.22. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
-------------
3.23. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
----------
3.24. Customers and Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-----------------------
3.25. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
---------------------
3.26. Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
----------------------
3.27. No Other Agreements to Sell the Assets of the Business or the Shares or Other Capital
--------------------------------------------------------------------------------------
Stock of the Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-----------------------
3.28. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
--------
3.29. Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
-------------
3.30. Real Property Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
--------------------
3.31. Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
---------
3.32. Licenses, Permits and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
-------------------------------
3.33 True Copies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
-----------
3.34 Intellectual Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
-----------------------
3.35 Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
-------------------------
3.36 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
-----------------
3.37 No Material Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
------------------
3.38 Absence of Change of Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
--------------------------
</TABLE>
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<TABLE>
<S> <C>
ARTICLE IV REPRESENTATIONS OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.1 Existence and Good Standing of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
------------------------------------
4.2 No Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
---------------
4.3 Financing Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
----------------------
4.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
----------
ARTICLE V FURTHER AGREEMENTS OF THE SELLERS AND CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . . . . . . 27
5.1. Satisfaction of Conditions by the Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
-----------------------------------------
5.2 Updating of Exhibits, Schedules, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
------------------------------------
5.3 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
------------------
5.4 Consents and Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
--------------------
5.5 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
----------------
5.6 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
-------------------------------
5.7 Conduct of Business of the Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
------------------------------------
5.8 Review of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
---------------------
5.9 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
---------------
5.10 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
------------
5.11 Pay Off of Cable Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
---------------------
5.12 Scheduled Leases and Entering Into Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
-----------------------------------------
5.14 Period Prior to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
-----------------------
5.15 Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
------------
ARTICLE VI CONDITIONS TO BUYER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.1 Cable Non-Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
-----------------
6.2 Shareholder Note Satisfied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
--------------------------
</TABLE>
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<TABLE>
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6.3 A Non-Competition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
---------------------------
6.4 A Consulting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
----------------------
6.5 Opinion of Sellers' Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
---------------------------
6.6 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
--------------------------
6.7 Truth of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
---------------------------------------
6.8 Performance of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
-------------------------
6.9 No Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
-------------
6.10 No Other Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
-------------------
6.11 Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
------------------
6.12 Transfer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
------------------
6.13 Third Party Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
----------------------
6.14 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
---------------
6.15 Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
-----------
6.16 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
------------
ARTICLE VII CONDITIONS TO SELLERS' OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.1 Opinions of Buyer's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
---------------------------
7.2 Truth of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
---------------------------------------
7.3 Performance of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
-------------------------
7.4 No Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
-------------
7.5 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
----------------------
ARTICLE VIII SURVIVAL OF REPRESENTATIONS;EVENTS OF TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 34
8.1 Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
---------------------------
8.2 Events of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
---------------------
8.3 Materiality of Actions Hereunder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
--------------------------------
</TABLE>
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<TABLE>
<S> <C>
ARTICLE IX INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.1 Indemnification by Cable and the Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
------------------------------------------
9.2 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
------
9.3 Defense of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
-----------------
9.4 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
-----------
9.5 Right to Participate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
--------------------
ARTICLE X MISCELLANEOUS....................................................................................... 37
10.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
--------
10.2 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
--------------
10.3 Notification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
------------
10.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-------------
10.5 "Person" Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
----------------
10.6 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
--------
10.7 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
---------
10.8 Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-------------------------
10.9 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-------
10.10 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-------------------
10.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
------------
10.12 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
----------------
10.13 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
----------
10.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
------------
10.15 Liquidated Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
------------------
</TABLE>
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<PAGE> 7
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") dated as of January 15,
1997, by and among ANGELES ACQUISITION CO., a Delaware company ("Buyer");
ANGELES METAL TRIM CO., INC., dba Angeles Metal Systems, Inc., ("Angeles") a
California corporation, and all of its wholly owned subsidiaries including but
not limited to CALIFORNIA BUILDING SYSTEMS, a Nevada Corporation ("CBS"), the
"Shareholders" listed on Schedule 1.0 attached hereto and D. Kingston Cable
("Cable") an individual having an address of ___________ , hereinafter Angeles
and its subsidiaries are collectively referred to as the "Companies" and
together with the Shareholders are referred to as the "Sellers".
WITNESSETH:
WHEREAS, Sellers own all of the outstanding stock of the Companies
(the "Shares"); and
WHEREAS, Sellers desire to sell, and Buyer desires to purchase, all of
the Shares of the Companies and to assume certain liabilities of the Companies
as set forth in this Agreement;
WHEREAS, Angeles has executed a letter of intent dated October 17,
1996, (the "Letter of Intent") which sets forth certain terms and conditions to
be included in this Agreement and which contemplated the entering into of this
Agreement; the Letter of Intent shall be deemed superceded by this Agreement;
and
WHEREAS, it is the intention of the parties hereto that, upon
consummation of the purchase and sale of the Shares pursuant to this Agreement,
Buyer shall own all of the Shares of the Companies;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and intending to be legally bound hereby, Sellers and Buyer hereby agree
as follows:
<PAGE> 8
ARTICLE I
PURCHASE AND SALE OF STOCK
1.1 Sale and Purchase of Stock. At the Closing (defined
hereinbelow), subject to the terms and conditions of this Agreement, and in
reliance upon the representations, warranties and agreements contained in this
Agreement, the Sellers will convey, assign and deliver to the Buyer, and the
Buyer will purchase and acquire from the Sellers, the Shares.
1.2 Payment of Purchase Price for the Shares. The Purchase Price
for the sale and transfer of the Shares by Sellers to Buyer is hereby agreed to
be Three Million Four Hundred Fifty Thousand Dollars ($3,450,000) to be paid in
cash in full at the Closing.
ARTICLE II
THE CLOSING
Section 2.1. Time and Place of Closing. The "Closing" shall mean the
time at which the Sellers consummate the sale of the Shares owned by them to
the Buyer, by delivery of the documents referred to in this Article II, and as
otherwise required by this Agreement, against the delivery by the Buyer of the
payment provided for in Section 1.02, after the satisfaction (or a duly
executed waiver thereof) of the conditions set forth in Articles V and VI
hereof. Time is of the essence in this transaction, the closing of the sale
and purchase of the Shares (the "Closing") shall take place at 10:00 A.M. at
the offices of Harrington, Foxx, Dubrow & Cantor, within (15) days of the
execution of this Agreement and in any event on or before January 15, 1997.
Section 2.2. Sellers' Particular Closing Deliveries. At the Closing,
the Sellers shall deliver to the Buyer the following instruments in form and
substance satisfactory to the Buyer and its counsel, against delivery of the
items specified in Section 2.2 hereof:
(a) Certificates evidencing all of the Shares, free and clear of any
claim, lien, pledge, option, charge, security interest, encumbrance or other
right of third parties of any nature whatsoever, duly endorsed in blank for
transfer or accompanied by stock powers duly executed in blank, together with
evidence of the payment of any applicable stock transfer taxes;
(b) The Certificates of Incorporation of Angeles and its subsidiary
CBS and any other subsidiary of Angeles at the date of Closing, certified by
the respective appropriate officials of each state of organization, and the
by-laws of each certified by their respective Secretary and a certificate of
good standing of each of the Companies dated within thirty (30) days of the
Closing;
(c) All required Shareholder and Board of Director consents,
approvals and resignations, as more fully described herein below;
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(d) All required consents, approvals, and documentation of
satisfaction or release of liens of creditors or lenders to the Sellers
including but not limited to: (a) the satisfaction and release of lien of Bank
of America of all indebtedness owed to it, (b) the statement of satisfaction
of the principal shareholder of Angeles verifying that the notes from Angeles
to the principal shareholder in an amount not to exceed Two Hundred Eighty Five
Thousand Dollars ($285,000.00) have been paid and all the indebtedness from the
Companies to any shareholder has been canceled;
(e) Copies of all UCC-3 Termination Statements and Discharges of
Mortgages or Leasehold Mortgages, if any, which evidence the termination of
any and all liens and encumbrances affecting the Business Assets;
(f) All required consents, waivers or agreements of third parties
to Leases or Scheduled Leases (as defined hereinbelow), contracts agreements,
commitments or other undertakings comprising a part of the assets used in the
Business, if any, in form and substance satisfactory to the Buyer and its
counsel, necessary to permit the operation of the Business as currently
conducted;
(h) All of the certificates, documents, contracts, assignments,
opinions, resignations, records, schedules and other exhibits required pursuant
to this Agreement.
(i) Any other documents or instruments of conveyance and transfer
as the Buyer may reasonably request for the purpose of assigning, transferring,
granting and conveying the Shares to the Buyer.
Section 2.3. Buyer's Particular Closing Deliveries. At the Closing,
in addition to any other documents specifically required to be delivered
pursuant to this Agreement, the Buyer shall:
(a) pay the Purchase Price set forth in Section 1.02 hereof; the
same shall be paid to the Trust Account of Harrington, Foxx, Dubrow and Canter
for the benefit of the Shareholders.
(b) deliver to the Sellers a certificate of the Buyer as to the
accuracy of its representations and warranties contained in this Agreement and
as to its compliance with and fulfillment of all covenants, agreements,
obligations and conditions required by this Agreement;
(c) deliver to the Sellers a certificate of good standing from the
Buyer from its jurisdiction of incorporation dated within thirty (30) days of
the Closing;
(d) deliver to the Sellers certified copies of the resolutions of
the Board of Directors of the Buyer authorizing the execution and delivery of
this Agreement and the transactions contemplated hereby; and
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(e) deliver to the Sellers such further certificates, records,
exhibits, opinions and documents as shall be reasonably requested by the
Sellers.
ARTICLE III
WARRANTIES AND REPRESENTATIONS OF SELLERS
CABLE REPRESENTS AND WARRANTS TO THE BUYER THAT THE FOLLOWING
REPRESENTATIONS AND WARRANTIES CONTAINED IN PARAGRAPHS 3.1 THROUGH 3.5
INCLUSIVE ARE AS OF THE DATE HEREOF, AND WILL BE AS OF THE CLOSING, TRUE AND
CORRECT:
3.1. Organization and Standing.
The Companies are corporations duly organized and validly
existing under the laws of their respective states of organization and are in
good standing under such laws. Each of the Companies have the requisite
corporate power, to own the properties owned by it and to conduct its business
as currently being conducted by it. Each of the Companies is qualified to do
business as foreign corporations in the jurisdictions in which it is required
to be so qualified by virtue of the nature of the business conducted by it or
the ownership or leasing of property by it makes such qualification necessary.
The Companies have furnished to the Buyer true and correct and complete copies
of the Articles of Incorporation and By-Laws, and all amendments to each to
date of each Company.
3.2. Title to the Shares. Cable owns beneficially and of record,
free and clear of any liens, encumbrances, options, rights of others, or
restrictions on transferability and has full power and authority to convey free
and clear of any lien or other encumbrance, all of Shares owned by Cable, the
ownership of which is set forth on Schedule 3.2 hereto, and, upon delivery of
the Shares owned by Cable, the Buyer will acquire good, valid and marketable
title thereto free and clear of any lien or other encumbrance.
3.3. Authorization. This Agreement is a valid and binding obligation
of each of the Companies and Cable and is enforceable in accordance with its
terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws of general
application affecting enforcement of creditors' rights generally. The
execution, delivery and performance by each of the Companies of this Agreement
and compliance therewith and the issuance and sale of the Shares will not
result in any violation of and will not conflict with, or result in a breach of
any of the terms of, or constitute a default under, (a) any provisions of State
or Federal law to which any of the Companies are subject, (b) any of the
Companies' articles of incorporation, as amended, by-laws, as amended, or any
mortgage, indenture, agreement, instrument, judgment, decree, order, rule or
regulation or other restriction to which Cable or any of the Companies is a
party or by which they are bound, or result in the creation of any mortgage,
pledge, lien, encumbrance or charge upon any
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of the properties or assets of Cable or any of the Companies pursuant to any
such term, or result in the creation of any shareholder dissent rights or
appraisal rights. No shareholder of any of the Companies has any pre-emptive
rights or appraisal rights of first refusal by reason of the sale of the Shares
which has not been waived. The Shares owned by Cable, when sold in compliance
with the provisions of this Agreement, will be validly issued, fully paid and
non-assessable.
3.4. Subsidiaries. Other than CBS, Angeles has no subsidiaries and
does not own of record or beneficially any capital stock or equity interest or
investment in any corporation, association or business entity.
3.5. Minute Books. The minute books of each Companies contain a
complete summary of all meetings of the Directors and Shareholders of the
Companies since the time of incorporation or formation and reflect all
transactions referred to in such minutes accurately in all material respects.
All actions taken by the Companies requiring action by their Boards of
Directors or shareholders or Partners, as appropriate, have been duly
authorized or ratified as necessary and are evidenced in the minute books of
the Companies.
CABLE REPRESENTS AND WARRANTS TO THE BUYER ONLY TO THE BEST OF
HIS CURRENT KNOWLEDGE THAT THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
PARAGRAPHS 3.6 THROUGH 3.59 INCLUSIVE ARE AS OF THE DATE HEREOF AND WILL BE AS
OF THE CLOSING, TRUE AND CORRECT.
3.6. Capitalization. The capitalization of each Companies is set
forth on Schedule 3.6 hereto. All the Companies' issued and outstanding shares
of capital stock are duly authorized and validly issued, are fully paid and
non-assessable and were issued, sold and delivered by such Companies in
compliance with applicable Federal and state securities laws. In addition,
Schedule 3.6 hereto sets forth all outstanding pre-emptive, conversion and
other rights, options, warrants and agreements granted or issued by or binding
upon each Companies for the purchase or acquisition of any Shares, or
partnership interests, as appropriate, of its capital stock or partnership
interests, respectively. Schedule 3.6 hereto also sets forth as to each
security, right, option, warrant and agreement listed thereon the date of
acquisition by the owner thereof. Except as set forth on Schedule 3.6, there is
not outstanding any subscriptions, calls, commitments, warrants, options or
other agreements for the purchase of shares of any capital stock or other
securities of the Companies or any securities or agreements convertible into or
exchangeable for shares of capital stock or other securities, or partnership
interests, as appropriate, issued by the Companies, or any other commitments of
any kind for the issuance of any additional shares of capital stock or other
securities, or partnership interests, as appropriate, issued by any of the
Companies. Neither Cable nor the Companies are subject to any voting trusts,
shareholders agreements, or other agreements pertaining to the voting or
disposition of such securities.
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3.7 Financial Statements. (a) Cable has furnished Buyer with
reviewed balance sheets of the Companies (the "Reference Balance Sheet") as at
December 31, 1995 (the "Balance Sheet Date"), 1994, and 1993, respectively, and
the related statements, of income and cash flows for the periods then ended,
accompanied by the report of Grant Thornton. Such Reference Balance Sheet,
attached hereto as Schedule 3.7, including the footnotes thereto, except as
indicated therein, have been prepared as set forth in the report of the
auditors which is a part of the same and are substantially complete and correct
in all material respects and fairly present in all material respects the
financial condition and results of the operations of the Companies and the
changes in its financial position at such dates and for such periods and show
all material liabilities absolute or contingent of the Companies.
Notwithstanding anything in this Agreement to the contrary, Sellers, to the
best of their knowledge, make no representations or warranties to Buyer as to
the adequacy or sufficiency of any reserves set forth in such Reference Balance
Sheet.
(b) A physical inventory will be taken under the supervision
of Grant Thornton, a certified public accountant, as of November 30th, 1996 and
a copy of the same together with the unaudited internally prepared financial
statements for the period ending November 30, 1996 will be furnished to the
Buyer prior to the Closing.
(c) There are no liabilities, debts, obligations or claims
against the Companies which could have, with respect to any party, a Material
Adverse Effect or Material Adverse Change (as defined below), on the financial
condition, assets, liabilities, results of operations or business of Angeles,
CBS or any other subsidiary which is party to this transaction, except:
3.7.1(a) as and to the extent reflected or reserved against on
the Reference Balance Sheet; and
3.7.2(b) as incurred since Reference Balance Sheet Date, in
the ordinary course of business consistent with prior practice.
3.7.3(c) Buyer hereby acknowledges, warrants and represents
that CBS will be a wholly owned subsidiary of Angeles upon Closing, and such
ownership will be so reflected on Balance Sheet of Angeles.
3.8. Liabilities. Each of the Companies has no liabilities or
obligations (absolute, accrued, contingent or otherwise) except (i) liabilities
that are reflected and reserved against on the unaudited balance sheet of the
Companies dated November 30, 1996 , that have not been paid or discharged since
the date thereof and (ii) liabilities incurred since November 30, 1996 in the
ordinary course of business consistent with past practice and in accordance
with this Agreement (none of which relates to any breach of contract, breach of
warranty, tort, infringement or violation of any law or arose out of any
complaint, action, suit or proceeding and none of which individually or in the
aggregate could have material adverse effect (financial or otherwise) on the
property, liabilities, reserves, working capital, earnings, technologies,
prospects or relations with customers, suppliers, distributors or employees of
the Companies).
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3.9. Litigation and Bankruptcy Proceedings. (a) Except as set forth
on Schedule 3.9 attached hereto there is neither pending nor threatened any
action, suit, proceeding or claim, or any basis therefore or threat thereof,
whether or not purportedly on behalf of the Companies, to which the Companies,
is or may be named as a party or to which its property is or may be subject, or
after due inquiry, against any officer, principal shareholder or partner of the
Companies and in which an unfavorable outcome, ruling or finding in any such
matter or for all such matters taken as a whole might have a Material Adverse
Effect on the condition, financial or otherwise, prospects or operations or any
Companies; and the Companies have no knowledge of any unasserted claim, the
assertion of which is likely and which, if asserted, will seek damages, an
injunction or other legal, equitable, monetary or nonmonetary relief which
claim individually or collectively with other such unasserted claims if granted
would have a material adverse effect on the condition, financial or otherwise,
prospects or operations of any Companies and none of the Companies are a party
to any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality. There is no action, suit, proceeding or
investigation which the Companies currently intend to initiate.
(b) None of the Companies has admitted in writing their
inability to pay its debts generally as they become due, filed or consented to
the filing against it of a petition in bankruptcy or a petition to take
advantage of any insolvency act, made an assignment for the benefit of
creditors, consented to the appointment of a receiver for itself or for the
whole or any substantial part of its property, or had a petition in bankruptcy
filed against it, been adjudicated a bankrupt, or filed a petition or answer
seeking reorganization or arrangement under the Federal bankruptcy laws or any
other law or statute of the United States of America or any other jurisdiction.
(c) Schedule 3.9 sets forth all legal actions, which have not
been completely determined with respect to every issue, so as to render a
decree or judgment res judicata ("Final Determination '), asserted or, to
Cable's best knowledge, threatened against the Company in respect of personal
injury, wrongful death or property damage alleged to have resulted from
products or services provided by the Companies, together with a description of
each such claim or action initiated with respect thereto and the disposition
thereof for the past three years. Schedule 3.9 sets forth all products
warrantee claims, actions or proceedings for which a Final Determination has
not been made and the Companies warranty and limitations of warranty used by
the Company in connection with the products or services provided by the
Companies. Cable further warrants and represents that the Companies have not
experienced product recall or warranty claims in excess of 5% of aggregate
gross sales for any of the past five years.
3.10 Title . Schedule 3.10 identifies all real and personal
property with a book value or replacement cost in excess of $25,000.00 owned or
leased by any Companies which together with the intellectual property set forth
on Schedule 3.34 comprise the "Business Assets". The Companies own free and
clear of any encumbrances or, as set forth on Schedule 3.10, leases or has the
right to use, the assets set forth on Schedule 3.10 except for encumbrances
specifically identified on Schedule 3.10. Each of the Companies owns all
assets reasonably necessary for the conduct of its business as presently
conducted. Such assets are free from substantial defects, have been maintained
in accordance with normal industry practice, are in
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good operating condition and repair (except for ordinary wear and tear). For
purposes of this Section 3.10, "encumbrances" shall mean any claim, lien,
pledge, option, charge, easement, security interest, right-of-way, encumbrance
or other right of third parties.
3.11 Liens. The Companies have good title to all their Business
Assets subject to no encumbrance, lien, charge or other restriction of any kind
or character, except for (a) liens reflected in the Reference Balance Sheet or
on Schedule 3.11 attached hereto, (b) liens arising by operation of law, (c)
liens for current taxes, assessments or governmental charges or levies on
property not yet due and delinquent and (d) liens which do not materially
affect the operation of the business of the Company (the "Encumbrances") (liens
of the type described in clauses (a) through (e) above, inclusive, are
hereinafter sometimes referred to as "Permitted Liens"). Except as set forth in
Schedule 3.11, the Company's Business Assets are in reasonably good working
order and condition in the aggregate, ordinary wear and tear excepted. Pursuant
to its good title, Angeles has full power to transfer the Business Assets free
and clear of any and all liens, encumbrances, security interests, equities,
options, claims, charges, and restrictions, other than the Permitted Liens.
Business Assets include all of the assets reflected in the Companies' financial
statements and as otherwise described in the Schedules to this Agreement,
except the cars used by Cable, Cable's life insurance policies and other Cable
personalty all as scheduled on Schedule 3.11 attached hereto all of which will
be transferred to Cable at the closing.
3.12 No Violations. Except as set forth in Schedule 3.12 attached
hereto, and the execution and delivery of this Agreement by Cable and the
consummation of the transactions contemplated hereby (a) will not violate any
provision of the Articles of Incorporation or By-Laws of the Company, (b) will
not violate any statute, rule, regulation, order or decree of any public body
or authority by which the Companies are bound or binding upon any of its
properties or assets and (c) will not result in a violation or breach of or
constitute a default under, any material license, franchise, permit, indenture,
agreement or other instrument to which the Companies are a party, or by which
the Companies or any of its assets or properties are bound, excluding from the
foregoing clauses (b) and (c) violations, breaches or defaults which, either
individually or in the aggregate, would not have a Material Adverse Effect (as
defined in below) on the businesses, financial conditions or results of
operations of the Companies.
3.13. Taxes. Each of the Companies has filed or will file within the
time prescribed by law (including extensions of time approved by the
appropriate taxing authority) all tax returns and reports required to be filed
with the United States Internal Revenue Service and with the State of
California and with all other jurisdictions where such filing is required by
law; and the Companies have paid, or have made adequate provision in the
Companies' financial statements for the payment of, all taxes, interest,
penalties, assessments or deficiencies shown to be due or claimed to be due on
or in respect of such tax returns and reports. The Companies know, after
diligent inquiry, of (i) no other tax returns or reports which are required to
be filed which have not been so filed and (ii) no unpaid assessment for
additional taxes for any fiscal period or any basis therefor. The Companies'
Federal income tax returns have not, to the best of their knowledge and belief,
been audited by the Internal Revenue Service in the last three years.
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3.14. Contracts. Except for Contracts (as hereinafter defined)
listed on Schedule 3.14, the Companies are not a party to, or bound by, any
contract of any kind to be performed after the Closing with any Personnel
relating to employment or otherwise with or other affiliates of the Companies
or any agreement or contract limiting the freedom of the Companies to engage in
any line of business or to compete with any other person. To the best of
Cable's knowledge, there is no default by any party to any such Contract, which
default could have a Material Adverse Effect on any of the Companies' business,
prospects or financial condition. Schedule 3.14 lists the following Contracts,
agreements and other written arrangements to which the Companies are a party:
(i) any written arrangements (or group
of related written arrangements) for the lease of
personal property providing for lease payments;
(ii) any written arrangement (or group of
related written arrangements) for the purchase or
sale of raw materials, commodities, supplies,
products or other property or for the furnishing or
receipt of services, including, without limitation,
any customer or vendor contracts;
(iii) any written arrangement (or group of
related written arrangements) concerning a
partnership or joint venture with any other person;
(iv) any written arrangement (or group
of related written arrangements) under which it has
created, incurred, assumed or guaranteed (or may
create, incur, assume or guarantee) indebtedness
(including capitalized lease obligations) or under
which it has imposed (or may impose) a security
interest or lien on any of its assets, tangible or
intangible;
(v) any written arrangement (or group
of related written arrangements) concerning
confidentiality or non-competition arrangements;
(vi) any written arrangement (or group
of related written arrangements) involving another
Company;
(vii) any employee compensation, incentive
or stock plan of such Companies and any written
arrangement with any of its directors, officers,
shareholders or employees in the nature of a
collective bargaining agreement, employment agreement
or severance agreement;
(viii) any written arrangement with any of
its directors, officers, shareholders or employees or
any member of any such person's immediate family (x)
providing for the furnishing of material services by,
(y) providing for the rental of material real or
personal property from, or (z) otherwise requiring
material payments to (other than for service as
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officers, directors or employees of the Companies),
any such person or any corporation, partnership,
trust or other entity in which any such person has a
substantial interest as a shareholder, officer,
director, trustee or partner;
(ix) any other written arrangement (or
group of related written arrangements) under which
the consequences of a default or termination could
have a material adverse effect on the business,
prospects or financial condition of the Companies;
(x) any other written arrangement (or
group of related written arrangements);
(xi) any written agreement concerning any
Intellectual Property Rights of the Companies; and
The Companies have delivered to the Buyer a correct and complete copy of each
written arrangement listed under the name of the Companies in Schedule 3.14.
With respect to each written arrangement listed, (A) the written arrangement is
legal, valid, binding, enforceable and in full force and effect; (B) the
written arrangement will continue to be legal, valid binding, enforceable and
in full force and effect on identical terms following the Closing; (C) no party
is in breach or default, and no event has occurred which with notice or lapse
of time could constitute a breach or default or permit termination,
modification or acceleration, under the written arrangement and (D) no party
has repudiated any term of the written arrangement.
3.15 Insurance. All policies of fire, liability, workmen's
compensation, products liability, and other policies of insurance maintained by
the Companies, are listed in Schedule 3.15 hereto (the "Policies") and are
valid, outstanding, and enforceable policies; which provide certain insurance
coverage for the property, assets, and operations of the Companies. The
Policies are in full force and effect as of the date hereof and will remain in
effect through the respective dates set forth in Schedule 3.15;. All
documentation and correspondence for the past three years concerning the
Policies including loss history, matters in controversy and all calculations
concerning retro-adjustments, if any, have been made available to Buyer.
3.16. Shareholders, Directors and Officers; Indebtedness. Set forth
on Schedule 3.16 hereof is a correct and complete list or description of all
indebtedness of any Companies' officers, directors, shareholders or partners
or any of their respective spouses or relatives and of all indebtedness of such
persons to any of the Companies. None of the officers or directors or
significant employees or consultants of any of the Companies or their
respective spouses or relatives, owns directly or indirectly, individually or
collectively, a material interest in any entity which is a competitor, customer
or supplier of (or has any existing contractual relationship with) the
Companies.
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3.17. Inventory. The values at which the inventories of the
Companies are shown on the financial statements have been determined in
accordance with the normal valuation policy of the Companies, consistently
applied. All inventory of each of the Companies, whether reflected in the
Financial Statements or otherwise, consists of a quality and quantity usable
and saleable in the ordinary course of business except for items of obsolete
materials and materials of below standard quality, all of which have been
written down in the Financial Statements to realizable market value or for
which reasonably adequate reserves have been provided therein. Except as
specifically indicated in the Financial Statements, the present quantities of
all inventory of the Companies are reasonable and warranted in the present
circumstances of the business of the Companies.
3.18 Accounts Receivable. The accounts receivable appearing on the
Reference Balance Sheet and all accounts receivable created since that date
through the Closing represent and will represent valid obligations (subject to
the effects of bankruptcy, insolvency, reorganization or other similar laws
affecting the rights of creditors generally) owing to the Companies and are
bona fide, subject to the reserve for doubtful accounts appearing on the
Reference Balance Sheet and which reserve may be adjusted for the passage of
time through the Closing in accordance with the past custom and practice of
the Companies.
3.19. Assets Necessary to Business. The Companies own or lease all
properties and assets, real, personal, and mixed, tangible and intangible, and
are a party to all licenses and other agreements necessary to permit it to
carry on its business. All plants, structures, and equipment are structurally
sound with no known substantial defects and in reasonably good operating
condition and repair, and none of the Companies have received any written
notification that there is any violation of any building, zoning, environmental
or other law, ordinance, or regulation in respect to such property plants, or
structures, and to the best of their knowledge no such violation exists.
3.20. Business of Companies. There is no pending claim or litigation
against or affecting the Companies relating to the operation of the business of
the Companies as currently operated or relating to or otherwise affecting or
contesting its right to: render or provide any services; to produce,
manufacture, sell, license or use any product, process, method, substance, part
or other material presently produced, manufactured, sold or used by the
Companies in connection with its business; and the Companies have no knowledge
or belief that (i) there exists, or there is pending or planned, any patent,
invention, device, software application or principle, or any statute, rule,
law, regulation, standard or code, including, without limitation, any
regulations, rules or interpretive position of the Agencies, which would
materially adversely affect the condition, financial or otherwise, prospects or
the operations of the Companies; or (ii) there is any other factor (other than
fire, flood, accident, act of war or civil commotion, market and competitive
factors or any other cause or event beyond the control of the Companies) which
may materially adversely affect the condition, financial or otherwise, or the
operations of any of the Companies and none of the Companies is in default with
respect to any judgment, order, writ, injunction or decree of any court or
governmental agency and there are no unsatisfied judgments against the
Companies or the business of the Companies.
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3.21. Compliance with Other Instruments and Laws. (a) None of the
Companies are in violation of any term of its Articles of Incorporation, as
amended, By-Laws as amended, or Partnership Agreement, as amended. None of the
Companies is in violation of any term of any mortgage, indenture, contract,
agreement, instrument, judgment, decree, order, statute, rule or regulation to
which it is subject.
(b) The Companies are as of a date hereof and
will be as of the Closing, in compliance with all laws, municipal by-laws,
regulations, rules, orders, judgments, decrees and other requirements and
policies imposed by any governmental authority applicable to it, its properties
or the operation of its businesses. Without limiting the generality of the
foregoing, the Companies are as of the date hereof, and will be as of the
Closing in substantial compliance with:
(i) all laws relating to the protection
of human health and safety, including, without
limitation, the Occupational Safety and Health Act of
1970, as amended, and all regulations and standards
issued thereunder by the Secretary of Labor or the
Occupational Safety and Health Administrator or other
governmental agency or authority acting at any time
thereunder;
(ii) all laws relating to protection of the
environment, including, without limitation, the
Resource Conservation and Recovery Act ("RCRA") and
the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") and ISRA;
(iii) all laws relating to equal employment
opportunity; and
(iv) all zoning, building and other laws,
ordinances, rules, regulations, plans and directives
of governmental authorities, Boards of Fire
Underwriters and other entities having jurisdiction,
as well as all recorded restrictions and covenants.
Cable has no actual knowledge and has received no notice or citation for
noncompliance with any of the foregoing, and of the date hereof and as of the
Closing there exists no condition, situation or circumstance, which would
constitute any substantial noncompliance.
3.22. Labor Matters. The Companies are not a party to any labor
agreement with respect to its employees with any labor organization, group or
association. The Companies have not within the past three years experienced
any attempt by organized labor or its representatives to make the Companies
conform to demands or organized labor relating to its employees or to enter
into a binding agreement with organized labor that would cover the employees of
the Companies. The Companies are in material compliance with all applicable
laws respecting employment practices, terms and conditions of employment and
wages and hours and is not and has not engaged in any unfair labor practice.
There is no unfair labor practice charge or complaint against the Companies
pending before the National Labor Relations Board or any other governmental
agency arising out of the Companies's activities, and the
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Companies have no knowledge of any facts or information that would give rise
thereto; there is no labor strike or labor disturbance pending or threatened
against the Companies nor is any grievance currently being asserted; and the
Companies have never experienced a work stoppage or other labor difficulty.
3.23. Disclosure. This Agreement, the Exhibits and Schedules hereto,
the Financial Statements furnished to the Buyer or any third party by or on
behalf of Cable or any Companies in connection with the transactions
contemplated hereby, do not contain any untrue statement of a material fact and
do not omit to state a material fact necessary in order to make the statements
contained therein or herein not misleading in the light of the circumstances
under which they were made. There is no fact or circumstance which Materially
Adversely Affects (so far as any of the Sellers can now reasonably foresee)
Materially Adversely Affect the assets, business, operations of the Companies
which have not been disclosed in writing to the Buyer.
3.24. Customers and Suppliers. Schedule 3.24 contains a
substantially complete and accurate list of (i) all customers of the Companies
during the Companies' last fiscal year, showing the approximate total sales by
the Companies to each such customer during such fiscal year; (ii) all suppliers
of the Companies from whom the Companies' last fiscal year, showing the
approximate total purchases by the Companies from each such supplier during
such fiscal year; and (iii) prospective customers of the companies for which a
proposal or other presentation has been made or for which the Companies have a
reasonable likelihood of selling or otherwise licensing any of its products.
3.25. Environmental Matters. (a) Except as set forth on Schedule
3.25, Cable represents and warrants that:
(b) All underground storage tanks have been removed from
the Cable Premises. Buyer has been afforded an opportunity to review and make
copies of all documentation with respect to the removal of any underground
storage tanks on the Cable Premises.
(c) Cable has received no actual written notification of
any investigation regarding any disposal, release or threatened release at any
of the Cable Premises of any Hazardous substances stored, generated or
transported by the Companies.
(d) Cable has advised Buyer that the Companies in the
ordinary course of their business utilize petroleum products and generate waste
water in the manufacturing process at the Cable Premises in accordance with
applicable governmental permits issued therefore.
(e) Except as set forth on Schedule 3.25, there are no
PCBs or asbestos located at or on the Cable Premises or any other owned or
leased property of the Companies.
(f) No environmental lien has attached to the Premises or
any real property owned or leased the Companies.
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(i) Definitions.
(i) For purposes of this Agreement,
"Environmental Laws" shall mean all federal, state,
district, local, and foreign laws, all rules or
regulations promulgated thereunder, and all orders,
consent orders, judgments, notices, permits, or
demand letters issued, promulgated, or entered
pursuant thereto, relating to pollution or protection
of the environment (including without limitation
ambient air, surface water, ground water, land
surface, or subsurface strata), including without
limitation (i) laws relating to emissions,
discharges, releases, or threatened releases of
pollutants, contaminants, chemicals, materials,
wastes or other substances into the environment and
(ii) laws relating to the identification, generation,
manufacture, processing, distribution, use,
treatment, storage, disposal, recovery, transport, or
other handling of pollutants, contaminants,
chemicals, industrial materials, wastes, or other
substances. Environmental Laws shall include without
limitation the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended,
the Toxic Substances Control Act, as amended, the
Hazardous Materials Transportation Act, as amended,
the Resource Conservation and Recovery Act, as
amended, the Clean Water Act, as amended, the Safe
Drinking Water Act, as amended, the Clean Air Act, as
amended, the Atomic Energy Act of 1954, as amended,
the Occupational Safety and Health Act, as amended,
and all analogous laws promulgated or issued by any
sate or other governmental authority.
(ii) For purposes of this Agreement,
"Environmental Claims" shall mean all notice of
violations, liens, claims, demands, suits, or causes
of action or any damage, including without
limitation, personal injury, property damage
(including any depreciation of property values), lost
use of property, or consequential damages, arising
directly or indirectly out of Environmental
Conditions or Environmental Laws. By way of example
only, Environmental Claims include (i) violations of
or obligations under any contract between the
Companies and any other person, (ii) actual or
threatened damages to natural resources, (iii) claims
for nuisance or its statutory equivalent, (iv) claims
for the recovery of response costs, or administrative
or judicial orders directing the performance of
investigations, response or remedial actions under
any Environmental Laws, (v) a requirement to
implement "corrective action" pursuant to any order
or permit issued pursuant to the Resource
Conservation and Recovery Act, as amended or similar
provisions of applicable state law, (vi) claims for
restitution, contribution, or indemnity, (vii) fines,
penalties, or liens of any kind against property,
(viii) claims for injunctive relief or other orders
or notices of violation from federal, state, or local
agencies or courts, and (ix) with regard to any
present or former employees, claims relating to
exposure to or injury from Environmental Conditions.
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(iii) For purposes of this Agreement,
"Environmental Conditions" shall mean the state of
the environment, including natural resources (e.g.,
flora and fauna), soil, surface water, ground water,
any present or potential drinking water supply,
subsurface strata, or ambient air, relating to or
arising out of the use, handling, storage, treatment,
recycling, generation, transportation, release,
spilling, leaking, pumping, pouring, emptying,
discharging, injecting, escaping, leaching, disposal,
dumping, or threatened release of Hazardous
Substances by the Companies or successors in
interest, agents, representatives, employees, or
independent contractors. With respect to
Environmental Claims by third parties, Environmental
Conditions also include the exposure of persons to
Hazardous Substances at the work place or the
exposure of persons or property to Hazardous
Substances migrating from or otherwise emanating from
or located on property owned or occupied by the
Companies.
(iv) For purposes of this Agreement,
"Hazardous Substances" shall mean all pollutants,
contaminants, chemicals, wastes, and any other
carcinogenic, ignitable, corrosive, reactive, toxic,
or otherwise hazardous substances or materials
(whether solids, liquids or gases), including but not
limited to any substances, materials, or wastes
subject to regulation, control, or remediation under
Environmental Laws. By way of example only, the term
Hazardous Substances includes petroleum, urea
formaldehyde, flammable, explosive and radioactive
materials, PCBs, pesticides, herbicides, asbestos,
sludge, slag, acids, metals, solvents, or waste
waters.
3.26. Employee Benefit Plans.
(a) Definitions. The following terms, when used
in this Section 3.26, shall have the following meanings. Any of these terms
may, unless the context otherwise requires, be used in the singular or the
plural depending on the reference.
(i) Employee Plan. "Employee Plan" shall
mean with respect to the Companies any employee
benefit plan, program or arrangement, whether oral or
written, with respect to which Companies may incur
any liability or which covers any employee or former
employee of the Companies.
(ii) ERISA. "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended.
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(iii) ERISA Affiliate. "ERISA Affiliate"
shall mean with respect to the Companies any entity
which is a member of a "controlled group of
corporations" with or is under "common control" with
the Companies as defined in section 414(b) or (c) of
the Internal Revenue Code of 1986, as amended (the
"Code").
(iv) Multiemployer Plan. "Multiemployer
Plan" shall mean with respect to the Companies any
Employee Plan with respect to Companies which are a
"multiemployer plan," as defined in Section
4001(a)(3) of ERISA.
(v) PBGC. "PBGC" shall mean the Pension
Benefit Guaranty Corporation.
(vi) Pension Plan. "Pension Plan" shall
mean with respect to each of the Companies any
Employee Plan with respect to the Companies which is
an "employee pension benefit plan" as defined in
Section 3(2) of ERISA (other than a Multiemployer
Plan).
(vii) Welfare Plan. "Welfare Plan" shall
mean with respect to each of the Companies any
Employee Plan with respect to the Companies which is
an "employee welfare benefit plan", as defined in
Section 3(1) of ERISA.
(b) Disclosure; Delivery of Copies of Relevant
Documents and Other Information. Schedule 3.26 contains a complete list of
Employee Plans with respect to the Companies. True and complete copies of each
of the following documents have been delivered to the Buyer: (i) each Employee
Plan (and each related trust agreement or other funding instrument) or written
description thereof (where an Employee Plan is not in writing), (ii) the most
recent determination letter issued by the Internal Revenue Service with respect
to each Pension Plan or 401K Plan, (iii) for the three most recent plan years,
Annual Reports on Form 5500 Series required to be filed with any governmental
agency for each Pension Plan, (iv) all actuarial reports prepared for the last
three plan years for each Pension Plan, (v) a description of complete age,
salary, service and related data as of the last day of the last plan year for
employees and former employees and (vi) a description setting forth the amount
of any liability as of the Closing Date for payments more than thirty days past
due with respect to each Welfare Plan with respect to the Companies.
(c) Representations. Except as set forth on
Schedule 3.26, the Companies represent as follows:
(i) As of the last day of the last plan
year of the Companies and as of the Closing, the
"amount of unfunded benefit liabilities" as defined
in Section 4001(a)(18) of ERISA (but excluding from
the definition of "current value" of "assets" of such
Pension Plan accrued but unpaid contributions) did
not and will not exceed zero. None of the companies
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<PAGE> 23
nor any ERISA Affiliate of the Companies has any
liability for unpaid contributions with respect to
any Pension Plan.
(ii) There are no Multiemployer Plans with
respect to the Companies.
(iii) Each Pension Plan with respect to the
Companies and each related trust agreement, annuity
contract or other funding instrument is qualified and
tax-exempt under the provisions of Code Sections
401(a) (or 403(a) as appropriate) and 501(a) and has
been so qualified during the period from its adoption
to date.
(iv) There has been no "reportable event"
(as defined in Section 4043(b) of ERISA and the PBGC
regulations under such Section) with respect to any
Pension Plan with respect to the Companies. No
filing has been made by the Companies or any ERISA
Affiliate of the companies with the PBGC, and no
proceeding has been commenced by any person,
(including the PBGC), to terminate any Pension Plan
with respect to the Companies. No condition exists
and no event has occurred that could constitute
grounds for termination of any Pension Plan with
respect to the Companies. None of the Companies or
any ERISA Affiliate of the Companies has, at any
time, incurred any liability, contingent or
otherwise, pursuant to any provision of Title IV of
ERISA or the regulations thereunder, other than for
premiums due the PBGC.
(v) Each Employee Plan with respect to the
Companies and each related trust agreement, annuity
contract or other funding instrument presently
complies and has been maintained in compliance with
its terms and, both as to form and operation, with
the requirements prescribed by any and all statutes,
orders, rules and regulations which are applicable to
such Employee Plan, including but not limited to
ERISA and the Code.
(vi) None of the Companies nor any ERISA
Affiliate of the Companies or any Welfare Plan with
respect to the Companies has any present or future
obligation to make any payment to or with respect to
any present or former employee of the Companies or
any ERISA Affiliate of the Companies pursuant to any
retiree medical benefit plan or other Welfare Plan
with respect to the Companies and no condition exists
which would prevent the Companies from amending or
terminating any such benefit program or Welfare Plan.
(vii) Except as provided by law and as set
forth in Schedule 3.26, the employment of all persons
presently employed or retained by the Companies is
terminable at will.
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(viii) There is no Employee Plan with respect
to the Companies that could give rise to the payment
of any amount that would not be deductible pursuant
to the terms of Sections 162(a)(1), 162(i)(2), 404 or
280G of the Code.
(ix) None of the Companies or any plan
fiduciary of any Welfare Plan or Pension Plan with
respect to the Companies has engaged in any
transaction in violation of Sections 404 or 406 of
ERISA or any "prohibited transaction," as defined in
Section 4975(c)(1) of the Code, for which no
exemption exists under Section 408 of ERISA or
Section 4975(c)(2) or (d) of the Code.
(x) Each Employee Plan with respect to the
Companies and related trust agreement, annuity
contract or other funding instrument is legally valid
and binding and in full force and effect.
(xi) None of the Companies, any ERISA
Affiliate of the Companies or any Employee Plan with
respect to the Companies is a party to any litigation
relating to or seeking benefits under any Employee
Plan with respect to the Companies.
(xii) Neither the Companies nor any ERISA
Affiliate of the Companies has any announced plan or
legally binding commitment to create any additional
Employee Plans or to amend or modify any existing
Employee Plan with respect to the Companies.
(xiii) No event has occurred in connection
with which the Companies, any ERISA Affiliate of the
Companies or any Employee Plan with respect to the
Companies directly or indirectly, could be subject to
any material liability under ERISA, the Code or any
other law or regulation or governmental order or
under any agreement, instrument, statute, rule of law
or regulation pursuant to or under which the
Companies has agreed to indemnify or is required to
indemnity any person against liability incurred
under, or for a violation or failure to satisfy the
requirements of, any such statute, regulation or
order.
3.27. No Other Agreements to Sell the Assets of the Business or the
Shares or Other Capital Stock of the Companies. Neither Cable nor any of the
Companies has any legal obligation, absolute or contingent, to any other person
or firm to sell or effect a sale of the assets of Companies, to sell or effect
a sale of the Shares or partnership interests, as appropriate, of the Companies
or to effect any merger, consolidation or other reorganization of the Companies
or to enter into any agreement or cause the entering into of an agreement with
respect thereto.
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3.28. Consents. All consents, approvals, qualifications, orders or
authorizations of, or filings with, any lender, creditor, supplier, contracting
party, governmental authority, including any court, or other third party
required in connection with each the Cable's valid execution, delivery or
performance of this Agreement and for the consummation of any other transaction
contemplated on the part of Cable by this Agreement each as set forth in
Schedule 3.28 hereto, shall have been duly made and obtained and shall be
effective on and as of the Closing.
3.29. Real Property. Schedule 3.29 constitutes a true and complete
list of all real property (including, without limitation, all construction in
progress) owned or leased by the Companies or to which the Companies may have
any ownership or leasehold rights, in connection with the Business (such leased
real property hereinafter collectively referred to as the "Leased Premises").
Cable further represents and warrants to Buyer, with respect to the Cable
Premises, all appurtenant rights, privileges and easements belonging or
appertaining thereto and all buildings, structures and improvements thereon
that:
(a) except for the matter set forth on Schedule 3.29 hereto,
there are no outstanding written or oral leases or tenancies of any kind
(including tenancies by sufferance and/or holdover tenancies arising under
expired written or oral leases) covering or in any way affecting the Premises
or any Leased Premises or any part or parts thereof;
(b) except for the matter set forth on Schedule 3.29 hereto,
no person, firm or corporation other than the Companies has any rights,
(including rights arising under an installment contract, option to purchase,
easement, right of way, or otherwise) with respect to the Premises, the Leased
Premises or any part or parts thereof;
(c) each of the buildings and other improvements constituting
part of the Premises and the Leased Premises is of reasonably sound structural
integrity and is usable and adequate for its intended purpose and to conduct
Business as it is now being conducted.
(d) the Seller hereby warrants and represents that the present
zoning for the City of Commerce property is C-M.
3.30 Real Property Leases. The Lessor on the Commerce and
Vancouver Properties will continue to be D.K. Cable. Schedule 3.30 (attached
hereto) contains a list of all real property leases to which the Company is a
party, including the rentals of the Neth and the Railroad Property (the
"Scheduled Leases"). The Scheduled Leases are (a) in full force and effect and
the Company has not received any notice of default and does not possess any
knowledge of or notice of a material event, occurrence, condition or act
(including the entering into of this Agreement) which, with the giving of
notice, the lapse of time or the happening of any further event or condition,
would become a default by the Company pursuant to the terms of the Scheduled
Leases; and (b) all rents and additional rents due to date on each Scheduled
Lease have been paid. The Companies and Cable warrant and represent to the
best of their knowledge that the "Cable Premises" (as defined in Section 5.13)
have no existing hazardous or other materials in violation of any EPA,
environmental or other local, state or federal laws or regulations (the
"Environmental Regulations") except as may be referenced in
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the Environmental Reports pertaining thereto which have been made available to
Buyer dated June 1993 and referred to in Section 5.13 hereof. The Cable
Premises will be leased by Sellers to Buyer pursuant to the form of the lease
attached hereto as Exhibit 3.30 as more fully set forth in Section 5.13 hereto.
Sellers hereby warrant and represent that to the best of their knowledge the
property subject to the Leases (as defined in Section 5.13) are not subject to
any immediate eminent domain proceeding.
Cable and the Companies, to the best of their knowledge, warrant and
represent that there are no significant costly impediments to obtaining
occupancy permits for the use by Buyer of the property pursuant to the Leases
or the Schedule Leases and Cable and the Companies will use their best efforts
obtain a current letter from the City of Commerce attesting to the conditions
under which such occupancy permits can be obtained by Buyer.
3.31. Utilities. There are no restrictions respecting availability
of public utilities, including, but not limited to, sewer, gas and electricity
and the Premises and Leased Premises are serviced by all such utilities; all
payments, assessments, deposits and other charges relating to such utilities
and any other existing on-site improvements (including public or quasi-public
utilities or services) have been paid in full to the extent they are due.
3.32. Licenses, Permits and Approvals. Schedule 3.32 hereto
constitutes a true and complete list of all licenses, permits, approvals,
qualifications or the like, issued or to be issued to the Companies by any
government or any governmental unit, agency, body or instrumentality, whether
federal, state, municipal or local (within the U.S. or otherwise) in connection
with the Business and/or the operation of the Business Assets, and all such
items are in full force and effect and are or will be renewable on their
existing or better terms. No registration with, approval by, consent or
clearance from or prenotification to any governmental agency is required in
connection with the execution and performance of this Agreement by any of the
Sellers except as set forth on Schedule 3.32 hereto. To the best of Cable's
current actual knowledge, except as set forth in Schedule 3.32 attached
hereto, the Company has received no written notification alleging any existing
violation of any applicable statutes, rules, regulations, ordinances, codes,
orders, licenses, permits or authorizations, including without limitation, any
applicable business, building, zoning, antipollution, occupational safety,
health or other law, ordinance or regulation.
3.33. True Copies. All documents furnished or caused to be furnished
to the Buyer by Sellers are true and correct copies, and there are no
amendments or modifications thereto except as set forth in such documents.
3.34 Intellectual Properties. To the best of Cable's knowledge and
belief, set forth in Schedule 3.34(a) attached hereto is a list of the material
domestic and foreign patents, patent applications, patent licenses, software,
corporate or other company names, trade names,
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trademarks, service marks, trademark registrations and applications,
servicemark registrations and applications, copyright registrations and
applications licensed or owned by the Companies, including, but not limited to,
"Angeles Metal Trim Company"', "Angeles Metal Systems, Inc.", "California
Building Systems, Inc.", "Model 640" or any variations of these (collectively,
the "Intellectual Property"). Schedule 3.34(b) sets forth any Intellectual
Property licenses from the Companies to third parties.
Except for the trade names "Gripper", "Stitcher" and "Driller", which
one Douglas Cable has the right to use, and unless otherwise indicated in
Schedule 3.34, the Companies own the entire right, title and interest in and to
the Intellectual Property (including, without limitation, the exclusive right
to use and license the same) and each item constituting part of the
Intellectual Property has been, to the extent indicated in Schedule 3.34, duly
registered with, filed in or issued by, as the case may be, the United States
Patent and Trademark Office or such other government entity, domestic or
foreign, as is indicated in Schedule 3.34 and, to Sellers' knowledge, such
registrations, filings and issuances remain in full force and effect. To
Sellers' knowledge, except as stated in Schedule 3.34, there are no pending
proceedings or litigation or other adverse claims made in writing affecting or
with respect to the Intellectual Property.
3.35 Broker's or Finder's Fees. No agent, broker, person or firm
acting on behalf of Sellers is, or will be, entitled to any commission or
broker's or finder's fees, deposits or damages from Sellers, in connection with
any of the transactions contemplated herein; except for Gardiner & Rauen, Inc.
("Gardiner"), whose total fees and expenses of $150,000 will be paid by the
Buyer in return for written confirmation from Gardiner that said payment is in
full satisfaction of all amounts due and owing to him, regardless of nature,
(fees, costs, expenses or claims).
3.36 Books and Records The Companies have made and will make
available for inspection by Buyer upon reasonable request all the books of
account, relating to the business of the Companies. Such books of account of
the Companies have been maintained in the ordinary course of business and shall
remain property of the Companies.
3.37 No Material Change. Since the Balance Sheet Date, there has
been no Material Adverse Change (defined below) in the Companies, except as
set forth on the attached Schedule 3.37. As used in this Agreement the terms
"Material Adverse Effect" or "Material Adverse Change" mean with respect to any
signatory to this Agreement an adverse change or effect on the financial
condition, assets, liabilities, results of operations, business of any such
party taken as a whole except as altered by the physical inventory taken
pursuant to Section 3.7 hereof.
3.38 Absence of Change or Event. Except as disclosed in Schedule
3.37 or as set forth in the Financial Statements or in the ordinary course,
since the Balance Sheet Date, the Companies have conducted their businesses
only in the ordinary course and have not:
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3.38(a) experienced a Material Adverse Change in the assets
liabilities or business condition (financial or otherwise) operations, results
of operations or prospects of any of the Companies or otherwise when considered
as a whole, incurred any obligation or liability, absolute, accrued, contingent
or otherwise, whether due or to become due, in excess of $100,000 in the
aggregate, except liabilities or obligations incurred in the ordinary course of
business and consistent with prior practice;
3.38(b) subjected to Encumbrance any of the property,
businesses or assets, tangible or intangible, of the Companies, except for the
loan as between the Companies and Bank of America, dated as of July 11, 1995,
with the outstanding principal balance on such loan not to exceed $1,000,000 at
the date of Closing as herein defined;
3.38(c) sold, transferred, leased to others or otherwise
disposed of any of its assets (or committed to do any of the foregoing),
including the payment of any loans owed to any affiliate, except for inventory
sold to customers or returned to vendors and payments to any non-affiliates on
account of accounts payable or scheduled payments in respect of indebtedness
for money borrowed disclosed on the Reference Balance Sheet or in the
Schedules, in each case in the ordinary course of business and consistent with
prior practice, or canceled, waived, released or otherwise compromised any debt
or claim, waived, released or otherwise compromised any debt or claim, or any
right of significant value, except in the ordinary course of business and
consistent with prior practice.
3.38(d) suffered any damage, destruction or loss (whether or
not covered by insurance) which has had or could have a Material Adverse Effect
on the Company considered as a whole;
3.38(e) when considered as a whole and except as set forth on
Schedule 3.40.(e), made or committed to make any capital expenditures or
capital additions or betterments in excess of an aggregate of $100,000;
3.38(f) encountered any labor union organizing activity or had
any actual or threatened employee strikes, work stoppages, slow-downs or
lock-outs;
3.38(g) instituted any litigation, action or proceeding before
any court, governmental body or arbitration tribunal relating to it or its
property, except for litigation, actions or proceedings instituted in the
ordinary course of business and consistent with prior practice;
3.38(h) declared or paid any dividend or made any other
payment or distribution in respect of its capital stock, or directly or
indirectly redeemed, purchased or otherwise acquired any of its capital stock;
3.38(i) (i) increased the compensation of any officer,
employee earning more than $100,000 per year or agent of the Company, directly
or indirectly, including by means of any bonus, pension plan, profit sharing,
deferred compensation, savings, insurance, retirement, or any other employee
benefit plan, except in the ordinary course of business consistent with
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prior practice, (ii) granted the payment or accrual contingent or otherwise,
for or to the credit of any Personnel with respect to any bonuses, incentive
compensation service award or like benefit, (iii) adopted, created or amended,
any employee compensation plan of any company, (iv) entered into any employment
agreement made to which one of the Companies is party or (v) other change in
employment terms for any of the Companies' officers or agents.
3.39 Canceled, compromised, waived or released any rights or
claims (or series of related rights or claims) either (i) involving an
affiliate of such Companies, (ii) involving more than $25,000 or (iii) outside
the ordinary course of business consistent with past practice;
3.40 Amendment, cancellation or termination of any contract,
agreement, license or other instrument (i) involving an affiliate of the
Companies, (ii) involving payments in excess of $25,000 in the aggregate, or
(iii) that are otherwise material to the Companies;
3.41 Capital expenditure or the execution of any lease, contract,
agreement, license, sublease or sublicense (or series of related contracts,
agreement leases, subleases, licenses and sublicenses) or any incurring of
liability therefore (i) involving an affiliate of the Companies, (ii) involving
payments in excess of $25,000 in the aggregate, or (iii) outside the ordinary
course of business consistent with past practice;
3.42 Delay or failure to repay when due any material obligation of
the Companies except for the past practice of paying supplier invoices in
greater than net thirty day terms;
3.43 Failure to operate the business of the Companies in the
ordinary course consistent with past practice (excepting the new accounting
computer system described by the Companies to Buyer so as to use reasonable
efforts to preserve the business intact, to keep available to the Buyer the
services of Personnel, and to preserve for Buyer the goodwill of the Companies'
suppliers, customers, distributors and others having business relations with
it;
3.44 Change in accounting methods or practices by the Companies;
3.45 Revaluation by the Companies of any of the assets of the
Companies in excess of $25,000, including without limitation, writing off notes
or accounts receivable;
3.46 Damage, destruction or loss (whether or not covered by
insurance) that has a material Adverse Effect or that may reasonably be
expected to have a material adverse effect on the business or financial
condition of the Companies;
3.47 Mortgage, pledge or other encumbrance of any of the assets of
any of the Companies;
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3.48 Declaration, setting aside for payment or payment of any
dividend or distribution in respect of any capital stock of the Companies or
any redemption, purchase, or other acquisition of the Companies' equity
securities or any bonus, fee or other payment, or any other transfer of the
assets to or on behalf of any shareholder of the Companies, any affiliate of
the Companies or any affiliate of any shareholder, including, but not limited
to, any payment of principal of or interest on any debt owed to any such
shareholder or affiliate;
3.49 Issuance by any of the Companies of, or commitment of the
Companies to issue, any shares of stock or other equity securities or
partnership interests, as appropriates, or obligations or securities
convertible into or exchangeable for shares of stock, other equity securities
or partnership interests, as appropriate;
3.50 Indebtedness incurred by any of the Companies for borrowed
money or any commitment to borrow money entered into by the Companies, or any
loans or guarantees made or agreed to be made by the Companies;
3.51 Liabilities involving $25,000 or more or otherwise material to
the business of the Companies except in the ordinary course of business and
consistent with past practice, or any increase or change in any assumptions
underlying or methods of calculating any bad debt, contingency or other
reserves;
3.52 Payment, discharge or satisfaction of any liabilities other
than the payment, discharge or satisfaction in the ordinary course of business
and consistent with past practice of liabilities reflected or reserved against
on the Financial Statements (other than debt principal or interest repayment)
or incurred in the ordinary course of business and consistent with past
practice since December 31, 1993 (other than debt principal or interest
repayment);
3.53 Acceleration, termination, modification, cancellation or
threatened termination or cancellation of any contract or agreement to which
the Companies are a party or by which the Companies are bound;
3.54 Capital investment in, any loan to, or any acquisition of the
securities or assets of any other person (i) involving an affiliate of the
Companies, (ii) involving more than $5,000 in the aggregate, or (iii) outside
the ordinary course of business consistent with past practice;
3.55 Grant of any license or sublicense of any rights under or with
respect to any Intellectual Property rights of the Companies;
3.56 Loan to, or other agreement with any Personnel of the
Companies outside the ordinary course of business consistent with past practice
giving rise to any claim or right on its part against the person or on the part
of the person against it;
3.57 Charitable or other capital contribution made or pledged by
the Companies;
3.58 Agreement (either oral or written) by the Companies or any of
its Personnel to do any of the foregoing;
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3.59 Other event or condition of any character that in any one case
or in the aggregate has a material adverse effect, or any event or condition
known to the Companies which it is reasonable to expect will, in any one case
or in the aggregate, have a material adverse effect on the business, prospects
or financial condition of the Companies in the future.
ARTICLE IV
REPRESENTATIONS OF BUYER
Buyer represents and warrants as follows:
4.1 Existence and Good Standing of Buyer. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Buyer has the corporate power and authority to make,
execute, deliver and perform this Agreement, and this Agreement has been duly
authorized and approved by all required corporate action of Buyer. This
Agreement is a valid and binding obligation of Buyer enforceable against Buyer
in accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting the enforcement of creditors' rights in general and except
that the availability of equitable remedies, including specific performance, is
subject to the discretion of the court before which any proceeding therefor may
be brought.
4.2 No Restrictions. Assuming the execution and delivery of this
Agreement by Buyer and the consummation of the transactions contemplated hereby
(a) will not violate any provision of the Certificate of Incorporation or
By-Laws of Buyer, (b) will not violate any statute' rule, regulation, order or
decree of any public body or authority by which Buyer or any of its properties
or assets is bound and (c) will not result in a violation or breach of, or
constitute a default under, any license, franchise, permit, indenture,
agreement or other instrument to which Buyer is a party, or by which Buyer or
any of its properties or assets is bound, excluding from the foregoing clauses
(b) and (c) violations, breaches or defaults which, either individually or in
the aggregate, would not prevent Buyer from performing its obligations under
this Agreement or consummation of the transactions contemplated by this
Agreement.
4.3 Financing Arrangements. In addition to the equity
requirements for this action, Buyer has furnished to Sellers true and complete
copies of all proposed loan and equity commitments secured in contemplation of
this transaction at least 10 business days prior to Closing. All such proposed
loan commitments are listed in Schedule 4.3 hereto. Such proposed loan and
equity commitments shall clearly evidence that Buyer will have sufficient funds
on the Closing to consummate the transactions contemplated hereby including
adequate working capital for the Companies to meet their obligations as they
become due. Such proposed commitments are in effect on the date hereof and
will be converted to firm commitments at least ten (10) business days prior to
the Closing. In the event that Buyer does not meet these requirements at
Closing, Seller has the right to cancel this Agreement and Seller shall
thereupon
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have no responsibility to Buyer by reason of this Agreement and the
transactions contemplated hereby and the Down Payment shall be retained in full
together with any interest accrued thereon pursuant to Section 10.15 hereof.
4.4 Litigation. There is no action, suit or proceeding at law or
in equity by any Person or any arbitration or other administrative or other
proceeding by or before any governmental or other instrumentality or agency,
pending, or to Buyer knowledge, threatened, seeking to restrain, prevent or
change the transactions contemplated hereby or questioning the legality or
validity of any such transactions or seeking damages in connection with such
transactions or which, individually or in the aggregate, if adversely
determined, would have an adverse effect on the ability of Buyer to consummate
the transactions contemplated by this Agreement.
ARTICLE V
FURTHER AGREEMENTS OF THE SELLERS
AND CONDUCT OF BUSINESS;
5.1. Satisfaction of Conditions by the Sellers. Neither Cable nor
the Companies shall voluntarily undertake any course of action inconsistent
with the satisfaction of the requirements or the conditions applicable to them
set forth in this Agreement, Cable shall promptly do all such reasonable acts
and take all such reasonable measures as may be appropriate to enable him
perform as early as possible the obligations herein provided to be performed by
them.
5.2. Updating of Exhibits, Schedules, etc. From the date of this
Agreement until the Closing, Cable shall cause each of the Subject Companies to
keep up to date, the Schedules hereto, and will promptly notify Buyer of any
material change or addition, (in accordance with the applicable provision of
this Agreement defining the term "material") or event which may after the lapse
of time cause any such change or addition, in any such Schedule.
5.3. Further Assurances. From time to time after the Closing, without
additional consideration, Buyer shall cause Cable to execute and deliver all
such other instruments of sale, assignment, conveyance and transfer and shall
cause the Cable to take all such other action as Buyer may reasonably request
more effectively to transfer and vest in Buyer, and to put Buyer in possession
of, the Shares, the Business Assets and the Premises.
5.4 Consents and Best Efforts. As soon as practicable, Cable will
commence all reasonable action to obtain all applicable permits, consents,
approvals and agreements of, and to give all notices and make all filings with,
any third parties as may be necessary to authorize, approve or permit the
consummation of the transaction provided for hereby on or prior to the Closing
Date.
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5.5 Employee Matters. During the period between the date hereof and
the Closing, the Cable and the Companies shall use their best efforts to keep
available the current employees now employed with respect to the Business and
shall not disclose the terms or existence of this Agreement without the prior
written consent of Buyer. Buyer shall have the right to attend any meeting
called by Cable or any of the Companies with its employees for the purpose of
advising such employees as to the transactions contemplated by this Agreement
and the arrangements made, if any, for the continuation of employment of such
employees by Buyer following the Closing.
5.6 Notification of Certain Matters. Between the date of this
Agreement and the Closing, the Companies and/or Cable shall give prompt notice
to the Buyer of (i) the occurrence, or failure to occur, of any event which
occurrence or failure would likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
any time from the date hereof to the Closing and (ii) any material failure of
any of Cable or any officer, director, partner, employee, consultant or agent
of any of the Companies to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however,
that such disclosure shall not be deemed to cure any breach of a
representation, warranty, covenant or agreement or to satisfy any condition.
5.7 Conduct of Business of the Companies. During the period from
the date of this Agreement to the Closing, Cable shall cause the Companies to
conduct their operations in the ordinary course of business. Notwithstanding
the immediately preceding sentence, pending the Closing and except as may be
first approved by Buyer (such approval not to be unreasonably withheld) or as
is otherwise permitted or required by this Agreement, Cable shall cause (a) the
Companies' Articles of Incorporation and By-Laws to be maintained in their
respective forms on the date of this Agreement, (b) the compensation payable or
to become payable by the Companies to any director, officer or employee being
paid $100,000 per year or more to be maintained at the amount existing on the
date of this Agreement, (c) the Companies to refrain from making any bonus,
pension, retirement or insurance payment or arrangement to or with any persons
except those that have been accrued or accrue in the ordinary course of
business and except as set forth in this Agreement (d) the Companies to refrain
from entering into any contract or commitment except contracts and commitments
in the ordinary course of business, (e) the Companies to refrain from
increasing its indebtedness for borrowed money, except current borrowings in
the ordinary course of business, (f) the Companies to refrain from canceling or
waiving any claims or rights of substantial value which individually is or in
the aggregate are material to the Companies; and (g) the Companies to refrain
from declaring or paying any dividends, notwithstanding the above, nothing
contained herein prohibits the repayment of the shareholder note as provided in
Section 5._herein.
5.8 Review of the Company. Buyer and its representatives and
lenders have, prior to the Closing, reviewed the properties, operations, books
and records of the Companies to familiarize themselves with such properties and
the business of the Companies. Cable has caused the Companies to permit Buyer
and its representatives to have reasonable access to the premises and agreed to
furnish to Buyer its representatives and lenders, its books and records of the
Companies and furnish such financial and operating data and other information
with
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respect to the business and properties of the Companies as Buyer has requested.
The Buyer and Cable hereby agree that all such access and investigations
conducted by Buyer and its representatives, shall be conducted in such manner
as not to interfere with the normal conduct of Angeles' business; and further,
that, if this Agreement is not be closed for any reason whatsoever, Buyer and
its representatives shall return to Angeles all documentation and keep and
maintain all such information in strict confidence.
5.09 Confidentiality. The parties hereto acknowledge that Buyer
and the Companies have entered into a Confidentiality Agreement dated March 1,
1996 (the "Confidentiality Agreement") and Buyer confirms that it and its
affiliates and advisors will comply with their respective obligations
thereunder. Notwithstanding the foregoing, Buyer and/or Cable (a) only after
written approval may issue or make a press release, announcement or other
disclosure regarding this Agreement and the transactions contemplated hereby
which it determines necessary or desirable under applicable law, and (b) Buyer
at its own discretion may, at any time after the date of this Agreement, file
with the Securities and Exchange Commission (the "Commission") a Report on Form
8-K pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), with respect to the transactions contemplated by this Agreement.
5.10 Best Efforts. Each of the parties agrees to use its best
efforts to take, or cause to be taken, all action to do, or cause to be done,
and to assist and cooperate with the other parties hereto in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this
Agreement, including, but not limited to, (a) the obtaining of all necessary
waivers, consents and approvals from governmental or regulatory agencies or
authorities and the making of all necessary registrations and filings
(including, but not limited to, filings with governmental or regulatory
agencies or authorities, if any) and the taking of all reasonable steps as may
be necessary to obtain any approval or waiver from, or to avoid any action or
proceeding by, any governmental agency or authority, (b) the obtaining of all
necessary consents, approvals or waivers from third parties and (c) the
defending of any lawsuits or any other legal proceedings whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby including, without limitation, seeking to have
any temporary restraining order entered by any court or administrative
authority vacated or reversed.
5.11 Pay off of Cable Note. The Cable Note of $285,000.00, plus
interest, will be paid in full as a condition of Closing by the Company.
5.12 Scheduled Leases and Entering into Leases. (a) Cable hereby
agrees to use its best efforts to obtain any consents required by the Scheduled
Leases to be obtained due to this change of control of the Companies.
5.12(b) Angeles will execute new leases (collectively, the "Leases")
with Cable for the real property owned by D.K. Cable and presently occupied by
Angeles (the "Cable Premises"), including 116 Y Street, Vancouver, Washington
(the "Y Street Lease") and 4817 and 4915 Sheila Street, Commerce, California
(the "Sheila Street Lease"). The Leases shall be in the form attached hereto
as exhibit 3.3 and shall be for a minimum term of three-years (the "Leases
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Term") with two (2) three year options to renew (the "Option Renewal Period")
at the then current market, but not less than the rent from the immediate prior
period. During the term of the lease, Buyer will pay all increased costs in
building insurance and property taxes above levels incurred during the 1995
base year. Buyer will represent and warrant that it will comply with all
governmental restrictions and requirements with respect to its use of the Cable
Premises excepting that Buyer will have no responsibility to take remedial
action which is required due to Sellers use of the property but may do so if
Cable fails to commence to do so after final written notice from Buyer and the
applicable Governmental Agency (which a notice from the Governmental Agency may
be provided by Buyer to Cable) in response to a environmental situation and
seek full indemnity from Sellers. Cable will provide a Phase 1 Environmental
Report dated June, 1993 on his Los Angeles properties located on East Sheila,
City of Commerce. Buyer acknowledges that the Los Angeles property is in a
redevelopment area and such Leases will contain provisions allowing for early
termination of the Lease without payment of any kind by Cable (Lessor) or any
governmental agency upon six (6) months notice in the event that the subject
property is transferred or sold for redevelopment. Purchaser assumes full
responsibility and expenses not to exceed $5,000 for obtaining the necessary
occupancy permits.
5.13 The monthly rental for the Cable Premises shall be (i) $5,000
for the Y Street Lease & $10,000 per month for the Sheila Street Lease for the
first twelve months of the Leases; (ii) $6,000 per month for the Y Street Lease
and $11,000 per month for the Sheila Street Lease, respectively, for the
balance of the Leases; and, (iii) with an annual cost of living allowance based
on National Consumer Price Index ("CPI") [U.S. City average all items indexed
1982-84-100 all urban consumers)] commencing thereafter for the Leases Term and
any Option Renewal Period of the Leases. The Leases shall provide for, without
cost to Cable the continued use by Cable of his existing office in its existing
use for a period of one year.
5.14 Period Prior to Closing. In consideration for the
substantial expenditures of time, effort and expense to be undertaken by Buyer
in connection with the preparation and execution of this Agreement, and the
various investigations and reviews referred to above, none of the Sellers, or
any officer or director of the Companies shall not, between the date of the
execution by them of the Letter of Intent and the Closing, enter into or
conduct any discussions with any other prospective purchaser relating to the
Shares which are the subject of this Agreement or the Letter of Intent or the
assets or operations of the Sellers or any subsidiary thereof except for
transaction in the ordinary course of Angeles' business.
5.15. Resignations. The Seller shall have delivered to the Buyer the
resignation of each member of the Board of Directors of each of the Companies,
which resignations shall be in the form attached hereto as Schedule 5.15. In
addition, each of the Companies shall have held a special meeting of its Board
of Directors to appoint the designees named by the Buyer to serve on the Board
of Directors of the Companies prior to the resignations and simultaneously with
the Closing contemplated hereunder. Cable shall have also delivered to the
Buyer such resignations of the officers of each of the Companies as Buyer shall
request in anticipation of Closing.
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ARTICLE VI
CONDITIONS TO BUYER'S OBLIGATIONS
The purchase of the Assets by Buyer on the Closing is conditioned upon
the satisfaction or waiver, at or prior to the Closing, of the following
conditions:
6.1 Cable Non-Compete. The Consulting and Non-Compete Agreement
between Buyer and Cable must be executed prior to or at Closing.
6.2 Shareholder Note Satisfied. As a condition precedent to
closing Angeles will prepay and receive the canceled note evidencing the
satisfaction of the loan in the amount of $285,000 from the principal
shareholder to Angeles.
6.3 A Non-Competition Agreement. Mr. Cable will enter into a
Non-Competition Agreement in substantially the form of Schedule 6.2 attached
hereto, whereby he covenants and agrees that he will not, for a period of one
(1) year from the date of the Closing, directly or indirectly, on his own
behalf as a partner, officer, director, employee, consultant or member of the
board of directors or trustees of any person, firm, corporation, association,
entity or otherwise engage in any business or activity within the continental
United States which directly or indirectly competes with the Purchaser in the
operation of Angeles whereby the Purchaser will pay a total amount of $125,000
in quarterly payments.
6.4 A Consulting Agreement. Mr. Cable will enter into a
Consulting Agreement in substantially the form of Schedule 6.2 attached hereto
pursuant to which he agrees for a period of one year shall pay Mr. Cable
$75,000 in exchange for certain services as contained in such Consulting
Agreement.
6.5 Opinion of Sellers' Counsel. Buyer shall have received an
opinion, dated the Closing Date, of Harrington, Foxx, Dubrow & Cantor, counsel
to Seller, to the effect set forth in Schedule 6.5 attached hereto.
6.6 No Material Adverse Change. From the date of this Agreement
to the Closing, there shall not have been a Material Adverse Change or
discovery of a condition or the occurrence of any event which might result in
such change in the Companies or its business.
6.7 Truth of Representations and Warranties. The representations
and warranties of Cable contained in this Agreement or in any Schedule
delivered pursuant hereto shall be true and correct to the best of his current
knowledge in all material respects on and as of the Closing with the same
effect as though such representations and warranties had been made on and as of
such date, and Cable shall have delivered to Buyer a certificate, dated the
Closing, to such effect.
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6.8 Performance of Agreements. Each and all of the agreements of
Sellers to be performed at or prior to the Closing pursuant to the terms hereof
shall have been duly performed in all material respects, and Sellers shall have
delivered to Buyer a certificate, dated the date of the Closing, to such
effect.
6.9 No Injunction. No court or other government body or public
authority shall have issued an order which shall then be in effect restraining
or prohibiting the completion of the actions contemplated hereby.
6.10 No Other Litigation. There shall not be any pending claim,
litigation, arbitration or administrative proceeding against or affecting the
Companies, or the assets to be purchased hereunder, which in the reasonable
judgment of Buyer (i) makes it inadvisable for Buyer to consummate the
Closing; (ii) could have a material adverse effect upon the Companies business;
or (iii) seeks to enjoin or restrain the transaction contemplated by this
Agreement.
6.11 Stock Certificates. There shall be made available to Buyer
for review prior to the Closing (a) all stock certificates, stock books, stock
transfer ledgers, and minute books of the Companies.
6.12 Transfer Documents. There shall be transferred to Buyer the
Shares, in form reasonably satisfactory to Buyer, as are required to grant
Buyer title to, or Sellers' interest in the Shares.
6.13 Third Party Agreements. As set forth in Section 5.5 there shall
be provided to Buyer all appropriate original instruments of consent or waiver
executed by third parties with respect to any contracts, agreements, etc. being
transferred to Buyer hereunder in order more fully to effect any such transfer
of the Companies assets hereunder.
6.14 Other Documents. There shall be provided or copies made
available to Buyer, to the extent not previously furnished to Buyer, all of
Sellers' business records and papers and any orders, contracts, agreements,
purchase orders, accepted and unaccepted, quotations, and any other property or
records used or usable in connection with the continued operation of the
Companies business, all tax returns and tax bills, but Buyer shall have copies
upon request; and the parties shall make all of said documents available to
each other upon request at any reasonable time hereafter.
6.15 Resolutions. At Closing there shall be provided to Buyer,
true and complete copies of resolutions duly accepted by the Companies' Board
of Directors and all Shareholders entitled to vote hereon confirming this
Agreement and its related documentation, authorizing the carrying out of all
transactions contemplated herein and the execution and delivery by the
Companies of all instruments then or thereafter required to do so; said
resolutions to be duly certified by the Secretary of the Companies.
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6.16 Risk of Loss. The risk of any loss, destruction or other
damage, other than ordinary wear and tear, between the date of execution hereof
and the completion of the Closing, shall be solely that of the Companies. In
the event that prior to the completion of the Closing any Assets of the
Companies shall be damaged by fire, casualty or any other cause:
6.16(a) If the replacement cost of the damaged
property should replacement be required, or, if not, the repair cost, equal or
exceed $25,000 net loss after insurance, Buyer shall have the option of
(a)Terminating this Agreement, without liability; or (b) Completing the Closing
hereunder in which latter event Buyer shall be entitled to a credit equal to
the ace proceeds arising with respect to such damage.
6.16 (b) If such replacement or repair cost, as the
case may be, is less than $25,000, Buyer shall be obligated to complete the
Closing hereunder and shall be entitled to the insurance proceeds arising with
respect to such damage.
6.16(c) If (i) the replacement or repair cost of
damaged property equals or exceeds $25,000 and Buyer, pursuant to subparagraph
(1) hereof, elects to complete the Closing or if the replacement or repair cost
of the damaged property is less that $25,000 (in which event Buyer shall be
obligated to complete the Closing) and if (ii) in the case of damage less than
$25,000 the insurance proceeds arising with respect to such damage are not
sufficient to cover the full amount of such replacement or repair cost, Buyer
shall be entitled to a credit therefore in addition to the insurance proceeds
arising with respect to such damage.
6.17 Buyer, Cable and the Shareholders each agree
to bear their own legal and accounting fees and expenses; Cable and the
Shareholders agree to reimburse the Company (based on their individual
proportionate ownership) for legal and accounting fees and expenses paid by the
Companies, if any, related solely to the preparation, negotiation and drafting
of this Agreement for their benefit, which would not otherwise have been paid
or incurred by the Companies in the ordinary course of the Companies business.
ARTICLE VII
CONDITIONS TO SELLERS' OBLIGATIONS
The sale of the Stock by Sellers on the Closing is conditioned upon
satisfaction or waiver, at or prior to the Closing, of the following
conditions:
7.1 Opinions of Buyer's Counsel. Buyer shall have furnished
Sellers with an opinion, dated the Closing, of Buyer's Counsel, to the effect
set forth in Schedule 7.1 hereto.
7.2 Truth of Representations and Warranties. The representations
and warranties of Buyer contained in this Agreement shall be true and correct
in all material respects on and as of the Closing with the same effect as
though such representations and warranties had been made on and as of such
date, and Buyer shall have delivered to Sellers a certificate, dated the
Closing, to such effect.
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7.3 Performance of Agreements. Each and all of the agreements of
Buyer to be performed at or prior to the Closing pursuant to the terms hereof
shall have been duty performed in all material respects, and Buyer shall have
delivered to Sellers a certificate, dated the Closing, to such effect.
7.4 No Injunction. No court or other government body or public
authority shall have issued an order which shall then be in effect restraining
or prohibiting the completion of the transactions contemplated hereby.
7.5 Consents and Approvals. All governmental and other consents
and approvals, if any, necessary to permit the consummation of the transactions
contemplated by this Agreement shall have been received.
7.6 The Agreements and documentation therefor referred to in
Sections 6.2, 6.3, 6.4 and 5.12 duly executed shall be delivered at the
Closing.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS;
EVENTS OF TERMINATION
8.1 Survival of Representations. The representations and
warranties of Sellers and Buyer contained in this Agreement shall survive the
purchase and sale of the Shares for a period of one year unless a written claim
or action is filed prior thereto. Nothing in this paragraph shall effect the
obligation and indemnifications of the parties with respect to the covenants
and agreement contained in this agreement that are to be performed in whole or
part after the Closing.
8.2 Events of Termination. This Agreement may be terminated (a)
by Cable by written notice to Buyer, if the conditions and requirements set
forth in Articles II, IV, V, and VII hereof shall not have been complied with
or performed on or prior to the Closing and, (b) by Buyer by written notice to
the Companies, if the conditions set forth in Articles II and VI hereof shall
not have been complied with or performed on or prior to the Closing in any
material respect, and, in either case, such noncompliance or nonperformance
shall not have been cured or eliminated (or by its nature cannot be cured or
eliminated) on or before January 15, 1997.
8.3 Materiality of Actions Hereunder. The parties hereto
understand and agree that no actions shall be brought in connection with this
Agreement unless such action(s) allege damages as provided for in Article IX
below.
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ARTICLE IX
INDEMNIFICATION
9.1. Indemnification by Cable and the Companies. Cable hereby
agree to indemnify, defend and hold Buyer harmless, from and against the amount
of any damage, loss, cost or expense not covered by insurance (including court
costs and attorneys' fees) to Buyer, of any kind or character (collectively,
"Indemnity Losses" and individually, an "Indemnity Loss", which shall not be
limited to matters asserted by third parties against the Companies or the
Buyer, but includes any damage, loss, cost or expense incurred or sustained by
the Companies or the Buyer in the absence of any third party claims) for an
individual claim in excess of $75,000, occasioned or caused by, resulting from
or arising out of:
(a) any failure by Cable to perform, abide by or fulfill any
agreement or obligation set forth in this Agreement to be so performed or
fulfilled by Cable;
(b) any breach of any of the representations, warranties or
covenants of Cable as set forth in this Agreement;
(c) all litigation pending against any of Cable and the Companies at
the Closing;
(d) any and all claims against Buyer for any of the Companies
relating to the operation of the Business and/or use of the Business Assets at
the Cable Premises prior to the Closing including, without limitation, any
claim, suit, proceeding, fine or otherwise arising from the environmental
condition of the Cable Premises as of the Closing or relating to the failure of
any of the Cable and the Companies to comply with applicable Federal and/or
state environmental statutes and regulations or any pre-existing environmental
condition existing at the Cable Premises prior to the Closing;
(e) any material (in accordance with the applicable provision of
this Agreement defining the term "material") or event which may after the lapse
of time cause any such change or addition, in any such Schedule. breach of any
of the representations, warranties or covenants or any failure of the Cable to
satisfy its indemnity obligations thereunder.
ALL CLAIMS UNDER THIS SECTION 9 MUST BE PRESENTED IN WRITING WITHIN ONE (1)
YEAR FOLLOWING THE CLOSING TO CABLE; ANY CLAIM NOT SO PRESENTED SHALL BE BARRED
FOR ALL PURPOSES. ANY INDIVIDUAL CLAIM OF LESS THAN $75,000 SHALL NOT BE
DEEMED MATERIAL AND SHALL BE OF NO EFFECT AND NOT SUBJECT TO INDEMNIFICATION.
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9.2 Notice. In the event that Buyer has suffered or incurred any
Indemnity Loss, Buyer shall promptly notify the Seller promptly in writing
describing such loss or expense, the amount thereof, if known, and the method
of computation of such loss or expense, all with reasonable particularity. If
any action at law, suit in equity or administrative action is instituted by or
against Buyer with respect to which Buyer intends to claim any liability or
expense as an Indemnity Loss under this Article IX, Buyer shall promptly notify
Cable and the Companies of such action or suit.
9.3 Defense of Claims. The Cable shall have 25 days after receipt
of either notice referred to in Section 9.3 hereof to notify the Buyer that it
elects to conduct and control any legal or administrative action or suit with
respect to an indemnifiable claim. If Cable and the Companies do not give such
notice, the Buyer shall have the right to defend, contest, and, only upon the
prior written consent of the Cable and the Companies, settle or compromise such
action or suit and the Cable and the Companies shall, upon request from the
Buyer, promptly pay the Buyer in accordance with the other terms of this
Article IX the amount of any individual Indemnity Loss resulting from its
liability to the third party claimant in excess if $75,000.00. If Cable and
the Companies give such notice, they shall have the right to undertake, conduct
and control, through counsel of their own choosing and at its sole expense, the
conduct and settlement of such action or suit, and the Buyer shall cooperate
with Cable and the Companies in connection therewith; provided, however, that
(i) Cable and the Companies shall not thereby consent to the imposition of any
injunction against the Buyer without the written consent of the Buyer, (ii)
Cable and the Companies shall permit the Buyer to participate in such conduct
or settlement through counsel chosen by the Buyer, but the fees and expenses of
such counsel shall be borne by the Buyer except as provided in clause (iii)
below, and (iii) upon a final determination of such action or suit, Cable and
the Companies shall agree promptly to reimburse to the extent required under
this Article IX the Buyer for the full amount of any Indemnity Loss resulting
from such action or suit and all reasonable and related expenses incurred by
the Buyer, except fees and expenses of counsel for the Buyer incurred after the
assumption of the conduct and control of such action or suit by Cable and the
Companies. So long as Cable and the Companies are contesting any such action
in good faith, the Buyer shall not pay or settle any such action or suit.
Notwithstanding the foregoing, the Buyer shall have the right to pay or settle
any such action or suit, provided that in such event the Buyer shall waive any
right to indemnity therefor from Cable and the Companies and no amount in
respect thereof shall be claimed as an Indemnity Loss under this Article IX.
9.4. Cooperation. If requested by Cable and the Companies, the
Buyer agrees to cooperate with Cable and the Companies and its counsel in
contesting any claim which Cable and the Companies elects to contest or, if
appropriate, in making any counterclaim against the person asserting the claim,
or any cross-complaint against any person and further agrees to take such other
action as reasonably may be requested by an Cable and the Companies to reduce
or eliminate any loss or expense for which Cable and the Companies would have
responsibility, but Cable and the Companies will reimburse the Buyer for any
reasonable expenses incurred by it in so cooperating or acting at the request
of Cable and the Companies.
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9.5 Right to Participate. The Buyer agrees to afford Cable and
the Companies and its counsel the opportunity to be present at, and to
participate in, conferences with all persons, including governmental
authorities, asserting any claim against the Buyer or conferences with
representatives of or counsel for such persons.
9.6 NOTWITHSTANDING ANY OTHER PROVISION HEREIN TO THE CONTRARY ANY
AMOUNT OF INDEMNIFICATION DUE FROM CABLE UNDER THIS SECTION 9 SHALL BE LIMITED
TO:
(A) A FINAL JUDGMENT UPON A CLAIM OF AN INDEPENDENT THIRD
PARTY; AND
(B) SHALL BE LIMITED SOLELY AND EXCLUSIVELY TO THE AMOUNT
DUE TO CABLE UNDER THE NON-COMPETITION AND CONSULTING AGREEMENT REFERRED TO IN
PARAGRAPHS 6.3 AND 6.4. AS OF THE INITIAL DATE OF THE WRITTEN CLAIM MADE UPON
CABLE; CABLE SHALL HAVE NO RESPONSIBILITY FOR ANY AGGREGATE AMOUNT IN EXCESS OF
SUCH AMOUNT THEN DUE TO CABLE ON SUCH NON-COMPETITION AND CONSULTING
AGREEMENTS. NO RECOURSE SHALL BE ALLOWED AS TO ANY OTHER ASSETS OF CABLE
INCLUDING BUT NOT LIMITED TO THE LEASES REFERRED TO IN PARAGRAPH 5.12 AND/OR
THE REAL PROPERTY WITH RESPECT TO SAME.
9.7 Designation of Roles in Joint Liability. For purposes of
interpretation of this Agreement only, in the event that any claim alleges
joint responsibility and liability of Cable and the Companies and Buyer, Cable
and the Companies shall be deemed to be Cable and the Companies and the Buyer
shall be deemed to be the Buyer for purposes of determining which party has the
right to defend any claim; provided, however, that such deemed designation
shall in no way affect any determination regarding the relative liabilities of
the parties.
ARTICLE IX
MISCELLANEOUS
10.1 Expenses. The parties hereto shall pay all of their own
expenses relating to the transactions contemplated by this Agreement,
including, without limitation, the fees and expenses of their respective
counsel and financial advisors.
10.2 Transfer Taxes. All stamp, transfer, documentary, sales, use,
registration and other such taxes and fees (including any penalties and
interest incurred in connection with this Agreement and the transactions
contemplated hereby (collectively, the "Transfer Taxes") shall
36
<PAGE> 43
be paid by Buyer, and Buyer shall, at its own expense, procure any Share
transfer stamps required by, and properly file on a timely basis all necessary
tax returns and other documentation with respect to, any Transfer Tax and
provide to Sellers evidence of payment of all Transfer Taxes.
10.3 Notification. Until the Closing, Buyer shall promptly inform
Sellers in writing of any material variances discovered by Buyer or its
representatives in the representations and warranties of Sellers contained in
this Agreement. BUYER SHALL BE DEEMED TO WAIVE ANY CLAIM OR RIGHT OF OFFSET
WITH RESPECT TO ANY SUCH VARIANCE OR DEFICIENCY OF WHICH IT HAS KNOWLEDGE PRIOR
TO THE CLOSING.
10.4 Governing Law. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the laws of
the State of California applicable to contracts made by California residents
and to be performed entirely within the State of California. All actions with
respect to the obligations of the parties hereto must be brought in the
appropriate forum at Los Angeles, California.
10.5 "Person" Defined. "Person" shall mean and include an
individual, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or other department or agency
thereof.
10.6 Captions. The Article, Section and Schedule captions used
herein are for reference purposes only, and shall not in any way affect the
meaning or interpretation of this Agreement.
10.7 Publicity. Except as otherwise required by law or regulation,
neither of the parties hereto shall issue any press release or make any other
public statement, in each case relating to or connected with or arising out of
this Agreement or the matters contained herein, without obtaining the prior
written approval of the other party to the contents and the manner of
presentation and publication thereof except for required government filings.
The requirements of this Section 8.7 shall be in addition to those included in
the Confidentiality Agreement.
10.8 Third Party Beneficiaries. Each party hereto intends that
this Agreement shall not benefit or create any right or cause of action in or
on behalf of any Person other than the parties hereto.
10.9 Notices. Any notice or other communications required or
permitted hereunder shall be sufficiently given if delivered in person or sent
by telecopy or by registered or certified mail, postage prepaid, addressed as
follows: if to Buyer, Stone Pine Atlantic LLC, 410 17th Street, Suite 400,
Denver, Colorado 80202, Attn: Donald Jackson; and if to Cable, to Angeles Metal
Trim Co., Inc., 4915 East Sheila Street, Los Angeles, California 90040, FAX
number (213)266-2921, Attention: D.K. Cable; with a copy to Eli B. Dubrow,
Esq., Harrington, Foxx,
37
<PAGE> 44
Dubrow & Canter, 611 W. Sixth Street, 30th Floor, Los Angeles, CA 90017, FAX
number (213) 622-4158; or such other address or number as shall be furnished in
writing by any such party, and such notice or communication shall be deemed to
have been given as of the date so delivered, sent by telecopy or mailed.
10.10 Parties in Interest. This Agreement may not be transferred,
assigned, pledged or hypothecated by any party hereto, other than by operation
of law. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns.
10.11 Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
10.12 Entire Agreement. This Agreement, including the Schedules and
other documents referred to herein which form a part hereof, and the
Confidentiality Agreement, contain the entire understanding of the parties
hereto with respect to the subject matter contained herein and therein. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter other than the Confidentiality
Agreement.
10.13 Amendments. This Agreement may not be changed orally, but
only by an agreement in writing signed by the parties hereto. Any provision of
this Agreement can be waived, amended, supplemented or modified by written
agreement of the parties hereto.
10.14 Severability. In case any provision in this Agreement shall
be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
10.15 LIQUIDATED DAMAGES. THE PARTIES HERETO, BEFORE ENTERING
THIS AGREEMENT, HAVE BEEN CONCERNED WITH THE FACT THAT SUBSTANTIAL DAMAGES
WILL BE SUFFERED BY SELLERS IN THE EVENT THAT BUYER SHOULD FAIL TO COMPLETE THE
PURCHASE OF SHARES ACCORDING TO THE TERMS OF THIS AGREEMENT. WITH THE
FLUCTUATION IN VALUES, THE HIGHLY UNPREDICTABLE STATE OF THE ECONOMY, AND THE
PERIOD OF TIME BETWEEN THIS AGREEMENT AND THE CLOSING OF THE TRANSACTION AND
OTHER FACTORS WHICH DIRECTLY OR INDIRECTLY EFFECT THE VALUE OF THE SHARES AND
THE CONTINUING OPERATIONS OF THE SELLERS, IT IS AGREED THAT IT WOULD BE
EXTREMELY DIFFICULT TO ASCERTAIN THE AMOUNT OF DAMAGES WHICH WOULD BE SUFFERED
BY SELLERS IN THE EVENT OF BUYERS' FAILURE TO PURCHASE THE SHARES UNDER THE
TERMS OF THIS AGREEMENT. BUYER AND SELLERS HAVING MADE A DILIGENT ENDEAVOR TO
ASCERTAIN THE ACTUAL COMPENSATORY DAMAGES WHICH SELLERS WOULD SUFFER IN THE
EVENT OF BUYER'S FAILURE TO PURCHASE THE SHARES, HEREBY AGREE THAT THE
REASONABLE ESTIMATE OF SAID DAMAGES IS THE AMOUNT OF THE DOWN PAYMENT, PLUS ANY
INTEREST WHICH MAY ACCRUE THEREON. IN THE
38
<PAGE> 45
EVENT THE PURCHASE OF SHARES BY THE BUYER IS CANCELED OR TERMINATED BY REASON
OF BUYERS'S BREACH AND/OR DEFAULT OF THIS AGREEMENT, SELLERS SHALL BE ENTITLED
TO AND MAY RETAIN THE AMOUNT OF THE DOWN PAYMENT TOGETHER WITH ANY INTEREST
ACCRUED THEREON AS LIQUIDATED DAMAGES. THE AMOUNT OF THE LIQUIDATED DAMAGES
HAS BEEN ESTABLISHED BY THE PARTIES AS THE AMOUNT OF THE MONETARY DAMAGES
SELLERS MAY SUFFER BASED SOLELY UPON A FAILURE OF BUYERS TO PURCHASE THE
SHARES AND SELLERS SHALL BE ENTITLED TO RECOVER NO OTHER DAMAGES FROM BUYER.
SELLERS HEREBY RELEASE BUYER AND AGREE THAT NO OTHER DAMAGES WILL BE SOUGHT BY
SELLER BASED SOLELY UPON A FAILURE BY BUYER TO PURCHASE THE SHARES. THE PARTIES
HERETO EXPRESSLY UNDERSTAND AND AGREE TO THE FOREGOING PROVISIONS RELATED TO
LIQUIDATED DAMAGES.
- -------------------------- ----------------------------
10.16 This document may be executed in counterparts all of which may be
deemed a fully executed document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
after due consideration of the liquidated damages clause hereinabove, and the
Shareholders acknowledgement and disclaimer set forth below to be duly executed
as of the day and year first above written.
Buyer:
ANGELES ACQUISITION CO.
By: /s/ Jeffrey R. Leach
----------------------------------
Name: Jeffrey R. Leach
Title: President
Sellers:
ANGELES METAL TRIM CO., INC.,
A California corporation
By: /s/ D.K. Cable
----------------------------------
Name: D.K. Cable
Title: Chairman
39
<PAGE> 46
CALIFORNIA BUILDING SYSTEMS, INC.,
a Nevada corporation
By: /s/ D.K. Cable
-----------------------------
Name: D.K. Cable
Title: Chairman
/s/ D. Kingston Cable
--------------------------------------
D. Kingston Cable, an Individual
Stock Certificate No.(s)
--------------------------------------
Number of Shares:
-------------------
SHAREHOLDERS:
Each of the following Shareholders acknowledges and agrees to Article I and
Section 2.2(a) of the foregoing Stock Purchase Agreement ("Agreement") but
specifically disclaims any obligations or liability (joint, several or
otherwise) for any other covenants, agreements, representations or warranties
contained in the Agreement, including but not limited to the representations
and warranties of Sellers set forth in Article III and the agreements of
Sellers set forth in Article V. By execution of the Agreement above, Buyer
acknowledges and agrees that notwithstanding the definition of "Sellers" set
forth in the introductory paragraph of the Agreement, the following
Shareholders will not be deemed included within the term "Sellers" except for
purposes of Article I and Section 2.2(a) of the Agreement. The Shareholders
further acknowledge that the Purchase Price for the Stock shall be paid to the
Trust Account of Harrington, Foxx, Dubrow & Canter for the benefit of the
Stockholders.
Cable and the Shareholders agree to reimburse the Company (based on their
individual proportionate ownership) for legal and accounting fees and expenses
paid by the Companies, if any, related solely to the preparation, negotiation
and drafting of this Agreement for their benefit, which would not otherwise
have been paid or incurred by the Companies in the ordinary course of the
Companies business.
40
<PAGE> 47
ANGELES METAL TRIM CO., INC.
[SUBSIDIARY]
/s/ Jacob Swarz
- -----------------------------------------------------------------
SHAREHOLDER: Jacob Swarz, Trustee Officer
G.C. Cable Trust
STOCK CERTIFICATE NO.: 52
-----------------------------
NUMBER OF SHARES: 10.5
--------------------------
/s/ Nancy Jean Lee
- -----------------------------------------------------------------
SHAREHOLDER: Nancy Jean Lee
STOCK CERTIFICATE NO.: 46
-----------------------------
NUMBER OF SHARES: 3.5
--------------------------
/s/ Charles B. Phillips
- -----------------------------------------------------------------
SHAREHOLDER: Charles B. Phillips
STOCK CERTIFICATE NO.: 42
-----------------------------
NUMBER OF SHARES: 6
--------------------------
/s/ Donald Phillips
- -----------------------------------------------------------------
SHAREHOLDER: Donald Phillips
STOCK CERTIFICATE NO.: 53
-----------------------------
NUMBER OF SHARES: 3.5
--------------------------
/s/ Robyn Jean Martin
- -----------------------------------------------------------------
SHAREHOLDER: Robyn Jean Martin
STOCK CERTIFICATE NO.: 49
-----------------------------
NUMBER OF SHARES: 4
--------------------------
/s/ Helen M. Lawlor
- -----------------------------------------------------------------
SHAREHOLDER: Helen M. Lawlor
STOCK CERTIFICATE NO.: 48
-----------------------------
NUMBER OF SHARES: 1
--------------------------
41
<PAGE> 48
/s/ Valerie Ann Glass
- ----------------------------------------------------------------
SHAREHOLDER: Valerie Ann Glass
STOCK CERTIFICATE NO.: 44
-----------------------------
NUMBER OF SHARES: 3.5
--------------------------
/s/ Kathleen Henderson
- ----------------------------------------------------------------
SHAREHOLDER: Kathleen Henderson
STOCK CERTIFICATE NO.: 32
-----------------------------
NUMBER OF SHARES: 4
--------------------------
/s/ Daniel Kingston Cable, /s/ Barbara White Cable
- ----------------------------------------------------------------
SHAREHOLDER: Daniel Kingston Cable, Barbara White Cable
STOCK CERTIFICATE NO.: 51
-----------------------------
NUMBER OF SHARES: 3
--------------------------
/s/ Daniel Kingston Cable
- ----------------------------------------------------------------
SHAREHOLDER: Daniel Kingston Cable
STOCK CERTIFICATE NO.: 50
-----------------------------
NUMBER OF SHARES: 95
--------------------------
/s/ Daniel Kingston Cable, as Custodian
- ----------------------------------------------------------------
SHAREHOLDER: D.K. Cable as Custodian for Douglas M. Cable
STOCK CERTIFICATE NO.: 33
-----------------------------
NUMBER OF SHARES: 4
--------------------------
/s/ Daniel Kingston Cable, as Custodian
- ----------------------------------------------------------------
SHAREHOLDER: D.K. Cable as Custodian for Ann C. Cable
STOCK CERTIFICATE NO.: 34
-----------------------------
NUMBER OF SHARES: 4
--------------------------
42
<PAGE> 1
EXHIBIT 2.2
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of January 16, 1997
among CONSOLIDATED CAPITAL OF NORTH AMERICA, INC., a Colorado corporation
("Consolidated Capital"); CONSOLIDATED LAND & CATTLE COMPANY, a Colorado
corporation and a wholly owned subsidiary of Consolidated Capital
("Consolidated Acquisition"); MESSRS. RAYMOND E. MCELHANEY, BILL M. CONRAD and
RONALD R. MCGINNIS (each a "Management Shareholder" and collectively the
"Management Shareholders"); ANGELES ACQUISITION CORP., a Delaware corporation
("Angeles Acquisition"), which is the holder of 100% of the outstanding shares
of ANGELES METAL TRIM CO., a California corporation ("Angeles Metal") which in
turn owns 100% of the outstanding shares of CALIFORNIA BUILDING SYSTEMS, INC.,
a Nevada Corporation ("CBS"); and STONE PINE COLORADO, L.L.C., a Colorado
limited liability company ("Stone Pine").
W I T N E S S E T H:
WHEREAS, the Management Shareholders beneficially own 66.97%
of the outstanding shares of Consolidated Capital;
WHEREAS, the respective Boards of Directors of Consolidated
Capital, Consolidated Acquisition and Angeles Acquisition have approved the
merger of Consolidated Acquisition and Angeles Acquisition;
WHEREAS, to effect such transaction, the respective Boards of
Directors of Consolidated Capital, Consolidated Acquisition and Angeles
Acquisition, and Consolidated Capital acting as the sole shareholder of
Consolidated Acquisition and Stone Pine acting as the sole shareholder of
Angeles Acquisition, have approved the merger of Consolidated Acquisition and
Angeles Acquisition (the "Merger"), pursuant and subject to the terms and
conditions of this Agreement;
WHEREAS, the parties desire to make certain representations,
warranties and agreements in connection with the Merger and also to prescribe
various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties agree
as follows:
<PAGE> 2
ARTICLE I
THE MERGER
1.1 THE MERGER. At the Effective Time (as hereinafter defined),
Consolidated Acquisition shall be merged with and into Angeles Acquisition
(Consolidated Acquisition and Angeles Acquisition are sometimes referred to
herein as the "Constituent Corporations"), the separate corporate existence of
Consolidated Acquisition shall cease and Angeles Acquisition shall continue as
the surviving corporation under the corporate name "Angeles Acquisition" (the
"Surviving Corporation") all upon the terms and subject to the conditions
provided for in this Agreement and pursuant to the Delaware General Corporation
Law (the "DGCL") and the Colorado Business Corporation Act (the "CBCA"). For
federal income tax purposes, it is intended that the Merger shall constitute a
reorganization within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code").
1.2 CLOSING AND EFFECTIVE TIME. Subject to the provisions of this
Agreement, the parties shall hold a closing (the "Closing") on (i) the first
business day on which the last of the conditions set forth in Article V to be
fulfilled prior to the Closing is fulfilled or waived or (ii) such other date
as the parties hereto may agree (the "Closing Date"), at such time and place as
the parties hereto may agree. The Merger shall become effective upon the
filing of a Certificate of Merger with the Secretary of the State of Delaware
and the Secretary of State of the State of Colorado or at such later time on
the Closing Date as is provided in the Certificate of Merger (the "Effective
Time"). As a result of the Merger, Angeles Acquisition shall become a
wholly-owned subsidiary of Consolidated Capital.
1.3 EFFECTS OF THE MERGER. The Merger shall have the effects
specified in the DGCL and the CBCA and, at and after the Effective Time, the
Surviving Corporation shall possess all the rights, privileges, powers and
franchises, and be subject to all the restrictions, disabilities and duties of
each of the Constituent Corporations; and all singular rights, privileges,
powers and franchises of each of the Constituent Corporations, and all
property, real, personal and mixed, and all debts due to either of the
Constituent Corporations on whatever account, and all other things in action or
belonging to each of the Constituent Corporations, shall be vested in the
Surviving Corporation; and all property, rights, privileges, powers and
franchises, and all and every other interest shall be thereafter the property
of the Surviving Corporation as they were of the Constituent Corporations; but
all rights of creditors and all liens upon any property of either of the
Constituent Corporations shall be preserved unimpaired, and all debts,
liabilities and duties of the Constituent Corporations shall thenceforth attach
to the Surviving Corporation, and may be enforced against it to the same extent
as if said debts and liabilities had been incurred by it.
1.4 CERTIFICATE OF INCORPORATION, BY-LAWS AND DIRECTORS AND
OFFICERS. The Certificate of Incorporation of the Surviving Corporation in
effect immediately prior to the Effective Time shall be and remain the
Certificate of Incorporation of the Surviving Corporation, until thereafter
amended in accordance with the provisions therein and as provided by the DGCL.
The By-Laws of the Surviving Corporation in effect immediately prior to the
Effective Time shall
-2-
<PAGE> 3
be the By-Laws of the Surviving Corporation until thereafter amended in
accordance with its terms. The initial directors and officers of the Surviving
Corporation shall be the directors and officers of the Surviving Corporation
immediately prior to the Effective Time, in each case until their successors
are duly elected and qualified.
1.5 CONVERSION AND CANCELLATION OF SHARES IN THE MERGER. As of
the Effective Time, by virtue of the Merger and without any action on the part
of Consolidated Capital, Consolidated Acquisition, Angeles Acquisition or the
holder of any shares of Consolidated Acquisition or Angeles Acquisition:
(a) CAPITAL STOCK OF CONSOLIDATED ACQUISITION. Each issued and
outstanding share of the capital stock of Consolidated Acquisition
shall be converted into and become one fully paid and nonassessable
share of Common Stock, par value $.01, of the Surviving Corporation.
(b) CAPITAL STOCK OF ANGELES ACQUISITION. Each issued and
outstanding share of the capital stock of Angeles Acquisition shall be
converted into the right to receive 86,380.03 shares of Common Stock,
par value $.0001 per share, of Consolidated Capital (the "Merger
Shares") with the result that after the Effective Time, Angeles
Acquisition will become a wholly owned subsidiary of Consolidated
Capital and Angeles Metal Trim will be a wholly owned subsidiary of
Angeles Acquisition. All such converted shares of Angeles Acquisition
shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with
respect thereto, except the right to receive the Merger Shares.
1.6 STOCK ISSUANCE. Contemporaneously with the Closing,
Consolidated Capital shall issue and sell 5,496,911 shares of Common Stock of
Consolidated Capital (the "Investor Shares").
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF CONSOLIDATED CAPITAL AND
CONSOLIDATED ACQUISITION. Consolidated Capital, Consolidated Acquisition and
the Management Shareholders jointly and severally represent and warrant to
Angeles Acquisition as follows:
(a) ORGANIZATION, STANDING AND POWER. (i) Consolidated Capital
is a corporation duly organized, validly existing and in good standing
under the laws of the State of Colorado, has all requisite power and
authority to own, lease and operate its properties and to carry on its
business as now being conducted, and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification necessary other than in
-3-
<PAGE> 4
such jurisdictions where the failure so to qualify would not have a
material adverse affect on Consolidated Capital and the Consolidated
Entities (as hereinafter defined) taken as a whole.
(ii) Schedule 2.1(a) hereto lists each of the direct and indirect
subsidiaries of Consolidated Capital and each association,
partnership, joint venture, limited liability company or other entity
in which Consolidated Capital has an interest, either of record,
beneficially or equitably along with a description of the interest
held by Consolidated Capital in such entity (individually, a
"Consolidated Entity" and together, the "Consolidated Entities"). All
shares of capital stock or ownership interests of each Consolidated
Entity held by Consolidated Capital or another Consolidated Entity
have been duly authorized, are fully paid and nonassessable, and are
lawfully owned of record and beneficially by Consolidated Capital or
another Consolidated Entity free and clear of all pledges, liens,
claims, security interests and other charges or defects in title of
any nature whatsoever.
(iii) Each Consolidated Entity is duly organized, validly existing,
in good standing and qualified to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties makes such qualification necessary other than in such
jurisdictions where the failure so to qualify would not have a
material adverse effect on Consolidated Capital and the Consolidated
Entities taken as a whole.
(b) CAPITAL STRUCTURE. The authorized capital stock of
Consolidated Capital consists of 50,000,000 shares of Common Stock,
par value $.0001 per share and 10,000,000 shares of Preferred Stock,
par value $.01 per share. As of the close of business on December 31,
1996, 1,570,546 shares of Consolidated Capital Common Stock were
outstanding; no shares of Consolidated Capital Common Stock were held
by Consolidated Capital in its treasury, and no shares of Consolidated
Capital Preferred Stock were issued or outstanding. All outstanding
shares of Consolidated Capital Common Stock are, and the Merger Shares
to be issued pursuant to this Agreement will be when issued pursuant
to the terms of the resolution of the Board of Directors of
Consolidated Capital approving such issuance, validly issued, fully
paid and nonassessable and not subject to preemptive rights. All of
the issued and outstanding shares of Consolidated Capital Common Stock
were issued in compliance with all Federal and state securities laws.
Except for options described in Schedule 2.1(b) hereto, there are no
options, warrants, calls, agreements or other rights to purchase or
otherwise acquire from Consolidated Capital at any time, or upon the
happening of any stated event, any shares of the capital stock of
Consolidated Capital or any Consolidated Entity, whether or not
presently issued or outstanding.
(c) CERTIFICATE OF INCORPORATION, BY-LAWS, AND MINUTE BOOKS. The
copies of the Certificate of Incorporation and of the By-Laws of
Consolidated Capital and Consolidated Acquisition and the
organizational documents of each Consolidated Entity which have been
delivered to Angeles Acquisition are true, correct and complete copies
thereof. The minute books of Consolidated Capital and Consolidated
Acquisition which have been
-4-
<PAGE> 5
made available for inspection contain accurate minutes of all meetings
and accurate consents in lieu of meetings of the Board of Directors
(and any committee thereof) and of the shareholders of Consolidated
Capital and Consolidated Acquisition since the respective dates of
incorporation and accurately reflect all transactions referred to in
such minutes and consents in lieu of meetings.
(d) AUTHORITY. (i) Consolidated Capital and Consolidated
Acquisition have all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the
Boards of Directors of Consolidated Capital and Consolidated
Acquisition and Consolidated Capital as the sole shareholder of
Consolidated Acquisition. No other corporate or shareholder
proceedings on the part of Consolidated Capital or Consolidated
Acquisition are necessary to authorize the Merger, the sale of assets
pursuant to the Asset Agreement (as herein defined) or the other
transactions contemplated hereby.
(ii) Each of the Management Shareholders has the capacity, power,
authority and legal right to execute, deliver and perform this
Agreement.
(iii) This Agreement has been duly executed and delivered by
Consolidated Capital, Consolidated Acquisition and each of the
Management Shareholders and constitutes a valid and binding obligation
of each of them enforceable in accordance with its terms.
(e) CONFLICT WITH OTHER AGREEMENTS; APPROVALS. The execution and
delivery of this Agreement and the Asset Agreement does not, and the
consummation of the transactions contemplated hereby will not result
in any violation of, or default (with or without notice or lapse of
time, or both) under, or give 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 Certificate
of Incorporation or By-laws or any organizational document of
Consolidated Capital or any Consolidated Entity or, 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 Consolidated
Capital or any Consolidated Entity or their respective properties or
assets which Violation would have a material adverse effect on
Consolidated Capital and the Consolidated Entities taken as a whole.
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") is required by or with
respect to Consolidated Capital or any Consolidated Entity in
connection with the execution and delivery of this Agreement by
Consolidated Capital and Consolidated Acquisition or the consummation
by Consolidated Capital and Consolidated Acquisition of the
transactions contemplated hereby, the failure to obtain
-5-
<PAGE> 6
which would have a material adverse effect on Consolidated Capital and
the Consolidated Entities, taken as a whole, except for (i) the filing
of such documents with, and the obtaining of such orders from, the
Securities and Exchange Commission (the "SEC"), the various state
authorities, including state securities authorities, that are required
in connection with the transactions contemplated by this Agreement;
and (ii) the filing of Certificates of Merger with the Secretary of
State of Delaware and the Secretary of State of Colorado.
(f) SEC DOCUMENTS. Consolidated Capital has furnished Angeles
Acquisition with a true and complete copy of each report, schedule,
registration statement and definitive proxy statement filed by
Consolidated Capital with the SEC since January 1, 1995 (as such
documents have since the time of their filing been amended, the
"Consolidated Capital SEC Documents") and since that date Consolidated
Capital has filed with the SEC all documents required to be filed
pursuant to Section 15(d) of the Exchange Act of 1934, as amended (the
"Exchange Act"). As of their respective dates, the Consolidated
Capital SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC thereunder applicable to such
Consolidated Capital SEC Documents, and none of the Consolidated
Capital SEC Documents contained 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 Consolidated Capital included in the
Consolidated Capital SEC Documents 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, are
accurate, complete and in accordance with the books and records of
Consolidated Capital, have been prepared 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
or, in the case of the unaudited statements, as permitted by Form 10-Q
of the SEC) and fairly present (subject, in the case of the unaudited
statements, to normal, recurring audit adjustments) the consolidated
financial position of Consolidated Capital as at the dates thereof and
the consolidated results of its operations and cash flows for the
periods then ended.
(g) BOOKS AND RECORDS. Consolidated Capital has made and will
make available for inspection by Angeles Acquisition upon reasonable
request all the books of Consolidated Capital and the Consolidated
Entities, relating to the business of Consolidated Capital and the
Consolidated Entities. Such books of Consolidated Capital and the
Consolidated Entities have been maintained in the ordinary course of
business. All documents furnished or caused to be furnished to
Angeles Acquisition by Consolidated Capital are true and correct
copies, and there are no amendments or modifications thereto except as
set forth in such documents.
-6-
<PAGE> 7
(h) COMPLIANCE WITH LAWS. Consolidated Capital and the
Consolidated Entities are and have been in compliance in all material
respects with all laws, regulations, rules, orders, judgments, decrees
and other requirements and policies imposed by any Governmental Entity
applicable to it, its properties or the operation of its businesses.
(i) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Consolidated Capital SEC Documents filed prior to the date of this
Agreement or in the audited consolidated balance sheets of
Consolidated Capital and the related consolidated statements of
income, cash flows and changes in shareholders' equity as of and for
the period ended December 31, 1995 (the "Consolidated Capital 1995
Financials"), true and correct copies of which have been delivered to
Angeles Acquisition, or except as contemplated by this Agreement or
the Asset Agreement or except as set forth on Schedule 2.1(i), since
the date of the Consolidated Capital 1995 Financials, Consolidated
Capital and the Consolidated Entities have conducted their respective
businesses only in the ordinary course, and, as of the date of this
Agreement, there has not been (i) any material adverse change, alone
or in the aggregate, in the business, assets, liabilities, condition
(financial or otherwise), results of operations or prospects of
Consolidated Capital or any Consolidated Entity; or (ii) any
declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any
of Consolidated Capital's capital stock.
(j) NOTES RECEIVABLE. The notes receivable of Consolidated
Capital as set forth on the consolidated balance sheet of Consolidated
Capital and the related consolidated statements of income, cash flows
and changes in shareholders' equity as of and for the period ended
September 30, 1996 (the "Consolidated Capital Interim Financial
Statements") or arising since the date thereof are valid and genuine;
are not subject to valid defenses, set-offs or counterclaims. All
currently outstanding notes receivable of Consolidated Capital are
listed on Schedule 2.1(j).
(k) LIABILITIES AND OBLIGATIONS. None of Consolidated Capital or
the Consolidated Entities have any material liabilities or obligations
(direct or indirect, contingent or otherwise) except (i) liabilities
that are reflected and reserved against on the Consolidated Capital
Interim Financial Statements that have not been paid or discharged
since the date thereof and (ii) liabilities incurred since September
30, 1996 in the ordinary course of business consistent with past
practice and in accordance with this Agreement.
(l) LITIGATION. There is no suit, action or proceeding pending,
or, to the knowledge of Consolidated Capital, threatened against or
affecting Consolidated Capital or any Consolidated Entity which is
reasonably likely to have a material adverse effect on Consolidated
Capital or any Consolidated Entity, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator
outstanding against Consolidated Capital or any Consolidated Entity
having, or which, insofar as reasonably can be foreseen, in the future
could have, any such effect.
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(m) TAXES. Each of Consolidated Capital and the Consolidated
Entities has filed or will file within the time prescribed by law and
(including extension of time approved by the appropriate taxing
authority) all tax returns and reports required to be filed with the
United States Internal Revenue Service and with all other
jurisdictions where such filing is required by law; and Consolidated
Capital and the Consolidated Entities have paid, or have made adequate
provision in the Consolidated Capital Interim Financial Statements for
the payment of all taxes, interest, penalties, assessments or
deficiencies shown due and payable on, and with respect to all periods
ending prior to September 30, 1996. Consolidated Capital knows of (i)
no other tax returns or reports which are required to be filed which
have not been so filed and (ii) no unpaid assessment for additional
taxes for any fiscal period or any basis therefor.
(n) ASSETS. Consolidated Capital and the Consolidated Entities
have good and marketable title to all their real and personal
properties and assets reflected in the Consolidated Capital Interim
Financial Statements free and clear of all mortgages, liens, pledges,
charges or encumbrances or other third party interests of any nature
whatsoever, except (i) as otherwise disclosed in the Consolidated
Capital Interim Financial Statements, (ii) the lien of current taxes
not yet due and payable, (iii) properties, interests, and assets
disposed of by Consolidated Capital or any Consolidated Entity since
September 30, 1996 solely in the ordinary course of business
consistent with past practice other than pursuant to the Asset
Agreement and (iv) such imperfections of title, easements and
encumbrances, if any, as are not substantial in character, amount or
extent and do not materially detract from the value, or interfere with
the present or proposed use, of the properties subject thereto.
(o) CONTRACTS. All written or oral contracts, agreements, loan
agreements, leases, mortgages or commitments ("Contracts"), excluding
Contracts involving payments of less than $10,000 over the term
thereof, to which Consolidated Capital or any Consolidated Entity is a
party or may be bound and which cannot be terminated by Consolidated
Capital or any Consolidated Entity without penalty within 30 days
after written notice are listed on Schedule 2.1(o). Except as
described in Schedule 2.1(o) hereto, all Contracts are valid and in
full force and effect on the date hereof, and neither Consolidated
Capital nor any Consolidated Entity has violated any provision of, or
committed or failed to perform any act which with notice, lapse of
time or both would constitute a default under the provisions of, any
Contract, the termination or violation of which might have a
materially adverse effect upon the business, assets, liabilities,
condition (financial or otherwise), results of operations or prospects
of Consolidated Capital or any Consolidated Entity. True and complete
copies of all Contracts, together with all amendments thereto,
disclosed in Schedule 2.1(o) have been delivered to Angeles
Acquisition or made available for inspection. Schedule 2.1(o)
identifies all Contracts which require the consent or approval of
third parties to the execution and delivery of this Agreement or to
the consummation and performance of the transactions contemplated
hereby.
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<PAGE> 9
(p) BENEFIT PLANS. Schedule 2.1(p) hereto lists all employee
benefit plans, contracts, agreements or arrangements sponsored,
maintained or contributed to by Consolidated Capital or any
Consolidated Entity (collectively, the "Consolidated Capital Employee
Benefit Plans"). Neither Consolidated Capital nor any Consolidated
Entity has incurred any obligation to contribute any material amount
to any multi-employer plan, as defined in Section 3(37) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA");
neither Consolidated Capital nor any Consolidated Entity has incurred
any material liability under Title IV of ERISA arising in connection
with the termination of, or complete or partial withdrawal from, any
plan covered or previously covered by Title IV of ERISA, and each
Consolidated Capital Employee Benefit Plan is in compliance with all
applicable laws and regulations in all material respects.
(q) LICENSES, PERMITS; INTELLECTUAL PROPERTY (i) Consolidated
Capital and each Consolidated Entity own or possess in the operation
of their business all material franchises, licenses, permits,
consents, approvals, rights, waivers and other authorizations,
governmental or otherwise ("Authorization"), which are necessary for
them to conduct their business as now conducted. Neither Consolidated
Capital nor any Consolidated Entity is in material default, or has
received any notice of any claim of default, with respect to any such
Authorization or any notice of any other claim or proceeding or
threatened proceeding relating to any such Authorization or claimed
lack of any necessary Authorization. Except as described in Schedule
2.1(q), neither the execution or delivery of this Agreement nor the
consummation of the transactions contemplated hereby will require any
notice or consent under or have any material adverse effect upon any
such Authorization.
(ii) Consolidated Capital does not hold or use any patents or use any
trade names, trademarks, servicemarks.
(r) ENVIRONMENTAL MATTERS. To the knowledge of Consolidated
Capital:
(i) Except as set forth on Schedule 2.1(r), Consolidated Capital
and the Consolidated Entities are in compliance with all Environmental
Laws (as defined below);
(ii) Except as set forth on Schedule 2.1(r), Consolidated Capital
has no knowledge of an existing or potential Environmental Claim (as
defined below), nor has Consolidated Capital or any Consolidated
Entity received any notification or knowledge of alleged, actual or
potential responsibility for, or any inquiry or investigation
regarding, any disposal, release, or threatened release at any
location of any Hazardous Substance (as defined below) stored,
generated or transported by Consolidated Capital or any Consolidated
Entity.
(iii) Except as set forth on Schedule 2.1(r), (x) no underground
tank or other underground storage receptacle for Hazardous Substances
has leaked from any underground tank or related piping at any time;
and (y) there have been no releases of
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<PAGE> 10
Hazardous Substances by Consolidated Capital or any Consolidated
Entity on, upon or into any properties of Consolidated Capital or any
Consolidated Entity.
(iv) Except as set forth on Schedule 2.1(r), there are no PCBs or
asbestos located at or on any owned or leased property of Consolidated
Capital or any Consolidated Entity.
(v) No environmental lien has attached to any real property owned
or leased by Consolidated Capital or any Consolidated Entity.
(vi) Definitions. For purposes of this Agreement, "Environmental
Laws" shall mean all federal, state, district, local, and foreign
laws, all rules or regulations promulgated thereunder, and all orders,
consent orders, judgments, notices, permits, or demand letters issued,
promulgated, or entered pursuant thereto, relating to pollution or
protection of the environment (including without limitation ambient
air, surface water, ground water, land surface, or subsurface strata),
including without limitation (x) laws relating to emissions,
discharges, releases, or threatened releases of pollutants,
contaminants, chemicals, materials, wastes or other substances into
the environment and (y) laws relating to the identification,
generation, manufacture, processing, distribution, use, treatment,
storage, disposal, recovery, transport, or other handling of
pollutants, contaminants, chemicals, industrial materials, wastes, or
other substances.
For purposes of this Agreement, "Environmental Claims" shall mean all
accusations, allegations, notice of violations, liens, claims,
demands, suits, or causes of action or any damage, including without
limitation, personal injury, property damage (including any
depreciation of property values), lost use of property, or
consequential damages, arising directly or indirectly out of
Environmental Conditions or Environmental Laws.
For purposes of this Agreement, "Environmental Conditions" shall mean
the state of the environment, including natural resources (e.g., flora
and fauna), soil, surface water, ground water, any present or
potential drinking water supply, subsurface strata, or ambient air,
relating to or arising out of the use, handling, storage, treatment,
recycling, generation, transportation, release, spilling, leaking,
pumping, pouring, emptying, discharging, injecting, escaping,
leaching, disposal, dumping, or threatened release of Hazardous
Substances by any Consolidated Entity or its predecessors or such
predecessors in interest, agents, representatives, employees, or
independent contractors.
For purposes of this Agreement, "Hazardous Substances" shall mean all
pollutants, contaminants, chemicals, wastes, and any other
carcinogenic, ignitable, corrosive, reactive, toxic, or otherwise
hazardous substances or materials (whether solids, liquids or gases),
including but not limited to any substances, materials, or wastes
subject to regulation, control, or remediation under Environmental
Laws.
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<PAGE> 11
(s) INTERIM OPERATIONS OF CONSOLIDATED ACQUISITION Consolidated
Acquisition has engaged in no other business activities and has
conducted its operations only as contemplated hereby.
(t) TRANSACTIONS AND AFFILIATES. Except as described in Schedule
2.1(t) or the Consolidated Capital SEC Documents, no director or
officer of Consolidated Capital or any member of his or her immediate
family, is a party to any Contract or other business arrangement or
relationship of any kind with Consolidated Capital or any Consolidated
Entity or, except for the ownership of not more than 1% of the stock
of a company having a class of securities registered pursuant to the
Exchange Act, has an ownership interest in any business, corporate or
otherwise, which is a party to, or in any property which is the
subject of, business arrangements or relationships of any kind with
Consolidated Capital or any Consolidated Entity.
(u) BROKERAGE. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection
with the Merger based upon arrangements made by or on behalf of
Consolidated Capital or Consolidated Acquisition.
2.2 REPRESENTATIONS AND WARRANTIES OF ANGELES ACQUISITION.
Angeles Acquisition and Stone Pine represent and warrant to Consolidated
Capital and Consolidated Acquisition as follows:
(a) ORGANIZATION, STANDING AND POWER. (i) Angeles Acquisition is
a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, has all requisite power and
authority to own, lease and operate its properties and to carry on its
business as now being conducted, and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification necessary other than in such jurisdiction where the
failure so to qualify would not have a material adverse effect on
Angeles Acquisition and the Angeles Entities (as hereinafter defined)
taken as a whole.
(ii) Schedule 2.2(a) hereto lists each of the direct and indirect
subsidiaries of Angeles Acquisition and each association, partnership,
joint venture, limited liability company or other entity in which
Angeles Acquisition has an interest, either of record, beneficially or
equitably, including Angeles Metal Trim, along with a description of
the interest held by Angeles Acquisition in such entity (individually,
an "Angeles Entity" and together, the "Angeles Entities"). All shares
of capital stock or ownership interests of each Angeles Entity held by
Angeles Acquisition or another Angeles Entity have been duly
authorized, are fully paid and nonassessable, and, are lawfully owned
of record and beneficially by Angeles Acquisition or another Angeles
Entity free and clear of all pledges, liens, claims, security
interests and other charges or defects in title of any nature
whatsoever.
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<PAGE> 12
(iii) Each Angeles Entity is duly organized, validly existing, in
good standing and qualified to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties makes such qualification necessary other than in such
jurisdictions where the failure so to qualify would not have a
material adverse effect on Angeles Acquisition and the Angeles
Entities taken as a whole.
(b) CAPITAL STRUCTURE. The authorized capital stock of Angeles
Acquisition consists of 2,500 shares of Common Stock, no par value.
As of the close of business on December 31, 1996, 100 shares of
Angeles Acquisition Common Stock were outstanding and no shares of
Angeles Common Stock were held by Angeles Acquisition in treasury.
All outstanding shares of Angeles Acquisition Common Stock are validly
issued, fully paid and nonassessable and not subject to preemptive
rights or other restrictions on transfer. All of the issued and
outstanding shares of Angeles Acquisition Common Stock were issued in
compliance with all Federal and State Securities Laws. There are no
options, warrants, calls, agreements or other rights to purchase or
otherwise acquire from Angeles Acquisition at any time, or upon the
happening of any stated event, any shares of the capital stock of
Angeles Acquisition or any Angeles Entity, whether or not presently
issued or outstanding.
(c) CERTIFICATE OF INCORPORATION, BY-LAWS, AND MINUTE BOOKS. The
copies of the Certificate of Incorporation and of the By-Laws of
Angeles Acquisition and each Angeles Entity which have been delivered
to Consolidated Capital are true, correct and complete copies thereof.
The minute books of Angeles Acquisition and each Angeles Entity which
have been made available for inspection contain accurate minutes of
all meetings and accurate consents in lieu of meetings of the Board of
Directors (and any committee thereof) and of the shareholders of
Angeles Acquisition and each Angeles Entity since the respective dates
of incorporation and accurately reflect all transactions referred to
in such minutes and consents in lieu of meetings.
(d) AUTHORITY. (i) Angeles Acquisition has all requisite power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by the Board of Directors and sole
shareholder of Angeles Acquisition, and no other corporate or
shareholder proceedings on the part of Angeles Acquisition are
necessary to authorize the Merger and the other transactions
contemplated hereby. This Agreement has been duly executed and
delivered by Angeles Acquisition and constitutes a valid and binding
obligation of Angeles Acquisition enforceable in accordance with its
terms.
(ii) Stone Pine has all requisite power and authority to enter into
this Agreement and this Agreement constitutes a valid and binding
obligation of Stone Pine enforceable in accordance with its terms.
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<PAGE> 13
(e) CONFLICT WITH AGREEMENTS; APPROVALS. The execution and
delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, conflict with, or result in
any Violation pursuant to any provision of the Certificate of
Incorporation or By-laws of Angeles Acquisition or any Angeles Entity
or, except as set forth on Schedule 2.2(e) hereto, 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 Angeles
Acquisition or any Angeles Entity or their respective properties or
assets which Violation would have a material adverse effect on Angeles
Acquisition and the Angeles Entities taken as a whole. Except as set
forth on Schedule 2.2(e) hereto, no consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Angeles
Acquisition or any Angeles Entity in connection with the execution and
delivery of this Agreement by Angeles Acquisition or the consummation
by Angeles Acquisition of the transactions contemplated hereby, the
failure to obtain which would have a material adverse effect on
Angeles Acquisition and the Angeles Entities taken as a whole except
for the filing of Certificates of Merger with the Secretary of State
of Delaware and the Secretary of State of Colorado.
(f) FINANCIAL STATEMENTS. Angeles Acquisition has furnished
Consolidated Capital with reviewed consolidated balance sheets of
Angeles Metal Trim as at December 31, 1995 (the "Angeles Metal 1995
Financials"), December 31, 1994, and December 31, 1993, respectively,
and the related statements of income and cash flows for the periods
then ended, accompanied by the report of Grant Thorton, along with an
unaudited balance sheet of Angeles Metal Trim as of November 30, 1996,
and the related unaudited statements of income and cash flows for the
period then ended (the "Angeles Metal Interim Financial Statements").
The Angeles Metal 1995 Financials including the footnotes thereto,
except as indicated therein, have been prepared as set forth in the
report of the auditors which is a part of the same. The Angeles Metal
Financials as of December 31, 1995, 1994 and 1993 and the Angels Metal
Interim Financial Statements are substantially complete and correct in
all material respects and fairly present in all material respects the
financial condition and results of the operations of Angeles Metal and
the changes in its financial position at such dates and for such
periods and show all material liabilities absolute or contingent of
Angeles Metal. Notwithstanding anything in this Agreement to the
contrary, Angeles Acquisition makes no representations or warranties
to Consolidated Capital as to the adequacy or sufficiency of any
reserves set forth in the Angeles Metal 1995 Financials.
(g) BOOKS AND RECORDS. Angeles Acquisition has made and will make
available for inspection by Consolidated Capital upon reasonable
request all the books of account, relating to the business of the
Angeles Entities. Such books of account of the Angeles Entities have
been maintained in the ordinary course of business. All documents
furnished or caused to be furnished to Consolidated Capital by Angeles
Acquisition are
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<PAGE> 14
true and correct copies, and there are no amendments or modifications
thereto except as set forth in such documents.
(h) COMPLIANCE WITH LAWS. Angeles Acquisition and the Angeles
Entities are and have been in compliance in all material respects with
all laws, regulations, rules, orders, judgments, decrees and other
requirements and policies imposed by any Governmental Entity
applicable to it, its properties or the operation of its businesses.
(i) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Angeles Metal 1995 Financials or except as contemplated by this
Agreement, the Angeles Metal Trim Purchase Agreement (as herein
defined) or as set forth on Schedule 2.2(i), since the date of the
Angeles Metal 1995 Financials, Angeles Metal has conducted its
business only in the ordinary course, and, as of the date of this
Agreement, there has not been (i) any material adverse change, alone
or in the aggregate, in the business, assets, liabilities, condition
(financial or otherwise), results of operations or prospects; or (ii)
any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any
of Angeles Metal's capital stock.
(j) ACCOUNTS RECEIVABLE. The accounts receivable appearing on the
Angeles Metal Interim Balance Sheet and all accounts receivable
created since that date represent valid obligations (subject to the
effects of bankruptcy, insolvency, reorganization or other similar
laws affecting the rights of creditors generally) owing to Angeles
Metal, subject to the reserve for doubtful accounts appearing on the
Angeles Metal Interim Balance Sheet which reserve may be adjusted for
the passage of time through the Effective Time in accordance with the
past custom and practice of Angeles Metal.
(k) INVENTORY. The values at which the inventories of Angeles
Metal Trim and CBS as shown on the Angeles Metal Interim Financial
Statements have been determined in accordance with the normal
valuation policy of Angeles Metal Trim and CBS, consistently applied.
All inventory of each of Angeles Metal Trim and CBS, whether reflected
in the Angeles Metal Interim Financial Statements or otherwise,
consists of a quality and quantity usable and saleable in the ordinary
course of business except for items of obsolete materials and
materials of below standard quality, all of which have been written
down in the Angeles Metal Interim Financial Statements to realizable
market value or for which reasonably adequate reserves have been
provided therein. Except as specifically indicated in the Angeles
Metal Interim Financial Statements, the present quantities of all
inventory of the Angeles Metal Trim and CBS are reasonable and
warranted in the present circumstances of the business of the Angeles
Metal Trim and CBS.
(l) LIABILITIES AND OBLIGATIONS. None of Angeles Acquisition or
the Angeles Entities have any material liabilities or obligations
(absolute, accrued, contingent or otherwise) except (i) those
liabilities incurred in connection with the transaction contemplated
by the Angeles Metal Trim Purchase Agreement, (ii) liabilities that
are reflected and reserved
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<PAGE> 15
against on the Angeles Metal Interim Financial Statements that have
not been paid or discharged since the date thereof and (iii)
liabilities incurred since November 30, 1996 in the ordinary course of
business consistent with past practice and in accordance with this
Agreement.
(m) LITIGATION. Except as described in Schedule 2.2(m), there is
no suit, action or proceeding pending, or, to the knowledge of Angeles
Acquisition, threatened against or affecting Angeles Acquisition or
any Angeles Entity which is reasonably likely to have a material
adverse effect on Angeles Acquisition or any Angeles Entity, nor is
there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Angeles
Acquisition or any Angeles Entity having, or which, insofar as
reasonably can be foreseen, in the future could have, any such effect.
(n) TAXES. Each of the Angeles Entities has filed or will file
within the time prescribed by law (including extension of time
approved by the appropriate taxing authority) all tax returns and
reports required to be filed with the United States Internal Revenue
Service and with all other jurisdictions where such filing is required
by law; and the Angeles Entities have paid, or have made adequate
provision in the Angeles Metal Interim Financial Statements for the
payment of all taxes, interest, penalties, assessments or deficiencies
due and payable on, and with respect to all periods ending prior to
September 30, 1996. Angeles Acquisition knows of (i) no other tax
returns or reports which are required to be filed which have not been
so filed and (ii) no unpaid assessment for additional taxes for any
fiscal period or any basis therefor.
(o) ASSETS. Except as described in Schedule 2.2(o), the Angeles
Entities have good and marketable title to all their real and personal
properties and assets reflected in the Angeles Metal Interim Financial
Statements free and clear of all mortgages, liens, pledges, charges or
encumbrances or other third party interests of any nature whatsoever,
except (i) the lien of current taxes not yet due and payable, (ii)
properties, interests, and assets disposed of by Angeles Metal Trim or
any Angeles Entity since November 30, 1996 solely in the ordinary
course of business consistent with past practice and (iii) such
imperfections of title, easements and encumbrances, if any, as are not
substantial in character, amount or extent and do not materially
detract from the value, or interfere with the present or proposed use,
of the properties subject thereto.
(p) CONTRACTS. All Contracts, excluding purchase or sales orders
placed in the ordinary course of business and other Contracts
involving payments of less than $10,000 over the term thereof, to
which Angeles Acquisition or any Angeles Entity is a party or may be
bound and which cannot be terminated by Angeles Acquisition or any
Angeles Entity without penalty within 30 days after written notice are
listed on Schedule 2.2(p). Except as described in Schedule 2.2(p)
hereto, all Contracts are valid and in full force and effect on the
date hereof, and neither Angeles Acquisition nor any Angeles Entity
has violated any provision of, or committed or failed to perform any
act which with notice, lapse of time or both would constitute a
default under the provisions of, any Contract, the
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termination or violation of which might have a materially adverse
effect upon the business, assets, liabilities, condition (financial or
otherwise), results of operations or prospects of Angeles Acquisition
or any Angeles Entity. True and complete copies of all Contracts,
together with all amendments thereto, disclosed in Schedule 2.2(p)
have been delivered to Consolidated Capital or made available for
inspection. Schedule 2.2(p) identifies all Contracts which require the
consent or approval of third parties to the execution and delivery of
this Agreement or to the consummation and performance of the
transactions contemplated hereby.
(q) BENEFIT PLANS. Schedule 2.2(q) hereto lists all employee
benefit plans, contracts, agreements or arrangements sponsored,
maintained or contributed to by any Angeles Entity (collectively, the
"Angeles Employee Benefit Plans"). Neither Angeles nor any Angeles
Entity has incurred any obligation to contribute any material amount
to any multi-employer plan, as defined in Section 3(37) of ERISA;
neither Angeles nor any Angeles Entity has incurred any material
liability under Title IV of ERISA arising in connection with the
termination of, or complete or partial withdrawal from, any plan
covered or previously covered by Title IV of ERISA, and each Angeles
Employee Benefit Plan is in compliance with all applicable laws and
regulations in all material respects.
(r) LICENSES, PERMITS; INTELLECTUAL PROPERTY. Angeles
Acquisition and each Angeles Entity owns or possesses in the operation
of their business all material Authorizations which are necessary for
them to conduct their business as now conducted. Neither Angeles
Acquisition nor any Angeles Entity is in material default, or has
received any notice of any claim of default, with respect to any such
Authorization or any notice of any other claim or proceeding or
threatened proceeding relating to any such Authorization or claimed
lack of any necessary Authorization. Except as described in Schedule
2.2(r), neither the execution or delivery of this Agreement nor the
consummation of the transactions contemplated hereby will require any
notice or consent under or have any material adverse effect upon any
such Authorization.
(ii) Set forth in Schedule 2.2(r) is a list of the material
domestic and foreign patents, patent applications, patent licenses,
software, corporate or other names, trade names, trademarks, service
marks, trademark registrations and applications, service mark
registrations and applications, copyright registrations and
applications licensed or owned by the Angeles Entities, (collectively
the "Intellectual Property"). Schedule 2.2(r) sets forth any
Intellectual Property licenses from the Angeles Entities to third
parties. Except for the trade names "Gripper," "Stitcher" and
"Driller", which one Douglas Cable has the right to use, unless
otherwise indicated in Schedule 2.2(r), the Angeles Entities own the
entire right, title and interest in and to the Intellectual Property
and each item constituting part of the Intellectual Property has been,
to the extent indicated in Schedule 2.2(r), duly registered with,
filed in or issued by, as the case may be, the United States Patent
and Trademark Office or such other government entity, domestic or
foreign, as is indicated in Schedule 2.2(r) and, to the knowledge of
Angeles Acquisition, such registrations, filings and issuances remain
in full force and effect and there are no pending proceedings
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<PAGE> 17
or litigation or other adverse claims made in writing affecting or
with respect to the Intellectual Property.
(s) ENVIRONMENTAL MATTERS. To the knowledge of Angeles Acquisition
Co.:
(i) All underground storage tanks have been removed from the
premises leased to an Angeles Entity by D.K. Cable (the "Cable
Premises").
(ii) No Angeles Entity has received any actual written notification
of any investigation regarding any disposal, release or threatened
release at any of the Cable Premises of any Hazardous Substances
stored, generated or transported by the Angeles Entities.
(iii) The Angeles Entities in the ordinary course of their business
utilize petroleum products and generate waste water in the
manufacturing process at the Cable Premises in accordance with
applicable governmental permits issued therefore.
(iv) Except as set forth on Schedule 2.2(s), there are no PCBs or
asbestos located at or on the Premises or any other owned or leased
property of the Angeles Entities.
(v) No environmental lien has attached to any real property owned
or leased the Angeles Entities.
(t) REAL PROPERTY. (i) Schedule 2.2(t) constitutes a true and
complete list of all real property owned or leased by any Angeles
Entity or to which any Angeles Entity may have any ownership or
leasehold rights (the "Premises"). With respect to the Premises, all
appurtenant rights, privileges and easements belonging or appertaining
thereto and all buildings, structures and improvements thereon:
(w) except for the matter set forth on Schedule 2.2(t)
hereto, no person, firm or corporation other than any Angeles Entity
has any rights, (including rights arising under an installment
contract, option to purchase, easement, right of way, or otherwise)
with respect to the Premises or any part or parts thereof;
(x) except for the matter set forth on Schedule 2.2(t)
hereto, no person, firm or corporation other than any Angeles Entity
has any rights, (including rights arising under an installment
contract, option to purchase, easement, right of way, or otherwise)
with respect to the Premises or any part or parts thereof;
(y) each of the buildings and other improvements constituting
part of the Premises is of reasonably sound structural integrity and
is able and adequate for its intended purpose and to conduct Angeles
Business as it is now being conducted; and
(z) the present zoning for the City of Commerce property is
C-M.
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(ii) Schedule 2.2(t) contains a list of all real property leases to
which any Angeles Entity is a party (the "Scheduled Leases"). The
Scheduled Leases are (x) in full force and effect and no Angeles
Entity has received any notice of default and does not possess any
knowledge of or notice of a material event, occurrence, condition or
act (including the entering into of this Agreement) which, with the
giving of notice, the lapse of time or the happening of any further
event or condition, would become a default by the Angeles Entity
pursuant to the terms of the Scheduled Leases; and (y) all rents and
additional rents due to date on each Scheduled Lease have been paid.
To the knowledge of Angeles Acquisition, the property subject to the
Scheduled Leases are not subject to any immediate eminent domain
proceeding.
(iii) There are no restrictions respecting availability of public
utilities, including, but not limited to, sewer, gas and electricity
and the Premises are served by all such utilities; all payments,
assessments, deposits and other charges relating to such utilities and
any other existing on-site improvements (including public or
quasi-public utilities or services) have been paid in full to the
extent the are due.
(u) INTERIM OPERATIONS OF ANGELES ACQUISITION Angeles Acquisition
was formed solely for the purpose of engaging in the transactions
contemplated hereby, has engaged in no other business activities and
has conducted its operations only as contemplated hereby.
(v) TRANSACTIONS AND AFFILIATES. Except as described in Schedule
2.2(v), no director or officer of Angeles Acquisition or any Angeles
Entity or any member of his or her immediate family, is a party to any
Contract or other business arrangement or relationship of any kind
with Angeles Acquisition or any Angeles Entity or, except for the
ownership of not more than 1% of the stock of a company having a class
of securities registered pursuant to the Exchange Act, has an
ownership interest in any business, corporate or otherwise, which is a
party to, or in any property which is the subject of, business
arrangements or relationships of any kind with any Angeles Acquisition
or Angeles Entity.
(w) BROKERS. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection
with the Merger based upon arrangements made by or on behalf of any
Angeles Entity.
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ARTICLE III
COVENANTS RELATING TO CONDUCT OF BUSINESS
3.1 COVENANTS OF ANGELES ACQUISITION AND CONSOLIDATED CAPITAL.
During the period from the date of this Agreement and continuing until the
Effective Time, Angeles Acquisition and Consolidated Capital each agree as to
itself and its related entities and subsidiaries that (except as expressly
contemplated or permitted by this Agreement, or to the extent that the other
party shall otherwise consent in writing):
(a) ORDINARY COURSE. Each party and their respective entities and
subsidiaries shall carry on their respective businesses in the usual,
regular and ordinary course in substantially the same manner as
heretofore conducted; provided, however, prior to the Closing, the
Management Shareholders shall acquire from Consolidated Capital
certain assets (the "Transferred Assets") and assume all of the
liabilities (the "PreClosing Liabilities") of Consolidated Capital on
the terms set forth in the Asset Purchase Agreement attached hereto as
Exhibit A and incorporated herein by reference (the "Asset
Agreement").
(b) DIVIDENDS; CHANGES IN STOCK. No party shall, nor shall any
party permit any of its subsidiaries to, nor shall any party propose
to, (i) declare or pay any dividends on or make other distributions in
respect of any of its capital stock, (ii) split, combine or reclassify
any of its capital stock or issue or authorize or propose the issuance
of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (iii) repurchase or otherwise
acquire, or permit any subsidiary to purchase or otherwise acquire,
any shares of its capital stock.
(c) ISSUANCE OF SECURITIES. No party shall, nor shall any party
permit any of its subsidiaries to, issue, deliver or sell, or
authorize or propose the issuance, delivery or sale of, any shares of
its capital stock of any class, any voting debt or any securities
convertible into, or any rights, warrants or options to acquire, any
such shares, voting debt or convertible securities.
(d) GOVERNING DOCUMENTS. No party shall amend or propose to amend
its Certificate of Incorporation or By-laws.
(e) NO SOLICITATIONS. No party shall, nor shall any party permit
any of its related entities or subsidiaries to, nor shall it authorize
or permit any of its officers, directors or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its related entities or
subsidiaries to, solicit or encourage (including by way of furnishing
information), or take any other action to facilitate, any inquiries or
the making of any proposal which constitutes, or may reasonably be
expected to lead to, any takeover proposal, or agree to or endorse any
takeover proposal. Each party shall promptly advise the other orally
and in writing of
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any such inquiries or proposals. As used in this Agreement, "takeover
proposal" shall mean any tender or exchange offer, proposal for a
merger, consolidation or other business combination involving a party
hereto or any related entity or subsidiary of such party or any
proposal or offer to acquire in any manner a substantial equity
interest in, or a substantial portion of the assets of, such party or
related entity or any of its subsidiaries other than the transactions
contemplated by this Agreement.
(f) NO ACQUISITIONS. No party shall, nor shall any party permit
any of its related entities or subsidiaries to, acquire or agree to
acquire by merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial portion of the assets
of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets in each
case which are material, individually or in the aggregate, to such
party and related entities and its subsidiaries taken as a whole.
(g) NO DISPOSITIONS. Except for the transfer of assets pursuant
to the Asset Agreement or in the ordinary course of business
consistent with prior practice, no party shall, nor shall any party
permit any of its related entities or subsidiaries to, sell, lease,
encumber or otherwise dispose of, or agree to sell, lease, encumber or
otherwise dispose of, any of its assets, which are material,
individually or in the aggregate, to such party, its related entities
and its subsidiaries taken as a whole.
(h) INDEBTEDNESS. No party shall, nor shall any party permit any
of its related entities or subsidiaries to, incur any indebtedness for
borrowed money or guarantee any such indebtedness or issue or sell any
debt securities or warrants or rights to acquire any debt securities
of such party or related entities or any of its subsidiaries or
guarantee any debt securities of others other than in each case in the
ordinary course of business consistent with prior practice.
(i) COMPENSATION. No party shall grant any increase in the salary
or other compensation of its officers or other employees or grant any
bonus to any officer or other employee or enter into any employment
agreement or make any loan to or enter into any material transaction
of any other nature with any officer or other employee of such party.
(j) NO NEW SEVERANCE. No party shall take any action to institute
any new severance or termination pay practices with respect to any
directors or officers or other employees of such party or to increase
the benefits payable under its severance or termination pay practices.
(k) BENEFIT PLANS. No party shall adopt or amend, in any respect,
except as may be required by applicable law or regulation, any bonus,
profit sharing, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment or other employee
benefit plan, agreement, trust, fund, plan or arrangement for the
benefit or
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welfare of any directors or officers or other employees except as
otherwise contemplated by this Agreement.
3.2 OTHER ACTIONS. No party shall, nor shall any party permit any
of its related entities subsidiaries to, take any action that would or is
reasonably likely to result in any of its representations and warranties set
forth in this Agreement being untrue as of the date made (to the extent so
limited), or in any of the conditions to the Merger set forth in Article V not
being satisfied. The parties hereto acknowledge and agree that certain
representations and warranties set forth in Section 2.1 of this Agreement shall
not be true as a result of and upon the consummation of the transactions
contemplated by the Asset Agreement and such effect shall not constitute a
breach of such representations and warranties.
3.3 ADVICE OF CHANGES; FILINGS. Each party shall confer on a regular
and frequent basis with the other, report on operational matters and promptly
advise the other orally and in writing of any change or event having, or which,
insofar as can reasonably be foreseen, could have, a material adverse effect on
such party and its related entities and subsidiaries taken as a whole. Each
party shall promptly provide the other (or its counsel) copies of all filings
made by such party with any State or Federal Governmental Entity in connection
with this Agreement and the transactions contemplated hereby and thereby.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 PURCHASE OF STOCK. On the Closing Date, Angeles Acquisition
shall acquire from the Management Shareholders or other shareholder of
Consolidated Capital an aggregate of 145,000 shares of Consolidated Capital
Common Stock and within 90 days of the Closing, 55,000 shares of Consolidated
Capital Stock, for an aggregate purchase price of $80,000 on the terms set
forth in the Stock Purchase Agreement attached hereto as Exhibit B. The
consummation of the stock purchase of the initial 145,000 shares shall be
conditioned on such shares being freely transferable by Angeles Acquisition
under the Securities Act and any applicable state securities laws and the
consummation of the Merger.
4.2 RESTRICTED CONSOLIDATED CAPITAL SHARES; REGISTRATION RIGHTS.
(a) The Merger Shares will not be registered under the Securities Act, and
accordingly, will constitute "restricted securities" for purposes of the
Securities Act and the Angeles Acquisition shareholder will not be able to
transfer such Merger Shares except upon compliance with the registration
requirements of the Securities Act and applicable state securities laws or an
exemption therefrom. The certificates evidencing the Merger Shares shall
contain a legend to the foregoing effect and Stone Pine shall deliver at
Closing an Investment Letter in substantially the form of Exhibit C hereto
acknowledging the fact that the Merger Shares are restricted securities and
agreeing to the foregoing transfer restrictions.
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(b) Consolidated Capital, shall upon the demand of any holder of
the Merger Shares, file a registration statement with the SEC to
permit the sale of the Merger Shares by the holders of such shares
from time to time. The holders of the Merger Shares shall also have
"piggyback" registration rights.
4.3 ACCESS TO INFORMATION. Upon reasonable notice, Consolidated
Capital and Angeles Acquisition shall each afford to the officers, employees,
accountants, counsel and other representatives of the other, access, during
normal business hours during the period prior to the Effective Time, to all its
properties, books, contracts, commitments and records and, during such period,
each of Consolidated Capital and Angeles Acquisition shall furnish promptly to
the other (a) a copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to the
requirements of Federal or state securities laws and (b) all other information
concerning its business, properties and personnel as such other party may
reasonably request. Unless otherwise required by law, the parties will hold
any such information which is nonpublic in confidence until such time as such
information otherwise becomes publicly available through no wrongful act of
either party, and in the event of termination of this Agreement for any reason
each party shall promptly return all nonpublic documents obtained from any
other party, and any copies made of such documents, to such other party.
4.4 LEGAL CONDITIONS TO MERGER. Each of Consolidated Capital,
Consolidated Acquisition and Angeles Acquisition will take all reasonable
actions necessary to comply promptly with all legal requirements which may be
imposed on itself with respect to the Merger and will promptly cooperate with
and furnish information to each other in connection with any such requirements
imposed upon any of them or any of their related entities or subsidiaries in
connection with the Merger. Each of Consolidated Capital, Consolidated
Acquisition and Angeles Acquisition will, and will cause its related entities
or subsidiaries to, take all reasonable actions necessary to obtain (and will
cooperate with each other in obtaining) any consent, authorization, order or
approval of, or any exemption by, any Governmental Entity or other public or
private third party, required to be obtained or made by Consolidated Capital,
Angeles Acquisition or any of their related entities or subsidiaries in
connection with the Merger or the taking of any action contemplated thereby or
by this Agreement.
4.5 STOCK OPTIONS. At the Effective Time, each outstanding option
to purchase shares of Consolidated Capital, whether vested or unvested, shall
be cancelled.
4.6 CONSOLIDATED CAPITAL BOARD OF DIRECTORS AND OFFICERS. All of
the directors of Consolidated Capital shall resign as directors of Consolidated
Capital as of the Closing Date and the following persons shall be appointed as
directors of Consolidated Capital as of such date: Thompson H. Rogers, J. Paul
Bagley, III and L. Wayne Harber
4.7 EXPENSES. Subject to Section 6.2 and 7.2, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expense.
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4.8 SUBSEQUENT SEC FILINGS. After the Closing Date, the following
documents shall be filed by Consolidated Capital with the SEC and/or the
National Association of Securities Dealers, Inc.:
(a) Within seventy-five (75) days following the Closing Date,
Consolidated Capital shall file under cover of Form 8-K, audited
financial statements of Angeles Metal Trim, proforma financial
information and other disclosures as required by Form 8-K of the
Exchange Act and Regulation S-B of the 1933 Act;
(b) Consolidated Capital will make its reasonable best efforts to
comply with the initial listing requirements imposed by the Nasdaq
Stock Market and, provided that Consolidated Capital meets such
criteria (of which there can be no assurance) or believes in its sole
discretion that an exception from one or more criteria is likely,
Consolidated Capital shall file within ninety (90) days of the Closing
Date an application for listing of its Common Stock on the Nasdaq
Small Cap Market, pay the applicable fees, and file such other
documents which may be requested by Nasdaq and use its best efforts to
obtain such listing;
(c) Consolidated Capital shall cause to be filed such other
reports as may be required to be filed with the SEC or the Nasdaq by
Sections 13 or 15(d) of the Exchange Act or necessary to maintain
listing of the Common Stock on Nasdaq.
4.9 ANGELES METAL TRIM PURCHASE AGREEMENT. The parties hereto
acknowledge and agree that Angeles Acquisition acquired the shares of Angeles
Metal Trim pursuant to a Stock Purchase Agreement with the prior stockholders
of Angeles Metal Trim (the "Angeles Metal Trim Purchase Agreement") which
agreement provides for certain rights of Angeles Acquisition. In the event
that there is a breach of any of the representations and warranties of the
Angeles Metal Trim stockholders contained in the Angeles Metal Trim Purchase
Agreement, Angeles Acquisition shall enforce against such Angeles Metal Trim
stockholders any rights of Angeles Acquisition contained in such Angeles Metal
Trim Purchase Agreement.
ARTICLE V
CONDITIONS PRECEDENT
5.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger shall be subject
to the satisfaction prior to the Closing Date of the following conditions:
(a) NECESSARY APPROVALS. All authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations of
waiting periods imposed by, any Governmental Entity the failure to
obtain which would have a material adverse effect on Consolidated
Capital and its subsidiaries and related entities, taken as a whole,
shall have been filed, occurred or been obtained. Consolidated
Capital shall have received all state
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securities or "Blue Sky" permits and other authorizations necessary to
issue the Merger Shares and to consummate the Merger.
(b) ASSET AGREEMENT. The Management Shareholders shall have
acquired certain assets of Consolidated Capital and assumed the
PreClosing Liabilities pursuant to the terms of the Asset Agreement
and as of the Effective Time Consolidated Capital shall have no
liabilities or obligations of any kind other than those arising from
this Agreement or the Merger.
5.2 CONDITIONS OF OBLIGATIONS OF CONSOLIDATED CAPITAL AND
CONSOLIDATED ACQUISITION. The obligations of Consolidated Capital and
Consolidated Acquisition to effect the Merger are subject to the satisfaction
of the following conditions unless waived by Consolidated Capital and
Consolidated Acquisition:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Angeles Acquisition set forth in this Agreement shall be
true and correct in all material respects as of the date of this
Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date as
though made on and as of the Closing Date, except as otherwise
contemplated by this Agreement, and Consolidated Capital shall have
received a certificate signed on behalf of Angeles Acquisition by the
President of Angeles Acquisition and the Manager of Stone Pine to such
effect.
(b) PERFORMANCE OF OBLIGATIONS OF ANGELES ACQUISITION. Angeles
Acquisition shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or
prior the Closing Date, and Consolidated Capital shall have received a
certificate signed on behalf of Angeles Acquisition by the President
to such effect.
(c) OPINION OF COUNSEL FOR ANGELES ACQUISITION. Consolidated
Capital shall have received an opinion dated the Closing Date of
Gallagher, Briody & Butler, counsel for Angeles Acquisition, in form
and substance reasonably satisfactory to Consolidated Capital and its
counsel relating to such matters as are customarily delivered in
connection with a merger transaction.
(d) CLOSING DOCUMENTS. Consolidated Capital shall have received
such certificates and other closing documents as counsel for
Consolidated Capital shall reasonably request.
(e) CONSENTS. Angeles Acquisition shall have obtained the consent
or approval of each person whose consent or approval shall be required
in connection with the transactions contemplated hereby under any loan
or credit agreement, note, mortgage, indenture, lease or other
agreement or instrument, except those for which failure to obtain such
consents and approvals would not, in the reasonable opinion of
Consolidated Capital, individually or in the aggregate, have a
material adverse effect on Angeles Acquisition
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and its subsidiaries and related entities taken as a whole upon the
consummation of the transactions contemplated hereby.
(f) BUSINESS REVIEW. Consolidated Capital shall have completed to
its reasonable satisfaction a review of the business, operations,
finances, assets and liabilities of Angeles Acquisition and the
Angeles Entities and shall not have determined that any of the
representations or warranties of Angeles Acquisition contained herein
are, as of the date hereof or the Closing Date, inaccurate in any
material respect or that Angeles Acquisition is otherwise in violation
of any of the provisions of this Agreement.
(g) PENDING LITIGATION. There shall not be any litigation or
other proceeding pending or threatened to restrain or invalidate the
transactions contemplated by this Agreement, which, in the sole
reasonable judgment of Consolidated Capital, made in good faith, would
make the consummation of the Merger imprudent. In addition, there
shall not be any other litigation or other proceeding pending or
threatened against Angeles Acquisition or any Angeles Entity, the
consequences of which, in the judgment of Consolidated Capital, could
be materially adverse to Angeles Acquisition, or any Angeles Entity.
5.3 CONDITIONS OF OBLIGATIONS OF ANGELES ACQUISITION. The
obligation of Angeles Acquisition to effect the Merger is subject to the
satisfaction of the following conditions unless waived by Angeles Acquisition:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Consolidated Capital set forth in this Agreement shall
be true and correct in all material respects as of the date of this
Agreement and (except to the extent such representations speak as of
an earlier date) as of the Closing Date as though made on and as of
the Closing Date, except as otherwise contemplated by Sections 3.1(a)
and 3.2 of this Agreement with respect to the Asset Agreement, and
Angeles Acquisition shall have received a certificate signed on behalf
of Consolidated Capital by the Chief Executive Officer to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF CONSOLIDATED CAPITAL AND
CONSOLIDATED ACQUISITION. Consolidated Capital and Consolidated
Acquisition shall have performed in all material respects all
obligations required to be performed by them under this Agreement at
or prior to the Closing Date, and Angeles Acquisition shall have
received a certificate signed on behalf of Consolidated Capital by the
Chief Executive Officer of Consolidated Capital to such effect.
(c) OPINION OF COUNSEL FOR CONSOLIDATED CAPITAL. Angeles
Acquisition shall have received an opinion dated the Closing Date of
Overton, Babiarz & Sykes, counsel for Consolidated Capital, in form
and substance reasonably satisfactory to Angeles Acquisition and its
counsel relating to (i) such matters as are customarily delivered in
connection with a merger transaction, (ii) that Consolidated Capital
is required to file reports, and has for a period of at least twelve
months prior to the Closing filed all
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material required to be filed, pursuant to Section 15(d) of the
Exchange Act and (iii) the transactions covered by the Asset Agreement
do not require the approval of the shareholders of Consolidated
Capital.
(d) CLOSING DOCUMENTS. Angeles Acquisition shall have received
such certificates and other closing documents as counsel for Angeles
Acquisition shall reasonably request.
(e) CONSENTS. Consolidated Capital shall have obtained the
consent or approval of each person whose consent or approval shall be
required in connection with the transactions contemplated hereby under
any loan or credit agreement, note, mortgage, indenture, lease or
other agreement or instrument, except those for which failure to
obtain such consents and approvals would not, in the reasonable
opinion of Angeles Acquisition, individually or in the aggregate, have
a material adverse effect on Consolidated Capital and its subsidiaries
and related entities, taken as a whole upon the consummation of the
transactions contemplated hereby.
(f) BUSINESS REVIEW. Angeles Acquisition shall have completed to
its reasonable satisfaction a review of the business, operations,
finances, assets and liabilities of Consolidated Capital and the
Consolidated Entities and shall not have determined that any of the
representations or warranties of Consolidated Capital contained herein
are, as of the date hereof or the Closing Date, inaccurate in any
material respect or that Consolidated Capital is otherwise in
violation of any of the provisions of this Agreement.
(g) PENDING LITIGATION. There shall not be any litigation or
other proceeding pending or threatened to restrain or invalidate the
transactions contemplated by this Agreement, which, in the sole
reasonable judgment of Angeles Acquisition, made in good faith, would
make the consummation of the Merger imprudent. In addition, there
shall not be any other litigation or other proceeding pending or
threatened against Consolidated Capital or any Consolidated Entity,
the consequences of which, in the judgment of Angeles Acquisition,
could be materially adverse to Consolidated Capital or any
Consolidated Entity.
(h) NO CONVERTIBLE SECURITIES OUTSTANDING. Consolidated Capital
shall have secured the cancellation, on terms and conditions
reasonably satisfactory to Angeles Acquisition, of all outstanding
stock options and no options, rights, convertible securities or other
instruments exercisable for equity securities of Consolidated Capital
shall be outstanding.
(i) RESIGNATION OF DIRECTORS. Each director of Consolidated
Capital shall have delivered his written resignation as a director of
Consolidated Capital effective as of the Closing Date of the Merger.
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ARTICLE VI
INDEMNIFICATION
6.1 INDEMNIFICATION OBLIGATIONS OF MANAGEMENT SHAREHOLDERS. From
and after the Effective Time the Management Shareholders jointly and severally,
shall reimburse, indemnify and hold harmless Consolidated Capital and Angeles
Acquisition and their directors, officers, shareholders, employees,
representatives and agents (each such person and its or his heirs, executors,
administrators, successors and assigns is referred to herein as an "Angeles
Indemnified Party") against and in respect of:
(a) Any and all damages, losses, settlement payments,
deficiencies, liabilities, costs, expenses and claims suffered,
sustained, incurred or required to be paid by any Angeles Indemnified
Party because of or that result from, relate to or arise out of:
(i) any asset of Consolidated Capital or any Assumed
Liability of Consolidated Capital which were transferred or
assumed by the Management Shareholders pursuant to the Asset
Agreement; or
(ii) the business, operations or assets of Consolidated
Capital or any Consolidated Entity prior to the Effective Time
or the actions or omissions of any officer, director,
shareholder, employee or agent of Consolidated Capital or any
Consolidated Entity prior to the Effective Time irrespective
of the date that any claim, suit or other cause of action
related to any of the foregoing is filed or otherwise
instituted against Consolidated Capital or any Angeles
Indemnified Party; and
(b) Any and all actions, suits, claims, or legal, administrative,
arbitration, governmental or other procedures or investigation against
any Angeles Indemnified Party that relate to the business, operations
or assets of Consolidated Capital or any Consolidated Entity in which
the event giving rise thereto occurred prior to the Effective Time or
which results from or arises out of any action or inaction prior to
the Effective Time of Consolidated Capital or any Consolidated Entity
or any director, officer, employee, agent, representative of
Consolidated Capital or any Consolidated Entity; and
(c) Any an all actions, suits, claims, proceedings,
investigations, allegations, demands, assessments, audits, fines,
judgments, costs and other expenses (including without limitation
reasonable legal fees and expenses) incident to any of the foregoing
or to the enforcement of this Section 6.1.
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6.2 INDEMNIFICATION OBLIGATIONS OF ANGELES ACQUISITION AND STONE
PINE. From and after the Effective Time Angles Acquisition and Stone Pine
jointly and severally shall reimburse, indemnify and hold harmless the
Management Shareholders and their representatives and agents (each such person
and its or his heirs, executors, administrators, successors and assigns is
referred to herein as a "Management Shareholder Indemnified Party") against and
in respect of:
(a) Any and all damages, losses, settlement payments,
deficiencies, liabilities, costs, expenses and claims suffered,
sustained, incurred or required to be paid by any Management
Shareholder Indemnified Party because of or that result from, relate
to or arise out of the business, operations or assets of Consolidated
Capital or any Consolidated Entity after the Effective Time or the
actions or omissions of any officer, director, shareholder, employee
or agent of Consolidated Capital or any Consolidated Entity after the
Effective Time; and
(b) Any and all actions, suits, claims, or legal, administrative,
arbitration, governmental or other procedures or investigation against
any Management Shareholder Indemnified Party that relate to the
business, operations or assets of Consolidated Capital or any
Consolidated Entity in which the event giving rise thereto occurred
after the Effective Time or which results from or arises out of any
action or inaction after the Effective Time of Consolidated Capital or
any Consolidated Entity or any director, officer, employee, agent,
representative of Consolidated Capital or any Consolidated Entity; and
(c) Any an all actions, suits, claims, proceedings,
investigations, allegations, demands, assessments, audits, fines,
judgments, costs and other expenses (including without limitation
reasonable legal fees and expenses) incident to any of the foregoing
or to the enforcement of this Section 6.2.
6.3 PAYMENT OF INDEMNIFICATION OBLIGATIONS. Each party agrees to
pay promptly to any other indemnified party the amount of all damages, losses,
settlement payments, deficiencies, liabilities, costs, expenses, claims and
other obligations to which the indemnity set forth in Section 6.1 or 6.2
relates. If all or part of any such obligation is not paid when due, then the
indemnifying party shall also pay the indemnified party interest on the unpaid
amount of the obligation for each day from the date the amount became due until
payment in full, payable on demand, at the fluctuating rate per annum which at
all times shall be four percentage points in excess of the "prime rate"
identified in The Wall Street Journal as the base rate on corporate loans at
large U.S. money center commercial banks.
6.4 OTHER REMEDIES. The indemnification rights of any indemnified
party under this Article VI are independent of and in addition to such rights
and remedies as such indemnified party may have at law, in equity or otherwise
for any misrepresentation, breach of warranty or failure to fulfill any
covenant or agreement under or in connection with this Agreement, including
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without limitation the right to seek specific performance, rescission or
restitution, none of which rights or remedies shall be affected or diminished
hereby.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time:
(a) by mutual consent of Consolidated Capital and Angeles
Acquisition;
(b) by either Consolidated Capital or Angeles Acquisition if there
has been a material breach of any representation, warranty, covenant
or agreement on the part of the other set forth in this Agreement
which breach has not been cured within 5 business days following
receipt by the breaching party of notice of such breach, or if any
permanent injunction or other order of a court or other competent
authority preventing the consummation of the Merger shall have become
final and non-appealable; or
(c) by either Consolidated Capital or Angeles Acquisition if the
Merger shall not have been consummated before January 30, 1997.
7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either Angeles Acquisition or Consolidated Capital as provided in
Section 7.1, this Agreement shall forthwith become void and there shall be no
liability or obligation on the part of any party hereto other than the
obligation of Consolidated Capital to refund to Angeles Acquisition, within
five days of such termination, $10,000 of the $20,000 which has been paid to
Consolidated Capital as earnest money. Except as provided in the foregoing
sentence, and Section 6.2, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses.
7.3 AMENDMENT. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
provided no amendment shall be made which by law requires approval by the
shareholders of any party without such further approval. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
7.4 EXTENSION; WAIVER. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in a written instrument signed on behalf of such
party.
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ARTICLE VIII
GENERAL PROVISIONS
8.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
None of the representations, warranties and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time, except for the agreements contained in Sections 4.2, 4.7, 4.8, 4.9, 6.1,
6.2, 6.3, 6.4, 7.2 and 8.1.
8.2 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(which is confirmed) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(a) If to Consolidated Capital, Consolidated Acquisition or any
Management Shareholder, to
Consolidated Capital of North America, Inc.
5525 Erindale Drive, Suite 201
Colorado Springs, CO 80918
Attention: Raymond E. McElhaney, President
Facsimile No.: 719-260-8516
with a copy to
Overton, Babiarz & Sykes, P.C.
7720 East Belleview, Suite 200
Englewood, CO 80111
Attention: David Babiarz, Esq.
Facsimile No.: 303-779-6006
and
(b) if to Angeles Acquisition or Stone Pine, to
Angeles Acquisition Corp.
c/o Stone Pine Atlantic, LLC
410 17th Street, Suite 400
Denver, CO 80202
Attention: Jeffrey R. Leach, President
Facsimile No.: 303-446-5922
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with a copy to
Gallagher, Briody & Butler
212 Carnegie Center, Suite 402
Princeton, NJ 08540
Attn: Thomas P. Gallagher, Esq.
Facsimile No.: 609-452-0090
8.3 INTERPRETATION. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". The phrase "made available" in this Agreement
shall mean that the information referred to has been made available if
requested by the party to whom such information is to be made available.
8.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each
of the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
8.5 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES; RIGHTS OF
OWNERSHIP. This Agreement (including the documents and the instruments
referred to herein) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the Consolidated Acquisition subject matter hereof, and is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
8.6 GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware without regard to
principles of conflicts of law. Each party hereby irrevocably submits to the
jurisdiction of any Colorado state court or any federal court in the State of
Colorado in respect of any suit, action or proceeding arising out of or
relating to this Agreement, and irrevocably accept for themselves and in
respect of their property, generally and unconditionally, the jurisdiction of
the aforesaid courts.
8.7 NO REMEDY IN CERTAIN CIRCUMSTANCES. Each party agrees that,
should any court or other competent authority hold any provision of this
Agreement or part hereof or thereof to be null, void or unenforceable, or order
any party to take any action inconsistent herewith or not to take any action
required herein, the other party shall not be entitled to specific performance
of such provision or part hereof or thereof or to any other remedy, including
but not limited to money damages, for breach hereof or thereof or of any other
provision of this Agreement or part hereof or thereof as a result of such
holding or order.
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8.8 PUBLICITY. Except as otherwise required by law or the rules
of the SEC, so long as this Agreement is in effect, no party shall issue or
cause the publication of any press release or other public announcement with
respect to the transactions contemplated by this Agreement without the written
consent of the other party, which consent shall not be unreasonably withheld.
8.9 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties, except that Consolidated Acquisition or Angeles
Acquisition may assign, in its sole discretion, any or all of its rights,
interests and obligations hereunder to any direct or indirect wholly owned
subsidiary of such company. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
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IN WITNESS WHEREOF, this Agreement has been signed by the parties set
forth below as of the date set forth above.
CONSOLIDATED CAPITAL OF NORTH
AMERICA, INC.
By: /s/ Raymond E. McElhany
------------------------------
Name:
Title:
CONSOLIDATED LAND & CATTLE
COMPANY
By: /s/ Raymond E. McElhany
------------------------------
Name:
Title:
MANAGEMENT SHAREHOLDERS:
/s/ Raymond E. McElhaney
---------------------------------
Raymond E. McElhaney
/s/ Bill M. Conrad
---------------------------------
Bill M. Conrad
/s/ Ronald R. McGinnis
---------------------------------
Ronald R. McGinnis
ANGELES ACQUISITION CORP.
/s/ Jeffrey R. Leach
---------------------------------
Jeffrey R. Leach
President
STONE PINE COLORADO, L.L.C.
/s/ J. Paul Bagley, III
---------------------------------
J. Paul Bagley, III
Manager
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<PAGE> 1
EXHIBIT 10.10
THE OFFER AND SALE OF THE SHARES OF COMMON STOCK REFERRED TO IN THIS
AGREEMENT (THE "OFFERING") HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS
AND SUCH SHARES ARE BEING OFFERED AND SOLD IN RELIANCE ON THE EXEMPTION FROM
THE SECURITIES REGISTRATION AND QUALIFICATION REQUIREMENTS OF THE ACT AND SUCH
LAWS OFFERED BY REGULATION S (PROMULGATED UNDER THE ACT). ACCORDINGLY, THE
SHARES OF COMMON STOCK MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION
AND QUALIFICATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, UNLESS AN
EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION UNDER THE ACT AND SUCH LAWS
IS THEN AVAILABLE. THE OFFER AND SALE OF THE SHARES OF COMMON STOCK EFFECTED
HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR
HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE
OFFERING.
STOCK PURCHASE AGREEMENT
AGREEMENT (the "Agreement") made as of January 16, 1997 by and among
Consolidated Capital of North America, Inc., a Colorado corporation (the
"Company"), Angeles Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of the Company ("Angeles Acquisition"), which owns 100%
of the outstanding stock of Angeles Metal Trim, Inc., a California corporation
("Angeles Metal Trim"), which in turn owns 100% of the outstanding stock of
California Building Systems, Inc., a Nevada corporation ("CBS"), and
_______________________, a company incorporated in _______________________
("Purchaser").
WITNESSETH:
WHEREAS, in transactions contemporaneous to the transaction
contemplated hereby, (i) Angeles Acquisition has acquired all the issued and
outstanding capital stock of Angeles Metal Trim and (ii) Consolidated Land &
Cattle Company, a former wholly-owned subsidiary of the Company, has merged
with and into Angeles Acquisition (the transactions described in (i) and (ii)
are collectively referred to herein as the "Business Combination").
WHEREAS, the Company and Purchaser desire to provide for and agree to
the issuance and sale of certain shares of the Company's common stock, par
value $.001 per share (the "Common Stock"), to Purchaser upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants made herein, and for other good and valuable
<PAGE> 2
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Purchaser hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SECURITIES
1.1 Purchase and Sale.
Subject to the terms and conditions hereof, Purchaser hereby agrees to
purchase and acquire from the Company, and the Company hereby agrees to issue
and sell to Purchaser, at the Closing (as that term is hereinafter defined),
785,273 shares of Common Stock (the "Purchase"). Such shares, which shall
constitute five percent (5%) of the Company's issued and outstanding Capital
Stock after giving effect to the Purchase, are referred to herein as the
"Shares."
1.2 Consideration.
The purchase price to be paid by Purchaser to the Company for the
Shares shall be U.S. $142,857.14 (the "Purchase Price").
1.3 Closing.
The closing of the issuance and sale to Purchaser of the Shares, at
which certificate(s) duly evidencing the Shares shall be delivered by the
Company to Purchaser and the Purchase Price shall be paid by Purchaser to the
Company in a form reasonably acceptable to the Company (the "Closing"), shall
take place on such date and at such time as Purchaser and the Company may so
decide (the "Closing Date"). The Closing shall take place at such location as
is mutually agreed to by the parties.
1.4 Conditions Precedent to Closing by Purchaser.
The obligations hereunder of Purchaser to purchase and acquire the
Shares are subject to the satisfaction of each of the following conditions at
or prior to the Closing unless waived by Purchaser in writing:
1.4.1 The representations and warranties of the Company and
Angeles Acquisition contained in this Agreement shall be true in all material
respects, on the Closing Date, as if originally made on such date.
1.4.2 The Company and Angeles Acquisition shall have performed
and complied in all material respects with the agreements and covenants
required by this Agreement to be performed or complied with by them prior to or
at the Closing.
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<PAGE> 3
1.4.3 (a) No statute, rule or regulation shall have been
enacted or promulgated, and no order, decree, writ or injunction shall have
been issued and shall remain in effect, by any court or governmental or
regulatory body, agency or authority which restrains, enjoins or otherwise
prohibits the consummation of the transactions contemplated hereby or
challenges the validity of the Business Combination (as defined below), and (b)
no action, suit or proceeding before any court or governmental or regulatory
body, agency or authority shall have been instituted or threatened by any
governmental or regulatory body, agency or authority, and no investigation by
any governmental or regulatory body, agency or authority shall have been
commenced, with respect to the transactions contemplated hereby or the Business
Combination or with respect to the Company or Angeles Acquisition which would
have a material adverse effect on the transactions contemplated hereby or on
the business of the Company or any of its direct or indirect subsidiaries.
1.4.4 One or more certificates duly issued by the Company in
the name of Purchaser, evidencing ownership of the Shares by Purchaser, shall
have been dated as of the Closing Date and delivered to Purchaser at the
Closing.
1.4.5 Purchaser shall have received the following documents
from the Company, in form and content satisfactory to Purchaser:
(a) Certified copies of the Resolutions of the
Board of Directors of the Company unanimously authorizing the execution and
performance by the Company of this Agreement and the agreements referred to
elsewhere in this Agreement, the issuance of the Shares to Purchaser and the
other transactions contemplated hereby, together with a certificate of the
Secretary or Assistant Secretary of the Company, dated the Closing Date, to the
effect that such authorization remains in full force and effect as of such
date.
(b) A certificate of the President and the
Secretary of the Company, dated the Closing Date, certifying that (i) the
representations and warranties of the Company set forth in Section 2.1 hereof
are true and correct in all material respects as of such date and (ii) the
Company has performed and complied in all material respects with the agreements
and covenants required by this Agreement to be performed or complied with by it
prior to or at the Closing.
(c) Certified copies of the Resolutions of the
Board of Directors of Angeles Acquisition unanimously authorizing the execution
and performance by Angeles Acquisition of this Agreement and the agreements
referred to elsewhere in this Agreement and the other transactions contemplated
hereby, together with a certificate of the Secretary or Assistant Secretary of
Angeles Acquisition, dated the Closing Date, to the effect that
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<PAGE> 4
such authorization remains in full force and effect as of such date.
(d) A certificate of the President and the
Secretary of Angeles Acquisition, dated the Closing Date, certifying that (i)
the representations and warranties of Angeles Acquisition set forth in Section
2.2 hereof are true and correct in all material respects as of such date and
(ii) Angeles Acquisition has performed and complied in all material respects
with the agreements and covenants required by this Agreement to be performed or
complied with by it prior to or at the Closing.
(e) A certificate of the Secretary or an
Assistant Secretary of the Company, dated the Closing Date, certifying that the
Articles of Incorporation and the By-Laws of the Company, as respectively
amended, have not been amended, modified or repealed from the forms of such
documents in effect on the date hereof which previously have been provided to
Purchaser.
(f) Certificates dated as of a date proximate
to the Closing Date confirming the good standing of the Company, Angeles
Acquisition, Angeles Metal Trim, and CBS in their respective states of
incorporation and in each state in which such entities are then required to be
qualified to do business.
(g) Receipt from the Company acknowledging
receipt of payment from Purchaser of the Purchase Price.
(h) A letter from legal counsel satisfactory to
the Company and the Purchaser, addressed to the transfer agent for the Common
Stock, setting forth such counsel's opinion that the Legend (as defined in
Section 2.1.22 hereof) on the certificates evidencing the Shares purchased by
Purchaser pursuant hereto, shall be removed on the forty-first (41st) day after
payment therefor is received by the Company for such Shares.
(i) A letter addressed to the transfer agent
for the Common Stock, instructing the transfer agent to remove the Legend from
the stock certificates. Such letter shall contain language to the effect that
the Company's instructions set forth therein are irrevocable.
(j) Such documents and materials as Purchaser
may reasonably request, evidencing and attesting to the legal validity and
successful completion of the Business Combination.
1.4.6 The Company shall not have filed or had filed against it
a petition under the United States Bankruptcy code, 11 U.S.C. Section 101, et.
seq., or any other similar law or laws, and the Company shall not be the
subject of or be engaged in the appointment of any receiver, trustee or
assignee for the benefit of its creditors or
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<PAGE> 5
(other than as contemplated by this Agreement) any reorganization, moratorium,
workout, recapitalization or restructuring.
1.4.7 The Company shall have delivered to Purchaser executed
written consents of third parties, including, without limitation, governmental
agencies, to the execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions contemplated
hereby, required pursuant to any agreement to which the Company is a party or
by which it is bound or by any law, regulation, judgment, order, writ,
injunction, decree, permit, license or authorization of any court or
governmental or regulatory body of any jurisdiction applicable to the Company
or any of its properties, except to the extent that the failure to obtain any
such consents, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on the business of the Company and
the Consolidated Entities (as defined below), taken as a whole.
1.4.8 Purchaser shall have received and approved (which
approval shall not be unreasonably withheld or delayed) the text of any Form
8-K to be filed by the Company prior to the Closing Date with respect to the
Purchase or the Business Combination with the United States Securities and
Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934 as
amended (the "Exchange Act").
1.5 Conditions Precedent to Closing by the Company.
The obligations hereunder of the Company to issue and sell the Shares
to Purchaser are subject to the satisfaction of each of the following
conditions at or prior to the Closing unless waived by the Company in writing:
(a) The representations and warranties of Purchaser contained
in this Agreement shall be true in all material respects on the Closing Date,
as if originally made on such date.
(b) Purchaser shall have performed and complied in all
material respects with the agreements and covenants required by this Agreement
to be performed or complied with by it prior to or at the Closing.
(c) (i) No statute, rule or regulation shall have
been enacted or promulgated, and no order, decree, writ or injunction shall
have been issued and shall remain in effect, by any court or governmental or
regulatory body, agency or authority which restrains, enjoins or otherwise
prohibits the consummation of the transactions contemplated hereby, and (ii) no
action, suit or proceeding before any court or governmental or regulatory body,
agency or authority shall have been instituted or threatened by any
governmental or regulatory body, agency or authority, and no investigation by
any governmental or regulatory body, agency or
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<PAGE> 6
authority shall have been commenced with respect to the transactions
contemplated hereby or with respect to Purchaser which would have a material
adverse effect on the transactions contemplated hereby.
(d) A certificate of the authorized signatory of the
Purchaser, dated the Closing Date, certifying that (i) the representations and
warranties of the Purchaser set forth in Section 2.3 hereof are true and
correct in all material respects as of such date and (ii) the Purchaser has
performed and complied in all material respects with the agreements and
covenants required by this Agreement to be performed or complied with by it
prior to or at the Closing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company.
The Company represents and warrants to Purchaser as follows:
2.1.1 Organization, Standing and Power. (a) The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Colorado, has all requisite power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted, and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary other than in such
jurisdictions where the failure so to qualify could not be reasonably be
expected to have a material adverse affect on the business, assets,
liabilities, condition (financial or otherwise), results of operations or
prospects of the Company and the Consolidated Entities (as hereinafter defined)
taken as a whole (a "Company Material Adverse Effect").
(b) Schedule 2.1.1(b) hereto lists each of the direct
and indirect subsidiaries of the Company and each association, partnership,
joint venture, limited liability company, or other entity in which the Company
has an interest, either of record, beneficially or equitably, along with a
description of the interest held by the Company in such entity (individually, a
"Consolidated Entity" and together, the "Consolidated Entities"). All shares
of capital stock or ownership interests of each Consolidated Entity held by the
Company or another Consolidated Entity have been duly authorized, are fully
paid and nonassessable, and are lawfully owned of record and beneficially by
the Company or another Consolidated Entity free and clear of all pledges,
liens, claims, security interests and other charges or defects in title of any
nature whatsoever.
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<PAGE> 7
(c) Each Consolidated Entity is duly organized, validly
existing and in good standing to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes such
qualification necessary other than in such jurisdictions where the failure so
to qualify would not have a Company Material Adverse Effect.
2.1.2 Capital Structure. The authorized capital stock of the
Company consists of 50,000,000 shares of Common Stock and 10,000,000 shares of
Preferred Stock, par value $.01 per share. Upon consummation of the Business
Combination and immediately prior to the closing of the transactions
contemplated by this Agreement, 10,208,549 shares of Common Stock were
outstanding; no shares of Common Stock were held by the Company in its treasury;
and no shares of the Company's Preferred Stock were issued or outstanding. All
outstanding shares of the Common Stock were validly issued and are fully paid
and nonassessable and not subject to preemptive rights. All of the issued and
outstanding shares of Common Stock were issued in compliance with all Federal
and state securities laws. Except for options described in Schedule 2.1.2
hereto, there are no options, warrants, calls, agreements or other rights to
purchase or otherwise acquire from the Company at any time, or upon the
happening of any stated event, any shares of the capital stock of the Company or
any Consolidated Entity, whether or not presently issued or outstanding. The
Shares are not subject to preemptive rights and, when issued in consideration of
the Purchase Price in accordance with this Agreement, will be validly issued,
fully paid and nonassessable, and free of any and all encumbrances, claims,
security interests or any other rights or interests of third parties whatsoever;
and will constitute thirty-five percent (35%) of the issued and outstanding
capital stock of the Company.
2.1.3 Certificate of Incorporation, By-Laws, and Minute Books.
Copies of the Certificate of Incorporation and of the By-Laws of the Company
and the organizational documents of each Consolidated Entity have been
delivered to Purchaser and are true, correct and complete copies thereof. The
minute books of the Company and each Consolidated Entity have been made
available to Purchaser for inspection; such books contain accurate minutes of
all meetings and accurate consents in lieu of meetings of the Board of
Directors (and any committee thereof) and of the shareholders of the Company
and each Consolidated Entity since the respective dates of incorporation of
such entities and accurately reflect all transactions referred to in such
minutes and consents in lieu of meetings.
2.1.4 Authority. (a) The Company has all requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite corporate and shareholder action of the Company.
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<PAGE> 8
(b) This Agreement has been duly executed and delivered
by the Company and constitutes a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
2.1.5 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 or lapse of time, or both)
under, or give 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
Certificate of Incorporation or By-laws or any organizational document of the
Company or any Consolidated Entity 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 any Consolidated Entity or their respective properties or
assets which Violation could reasonably be expected to have a Company Material
Adverse Effect. 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 is required by or
with respect to the Company or any Consolidated Entity in connection with the
execution and delivery of this Agreement by the Company or the consummation by
the Company of the transactions contemplated hereby, the failure to obtain
which could reasonably be expected to have a Company Material Adverse Effect.
2.1.6 Financial Statements. The Company has delivered to
Purchaser audited balance sheets of the Company as at December 31, 1995,
December 31, 1994 and December 31, 1993, and the related statements of income
and cash flow, together with an unaudited balance sheet for the nine months
ended September 30, 1996, and the related unaudited statements of income and
cash flows for the period then ended (collectively, the "Company Financial
Statements").
2.1.7 SEC Documents. The Company has furnished Purchaser with
a true and complete copy of each report, schedule, registration statement,
definitive proxy statement and other filings made by the Company with the SEC
since January 1, 1995 (as such documents have since the time of their filing
been amended, "the Company SEC Documents") and since that date the Company has
timely filed with the SEC all documents required to be filed pursuant to the
Exchange Act, and the rules and regulations
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<PAGE> 9
promulgated thereunder. As of their respective dates, the Company SEC
Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act,
as the case may be, and the rules and regulations of the SEC thereunder
applicable to such Company SEC Documents, and none of the Company SEC Documents
(as of their respective dates) contained 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 Company Financial Statements
included in the Company SEC Documents 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 Company 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 or, in the case of the
unaudited statements included in the Company SEC Documents, as permitted by
Form 10-Q of the SEC) 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.
2.1.8 Books and Records. The Company has made and will make
available for inspection by Purchaser upon reasonable request all the books of
the Company and the Consolidated Entities, relating to the business of the
Company and the Consolidated Entities. Such books of the Company and the
Consolidated Entities have been maintained in the ordinary course of business
and in accordance with applicable law. All documents furnished or caused to be
furnished to Purchaser by the Company are true and correct copies, and there
are no amendments or modifications thereto except as set forth in such
documents.
2.1.9 Compliance with Laws. The Company and the Consolidated
Entities are and have been in compliance in all material respects with all
laws, regulations, rules, orders, judgments, decrees and other requirements and
policies imposed by any Governmental Entity applicable to the Company and the
Consolidated Entities, their respective properties or the operation of their
respective businesses.
2.1.10 Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Documents filed prior to the date of this
Agreement or in the Company Interim Financial Statements (as defined below),
since September 30, 1996 (except as contemplated by this Agreement, the
Business Combination or as set forth on Schedule 2.1.10) the Company and the
Consolidated Entities have
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conducted their respective businesses only in the ordinary course of business
consistent with past practice, and, as of the date of this Agreement, there has
not been (i) any material adverse change, alone or in the aggregate, in the
business, assets, liabilities, condition (financial or otherwise), results of
operations or prospects of the Company or any Consolidated Entity; or (ii) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of the Company's
capital stock.
2.1.11 Notes Receivable. The notes receivable of the Company as
set forth on the consolidated balance sheet of the Company and the related
consolidated statements of income, cash flows and changes in shareholders'
equity as of and for the period ended September 30, 1996 (the "Company Interim
Financial Statements") or arising since the date thereof are valid and genuine
and are not subject to valid defenses, set-offs or counterclaims. All
currently outstanding notes receivable of the Company are listed on Schedule
2.1.11.
2.1.12 Liabilities and Obligations. None of the Company or the
Consolidated Entities have any material liabilities or obligations (direct or
indirect, contingent or otherwise) except (i) liabilities that are reflected
and reserved against on the Company Interim Financial Statements that have not
been paid or discharged since the date thereof and (ii) liabilities incurred
since September 30, 1996 in the ordinary course of business consistent with
past practice and in accordance with this Agreement.
2.1.13 Litigation. There is no suit, action or proceeding
pending, or, to the knowledge of the Company, threatened against or affecting
the Company or any Consolidated Entity or any of their respective assets or
businesses which is reasonably likely to have a Company Material Adverse
Effect, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against the Company or any
Consolidated Entity or any of their respective assets or business which has or
is reasonably likely to have any such effect.
2.1.14 Taxes. Each of the Company and the Consolidated Entities
has filed or will file within the time prescribed by law and (including
extension of time approved by the appropriate taxing authority) all tax returns
and reports required to be filed with the United States Internal Revenue
Service and with all other jurisdictions where such filing is required by law;
and the Company and the Consolidated Entities have paid, or have made adequate
provision in the Company Interim Financial Statements for the payment of, all
taxes, interest, penalties, assessments or deficiencies due and payable. There
are (i) no tax returns or reports with respect to the Company or the
Consolidated Entities which are required to be filed which have not been so
filed and
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(ii) no unpaid assessment for additional taxes for any fiscal period or any
basis therefor.
2.1.15 Assets. The Company and the Consolidated Entities have
good and marketable title to all their real and personal properties and assets
reflected in the Company Interim Financial Statements as being owned by them,
free and clear of all mortgages, liens, pledges, charges or encumbrances or
other third party interests of any nature whatsoever, except (i) the lien of
current taxes not yet due and payable, (ii) properties, interests, and assets
disposed of by the Company or any Consolidated Entity since September 30, 1996
solely in the ordinary course of business consistent with past practice and
(iii) such imperfections of title, easements and encumbrances, if any, as are
not substantial in character, amount or extent and do not materially detract
from the value, or interfere with the present or proposed use, of the
properties subject thereto.
2.1.16 Contracts. All written or oral contracts, agreements,
loan agreements, leases, mortgages or commitments ("Contracts"), excluding
Contracts involving payments of less than $10,000 over the term thereof, to
which the Company or any Consolidated Entity is a party or any of them or their
respective assets or businesses may be bound and which cannot be terminated by
the Company or any Consolidated Entity without penalty within 30 days after
written notice are listed on Schedule 2.1.16. Except as described in Schedule
2.1.16 hereto, all Contracts are valid and in full force and effect on the date
hereof, and neither the Company nor any Consolidated Entity has violated any
provision of, or committed or failed to perform any act which with notice,
lapse of time or both would constitute a default under the provisions of, any
Contract, the termination or violation of which might have a Company Material
Adverse Effect. True and complete copies of all Contracts, together with all
amendments thereto, disclosed in Schedule 2.1.16 have been delivered to
Purchaser or made available for inspection. Schedule 2.1.16 identifies all
Contracts which require the consent or approval of third parties to the
execution and delivery of this Agreement or to the consummation and performance
of the transactions contemplated hereby.
2.1.17 Benefit Plans. Schedule 2.1.17 hereto lists all employee
benefit plans, contracts, agreements or arrangements sponsored, maintained or
contributed to by the Company or any Consolidated Entity (collectively, the
"Company Employee Benefit Plans"). Neither the Company nor any Consolidated
Entity has incurred any obligation to contribute any material amount to any
multi-employer plan, as defined in Section 3(37) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"); neither the Company nor any
Consolidated Entity has incurred any material liability under Title IV of ERISA
arising in connection with the termination of, or complete or partial
withdrawal from, any plan covered or previously covered by Title IV of ERISA,
and
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each Company Employee Benefit Plan is in compliance with all applicable laws
and regulations in all material respects.
2.1.18 Licenses, Permits; Intellectual Property.
(a) The Company and each Consolidated Entity own or
possess in the operation of their business all material franchises, licenses,
permits, consents, approvals, rights, waivers and other authorizations,
governmental or otherwise ("Authorization"), which are necessary for them to
conduct their business as now conducted. Neither the Company nor any
Consolidated Entity is in material default, or has received any notice of any
claim of default, with respect to any such Authorization or any notice of any
other claim or proceeding or threatened proceeding relating to any such
Authorization or claimed lack of any necessary Authorization. Except as
described in Schedule 2.1.18, neither the execution or delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
require any notice or consent under or have any material adverse effect upon
any such Authorization.
(b) The Company and the Consolidated Entities do not
hold or use any patents or use any trade names, trademarks, or servicemarks.
2.1.19 Environmental Matters. To the knowledge of the Company:
(i) Except as set forth on Schedule 2.1.19, the
Company and the Consolidated Entities are in compliance with all Environmental
Laws (as defined below).
(ii) Except as set forth on Schedule 2.1.19, the
Company has no knowledge of an existing or potential Environmental Claim
relating to, nor has the Company or any Consolidated Entity received any
notification or knowledge of alleged, actual or potential responsibility for,
or any inquiry or investigation regarding, any disposal, release, or threatened
release at any location of any Hazardous Substance (as defined below) stored,
generated or transported by the Company or any Consolidated Entity.
(iii) Except as set forth on Schedule 2.1.19, (x)
no underground tank or other underground storage receptacle for Hazardous
Substances located on property owned or leased at any time by the Company or
any Consolidated Entity has leaked at any time; and (y) there have been no
releases of Hazardous Substances by the Company or any Consolidated Entity on,
upon or into any properties owned or leased at any time by the Company or any
Consolidated Entity.
(iv) Except as set forth on Schedule 2.1.19,
there are no PCBs or asbestos located at or on any owned or leased property of
the Company or any Consolidated Entity.
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(v) No environmental lien has attached to any
real property owned or leased by the Company or any Consolidated Entity.
(vi) Definitions. For purposes of this
Agreement, "Environmental Laws" shall mean all federal, state, district, local,
and foreign laws, all rules or regulations promulgated thereunder, and all
orders, consent orders, judgments, notices, permits, or demand letters issued,
promulgated, or entered pursuant thereto, relating to pollution or protection
of the environment (including without limitation ambient air, surface water,
ground water, land surface, or subsurface strata), including without limitation
(x) laws relating to emissions, discharges, releases, or threatened releases of
pollutants, contaminants, chemicals, materials, wastes or other substances into
the environment and (y) laws relating to the identification, generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
recovery, transport, or other handling of pollutants, contaminants, chemicals,
industrial materials, wastes, or other substances.
For purposes of this Agreement, "Environmental Claims" shall mean all
accusations, allegations, notice of violations, liens, claims, demands, suits,
or causes of action or any damage, including without limitation, personal
injury, property damage (including any depreciation of property values), lost
use of property, or consequential damages, arising directly or indirectly out
of Environmental Conditions or Environmental Laws.
For purposes of this Agreement, "Environmental Conditions" shall mean
the state of the environment, including natural resources (e.g., flora and
fauna), soil, surface water, ground water, any present or potential drinking
water supply, subsurface strata, or ambient air, relating to or arising out of
the use, handling, storage, treatment, recycling, generation, transportation,
release, spilling, leaking, pumping, pouring, emptying, discharging, injecting,
escaping, leaching, disposal, dumping, or threatened release of Hazardous
Substances by the Company or any Consolidated Entity or their respective
predecessors or such predecessors in interest, agents, representatives,
employees, or independent contractors.
For purposes of this Agreement, "Hazardous Substances" shall mean all
pollutants, contaminants, chemicals, wastes, and any other carcinogenic,
ignitable, corrosive, reactive, toxic, or otherwise hazardous substances or
materials (whether solids, liquids or gases), including but not limited to any
substances, materials, or wastes subject to regulation, control, or remediation
under Environmental Laws.
2.1.20 Transactions and Affiliates. Except as described in
Schedule 2.1.20 or the Company SEC Documents, no director or officer of the
Company or any member of his or her immediate family, is a party to any
Contract or other business arrangement or
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relationship of any kind with the Company or any Consolidated Entity or, except
for the ownership of not more than 1% of the stock of a company having a class
of securities registered pursuant to the Exchange Act, has an ownership
interest in any business, corporate or otherwise, which is a party to, or in
any property which is the subject of, business arrangements or relationships of
any kind with the Company or any Consolidated Entity.
2.1.21 Brokerage. No person or entity is entitled to any
brokerage, finder's or other fee or commission in connection with the issuance
of the Shares based upon arrangements made by or on behalf of the Company.
2.1.22 Regulation S. The Company is a "domestic issuer" and a
"reporting issuer," as such terms are defined in Section 902 of Regulation S
under the Securities Act. The Company has registered the Common Stock pursuant
to Section 12(b) or (g) of the Exchange Act in full compliance with all
reporting requirements of either Section 13(a) or 15(d) of the Exchange Act,
and the Company's Common Stock trades on the NASD OTC Bulletin Board. The
Company has not offered the Shares to any person in the United States, any
identifiable group of U.S. citizens abroad, or to any U.S. Person (as defined
by Rule 902 of Regulation S). At the time the buy order relating to the Shares
was originated, the Company and/or its agents reasonably believed that the
Purchaser was outside the United States and was not a U.S. Person based on such
Purchaser's representations set forth herein. The Company and/or its agents
reasonably believe that the sale of Shares has not been prearranged with a
buyer in the United States. The Company will instruct its transfer agent to
issue one or more share certificates representing the Shares with the following
restrictive legend set forth below (the "Legend") registered in the name of
Purchaser and in such denominations to be specified by Purchaser prior to
closing:
"The Securities represented by this Certificate have not been
registered under the United States Securities Act of 1933 (the "Act") and may
not be sold, transferred, pledged or otherwise hypothecated unless (a) they are
covered by a registration statement or a post-effective amendment thereto under
the Act, (b) they are covered by an exemption available under Regulation S
promulgated under the Act, or (c) in the opinion of counsel for the Purchaser,
which opinion shall be reasonably acceptable to the Company, such sale,
transfer, pledge or hypothecation is otherwise exempt from the provisions of
Section 5 of the Act."
The Company further warrants that no instructions other than these
instructions, and instructions for a "stop transfer" until the end of the
applicable Restricted Period (as defined in Regulation S), have been given to
the transfer agent. The Company will notify the transfer agent of the date of
completion of the offering of the Shares and of the date of expiration of the
Restricted Period. The Company has taken and will take no action
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that will affect in any way the running of the Restricted Period or the ability
of Purchaser to resell the Shares in accordance with applicable securities laws
and this Agreement. The Company shall furnish to the transfer agent a legal
opinion from counsel to the Company in order to effectuate the removal of the
Legend from the certificate(s) representing the Shares on the 41st day
following the Closing Date. The Company will comply with all applicable
securities laws and regulations with respect to the sale of the Shares,
including but not limited to the filing of all reports required to be filed in
connection therewith with the SEC or any stock exchange or the National
Association of Securities Dealers or any other regulatory authority.
2.1.23 Authorization. The execution, delivery and performance
of this Agreement and the agreements herein contemplated, and the consummation
of the transactions contemplated hereby, have been duly authorized by all
requisite action of the Company, which has not been revoked, and no other
action on the part of the Company is necessary.
2.2 Representations and Warranties of Angeles Acquisition.
Angeles Acquisition represents and warrants to Purchaser as follows:
2.2.1 Organization, Standing and Power.
(a) Angeles Acquisition is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
has all requisite power and authority to own, lease and operate its properties
and to carry on its business as now being conducted, and is duly qualified and
in good standing to do business in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such qualification
necessary other than in such jurisdiction where the failure so to qualify would
not have a material adverse effect on the business, assets, liabilities,
condition (financial or otherwise), results of operations or prospects of
Angeles Acquisition and the Angeles Entities (as defined below) taken as a
whole (an "Angeles Material Adverse Effect").
(b) Schedule 2.2.1(b) hereto lists each of the direct
and indirect subsidiaries of Angeles Acquisition and each association,
partnership, joint venture, company, limited liability company or other entity
in which Angeles Acquisition has an interest, either of record, beneficially or
equitably, along with a description of the interest held by Angeles Acquisition
in such entity (individually, an "Angeles Entity" and together, the "Angeles
Entities"). All shares of capital stock or ownership interests of each Angeles
Entity held by Angeles Acquisition or another Angeles Entity have been duly
authorized, are fully paid and nonassessable, and are lawfully owned of record
and
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beneficially by Angeles Acquisition or another Angeles Entity free and clear of
all pledges, liens, claims, security interests and other charges or defects in
title of any nature whatsoever.
(c) Each Angeles Entity is duly organized,
validly existing and in good standing to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its properties
makes such qualification necessary, other than in such jurisdictions where the
failure so to qualify would not have an Angeles Material Adverse Effect.
2.2.2 Capital Structure. All issued and outstanding shares of
capital stock of Angeles Acquisition are owned by the Company and are validly
issued, fully paid and nonassessable and not subject to preemptive rights. All
of the issued and outstanding shares of capital stock of Angeles Acquisition
were issued in compliance with all Federal and state securities laws. There
are no options, warrants, calls, agreements or other rights to purchase or
otherwise acquire from Angeles Acquisition at any time, or upon the happening
of any stated event, any shares of the capital stock of Angeles Acquisition or
any Angeles Entity, whether or not presently issued or outstanding.
2.2.3 Certificate of Incorporation, By-Laws, and Minute Books.
Copies of the Certificate of Incorporation and of the By-Laws of Angeles
Acquisition and each Angeles Entity have been delivered to Purchaser and are
true, correct and complete copies thereof. The minute books of Angeles
Acquisition and each Angeles Entity have been made available for inspection by
the Purchaser and contain accurate minutes of all meetings and accurate
consents in lieu of meetings of the Board of Directors (and any committee
thereof) and of the shareholders of Angeles Acquisition and each Angeles Entity
since the respective dates of incorporation of such entities and accurately
reflect all transactions referred to in such minutes and consents in lieu of
meetings.
2.2.4 Authority. Angeles Acquisition has all requisite power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all required corporate and shareholder action of Angeles Acquisition.
ANGELES ACQUISITION REPRESENTS AND WARRANTS TO THE
PURCHASER ONLY TO THE BEST OF ITS CURRENT KNOWLEDGE THAT THE REPRESENTATIONS
AND WARRANTIES CONTAINED IN PARAGRAPHS 2.2.5 THROUGH 2.2.19 INCLUSIVE ARE AS OF
THE DATE HEREOF AND WILL BE AS OF THE CLOSING, TRUE AND CORRECT.
2.2.5 Conflict with Agreements; Approvals. The
execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby
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will not, conflict with, or result in any Violation pursuant to any
provision of the Certificate of Incorporation or By-laws of Angeles
Acquisition or the organizational documents of any Angeles Entity or,
except as set forth on Schedule 2.2.5 hereto, 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 Angeles Acquisition or any
Angeles Entity or their respective properties or assets which
Violation would have an Angeles Material Adverse Effect. No consent,
approval, order or authorization of, or registration, declaration or
filing with, any Governmental Entity or other third party is required
by or with respect to Angeles Acquisition or any Angeles Entity in
connection with the execution and delivery of this Agreement by
Angeles Acquisition or the consummation by Angeles Acquisition of the
transactions contemplated hereby, the failure to obtain which would
have an Angeles Material Adverse Effect.
2.2.6 Financial Statements. Angeles Acquisition has furnished
Purchaser with reviewed consolidated balance sheets of Angeles Metal Trim as at
December 31, 1995 (the "Angeles Metal 1995 Financials"), December 31, 1994, and
December 31, 1993, respectively, and the related statements of income and cash
flows for the periods then ended, accompanied by the report of Grant Thornton,
along with an unaudited balance sheet of Angeles Metal Trim for the eleven
months ended November 30, 1996, and the related unaudited statements of income
and cash flows for the period then ended (the "Angeles Metal Interim Financial
Statements"). The Angeles Metal 1995 Financials including the footnotes
thereto, except as indicated therein, have been prepared as set forth in the
report of the auditors which is a part of the same. The Angeles Metal 1995
Financials and the Angeles Metal Interim Financial Statements are substantially
complete and correct in all material respects and fairly present in all
material respects the financial condition and results of the operations of
Angeles Metal and the changes in its financial position at such dates and for
such periods and show all material liabilities, absolute or contingent, of
Angeles Metal. Notwithstanding anything in this Agreement to the contrary,
Angeles Acquisition makes no representations or warranties to Purchaser as to
the adequacy or sufficiency of any reserves set forth in the December 31, 1995
Balance Sheet.
2.2.7 Books and Records. Angeles Acquisition has made and will
make available for inspection by Purchaser upon reasonable request all the
books of account relating to the business of the Angeles Entities. Such books
of account of the Angeles Entities have been maintained in the ordinary course
of business and in
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accordance with applicable law. All documents furnished or caused to be
furnished to Purchaser by Angeles Acquisition are true and correct copies of
the documents purported to be the originals thereof, and there are no
amendments or modifications thereto except as set forth in such documents.
2.2.8 Compliance with Laws. Angeles Acquisition and the
Angeles Entities are and have been in compliance in all material respects with
all laws, regulations, rules, orders, judgments, decrees and other requirements
and policies imposed by any Governmental Entity applicable to any of them,
their respective properties or the operation of their respective businesses.
2.2.9 Accounts Receivable. The accounts receivable appearing
on the Angeles Metal Interim Financial Statements and all accounts receivable
of the Angeles Entities created since that date represent valid obligations
(subject to the effects of bankruptcy, insolvency, reorganization or other
similar laws affecting the rights of creditors generally) owing to the Angeles
Entities, subject to the reserve for doubtful accounts appearing on the Angeles
Metal Interim Financial Statements which reserve may be adjusted for the
passage of time through the Closing in accordance with the past custom and
practice of Angeles Metal.
2.2.10 Inventory. The values at which the inventories of
Angeles Metal Trim and CBS are shown on the Angeles Metal Interim Financial
Statements have been determined in accordance with GAAP and the normal
valuation policy of Angeles Metal Trim and CBS, consistently applied. All
inventory of each of Angeles Metal Trim and CBS, whether reflected in the
Angeles Metal Interim Financial Statements or otherwise, consists of a quality
and quantity usable and saleable in the ordinary course of business except for
items of obsolete materials and materials of below standard quality, all of
which have been written down in the Angeles Metal Interim Financial Statements
to realizable market value or for which reasonably adequate reserves have been
provided therein. Except as specifically indicated in the Angeles Metal
Interim Financial Statements, the present quantities of all inventory of
Angeles Metal Trim and CBS are reasonable and warranted in the present
circumstances of the business of Angeles Metal Trim and CBS.
2.2.11 Liabilities and Obligations. None of Angeles Acquisition
or the Angeles Entities have any material liabilities or obligations (absolute,
accrued, contingent or otherwise) except (i) liabilities that are reflected and
reserved against on the Angeles Metal Interim Financial Statements that have
not been paid or discharged since the date thereof and (ii) liabilities
incurred since November 30, 1996 in the ordinary course of business consistent
with past practice and in accordance with this Agreement and (iii) those
liabilities incurred in connection with the transactions contemplated by
documents relating to the Business Combination.
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2.2.12 Litigation. Except as set forth on Schedule 2.2.12,
there is no suit, action or proceeding pending, or, to the knowledge of Angeles
Acquisition, threatened against or affecting Angeles Acquisition or any Angeles
Entity or any of their respective assets or business which is reasonably likely
to have an Angeles Material Adverse Effect, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding
against Angeles Acquisition or any Angeles Entity or any of their respective
assets or businesses having, or which, insofar as reasonably can be foreseen,
in the future could have, any such effect.
2.2.13 Taxes. Each of the Angeles Entities has filed or will
file within the time prescribed by law (including extension of time approved by
the appropriate taxing authority) all tax returns and reports required to be
filed with the United States Internal Revenue Service and with all other
jurisdictions where such filing is required by law; and the Angeles Entities
have paid, or have made adequate provision in the Angeles Metal Interim
Financial Statements for the payment, of all taxes, interest, penalties,
assessments or deficiencies due and payable on, and with respect to all periods
ending prior to September 30, 1996. There are (i) no other tax returns or
reports with respect to Angeles Acquisition or any Angeles Entity which are
required to be filed which have not been so filed and (ii) no unpaid assessment
for additional taxes for any fiscal period or any basis therefor.
2.2.14 Assets. Except as described in Schedule 2.2.14 the
Angeles Entities have good and marketable title to all their real and personal
properties and assets reflected in the Angeles Metal Interim Financial
Statements as being owned by them, free and clear of all mortgages, liens,
pledges, charges or encumbrances or other third party interests of any nature
whatsoever, except (i) the lien of current taxes not yet due and payable, (ii)
properties, interests, and assets disposed of by Angeles Metal Trim or any
Angeles Entity since September 30, 1996 solely in the ordinary course of
business consistent with past practice and (iii) such imperfections of title,
easements and encumbrances, if any, as are not substantial in character, amount
or extent and do not materially detract from the value, or interfere with the
present or proposed use, of the properties subject thereto.
2.2.15 Contracts. All Contracts, excluding Contracts involving
payments of less than $10,000 over the term thereof, to which Angeles
Acquisition or any Angeles Entity is a party or any of them or their respective
assets or businesses may be bound and which cannot be terminated by Angeles
Acquisition or any Angeles Entity without penalty within 30 days after written
notice are listed on Schedule 2.2.15. Except as described in Schedule 2.2.15
hereto, all Contracts are valid and in full force and effect on the date
hereof, and neither Angeles Acquisition nor any Angeles Entity has violated any
provision of, or committed or failed to perform
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any act which with notice, lapse of time or both would constitute a default
under the provisions of, any Contract, the termination or violation of which
might have an Angeles Materially Adverse Effect. True and complete copies of
all Contracts, together with all amendments thereto, disclosed in Schedule
2.2.15 have been delivered to Purchaser or made available for inspection.
Schedule 2.2.15 identifies all Contracts which require the consent or approval
of third parties to the execution and delivery of this Agreement or to the
consummation and performance of the transactions contemplated hereby.
2.2.16 Benefit Plans. Schedule 2.2.16 hereto lists all employee
benefit plans, contracts, agreements or arrangements sponsored, maintained or
contributed to by any Angeles Entity (collectively, the "Angeles Employee
Benefit Plans"). Neither Angeles nor any Angeles Entity has incurred any
obligation to contribute any material amount to any multi-employer plan, as
defined in Section 3(37) of ERISA; neither Angeles nor any Angeles Entity has
incurred any material liability under Title IV of ERISA arising in connection
with the termination of, or complete or partial withdrawal from, any plan
covered or previously covered by Title IV of ERISA, and each Angeles Employee
Benefit Plan is in compliance with all applicable laws and regulations in all
material respects.
2.2.17 Licenses, Permits; Intellectual Property. Angeles
Acquisition and each Angeles Entity owns or possesses in the operation of their
business all material Authorizations which are necessary for them to conduct
their business as now conducted. Neither Angeles Acquisition nor any Angeles
Entity is in material default, or has received any notice of any claim of
default, with respect to any such Authorization or any notice of any other
claim or proceeding or threatened proceeding relating to any such Authorization
or claimed lack of any necessary Authorization. Except as described in
Schedule 2.2.17, neither the execution or delivery of this Agreement nor the
consummation of the transactions contemplated hereby will require any notice or
consent under or have any material adverse effect upon any such Authorization.
Set forth in Schedule 2.2.17 is a list of the material
domestic and foreign patents, patent applications, patent licenses, software,
corporate or other names, trade names, trademarks, service marks, trademark
registrations and applications, service mark registrations and applications,
copyright registrations and applications licensed or owned by the Angeles
Entities (collectively the "Intellectual Property"). Schedule 2.2.17 sets
forth any Intellectual Property licenses from the Angeles Entities to third
parties. Except for the trade names "Gripper," "Stitcher" and "Driller", which
one Douglas Cable has the right to use, unless otherwise indicated in Schedule
2.2.17, the Angeles Entities own the entire right, title and interest in and to
the Intellectual Property and each item constituting part of the Intellectual
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Property has been, to the extent indicated in Schedule 2.2.17, duly registered
with, filed in or issued by, as the case may be, the United States Patent and
Trademark Office or such other government entity, domestic or foreign, as is
indicated in Schedule 2.2.17 and, to the knowledge of Angeles Acquisition, such
registrations, filings and issuances remain in full force and effect and there
are no pending proceedings or litigation or other adverse claims made in
writing affecting or with respect to the Intellectual Property.
2.2.18 Environmental Matters. Except as set forth on Schedule
2.2.18, Angeles Acquisition represents and warrants that:
(i) All underground storage tanks have been
removed from the premises leased to an Angeles Entity by D.K. Cable (the "Cable
Premises").
(ii) Angeles Acquisition has received no actual
written notification of any investigation regarding any disposal, release or
threatened release at any of the Cable Premises of any Hazardous substances
stored, generated or transported by any Angeles Entity.
(iii) Except as set forth on Schedule 2.2.18,
there are no PCBs or asbestos located at or on any owned or leased property of
any Angeles Entity.
(iv) No environmental lien has attached to any
real property owned or leased by any Angeles Entity.
2.2.19 Real Property. (a) Schedule 2.2.19 constitutes a true
and complete list of all real property owned or leased by any Angeles Entity or
to which any Angeles Entity may have any ownership or leasehold rights (the
"Premises"). With respect to the Premises, all appurtenant rights, privileges
and easements belonging or appertaining thereto and all buildings, structures
and improvements thereon:
(i) except for the matter set forth on
Schedule 2.2.19 hereto, no person, firm or corporation other than any Angeles
Entity has any rights, (including rights arising under an installment contract,
option to purchase, easement, right of way, or otherwise) with respect to the
Premises or any part or parts thereof;
(ii) each of the buildings and other
improvements constituting part of the Premises is of reasonably sound
structural integrity and is able and adequate for its intended purpose and to
conduct the business of Angeles Entities as it is now being conducted; and
(iii) the present zoning for the Premises
located in the City of Commerce is C-M.
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(b) Schedule 2.2.19 contains a list of all real property
leases to which any Angeles Entity is a party (the "Scheduled Leases"). The
Scheduled Leases are (x) in full force and effect and no Angeles Entity has
received any notice of default and does not possess any knowledge of or notice
of a material event, occurrence, condition or act (including the entering into
of this Agreement) which, with the giving of notice, the lapse of time or the
happening of any further event or condition, would become a default by the
Angeles Entity pursuant to the terms of the Scheduled Leases; and (y) all rents
and additional rents due to date on each Scheduled Lease have been paid. To
the knowledge of Angeles Acquisition, the property subject to the Scheduled
Leases are not subject to any eminent domain proceeding.
(c) There are no restrictions respecting availability of
public utilities, including, but not limited to, sewer, gas and electricity and
the Premises are adequately serviced by all such utilities; all payments,
assessments, deposits and other charges relating to such utilities and any
other existing on-site improvements (including public or quasi-public utilities
or services) have been paid in full to the extent they are due.
2.2.20 Transactions and Affiliates. Except as described in
Schedule 2.2.20, no director or officer of Angeles Acquisition or any Angeles
Entity or any member of his or her immediate family, is a party to any Contract
or other business arrangement or relationship of any kind with Angeles
Acquisition or any Angeles Entity or, except for the ownership of not more than
1% of the stock of a company having a class of securities registered pursuant
to the Exchange Act, has an ownership interest in any business, corporate or
otherwise, which is a party to, or in any property which is the subject of,
business arrangements or relationships of any kind with Angeles Acquisition or
any Angeles Entity.
2.2.21 Authorization. The execution, delivery and performance
of this Agreement and the agreements herein contemplated, and the consummation
of the transactions contemplated hereby, have been duly authorized by all
requisite action of Angeles Acquisition, which has not been revoked, and no
other action on the part of Angeles Acquisition is necessary.
2.3 Representations and Warranties of Purchaser.
Purchaser hereby represents and warrants to the Company that:
2.3.1 U.S. Person. Purchaser is not a "U.S. person", as such
term is defined in Rule 902 of Regulation S ("Regulation S") as promulgated
under the Securities Act.
2.3.2 Negotiations. During the time this Agreement was
negotiated Purchaser was outside the U.S. and is outside the U.S. on the
Closing Date.
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2.3.3 Distributor. Purchaser represents that it is not a
"distributor" as that term is used in Regulation S.
2.3.4 Subsistence. Purchaser is duly formed and validly
subsisting under the laws of its jurisdiction of formation and has the full
power and authority to enter into and carry out this Agreement and the
agreements herein contemplated.
2.3.5 Authorization. The execution, delivery and performance
of this Agreement and the agreements herein contemplated, and the consummation
of the transactions contemplated hereby, have been duly authorized by all
requisite action of Purchaser, which has not been revoked, and no other action
on the part of Purchaser is necessary.
2.3.6 No Violation. The execution, delivery and performance of
this Agreement and the consummation by Purchaser of the transactions
contemplated hereby, will not: (i) result in a breach of, or a default under
(or an event which, with the lapse of time or the giving of notice or both,
would constitute an event of default), or give any third party the right to
terminate, cancel, modify or accelerate, or require any consent or the giving
of any notice under, any contract, mortgage, note, lease, bond, indenture,
security agreement, undertaking or other agreement, instrument or obligation to
which Purchaser is a party or by which it or its property may be bound or
affected, or cause any security interest, lien, claim or encumbrance to be
created or imposed upon any such property by reason thereof, (ii) be in
conflict with or contravention of any term or provision of the charter
documents of Purchaser, (iii) violate or conflict with any law, statue,
ordinance, code, rule, regulation, judgment, order, writ, injunction, decree or
other instrument or any Federal, state, local or foreign court or governmental
or regulatory body, agency or authority applicable to Purchaser or by which it
or its properties or assets may be bound or (iv) require, on the part of
Purchaser, any filing or registration with, or permit, license, exemption,
consent, authorization or approval of, or the giving of any notice to, any
governmental or regulatory body, agency or authority, except, in the case of
the preceding subclause (iv), those which shall have been made or obtained on
or prior to the Closing Date, in each case, other than any matter which would
not interfere with Purchaser's ability to consummate the Purchase.
2.3.7 Binding Effect. This Agreement is the valid and binding
obligation of Purchaser legally enforceable against it in accordance with its
terms, subject to the effects of bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and of general equitable principles (whether considered in a
proceeding in equity or at law).
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2.3.8 Restricted Shares. Purchaser acknowledges that the offer
and sale of the Shares has not been registered under the Securities Act and
agrees that the Shares may not be sold, transferred, pledged or otherwise
hypothecated by it unless (a) they are covered by an effective registration
statement or a post-effective amendment thereto under the Securities Act, or
(b) they are sold pursuant to an applicable exemption under the Securities Act.
2.3.9 Due Diligence. Purchaser or Purchaser's designated
representative has concluded a satisfactory due diligence investigation of the
Company and has had an opportunity to have all its questions regarding the
Company satisfactorily answered.
2.3.10 Investment Experience. Purchaser has such knowledge and
experience in financial matters that it is capable of evaluating the merits and
risks of an investment in the Shares.
ARTICLE III
COVENANTS
3.1 Covenants of the Company.
3.1.1 As soon as reasonably practicable after the date hereof,
the Company will use all reasonable efforts to obtain the consents of all
necessary Governmental Entities and other persons to the transactions
contemplated hereby.
3.1.2 Through the Closing Date, the Company shall promptly
advise Purchaser in writing of the occurrence of any event or the existence of
any state of affairs which would render any representation or warranty of the
Company or Angeles Acquisition hereunder inaccurate in any material respect or
which would preclude satisfaction of any condition or covenant of this
Agreement, provided that no such notification shall affect any such
representation, warranty, condition or covenant.
3.1.3 Except as disclosed on Schedule 3.1.3 attached hereto,
from and after the date of this Agreement to and including the Closing Date,
the Company shall, and shall cause each of the Consolidated Entities, Angeles
Acquisition and the Angeles Entities to:
(a) carry on its business in the ordinary
course in a prudent manner consistent with its business practices since the
commencement of the current fiscal year;
(b) use all reasonable efforts to preserve and
maintain its business organization and properties intact, to keep available the
services of its employees and independent
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contractors, to preserve its goodwill and to preserve the goodwill of its
suppliers, customers and employees;
(c) maintain in full force and effect all
contracts of insurance currently in effect without any reduction in coverage
(other than any reduction in coverage necessary to avoid a material increase in
premium costs);
(d) not amend its Articles of Incorporation or
By-Laws or other charter documents;
(e) not amend, terminate or change any material
permit, contract, mortgage, note, lease, indenture, undertaking or other
agreement, commitment or arrangement, including, without limitation, any right
or grant enjoyed by it, in any way, and will not knowingly do any act or omit
to do any act, and will use all reasonable efforts to prevent an act or
omission to act, which will cause a material breach of any of the foregoing;
(f) not enter into any contract or commitment
or series of related contracts or commitments, without the prior written
approval of Purchaser, unless any such contract or commitment, or series of
related contracts or commitments, involves an expenditure or sale by the
Company of $10,000 or less;
(g) not declare or pay any dividend in cash,
stock or other property, or make any other distribution (however characterized)
upon or in respect of any of its shares of capital stock, or purchase, retire
or redeem any of the shares of its capital stock, or any other securities,
including any warrants or options to purchase any capital stock, or obligate
itself to do any of the foregoing;
(h) not adopt, enter into, amend, terminate,
curtail, or withdraw from any employee benefit plan or make any change in the
actuarial methods or assumptions used in funding or determining benefit
equivalences thereunder; make any change in the rate of compensation (other
than changes in pay rates for employees changing job positions), commission,
bonus, deferred compensation arrangement or other direct or indirect
remuneration payable, or pay or agree or orally promise to pay, conditionally
or otherwise, any bonus (cash or non-cash), extra compensation, deferred
compensation or severance or vacation pay, to any shareholder, director,
officer, employee, salesman or distributor, other than payments in the ordinary
course of its business with respect to overtime, vacation, currently existing
deferred compensation plans or other currently existing benefits, or hire or
enter into any employment agreement or severance or compensation arrangement
with any person, except as set forth in Schedule 3.1.3(h) hereto;
(i) not, except in the ordinary course of its
business consistent with past practice, create, and will use all
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<PAGE> 26
reasonable efforts to prevent the creation of, any mortgage, pledge, lien,
charge, security interest or any other encumbrance or restriction upon any of
its properties, business or assets, tangible or intangible;
(j) not make any change in its accounting
procedures and practices;
(k) not issue, sell, or agree to issue or sell,
any shares of its capital stock, or any options, warrants or other rights to
acquire shares of its capital stock; or any securities convertible into or
exchangeable for shares of its capital stock;
(l) not combine, split or otherwise reclassify
any shares of its capital stock;
(m) not sell, transfer, lease to others or
otherwise dispose of any of its assets (other than in the ordinary course of
business and consistent with prior practice), or cancel or compromise any debt
or claim, or waive or release any claim or right of substantial value without
the prior written consent of Purchaser;
(n) not organize any new subsidiary, acquire
any capital stock or other equity securities of any corporation or acquire any
equity or ownership interest in any business;
(o) not borrow or agree to borrow any funds or
incur, or assume or become subject to, whether directly or by way of guarantee
or otherwise, any obligation or liability (absolute or contingent), except
obligations and liabilities incurred in the ordinary course of its business
consistent with pat practice or as contemplated by this Agreement;
(p) not pay, discharge or satisfy any claim,
liability or obligation (absolute, accrued, choate, inchoate or contingent),
other than the payment, discharge or satisfaction in the ordinary course of
business, of liabilities or obligations reflected or reserved against in the
Company Financial Statements or the Angeles Financial Statements, as
applicable, or incurred in the ordinary course of its business consistent with
past practice since such date;
(q) not prepay any obligation;
(r) not write down the value of any inventory
or write off as uncollectible any notes or accounts receivable (except as
required by generally accepted accounting principles);
(s) not dispose of or permit to lapse any
rights to the use of any patents, trademarks, trade names, copyrights,
technology, know-how or processes, or dispose of or disclose to any
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person any trade secret, formula, process or know-how not theretofore a matter
of public knowledge;
(t) not pay, loan or advance any amount to, or
sell, transfer or lease any properties or assets to, or enter into any
agreement or arrangement therefor with, any of its officers or directors or any
affiliate or associate or near relative of any of its officers or directors;
(u) not grant or extend any power of attorney,
or act as guarantor, surety, co-signer, endorser, co-maker, indemnitor or
otherwise, in respect of the obligation of any person, corporation,
partnership, joint venture, association, organization or other entity; and
(v) promptly advise Purchaser of any legal
actions, lawsuits, investigations or workers' compensation claims or
proceedings commenced or threatened against or affecting it or its property,
assets or business (or, to its best knowledge, commenced or threatened against,
relating to or involving any of its officers, directors, employees, agents or
consultants in connection with its business) which might have an adverse impact
on its business.
3.1.4 From and after the date hereof, and from and after the
Closing Date, the Company will promptly furnish Purchaser with the following:
(a) Copies of all financial statements, reports
and documents that the Company shall send to its stockholders generally;
(b) Copies of all documents filed by the
Company with the SEC; and
(c) Such other information relating to the
business, assets, results of operations, prospects, and condition (financial or
otherwise) of the Company, the Consolidated Entities, Angeles Acquisition and
the Angeles Entities as Purchaser may reasonably request from time to time.
3.1.5 From and after the date hereof through the Closing Date,
the Company shall, and shall cause each of the Consolidated Entities, Angeles
Acquisition and the Angeles Entities to, duly comply in all material respects
with all laws, ordinances, rules, regulations and other governmental and
regulatory requirements applicable to it and its properties, operations,
business and employees.
3.1.6 From and after the date hereof through the Closing Date,
the Company will not, and shall cause each of the Consolidated Entities,
Angeles Acquisition and the Angeles Entities
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to, not take, agree to take, or knowingly permit to be taken any action to do
or knowingly permit to be done anything in the conduct of its business, or
otherwise, which would be contrary to or in breach of any of the terms or
provisions of this Agreement, or which would cause any of the representations
or warranties of the Company or Angeles Acquisition contained herein to be or
become untrue in any material respect. The Company will promptly take or cause
to be taken all actions necessary or advisable in order to comply with the
terms of this Agreement.
3.1.7 From and after the date hereof through the Closing Date,
the Company will, and shall cause each of the Consolidated Entities, Angeles
Acquisition and the Angeles Entities to, make available to Purchaser and its
accountants, agents, attorneys, employees and other representatives during
normal business hours all of its properties, books, contracts, commitments,
records and management personnel and will furnish Purchaser during such period
with all such information concerning its affairs as Purchaser reasonably
requests. The Company shall permit Purchaser or its representatives, at all
reasonable times prior to the Closing Date, if Purchaser shall so elect, to
enter upon any and all of its and its subsidiaries premises for the purposes of
inspecting same.
3.1.8 The Company covenants and agrees that the Company shall
treat as confidential all information obtained by it in connection with the
transactions contemplated hereby concerning Purchaser except any information
(i) which was available to the Company on a non-confidential basis prior to its
disclosure by Purchaser, or was rightfully obtained by the Company from a
source other than Purchaser, (ii) appearing in public literature or otherwise
in the public domain (through no fault of the Company), whether at the date
hereof or at any time hereafter or (iii) which the Company is legally compelled
(by depositions, interrogatories or requests for information through documents,
subpoena, civil investigative demand or similar process) to disclose, provided
that the Company shall have used its best efforts to obtain, and shall have
afforded Purchaser an opportunity to obtain, a protective order or other
satisfactory assurance of confidential treatment for the information required
to be disclosed, and provided further that if such protective order or other
remedy is not obtained and the Company is nonetheless, in the opinion of its
counsel, compelled to disclose the information to any tribunal having
jurisdiction, the Company shall disclose only that information which the
Company is advised by opinion of its counsel is legally required to be
disclosed. The Company shall not disclose any such information to any third
person other than to employees and advisers of the Company, and shall preserve
and maintain and prevent the disclosure or publication of any proprietary
information and trade secrets.
3.1.9 [Omitted]
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3.1.10 From and after the date hereof, until March 1, 1997, the
Company shall not issue or sell any Common Stock or Preferred Stock without the
written consent of Purchaser.
3.1.11 From and after the date hereof, until March 1, 1997,
should the Company issue any shares of its capital stock (or any securities
convertible into or exchangeable for such capital stock) to any person other
than Purchaser (an "Issuance"), the Company shall concurrently with such
Issuance issue to Purchaser, for no consideration, pecuniary or otherwise, a
number of shares of the Company's capital stock sufficient to maintain
Purchaser's percentage ownership of the Company's capital stock on a fully
diluted basis after giving effect to such Issuance.
3.2 Covenants of Purchaser.
3.2.1 Purchaser covenants and agrees that Purchaser shall treat
as confidential all information obtained by it in connection with the
transactions contemplated hereby concerning the Company except any information
(i) which was available to Purchaser on a non-confidential basis prior to its
disclosure by the Company, or was rightfully obtained by Purchaser from a
source other than the Company, (ii) appearing in public literature or otherwise
in the public domain (through no fault of Purchaser), whether at the date
hereof or at any time hereafter or (iii) which Purchaser is legally compelled
(by deposition, interrogatories or requests for information through documents,
subpoena, civil investigative demand or similar process) to disclose, provided
that Purchaser shall have used its best efforts to obtain, and shall have
afforded the Company an opportunity to obtain, a protective order or other
satisfactory assurance of confidential treatment for the information required
to be disclosed, and provided further that if such protective order or other
remedy is not obtained and Purchaser is nonetheless, in the opinion of its
counsel, compelled to disclose the information to any tribunal having
jurisdiction, Purchaser shall disclose only that information which Purchaser is
advised by opinion of its counsel is legally required to be disclosed.
Purchaser shall not disclose any such information to any third party other than
to employees and advisers of Purchaser, and shall preserve and maintain and
prevent the disclosure or publication of any proprietary information and trade
secrets.
3.2.2 Purchaser further acknowledges and agrees that neither it
nor its affiliates, nor any persons acting on its behalf, has
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engaged or will engage in any directed selling efforts (as defined in
Regulation S) with respect to the Shares, and Purchaser, its affiliates and all
persons acting on Purchaser's behalf have complied and will comply with the
offering restrictions requirements of Regulation S.
3.2.3 Purchaser agrees that any distributor shall agree in
writing that all offers and sales of the Shares prior to the expiration of the
restricted period specified in Rule 903(c)(2), shall be made only: in
accordance with the provisions of Rule 903 or 904 of Regulation S; pursuant to
registration of the Shares under the Securities Act; or pursuant to an
available exemption from the registration requirements of the Securities Act.
ARTICLE IV
SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
4.1 Survival of Representations and Warranties.
The representations and warranties contained herein shall survive the
Closing for a period of one (1) year from the Closing Date.
4.2 Indemnity Obligations of the Company and Angeles Acquisition.
The Company and Angeles Acquisition, jointly and severally, hereby
agree to indemnify, defend and hold Purchaser and its affiliates (other than
the Company) and any director, officer, employee, agent or representative of
Purchaser or any of its affiliates (other than the Company) (the "Purchaser
Indemnified Parties") harmless from, and to reimburse 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 or Angeles
Acquisition which is contained in this Agreement or any Schedule or certificate
delivered by the Company or Angeles Acquisition pursuant thereto (but only to
the extent such representation or warranty survives the Closing pursuant to
Section 4.1); or (ii) any breach or nonfulfillment of, or any failure to
perform, any of the covenants, agreements or undertaking of the Company or
Angeles Acquisition which are contained in or made pursuant to the terms and
conditions of this Agreement or contained in any documents required to be
delivered pursuant hereto.
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4.3 Indemnity Obligations of Purchaser.
Purchaser hereby agrees to indemnify, defend and hold the Company and
any director, officer, employee, agent 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 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
Purchaser which are contained in or made pursuant to the terms and conditions
of this Agreement.
4.4 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 identifying 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, provided that such indemnifying party shall obtain the
consent of the indemnified 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
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represented by counsel of its own choosing and with whom counsel for the
indemnifying party shall confer in connection with such defense, settlement,
adjustment or compromise or ceasing to defend against each claim.
ARTICLE V
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated at any time prior to the Closing
Date:
(a) by the mutual written consent of the Company and
Purchaser;
(b) by either the Company or Purchaser if any court or
governmental or regulatory agency, authority or body shall have enacted,
promulgated or issued any statute, rule, regulation, ruling, writ or
injunction, or taken any other action, restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby, which statute, rule,
regulation, ruling, writ, injunction or other action shall have become final
and nonappealable; or
(c) by Purchaser, if any condition specified in Section 1.4,
or by the Company, if any condition specified in Section 1.5, has not been met
or waived prior to such time as such condition can no longer be satisfied.
5.2 Effect of Termination.
In the event of termination of this Agreement, this Agreement shall
forthwith become void and there shall be no liability on the part of any of the
parties hereto, their respective officers or directors, except for Sections
3.1.8, 3.2.1 and 5.9, which shall remain in full force and effect, and except
that nothing herein shall relieve any party from liability for a breach of this
Agreement prior to the termination hereof.
5.3 No Waiver of Rights.
No failure or delay on the part of any party in the exercise of any
power, right or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
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5.4 Notice.
Any notice or communication herein required or permitted to be given
shall be in writing and may be sent by hand, by registered or certified mail,
return receipt requested, or by facsimile transmission. All such notices and
communications hereunder shall be deemed given when received, as evidenced by
the date indicated as the date of delivery (or attempted delivery if refused)
on the return receipt, or confirmed facsimile transmission, as applicable. For
purposes hereof, the addresses of the parties hereto (until notice of change
thereof is given in accordance with this Section 5.4) shall be as follows:
To the Company and Angeles Acquisition:
Consolidated Capital of North America, Inc.
c/o Stone Pine Capital Ltd.
410 17th Street, Suite 400
Denver, Colorado 80202
Attention: Peter W. Damisch, President
Telephone: (303) 446-2188
Facsimile: (303) 446-5922
To Purchaser:
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
5.5 Governing Law.
This Agreement, and the respective rights, duties and obligations of
the parties hereunder, shall be governed by and construed in accordance with
the internal substantive laws of the State of Colorado without regard to the
conflicts of laws or choice of laws principles thereof.
5.6 Facsimile Signatures.
In the event that any party hereto utilizes a facsimile device or
telecopier to transmit executed documents hereunder, including this Agreement
but excluding any stock certificates, powers or assignments, the other party
hereto shall accept and shall have the right to rely on such executed documents
as so transmitted as if they bore the original signatures.
5.7 Independent Counsel.
Each of the parties hereto has had an adequate opportunity to consult
with legal counsel of its choice regarding the transactions
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contemplated herein, and has executed this Agreement with a full understanding
of its rights and obligations as created hereby.
5.8 Counterpart Originals.
This Agreement may be executed simultaneously in counterparts each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument.
5.9 Expenses.
Each party shall bear and pay its own expenses in connection with this
Agreement, including, without limitation, expenses of its legal counsel.
5.10 Assignment; Successors.
This Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of the parties hereto. Neither the Company
nor Purchaser may assign or transfer any of its interests, rights or
obligations under this Agreement without the prior written consent of the other
party, and any attempted assignment or transfer without such prior written
consent shall be void.
5.11 Further Assurances.
The parties hereto agree that, from time to time hereafter, and upon
request of the other, each of them will execute, acknowledge and deliver such
other documents and instruments as may be reasonably required more effectively
to carry out the terms and conditions of this Agreement.
5.12 Third Party Beneficiaries.
This Agreement shall not confer upon any person or entity, other than
the Company and Purchaser and their respective permitted assigns and
successors, any rights or remedies of any kind or nature.
5.13 Entire Agreement.
This Agreement together with the other agreements between the parties
referred to herein, constitute the entire agreement between the parties
pertaining to the subject matter hereof and supersede all prior and
contemporaneous, oral and written, agreements, representations and
understandings of the parties with respect thereto.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
CONSOLIDATED CAPITAL OF NORTH
AMERICA, INC.
By:
---------------------------
Peter Damisch
President
ANGELES ACQUISITION CORP.
By:
---------------------------
Jeffrey R. Leach
President
PURCHASER:
By:
--------------------------
Name:
------------------------
Title:
-----------------------
Address:
---------------------
---------------------
---------------------
---------------------
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