<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): March 3, 1998
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
(Exact Name of Company 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
Company's telephone number, including area code: (888) 313-8051
<PAGE> 2
Item 5. Other Events.
On March 10, 1998, Christian Wolf resigned as Chief Executive Officer of the
Company, Paul Bagley, the Chairman of the Company, was appointed the Chief
Executive Officer of the Company and Carl Casareto was appointed the Chief
Financial Officer of the Company. On March 10, 1998, the Board of Directors of
the Company was expanded to seven members and Richard Bailey was appointed a
Class III director of the Company. A copy of the Company's March 12, 1998 Press
Release is attached hereto as Exhibit 20.3.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
(a) On March 3, 1998, in connection with the execution and delivery of certain
releases and the payment of $385,000 by Stone Pine Atlantic, LLC to the Company,
the Company issued (i) warrants to purchase up to one million Common Shares of
the Company, exercisable at $1.00 per share, having an exercise term of three
years from the date of issuance (the "$1.00 Warrants") (the Form of Warrant is
attached as Exhibit 2.3) and (ii) warrants to purchase up to one million Common
Shares of the Company, exercisable at $0.75 per share, having an exercise term
of two years from the date of issuance (the "$0.75 Warrants") (the Form of
Warrant is attached as Exhibit 2.4). The Warrants are immediately exercisable.
The Warrants were issued pursuant to an exemption from registration under
Regulation S of the Securities Act to two private offshore entities who are not
"U.S. Persons" (as defined in Rule 902(o) of Regulation S). No underwriter was
used and no underwriter discounts or commissions were paid. The Company issued
the Warrants pursuant to Rule 903 of Regulation S based on the following:
representations that the offshore entities are not U.S. Persons, the Company 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.
(b) On March 10, 1998, the Company sold 200 shares of the Company's Series C 6%
Convertible Preferred Shares pursuant to an exemption from registration under
Regulation S of the Securities Act of 1933 (the "Preferred Shares") for an
aggregate purchase price of $2 million. The Shares were issued to seven private
investors who are not "U.S. Persons" (as defined in Rule 902(o) of Regulation
S). The Company issued the Preferred Shares to the investors pursuant to the
terms of a Securities Subscription Agreement dated as of March 6, 1998 (a copy
of which is attached as Exhibit 10.53 hereto). The Preferred Shares were issued
for cash. No underwriter was used and no underwriter discounts or commissions
were paid.
The Preferred Shares are convertible into Common Shares of the Company
commencing April 20, 1998 at the conversion price per Preferred Share equal to
$10,000 divided by the lesser of (x) $1.75 and (y) Seventy Five Percent (75%) of
the arithmetic average of the closing bid prices for each of the five trading
days prior to the exercise date of any such conversion. Based on the conversion
price formula the Preferred Shares will be convertible into no less than 1.14
million Common Shares.
<PAGE> 3
In connection with the purchase of the Preferred Shares, the Company
issued to the Preferred Share investors Warrants to purchase up to 250,000
Common Shares of the Company, exercisable at $2.38 per share, having an exercise
term of two years from the date of issuance (the "$2.38 Warrants") (the Form of
Warrant is attached as Exhibit 2.5). The Warrants are immediately exercisable.
The Company issued the Preferred Shares and the $2.38 Warrants 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 Securities Subscription Agreement, and based on the following:
the Company 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. A copy of the Company's March 11,
1998 Press Release is attached as Exhibit 20.2.
Item 7. Financial Statements and Exhibits.
2.3 Form of Warrant to Purchase 1,000,000 Common Shares of the Company at
$1.00
2.4 Form of Warrant to Purchase 1,000,000 Common Shares of the Company at
$.75
2.5 Form of Warrant to Purchase 250,000 Common Shares of the Company at
$2.38
3.3 Articles of Amendment to Articles of Incorporation as of March 9, 1998
designating the terms of the Series C Preferred Shares
10.53 Offshore Securities Subscription Agreement dated for 6% Convertible
Preferred Shares - Series C March 6, 1998 (Exhibits and Schedules
Omitted)
20.2 Press Release issued by the Company on March 11, 1998
20.3 Press Release issued by the Company on March 12, 1998
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company 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,
Treasurer and Secretary
Date: March 18, 1998
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
2.3 Form of Warrant to Purchase 1,000,000 Common Shares of the
Company at $1.00
2.4 Form of Warrant to Purchase 1,000,000 Common Shares of the
Company at $.75
2.5 Form of Warrant to Purchase 250,000 Common Shares of the Company
at $2.38
3.3 Articles of Amendment to Articles of Incorporation as of March 9,
1998 designating the terms of the Series C Preferred Shares
10.53 Offshore Securities Subscription Agreement dated for 6%
Convertible Preferred Shares - Series C March 6, 1998 (Exhibits
and Schedules Omitted)
20.2 Press Release issued by the Company on March 11, 1998
20.3 Press Release issued by the Company on March 12, 1998
</TABLE>
<PAGE> 1
EXHIBIT 2.3
THE WARRANTS REPRESENTED BY THIS CERTIFICATE ("WARRANTS") AND THE UNDERLYING
WARRANT SHARES ("WARRANT SHARES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE WARRANTS AND WARRANT SHARES
MAY NOT BE OFFERED OR SOLD TO ANY U.S. PERSON, THE WARRANTS MAY NOT BE EXERCISED
IN THE UNITED STATES (EXCEPT AS PERMITTED BY REGULATION S), AND THE WARRANT
SHARES MAY NOT BE DELIVERED IN THE UNITED STATES, UNLESS, IN EACH CASE, THE
OFFER AND SALE OF THE WARRANTS AND WARRANT SHARES HAS BEEN REGISTERED UNDER THE
SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE, AS EVIDENCED
BY AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.
WARRANTS TO PURCHASE COMMON STOCK NO. 1
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC., a Colorado corporation
(the "Company") hereby grants to _______________ (the "Holder") ONE MILLION
(1,000,000) warrants (the "Warrants") for the purchase of common stock of the
Company (the "Common Stock"), with each whole Warrant entitling the Holder to
purchase one share of Common Stock (each a "Warrant Share" and collectively the
"Warrant Shares") on the terms and subject to the conditions set forth herein.
1. TERM. The Warrants may be exercised, in whole or in part, at any
time and from time to time from the date hereof until 5:00 p.m. Eastern Time on
February 17, 2001 (the "Exercise Period").
2. EXERCISE PRICE. The initial exercise price of each whole Warrant
shall be $1.00 (the "Exercise Price"). The Exercise Price shall be subject to
adjustment as provided in Section 7.
3. EXERCISE OF WARRANTS. The Warrants are exercisable on the terms
provided herein at any time during the Exercise Period by the surrender of this
certificate to the Company at its principal office together with the Notice of
Exercise annexed hereto duly completed and executed on behalf of the Holder,
accompanied by payment in full, in immediately available funds, of the amount of
the aggregate Exercise Price of the Warrant Shares being purchased upon such
exercise. The Holder shall be deemed the record owner of such Warrant Shares as
of and from the close of business on the date on which this certificate is
surrendered together with the completed Notice of Exercise and payment in full
as required above (the "Exercise Date"). The Company agrees that the Warrant
Shares so purchased shall be issued as soon as practicable thereafter. It shall
be a condition to the exercise of the Warrants that the Holder or any transferee
hereof certify to the Company, at the time of exercise, either that the Holder
is not a U.S. person (as defined in Regulation S under the Securities Act of
1933, as amended (the "Securities Act")) and that the Warrants are not being
exercised on behalf of a U.S. person, or to provide an opinion of counsel
satisfactory to the Company that the offer and sale of the Warrants and the
Warrant
<PAGE> 2
Shares to be delivered upon exercise thereof has been registered under the
Securities Act or that an exemption from the registration requirements of the
Securities Act is available. It shall be a further condition to the exercise of
the Warrants that the Warrants may not be exercised in the United States and the
Warrant Shares may not be delivered in the United States absent registration
under the Securities Act or available exemption from registration, unless
otherwise permitted by Regulation S.
4. WARRANTS CONFER NO RIGHTS OF STOCKHOLDER. The Holder shall not have
any rights as a stockholder of the Company with regard to the Warrant Shares
prior to the Exercise Date for any actual purchase of Warrant Shares.
5. INVESTMENT REPRESENTATION. Neither the Warrants nor the Warrants
Shares issuable upon the exercise of the Warrants have been registered under the
Securities Act or any state securities laws. The Holder acknowledges by
acceptance of this certificate that, as of the date of this Warrant and at the
time of exercise, (a) the Holder has acquired the Warrants or the Warrant
Shares, as the case may be, for investment and not with a view to distribution;
and either (b) the Holder has a pre-existing personal or business relationship
with the Company or its executive officers, or by reason of the Holder's
business or financial experience the Holder has the capacity to protect the
Holder's own interests in connection with the transaction; and (c) the Holder is
an accredited investor as that term is defined in Rule 501(a) of Regulation D
under the Securities Act. The Holder, by acceptance of this certificate,
consents to the placement of a restrictive legend (the "Legend") on the
certificates representing any Warrant Shares that are purchased upon exercise of
the Warrants during the applicable restricted period under Regulation S or any
other applicable restricted period under the Securities Act (the "Restricted
Period"). The Legend shall be in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SHARES") HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS ("STATE LAWS") OR
ANY SECURITIES LAWS OF JURISDICTIONS OUTSIDE OF THE UNITED STATES, AND
MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE UNITED STATES
OR TO A "U.S. PERSON," AS THAT TERM IS DEFINED IN REGULATION S UNDER
THE SECURITIES ACT, EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER THE SECURITIES ACT COVERING THE SECURITIES, OR
(2) UPON DELIVERY TO THE COMPANY OF AN OPINION OF U.S. COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT THE SECURITIES MAY BE
TRANSFERRED WITHOUT REGISTRATION PURSUANT TO (A) RULE 144, RULE 144A,
OR REGULATION S PROMULGATED UNDER THE SECURITIES ACT OR (B) ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE SECURITIES ACT.
Upon the issuance of the Warrant Shares the Company will notify the
transfer agent of the date of expiration of the Restricted Period. Upon delivery
to the Company of an opinion of U.S. Counsel reasonably satisfactory to the
Company that the securities may be transferred without registration pursuant to
Regulation S the Company shall instruct the transfer agent to
<PAGE> 3
effectuate the removal of the Legend from the certificate(s) representing the
Shares upon the expiration of the Restricted Period.
6. RESERVATION OF SHARES. The Company agrees that, at all times during
the Exercise Period, the Company will have authorized and reserved, for the
exclusive purpose of issuance and delivery upon exercise of the Warrants, a
sufficient number of shares of its Common Stock to provide for the issuance of
the Warrant Shares.
7. ADJUSTMENT FOR CHANGES IN CAPITAL STOCK. If the Company at any time
during the Exercise Period shall, by subdivision, combination or
reclassification of securities, change any of the securities into which the
Warrants are exercisable into the same or a different number of securities of
any class or classes, the Warrants shall thereafter entitle the Holder to
acquire such number and kind of securities as would have been issuable as a
result of such change with respect to the Warrant Shares as if the Warrant
Shares had been outstanding immediately prior to such subdivision, combination,
or reclassification. If shares of the Company's Common Stock are subdivided into
a greater number of shares of Common Stock, the Exercise Price for the Warrant
Shares upon exercise of the Warrants shall be proportionately reduced and the
number of Warrant Shares shall be proportionately increased; and conversely, if
shares of the Company's Common Stock are combined into a smaller number of
shares of Common Stock, the Exercise Price shall be proportionately increased,
and the number of Warrant Shares shall be proportionately decreased.
8. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(a) Definitions. The following terms, when used herein, shall
have the meanings set forth below:
(i) "Commission" shall mean the Securities and
Exchange Commission or any other federal agency at the time
administering the Securities Act.
(ii) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(iii) The term "register", "registered", and
"registration" shall refer to a registration effected by
preparing and filing a registration statement or similar
document in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration
statement or document.
(iv) "Registrable Securities" shall mean the Warrant
Shares.
(b) Piggyback Registration. If (but without any obligation to
do so) the Company proposes to register (including for this purpose a
registration effected by the Company for shareholders other than the
Holder) any of its Common Stock in connection with the public offering
of such securities solely for cash (other than a registration relating
solely to the sale of securities to participants in a Company stock
plan, or a registration on any form which does not include
substantially the same information, other than
<PAGE> 4
information related to the selling shareholders or their plan of
distribution, as would be required to be included in a registration
statement covering the sale of the Registrable Securities), the Company
shall, at such time, promptly give the Holder written notice of such
registration. Upon the written request of the Holder given within
twenty (20) days after mailing of such notice by the Company in
accordance with Section 11, the Company shall, subject to the
provisions of Section 8(f), cause to be registered under the Securities
Act all of the Registrable Securities that such Holder has requested to
be registered. The Company shall not be required to include Registrable
Securities in any registration statement on more than two occasions.
(c) Obligations of the Company. Whenever the Holder has
requested that any the Registrable Securities be registered pursuant to
Section 8(b), the Company shall, as expeditiously as reasonably
possible:
(i) Prepare and file with the Commission a
registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration
statement to become effective, and, upon the request of the
Holder keep such registration statement effective for up to
one hundred twenty (120) days.
(ii) Prepare and file with the Commission such
amendments and supplements to such registration statement and
the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(iii) Furnish to the Holder such numbers of copies of
a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and
such other documents as the Holder may reasonably request in
order to facilitate the disposition of Registrable Securities
owned by the Holder.
(iv) Use its best efforts to register and qualify the
securities covered by such registration statement under such
other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by the Holder, provided that the
Company shall not be required to qualify to do business or to
file a general consent to service or process in any such
states of jurisdictions.
(v) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing
underwriter of such offering. If the Holder participates in
such underwriting the Holder shall also enter into and perform
its obligations under such agreement.
(vi) Notify the Holder at any time when a prospectus
relating to the Registrable Securities covered by such
registration statement is required to be delivered under the
Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in
effect, includes an
<PAGE> 5
untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing.
(d) Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to Section
8(c) with respect to the Registrable Securities of the Holder that the
Holder shall furnish to the Company such information regarding itself,
the Registrable Securities held by it, and the intended method of
disposition of such securities as shall be required to effect the
registration of the Holder's Registrable Securities.
(e) Expenses of Registration. The Company shall bear and pay
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the
registrations pursuant to Section 8(c), for the Holder, including
(without limitation) all registration, filing, and qualification fees,
printers and accounting fees relating or allocable thereto and the fees
and disbursements of counsel for the Company, but excluding
underwriting discounts and commissions relating to Registrable
Securities.
(f) Underwriting Requirements. In connection with any offering
involving an underwriting of shares being issued by the Company, the
Company shall not be required to include any of the Holder's securities
in such underwriting unless the Holder accepts the terms of the
underwriting as agreed upon between the Company and the underwriters
selected by it, and then only in such quantity as will not, in the
opinion of the underwriters, jeopardize the success of the offering by
the Company. If the total amount of securities, including Registrable
Securities, requested by shareholders to be included in such offering
exceeds the amount of securities sold other than by the Company that
the underwriters reasonably believe compatible with the success of the
offering, then the Company shall be required to include in the offering
only that number of such securities, including Registrable Securities,
which the underwriters believe will not jeopardize the success of the
offering (the securities so included to be apportioned pro rata among
the selling shareholders according to the total amount of securities
entitled to be included therein owned by each selling shareholder or in
such other proportion as shall mutually be agreed to by such selling
shareholders). For purposes of the preceding parenthetical concerning
apportionment, for any selling shareholder which is a holder of
Registrable Securities and which is a partnership or corporation, the
partners, retired partners and shareholders of such holder, or the
estates and family members of any such partners and retired partners
and any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single "selling shareholder," and any pro-rata reduction
with respect to such "selling shareholder" shall be based upon the
aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling shareholder," as
defined in this sentence.
(g) Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with
respect to the interpretation or implementation of this Agreement.
<PAGE> 6
(h) Indemnification. In the event any Registrable Securities
are included in a registration statement under this Agreement:
(i) To the extent permitted by law, the Company will
indemnify and hold harmless the Holder, any underwriter (as
defined in the Securities Act) for the Holder and each person,
if any, who controls the Holder or underwriter within the
meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages or liabilities (joint or several) to
which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration
statement, including any preliminary prospectus (but only if
such is not corrected in the final prospectus) contained
therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the
statements therein not misleading (but only if such is not
corrected in the final prospectus), or (iii) any violation or
alleged violation by the Company in connection with the
registration of Registrable Securities of the Securities Act,
the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange
Act or any state securities law; and the Company will pay to
the Holder, and any underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this Section 8(h)(i)
shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability, or action if such settlement
is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim damage,
liability, or action to the extent that it arises out of or is
based upon a violation which occurs in reliance upon and in
conformity with written information furnished expressly for
use in connection with such registration by the Holder, or any
underwriter or controlling person of the Holder.
(ii) To the extent permitted by law, the Holder will
indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the
registration statement, each person, if any, who controls the
Company within the meaning of the Securities Act, any
underwriter, any other shareholder selling securities in such
registration statement and any controlling person of any such
underwriter or other shareholder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Securities
Act, the Exchange Act or other federal or state law, insofar
as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with
written information furnished by the Holder expressly for use
in connection with such registration; and the holder will pay,
as incurred, any legal or other expenses
<PAGE> 7
reasonably incurred by any person intended to be indemnified
pursuant to this Section 8(h)(ii), in connection with
investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity
agreement contained in this Section 8(h)(ii) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably
withheld; provided, that, in no event shall any indemnity
under this Section 8(h)(ii) exceed the gross proceeds from the
offering received by the Holder.
(iii) Promptly after receipt by an indemnified party
under this Section 8(h) of notice of the commencement of any
action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made
against any indemnifying party under this Section 8(h),
deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that
an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would
be inappropriate due to actual or potential differing
interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to
deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the
indemnified party under this Section 8(h), but the omission so
to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 8(h).
9. ASSIGNMENT OF REGISTRATION RIGHTS. The registration rights granted
hereunder may be assigned by the Holder to a transferee or assignee of the
Registrable Securities; provided, however, the Company is, within a reasonable
time after such transfer, furnished with written notice of the name and address
of such transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act.
10. LOSS, THEFT, DESTRUCTION OR MUTILATION OF CERTIFICATE. Upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any certificate representing the Warrants or the
Warrant Shares (referred to herein as the "original certificate"), and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to the Company, and upon reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the original
certificate if mutilated, the Company will make and deliver a new certificate of
like tenor in lieu of the original certificate.
<PAGE> 8
11. GENERAL. This certificate shall be governed by and construed in
accordance with the laws of the State of Colorado applicable to contracts
between Colorado residents entered into and to be performed entirely within the
State of Colorado. The headings herein are for purposes of convenience and
reference only and shall not be used to construe or interpret the terms of this
certificate. The terms of this certificate may be amended, waived, discharged or
terminated only by a written instrument signed by both the Company and the
Holder. All notices and other communications from the Company to the Holder
shall be mailed by first-class registered or certified mail, postage pre-paid,
to the address furnished to the Company in writing by the last Holder who shall
have furnished an address to the Company in writing.
Dated: February 17, 1998
CONSOLIDATED CAPITAL OF NORTH
AMERICA, INC.
By:
--------------------------------------
(Authorized Signature)
--------------------------------------
(Name and Title)
<PAGE> 9
NOTICE OF EXERCISE
Dated _______________, 19__
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _______ shares of Common Stock and hereby
makes payment of ____________________ in payment of the actual exercise price
thereof.
__________________________
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name ___________________________________________________________________________
(Please typewrite or print in block letters)
Signature ___________________________________
__________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, _______________________________________ hereby
sells, assigns and transfer unto
Name ___________________________________________________________________________
(Please typewrite or print in block letters)
Address_________________________________________________________________________
the right to purchase Common Stock represented by this Warrant to the extent of
________ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint ______________________ Attorney, to transfer
the same on the books of the Company with full power of substitution in the
premises.
Dated: ___________________, 19__
Signature ______________________
Signature Guaranteed
________________________
<PAGE> 1
EXHIBIT 2.4
THE WARRANTS REPRESENTED BY THIS CERTIFICATE ("WARRANTS") AND THE UNDERLYING
WARRANT SHARES ("WARRANT SHARES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE WARRANTS AND WARRANT SHARES
MAY NOT BE OFFERED OR SOLD TO ANY U.S. PERSON, THE WARRANTS MAY NOT BE EXERCISED
IN THE UNITED STATES (EXCEPT AS PERMITTED BY REGULATION S), AND THE WARRANT
SHARES MAY NOT BE DELIVERED IN THE UNITED STATES, UNLESS, IN EACH CASE, THE
OFFER AND SALE OF THE WARRANTS AND WARRANT SHARES HAS BEEN REGISTERED UNDER THE
SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE, AS EVIDENCED
BY AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.
WARRANTS TO PURCHASE COMMON STOCK NO. 2
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC., a Colorado corporation
(the "Company") hereby grants to _______________ (the "Holder") ONE MILLION
(1,000,000) warrants (the "Warrants") for the purchase of common stock of the
Company (the "Common Stock"), with each whole Warrant entitling the Holder to
purchase one share of Common Stock (each a "Warrant Share" and collectively the
"Warrant Shares") on the terms and subject to the conditions set forth herein.
1. TERM. The Warrants may be exercised, in whole or in part, at any
time and from time to time from the date hereof until 5:00 p.m. Eastern Time on
February 17, 2000 (the "Exercise Period").
2. EXERCISE PRICE. The initial exercise price of each whole Warrant
shall be $0.75 (the "Exercise Price"). The Exercise Price shall be subject to
adjustment as provided in Section 7.
3. EXERCISE OF WARRANTS. The Warrants are exercisable on the terms
provided herein at any time during the Exercise Period by the surrender of this
certificate to the Company at its principal office together with the Notice of
Exercise annexed hereto duly completed and executed on behalf of the Holder,
accompanied by payment in full, in immediately available funds, of the amount of
the aggregate Exercise Price of the Warrant Shares being purchased upon such
exercise. The Holder shall be deemed the record owner of such Warrant Shares as
of and from the close of business on the date on which this certificate is
surrendered together with the completed Notice of Exercise and payment in full
as required above (the "Exercise Date"). The Company agrees that the Warrant
Shares so purchased shall be issued as soon as practicable thereafter. It shall
be a condition to the exercise of the Warrants that the Holder or any transferee
hereof certify to the Company, at the time of exercise, either that the Holder
is not a U.S. person (as defined in Regulation S under the Securities Act of
1933, as amended (the "Securities Act")) and that the Warrants are not being
exercised on behalf of a U.S. person, or to provide an opinion of counsel
satisfactory to the Company that the offer and sale of the Warrants and the
Warrant Shares to be delivered upon exercise thereof has been registered under
the Securities Act or that an exemption from the registration requirements of
the Securities Act is available. It shall be a further condition to the exercise
of the Warrants that the Warrants may not be exercised in the United States and
the Warrant Shares may not be delivered in the United States absent
<PAGE> 2
registration under the Securities Act or available exemption from registration,
unless otherwise permitted by Regulation S.
4. WARRANTS CONFER NO RIGHTS OF STOCKHOLDER. The Holder shall not have
any rights as a stockholder of the Company with regard to the Warrant Shares
prior to the Exercise Date for any actual purchase of Warrant Shares.
5. INVESTMENT REPRESENTATION. Neither the Warrants nor the Warrants
Shares issuable upon the exercise of the Warrants have been registered under the
Securities Act or any state securities laws. The Holder acknowledges by
acceptance of this certificate that, as of the date of this Warrant and at the
time of exercise, (a) the Holder has acquired the Warrants or the Warrant
Shares, as the case may be, for investment and not with a view to distribution;
and either (b) the Holder has a pre-existing personal or business relationship
with the Company or its executive officers, or by reason of the Holder's
business or financial experience the Holder has the capacity to protect the
Holder's own interests in connection with the transaction; and (c) the Holder is
an accredited investor as that term is defined in Rule 501(a) of Regulation D
under the Securities Act. The Holder, by acceptance of this certificate,
consents to the placement of a restrictive legend (the "Legend") on the
certificates representing any Warrant Shares that are purchased upon exercise of
the Warrants during the applicable restricted period under Regulation S or any
other applicable restricted period under the Securities Act (the "Restricted
Period"). The Legend shall be in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SHARES") HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS ("STATE LAWS") OR
ANY SECURITIES LAWS OF JURISDICTIONS OUTSIDE OF THE UNITED STATES, AND
MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE UNITED STATES
OR TO A "U.S. PERSON," AS THAT TERM IS DEFINED IN REGULATION S UNDER
THE SECURITIES ACT, EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER THE SECURITIES ACT COVERING THE SECURITIES, OR
(2) UPON DELIVERY TO THE COMPANY OF AN OPINION OF U.S. COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT THE SECURITIES MAY BE
TRANSFERRED WITHOUT REGISTRATION PURSUANT TO (A) RULE 144, RULE 144A,
OR REGULATION S PROMULGATED UNDER THE SECURITIES ACT OR (B) ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE SECURITIES ACT.
Upon the issuance of the Warrant Shares the Company will notify the
transfer agent of the date of expiration of the Restricted Period. Upon delivery
to the Company of an opinion of U.S. Counsel reasonably satisfactory to the
Company that the securities may be transferred without registration pursuant to
Regulation S the Company shall instruct the transfer agent to effectuate the
removal of the Legend from the certificate(s) representing the Shares upon the
expiration of the Restricted Period.
6. RESERVATION OF SHARES. The Company agrees that, at all times during
the Exercise Period, the Company will have authorized and reserved, for the
exclusive purpose of issuance and delivery upon exercise of the Warrants, a
sufficient number of shares of its Common Stock to provide for the issuance of
the Warrant Shares.
<PAGE> 3
7. ADJUSTMENT FOR CHANGES IN CAPITAL STOCK. If the Company at any time
during the Exercise Period shall, by subdivision, combination or
reclassification of securities, change any of the securities into which the
Warrants are exercisable into the same or a different number of securities of
any class or classes, the Warrants shall thereafter entitle the Holder to
acquire such number and kind of securities as would have been issuable as a
result of such change with respect to the Warrant Shares as if the Warrant
Shares had been outstanding immediately prior to such subdivision, combination,
or reclassification. If shares of the Company's Common Stock are subdivided into
a greater number of shares of Common Stock, the Exercise Price for the Warrant
Shares upon exercise of the Warrants shall be proportionately reduced and the
number of Warrant Shares shall be proportionately increased; and conversely, if
shares of the Company's Common Stock are combined into a smaller number of
shares of Common Stock, the Exercise Price shall be proportionately increased,
and the number of Warrant Shares shall be proportionately decreased.
8. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(a) Definitions. The following terms, when used herein, shall
have the meanings set forth below:
(i) "Commission" shall mean the Securities and
Exchange Commission or any other federal agency at the time
administering the Securities Act.
(ii) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(iii) The term "register", "registered", and
"registration" shall refer to a registration effected by
preparing and filing a registration statement or similar
document in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration
statement or document.
(iv) "Registrable Securities" shall mean the Warrant
Shares.
(b) Piggyback Registration. If (but without any obligation to
do so) the Company proposes to register (including for this purpose a
registration effected by the Company for shareholders other than the
Holder) any of its Common Stock in connection with the public offering
of such securities solely for cash (other than a registration relating
solely to the sale of securities to participants in a Company stock
plan, or a registration on any form which does not include
substantially the same information, other than information related to
the selling shareholders or their plan of distribution, as would be
required to be included in a registration statement covering the sale
of the Registrable Securities), the Company shall, at such time,
promptly give the Holder written notice of such registration. Upon the
written request of the Holder given within twenty (20) days after
mailing of such notice by the Company in accordance with Section 11,
the Company shall, subject to the provisions of Section 8(f), cause to
be registered under the Securities Act all of the Registrable
Securities that such Holder has requested to be registered. The Company
shall not be required to include Registrable Securities in any
registration statement on more than two occasions.
<PAGE> 4
(c) Obligations of the Company. Whenever the Holder has
requested that any the Registrable Securities be registered pursuant to
Section 8(b), the Company shall, as expeditiously as reasonably
possible:
(i) Prepare and file with the Commission a
registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration
statement to become effective, and, upon the request of the
Holder keep such registration statement effective for up to
one hundred twenty (120) days.
(ii) Prepare and file with the Commission such
amendments and supplements to such registration statement and
the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(iii) Furnish to the Holder such numbers of copies of
a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and
such other documents as the Holder may reasonably request in
order to facilitate the disposition of Registrable Securities
owned by the Holder.
(iv) Use its best efforts to register and qualify the
securities covered by such registration statement under such
other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by the Holder, provided that the
Company shall not be required to qualify to do business or to
file a general consent to service or process in any such
states of jurisdictions.
(v) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing
underwriter of such offering. If the Holder participates in
such underwriting the Holder shall also enter into and perform
its obligations under such agreement.
(vi) Notify the Holder at any time when a prospectus
relating to the Registrable Securities covered by such
registration statement is required to be delivered under the
Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in
the light of the circumstances then existing.
(d) Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to Section
8(c) with respect to the Registrable Securities of the Holder that the
Holder shall furnish to the Company such information regarding itself,
the Registrable Securities held by it, and the intended method of
disposition of such securities as shall be required to effect the
registration of the Holder's Registrable Securities.
<PAGE> 5
(e) Expenses of Registration. The Company shall bear and pay
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the
registrations pursuant to Section 8(c), for the Holder, including
(without limitation) all registration, filing, and qualification fees,
printers and accounting fees relating or allocable thereto and the fees
and disbursements of counsel for the Company, but excluding
underwriting discounts and commissions relating to Registrable
Securities.
(f) Underwriting Requirements. In connection with any offering
involving an underwriting of shares being issued by the Company, the
Company shall not be required to include any of the Holder's securities
in such underwriting unless the Holder accepts the terms of the
underwriting as agreed upon between the Company and the underwriters
selected by it, and then only in such quantity as will not, in the
opinion of the underwriters, jeopardize the success of the offering by
the Company. If the total amount of securities, including Registrable
Securities, requested by shareholders to be included in such offering
exceeds the amount of securities sold other than by the Company that
the underwriters reasonably believe compatible with the success of the
offering, then the Company shall be required to include in the offering
only that number of such securities, including Registrable Securities,
which the underwriters believe will not jeopardize the success of the
offering (the securities so included to be apportioned pro rata among
the selling shareholders according to the total amount of securities
entitled to be included therein owned by each selling shareholder or in
such other proportion as shall mutually be agreed to by such selling
shareholders). For purposes of the preceding parenthetical concerning
apportionment, for any selling shareholder which is a holder of
Registrable Securities and which is a partnership or corporation, the
partners, retired partners and shareholders of such holder, or the
estates and family members of any such partners and retired partners
and any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single "selling shareholder," and any pro-rata reduction
with respect to such "selling shareholder" shall be based upon the
aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling shareholder," as
defined in this sentence.
(g) Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with
respect to the interpretation or implementation of this Agreement.
(h) Indemnification. In the event any Registrable Securities
are included in a registration statement under this Agreement:
(i) To the extent permitted by law, the Company will
indemnify and hold harmless the Holder, any underwriter (as
defined in the Securities Act) for the Holder and each person,
if any, who controls the Holder or underwriter within the
meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages or liabilities (joint or several) to
which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration
statement, including any
<PAGE> 6
preliminary prospectus (but only if such is not corrected in
the final prospectus) contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading
(but only if such is not corrected in the final prospectus),
or (iii) any violation or alleged violation by the Company in
connection with the registration of Registrable Securities of
the Securities Act, the Exchange Act, any state securities law
or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law; and the
Company will pay to the Holder, and any underwriter or
controlling person, as incurred, any legal or other expenses
reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement
contained in this Section 8(h)(i) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case
for any such loss, claim damage, liability, or action to the
extent that it arises out of or is based upon a violation
which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with
such registration by the Holder, or any underwriter or
controlling person of the Holder.
(ii) To the extent permitted by law, the Holder will
indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the
registration statement, each person, if any, who controls the
Company within the meaning of the Securities Act, any
underwriter, any other shareholder selling securities in such
registration statement and any controlling person of any such
underwriter or other shareholder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Securities
Act, the Exchange Act or other federal or state law, insofar
as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with
written information furnished by the Holder expressly for use
in connection with such registration; and the holder will pay,
as incurred, any legal or other expenses reasonably incurred
by any person intended to be indemnified pursuant to this
Section 8(h)(ii), in connection with investigating or
defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in
this Section 8(h)(ii) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of
the Holder, which consent shall not be unreasonably withheld;
provided, that, in no event shall any indemnity under this
Section 8(h)(ii) exceed the gross proceeds from the offering
received by the Holder.
(iii) Promptly after receipt by an indemnified party
under this Section 8(h) of notice of the commencement of any
action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made
against any indemnifying party under this Section 8(h),
deliver to the indemnifying
<PAGE> 7
party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and
expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due
to actual or potential differing interests between such
indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of
the commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve such indemnifying
party of any liability to the indemnified party under this
Section 8(h), but the omission so to deliver written notice to
the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under
this Section 8(h).
9. ASSIGNMENT OF REGISTRATION RIGHTS. The registration rights granted
hereunder may be assigned by the Holder to a transferee or assignee of the
Registrable Securities; provided, however, the Company is, within a reasonable
time after such transfer, furnished with written notice of the name and address
of such transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act.
10. LOSS, THEFT, DESTRUCTION OR MUTILATION OF CERTIFICATE. Upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any certificate representing the Warrants or the
Warrant Shares (referred to herein as the "original certificate"), and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to the Company, and upon reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the original
certificate if mutilated, the Company will make and deliver a new certificate of
like tenor in lieu of the original certificate.
11. GENERAL. This certificate shall be governed by and construed in
accordance with the laws of the State of Colorado applicable to contracts
between Colorado residents entered into and to be performed entirely within the
State of Colorado. The headings herein are for purposes of convenience and
reference only and shall not be used to construe or interpret the terms of this
certificate. The terms of this certificate may be amended, waived, discharged or
terminated only by a written instrument signed by both the Company and the
Holder. All notices and other communications from the Company to the Holder
shall be mailed by first-class registered or certified mail, postage pre-paid,
to the address furnished to the Company in writing by the last Holder who shall
have furnished an address to the Company in writing.
<PAGE> 8
Dated: February 17, 1998
CONSOLIDATED CAPITAL OF NORTH
AMERICA, INC.
By:
--------------------------------------
(Authorized Signature)
--------------------------------------
(Name and Title)
<PAGE> 9
NOTICE OF EXERCISE
Dated _______________, 19__
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _______ shares of Common Stock and hereby
makes payment of ____________________ in payment of the actual exercise price
thereof.
___________________________
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name ___________________________________________________________________________
(Please typewrite or print in block letters)
Signature ___________________________________
___________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, _______________________________________ hereby
sells, assigns and transfer unto
Name ___________________________________________________________________________
(Please typewrite or print in block letters)
Address_________________________________________________________________________
the right to purchase Common Stock represented by this Warrant to the extent of
________ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint ______________________ Attorney, to transfer
the same on the books of the Company with full power of substitution in the
premises.
Dated: ___________________, 19__
Signature ______________________
Signature Guaranteed
________________________
<PAGE> 1
EXHIBIT 2.5
THE WARRANTS REPRESENTED BY THIS CERTIFICATE ("WARRANTS") AND THE UNDERLYING
WARRANT SHARES ("WARRANT SHARES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE WARRANTS AND WARRANT SHARES
MAY NOT BE OFFERED OR SOLD TO ANY U.S. PERSON, THE WARRANTS MAY NOT BE EXERCISED
IN THE UNITED STATES (EXCEPT AS PERMITTED BY REGULATION S), AND THE WARRANT
SHARES MAY NOT BE DELIVERED IN THE UNITED STATES, UNLESS, IN EACH CASE, THE
OFFER AND SALE OF THE WARRANTS AND WARRANT SHARES HAS BEEN REGISTERED UNDER THE
SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE, AS EVIDENCED
BY AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.
WARRANTS TO PURCHASE COMMON STOCK NO. 3
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC., a Colorado corporation
(the "Company") hereby grants to ____________ (the "Holder") Two Hundred Fifty
Thousand (250,000) warrants (the "Warrants") for the purchase of common stock of
the Company (the "Common Stock"), with each whole Warrant entitling the Holder
to purchase one share of Common Stock (each a "Warrant Share" and collectively
the "Warrant Shares") on the terms and subject to the conditions set forth
herein.
1. TERM. The Warrants may be exercised, in whole or in part, at any
time and from time to time from the date hereof until 5:00 p.m. Eastern Time on
March 6, 2000 (the "Exercise Period").
2. EXERCISE PRICE. The initial exercise price of each whole Warrant
shall be $2.38 (the "Exercise Price"). The Exercise Price shall be subject to
adjustment as provided in Section 7.
3. EXERCISE OF WARRANTS. The Warrants are exercisable on the terms
provided herein at any time during the Exercise Period by the surrender of this
certificate to the Company at its principal office together with the Notice of
Exercise annexed hereto duly completed and executed on behalf of the Holder,
accompanied by payment in full, in immediately available funds, of the amount of
the aggregate Exercise Price of the Warrant Shares being purchased upon such
exercise. The Holder shall be deemed the record owner of such Warrant Shares as
of and from the close of business on the date on which this certificate is
surrendered together with the completed Notice of Exercise and payment in full
as required above (the "Exercise Date"). The Company agrees that the Warrant
Shares so purchased shall be issued as soon as practicable thereafter. It shall
be a condition to the exercise of the Warrants that the Holder or any transferee
hereof certify to the Company, at the time of exercise, either that the Holder
is not a U.S. person (as defined in Regulation S under the Securities Act of
1933, as amended (the "Securities Act")) and that the Warrants are not being
exercised on behalf of a U.S. person, or to provide an opinion of counsel
satisfactory to the Company that the offer and sale of the Warrants and the
Warrant Shares to be delivered upon exercise thereof has been registered under
the Securities Act or that an exemption from the registration requirements of
the Securities Act is available. It shall be a further condition to the exercise
of the Warrants that the Warrants may not be exercised in the United States and
the Warrant Shares may not be delivered in the United States absent
<PAGE> 2
registration under the Securities Act or available exemption from registration,
unless otherwise permitted by Regulation S.
4. WARRANTS CONFER NO RIGHTS OF STOCKHOLDER. The Holder shall not have
any rights as a stockholder of the Company with regard to the Warrant Shares
prior to the Exercise Date for any actual purchase of Warrant Shares.
5. INVESTMENT REPRESENTATION. Neither the Warrants nor the Warrants
Shares issuable upon the exercise of the Warrants have been registered under the
Securities Act or any state securities laws. The Holder acknowledges by
acceptance of this certificate that, as of the date of this Warrant and at the
time of exercise, (a) the Holder has acquired the Warrants or the Warrant
Shares, as the case may be, for investment and not with a view to distribution;
and either (b) the Holder has a pre-existing personal or business relationship
with the Company or its executive officers, or by reason of the Holder's
business or financial experience the Holder has the capacity to protect the
Holder's own interests in connection with the transaction; and (c) the Holder is
an accredited investor as that term is defined in Rule 501(a) of Regulation D
under the Securities Act. The Holder, by acceptance of this certificate,
consents to the placement of a restrictive legend (the "Legend") on the
certificates representing any Warrant Shares that are purchased upon exercise of
the Warrants during the applicable restricted period under Regulation S or any
other applicable restricted period under the Securities Act (the "Restricted
Period"). The Legend shall be in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SHARES") HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS ("STATE LAWS") OR
ANY SECURITIES LAWS OF JURISDICTIONS OUTSIDE OF THE UNITED STATES, AND
MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE UNITED STATES
OR TO A "U.S. PERSON," AS THAT TERM IS DEFINED IN REGULATION S UNDER
THE SECURITIES ACT, EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER THE SECURITIES ACT COVERING THE SECURITIES, OR
(2) UPON DELIVERY TO THE COMPANY OF AN OPINION OF U.S. COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT THE SECURITIES MAY BE
TRANSFERRED WITHOUT REGISTRATION PURSUANT TO (A) RULE 144, RULE 144A,
OR REGULATION S PROMULGATED UNDER THE SECURITIES ACT OR (B) ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE SECURITIES ACT.
Upon the issuance of the Warrant Shares the Company will notify the
transfer agent of the date of expiration of the Restricted Period. Upon delivery
to the Company of an opinion of U.S. Counsel reasonably satisfactory to the
Company that the securities may be transferred without registration pursuant to
Regulation S the Company shall instruct the transfer agent to effectuate the
removal of the Legend from the certificate(s) representing the Shares upon the
expiration of the Restricted Period.
6. RESERVATION OF SHARES. The Company agrees that, at all times during
the Exercise Period, the Company will have authorized and reserved, for the
exclusive purpose of issuance and delivery upon exercise of the Warrants, a
sufficient number of shares of its Common Stock to provide for the issuance of
the Warrant Shares.
<PAGE> 3
7. ADJUSTMENT FOR CHANGES IN CAPITAL STOCK. If the Company at any time
during the Exercise Period shall, by subdivision, combination or
reclassification of securities, change any of the securities into which the
Warrants are exercisable into the same or a different number of securities of
any class or classes, the Warrants shall thereafter entitle the Holder to
acquire such number and kind of securities as would have been issuable as a
result of such change with respect to the Warrant Shares as if the Warrant
Shares had been outstanding immediately prior to such subdivision, combination,
or reclassification. If shares of the Company's Common Stock are subdivided into
a greater number of shares of Common Stock, the Exercise Price for the Warrant
Shares upon exercise of the Warrants shall be proportionately reduced and the
number of Warrant Shares shall be proportionately increased; and conversely, if
shares of the Company's Common Stock are combined into a smaller number of
shares of Common Stock, the Exercise Price shall be proportionately increased,
and the number of Warrant Shares shall be proportionately decreased.
8. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(a) Definitions. The following terms, when used herein, shall
have the meanings set forth below:
(i) "Commission" shall mean the Securities and
Exchange Commission or any other federal agency at the time
administering the Securities Act.
(ii) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(iii) The term "register", "registered", and
"registration" shall refer to a registration effected by
preparing and filing a registration statement or similar
document in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration
statement or document.
(iv) "Registrable Securities" shall mean the Warrant
Shares.
(b) Piggyback Registration. If (but without any obligation to
do so) the Company proposes to register (including for this purpose a
registration effected by the Company for shareholders other than the
Holder) any of its Common Stock in connection with the public offering
of such securities solely for cash (other than a registration relating
solely to the sale of securities to participants in a Company stock
plan, or a registration on any form which does not include
substantially the same information, other than information related to
the selling shareholders or their plan of distribution, as would be
required to be included in a registration statement covering the sale
of the Registrable Securities), the Company shall, at such time,
promptly give the Holder written notice of such registration. Upon the
written request of the Holder given within twenty (20) days after
mailing of such notice by the Company in accordance with Section 11,
the Company shall, subject to the provisions of Section 8(f), cause to
be registered under the Securities Act all of the Registrable
Securities that such Holder has requested to be registered. The Company
shall not be required to include Registrable Securities in any
registration statement on more than two occasions.
<PAGE> 4
(c) Obligations of the Company. Whenever the Holder has
requested that any the Registrable Securities be registered pursuant to
Section 8(b), the Company shall, as expeditiously as reasonably
possible:
(i) Prepare and file with the Commission a
registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration
statement to become effective, and, upon the request of the
Holder keep such registration statement effective for up to
one hundred twenty (120) days.
(ii) Prepare and file with the Commission such
amendments and supplements to such registration statement and
the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(iii) Furnish to the Holder such numbers of copies of
a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and
such other documents as the Holder may reasonably request in
order to facilitate the disposition of Registrable Securities
owned by the Holder.
(iv) Use its best efforts to register and qualify the
securities covered by such registration statement under such
other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by the Holder, provided that the
Company shall not be required to qualify to do business or to
file a general consent to service or process in any such
states of jurisdictions.
(v) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing
underwriter of such offering. If the Holder participates in
such underwriting the Holder shall also enter into and perform
its obligations under such agreement.
(vi) Notify the Holder at any time when a prospectus
relating to the Registrable Securities covered by such
registration statement is required to be delivered under the
Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in
the light of the circumstances then existing.
(d) Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to Section
8(c) with respect to the Registrable Securities of the Holder that the
Holder shall furnish to the Company such information regarding itself,
the Registrable Securities held by it, and the intended method of
disposition of such securities as shall be required to effect the
registration of the Holder's Registrable Securities.
<PAGE> 5
(e) Expenses of Registration. The Company shall bear and pay
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the
registrations pursuant to Section 8(c), for the Holder, including
(without limitation) all registration, filing, and qualification fees,
printers and accounting fees relating or allocable thereto and the fees
and disbursements of counsel for the Company, but excluding
underwriting discounts and commissions relating to Registrable
Securities.
(f) Underwriting Requirements. In connection with any offering
involving an underwriting of shares being issued by the Company, the
Company shall not be required to include any of the Holder's securities
in such underwriting unless the Holder accepts the terms of the
underwriting as agreed upon between the Company and the underwriters
selected by it, and then only in such quantity as will not, in the
opinion of the underwriters, jeopardize the success of the offering by
the Company. If the total amount of securities, including Registrable
Securities, requested by shareholders to be included in such offering
exceeds the amount of securities sold other than by the Company that
the underwriters reasonably believe compatible with the success of the
offering, then the Company shall be required to include in the offering
only that number of such securities, including Registrable Securities,
which the underwriters believe will not jeopardize the success of the
offering (the securities so included to be apportioned pro rata among
the selling shareholders according to the total amount of securities
entitled to be included therein owned by each selling shareholder or in
such other proportion as shall mutually be agreed to by such selling
shareholders). For purposes of the preceding parenthetical concerning
apportionment, for any selling shareholder which is a holder of
Registrable Securities and which is a partnership or corporation, the
partners, retired partners and shareholders of such holder, or the
estates and family members of any such partners and retired partners
and any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single "selling shareholder," and any pro-rata reduction
with respect to such "selling shareholder" shall be based upon the
aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling shareholder," as
defined in this sentence.
(g) Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with
respect to the interpretation or implementation of this Agreement.
(h) Indemnification. In the event any Registrable Securities
are included in a registration statement under this Agreement:
(i) To the extent permitted by law, the Company will
indemnify and hold harmless the Holder, any underwriter (as
defined in the Securities Act) for the Holder and each person,
if any, who controls the Holder or underwriter within the
meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages or liabilities (joint or several) to
which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration
statement, including any
<PAGE> 6
preliminary prospectus (but only if such is not corrected in
the final prospectus) contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading
(but only if such is not corrected in the final prospectus),
or (iii) any violation or alleged violation by the Company in
connection with the registration of Registrable Securities of
the Securities Act, the Exchange Act, any state securities law
or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law; and the
Company will pay to the Holder, and any underwriter or
controlling person, as incurred, any legal or other expenses
reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement
contained in this Section 8(h)(i) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case
for any such loss, claim damage, liability, or action to the
extent that it arises out of or is based upon a violation
which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with
such registration by the Holder, or any underwriter or
controlling person of the Holder.
(ii) To the extent permitted by law, the Holder will
indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the
registration statement, each person, if any, who controls the
Company within the meaning of the Securities Act, any
underwriter, any other shareholder selling securities in such
registration statement and any controlling person of any such
underwriter or other shareholder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Securities
Act, the Exchange Act or other federal or state law, insofar
as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with
written information furnished by the Holder expressly for use
in connection with such registration; and the holder will pay,
as incurred, any legal or other expenses reasonably incurred
by any person intended to be indemnified pursuant to this
Section 8(h)(ii), in connection with investigating or
defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in
this Section 8(h)(ii) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of
the Holder, which consent shall not be unreasonably withheld;
provided, that, in no event shall any indemnity under this
Section 8(h)(ii) exceed the gross proceeds from the offering
received by the Holder.
(iii) Promptly after receipt by an indemnified party
under this Section 8(h) of notice of the commencement of any
action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made
against any indemnifying party under this Section 8(h),
deliver to the indemnifying
<PAGE> 7
party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and
expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due
to actual or potential differing interests between such
indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of
the commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve such indemnifying
party of any liability to the indemnified party under this
Section 8(h), but the omission so to deliver written notice to
the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under
this Section 8(h).
9. ASSIGNMENT OF REGISTRATION RIGHTS. The registration rights granted
hereunder may be assigned by the Holder to a transferee or assignee of the
Registrable Securities; provided, however, the Company is, within a reasonable
time after such transfer, furnished with written notice of the name and address
of such transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act.
10. LOSS, THEFT, DESTRUCTION OR MUTILATION OF CERTIFICATE. Upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any certificate representing the Warrants or the
Warrant Shares (referred to herein as the "original certificate"), and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to the Company, and upon reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the original
certificate if mutilated, the Company will make and deliver a new certificate of
like tenor in lieu of the original certificate.
11. GENERAL. This certificate shall be governed by and construed in
accordance with the laws of the State of Colorado applicable to contracts
between Colorado residents entered into and to be performed entirely within the
State of Colorado. The headings herein are for purposes of convenience and
reference only and shall not be used to construe or interpret the terms of this
certificate. The terms of this certificate may be amended, waived, discharged or
terminated only by a written instrument signed by both the Company and the
Holder. All notices and other communications from the Company to the Holder
shall be mailed by first-class registered or certified mail, postage pre-paid,
to the address furnished to the Company in writing by the last Holder who shall
have furnished an address to the Company in writing.
<PAGE> 8
Dated: March 6, 1998
CONSOLIDATED CAPITAL OF NORTH
AMERICA, INC.
By:
--------------------------------------
(Authorized Signature)
--------------------------------------
(Name and Title)
<PAGE> 9
NOTICE OF EXERCISE
Dated _______________, ________
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _______ shares of Common Stock and hereby
makes payment of ____________________ in payment of the actual exercise price
thereof.
__________________________
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name ___________________________________________________________________________
(Please typewrite or print in block letters)
Signature ___________________________________
__________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, _______________________________________ hereby
sells, assigns and transfer unto
Name ___________________________________________________________________________
(Please typewrite or print in block letters)
Address_________________________________________________________________________
the right to purchase Common Stock represented by this Warrant to the extent of
________ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint ______________________ Attorney, to transfer
the same on the books of the Company with full power of substitution in the
premises.
Dated _______________, ________
Signature ____________________________
Signature Guaranteed
_________________________
<PAGE> 1
EXHIBIT 3.3
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned Seller adopts the following Articles of Amendment to its Articles of
Incorporation:
FIRST: The name of the Corporation is Consolidated Capital of North America,
Inc. (the "Corporation").
SECOND: The following amendment to the Articles of Incorporation was adopted on
March 10, 1998, as prescribed by the Colorado Business Corporation Act, in the
manner marked with an X below:
No Common Shares have been issued or Directors Elected - Action by
------- Incorporators
No Common Shares have been issued but Directors Elected - Action by
------- Directors
X Such amendment was adopted by the board of directors where Common
------- Shares have been issued.
Such amendment was adopted by a vote of the shareholders. The number of
------- Common Shares voted for the amendment was sufficient for approval.
THIRD: ARTICLE IV of the Corporation's Articles of Incorporation is hereby
amended as follows:
Section 5. Series C Preferred Shares
A. Designation and Authorized Number. One series of Preferred Shares,
designated "Series C 6% Convertible Preferred Shares" and hereinafter called
(the "Series C Preferred Shares") is hereby provided for, which shares shall
have the rights, privileges and preferences set forth below. The stated value of
the Series C Preferred Shares shall be $10,000 per share (the "Stated Value").
The number of shares constituting the Series C Preferred Shares shall be Two
Hundred (200).
B. Defined Terms.
(1) The term "Dividend Parity Stock" as used herein shall be deemed to
mean all shares of Series A Preferred Shares and Series B Preferred Shares of
the Corporation which shall rank equally to the Series C Preferred Shares as to
the payment of dividends. The term "Liquidation Parity Stock" as used herein
shall be deemed to mean all shares of Series A Preferred Shares and Series B
Preferred Shares of the Corporation which shall rank equally to the Series C
Preferred Shares as to distribution of assets upon liquidation.
<PAGE> 2
(2) The term "Dividend Junior Stock" as used herein shall be deemed to
mean the Common Shares and all other stock of the Corporation ranking junior to
the Series A Preferred Shares, the Series B Preferred Shares and the Series C
Preferred Shares as to the payment of dividends. The term "Liquidation Junior
Stock" as used herein shall be deemed to mean the Common Shares and all other
stock of the Corporation ranking junior to the Series A Preferred Shares, the
Series B Preferred Shares and the Series C Preferred Shares as to distribution
of assets upon liquidation.
C. Dividends. (1) The holders of record of the Series C Preferred
Shares shall be entitled to receive, out of any assets legally available for the
purpose, prior and in preference to any declaration or payment of any dividend
on any Dividend Junior Stock, dividends at the rate of $600 per share per annum
payable quarterly in arrears (when, as and if declared by the Board of Directors
out of its funds legally available for such purpose) on the first day of
January, April, July and October of each year to the holders of record on such
dates. Such dividends shall be cumulative. The dividends shall be paid in cash
or at the option of the Corporation, dividends shall be paid in Common Shares of
the Corporation based on the average of the closing bid price of the
Corporation's Common Shares for the five consecutive trading days preceding the
interest payment due date.
(2) Dividends shall accrue from the date of original issue of the
Series C Preferred Shares. Quarterly dividends which are not paid in full on any
dividend payment date will cumulate without interest until such accumulated
quarterly dividends shall have been declared and paid. Any declaration of
dividends may be for a portion, or all, of the then accumulated dividends. Any
accumulated dividends which are not paid will continue to cumulate in the manner
described above.
(3) Unless full cumulative dividends on outstanding Series C Preferred
Shares have been paid, no dividend or other distribution shall be declared or
paid on any Dividend Junior Stock and no amount shall be set aside or applied to
the redemption, purchase or other acquisition of any Dividend Junior Stock.
D. Liquidation Preference.
(1) Series C Preferred Shares. In the event of any liquidation,
dissolution or winding up of the Corporation, either voluntary or involuntary,
the holders of Series C Preferred Shares shall be entitled to receive, prior and
in preference to any distribution of any of the assets of the Corporation to the
holders of any Liquidation Junior Stock an amount per share equal to (i) $10,000
for each outstanding Series C Preferred Share and (ii) all accumulated but
unpaid dividends, if any, on each such Series C Preferred Share. If upon the
occurrence of such event, the assets and funds thus distributed among the
holders of the Liquidation Parity Stock shall be insufficient to permit the
payment to such holders of the full aforesaid preferential amounts, then the
entire assets and funds of the Corporation legally available for distribution
shall be distributed ratably among the holders of the Liquidation Parity Stock
in proportion to the number of shares of such stock owned by each such holder.
(2) Remaining Assets. After the distributions described in Section D(1)
have been paid, the remaining assets of the Corporation available for
distribution to shareholders shall be distributed among the holders of any
Liquidation Junior Stock pro rata based on the number of shares of any
Liquidation Junior Stock.
<PAGE> 3
(3) Treatment of Mergers, etc. Neither a consolidation, merger or share
exchange by the Corporation with or into any other Corporation or Corporations,
or a sale, conveyance or disposition of all or substantially all of the assets
of the Corporation shall be deemed to be a liquidation, dissolution or winding
up within the meaning of this Section D.
E. Conversion. The holders of the Series C Preferred Shares shall have
conversion rights as follows (the "Conversion Rights"):
(1) Conversion Rights.
(i) All Series C Preferred Share shall be convertible, at the
option of the holders of such shares, at any time after the fortieth (40th) day
of issuance of such shares, at the office of the Corporation or any transfer
agent for the Series C Preferred Shares, into the number of fully paid and
nonassessable unrestricted and nonlegended Common Shares of the Corporation at
the conversion price per Series C Preferred Share equal to $10,000 divided by
the lesser of (x) $1.75 and (y) Seventy Five Percent (75%) of the arithmetic
average of the closing bid prices for each of the five trading days prior to the
exercise date of any such conversion.
(ii) In the event of a call for redemption of any Series C
Preferred Shares pursuant to Section F hereof, each holder of any Series C
Preferred Share shall have the right to exercise the conversion rights set forth
in this Section E and the right to convert each share shall cease as to the
shares designated for redemption as of the close of business on the business day
immediately prior to the redemption date, unless default is made in payment of
the redemption price. If the Corporation has received a notice of conversion
with respect to any Series C Preferred Shares the Corporation may not redeem
such Series C Preferred Shares provided the Series C Preferred Shares are
delivered for conversion as set forth in Section E(2).
(2) Mechanics of Conversion. (i) No fractional shares of Common Stock
shall be issued upon conversion of the Series C Preferred Shares. In lieu of any
fractional share to which the holder would otherwise be entitled, the
Corporation shall round up to the nearest whole share. In the case of a dispute
as to the calculation of the Conversion Rate, the Corporation's calculation
shall be deemed conclusive absent manifest error. In order to convert Series C
Preferred Shares into full shares of Common Stock, the holder shall surrender
the certificate or certificates therefor, duly endorsed, by either overnight
courier or 2-day courier, to the office of the Corporation for the Series C
Preferred Shares, and shall give written notice to the Corporation at such
office that the holder elects to convert the same, the number of shares of
Series C Preferred Shares so converted and a calculation of the Conversion Rate
(with an advance copy of the certificate(s) and the notice by facsimile);
provided, however, that the Corporation shall not be obligated to deliver
certificates evidencing the shares of Common Stock issuable upon such conversion
unless certificates evidencing such Series C Preferred Shares are delivered to
the Corporation as provided above, or the holder notifies the Corporation that
such certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection with such certificates.
(ii) The Corporation shall use reasonable efforts to cause to
be issued and delivered within two (2) business days after delivery to the
Corporation of such Series C Preferred Shares, or after such agreement and
indemnification, to such holder of Series C Preferred Shares at the address of
the holder on the stock books of the Corporation, a certificate or certificates
for the number of shares of Common Stock to which he shall be entitled as
aforesaid. The date on which notice of conversion is given (the "Date of
Conversion") shall be
<PAGE> 4
deemed to be the date set forth in such notice of conversion provided the
original Series C Preferred Shares to be converted are received by the
Corporation within five (5) business days thereafter and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock on such date. If the original Series C Preferred Shares to be
converted are not received by the Corporation within five (5) business days
after the Conversion, the notice of conversion shall become null and void.
(3) Conversion Price Adjustments. The closing bid price used to
determine the Conversion Price shall be appropriately adjusted to reflect, as
deemed equitable and appropriate by the Corporation, any stock dividend, stock
split or share combination of the Common Stock. In the event of a merger,
reorganization, recapitalization or similar event of or with respect to the
Corporation (a "Corporate Change") (other than a Corporate Change in which all
or substantially all of the consideration received by the holders of the
Company's equity securities upon such Corporate Change consists of cash or
assets other than securities issued by the acquiring entity or any affiliate
thereof), the Series C Preferred Shares shall be convertible into such class and
type or securities as the Holder would have received had the Holder converted
the Series C Preferred Shares immediately prior to such Corporate Change, as
appropriately adjusted to equitably reflect the conversion price and any stock
dividend, stock split or share combination of the common stock after such
corporate event.
(4) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
Common Shares solely for the purpose of effecting the conversion of the Series C
Preferred Shares such number of its Common Shares as shall from time to time be
sufficient to effect the conversion of all outstanding Series C Preferred
Shares; and if at any time the number of authorized but unissued Common Shares
shall not be sufficient to effect the conversion of all then outstanding Series
C Preferred Shares, in addition to such other remedies as shall be available to
the holder of such Series C Preferred Shares, the Corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued Common Shares to such number of shares as shall be
sufficient for such purposes.
F. Redemption of Series C Preferred Shares.
(1) Optional Redemption. In the event that the arithmetic closing bid
price for any five consecutive trading day period subsequent to the date of
issuance of the Series C Preferred Shares is 50% or less than the arithmetic
average of the closing bid prices for the five trading day period immediately
prior to the date of issuance, the Corporation may redeem all outstanding and
unconverted Series C Preferred Shares for cash at a per share price equal to
120% of the State Value of each Series C Preferred Share plus accumulated and
unpaid dividends. If the Corporation has received a notice of conversion with
respect to any Series C Preferred Shares the Corporation may not redeem such
Series C Preferred Shares provided the Series C Preferred Shares are delivered
for conversion as set forth in Section E(2)
(2) Mandatory Redemption. On March 10, 2001, the Corporation shall
redeem all Series C Preferred Shares then outstanding, by the payment therefor
of the redemption price of $10,000 per share and all accumulated and unpaid
dividends.
(3) Manner of Redemption of Series C Preferred Shares. (i) If less than
all of the outstanding Series C Preferred Shares shall be called for redemption,
the particular shares of such
<PAGE> 5
series to be redeemed shall be selected by lot or by such other equitable manner
as may be prescribed by resolution of the Board of Directors.
(ii) Notice of redemption of any Series C Preferred Shares
shall be given by the Corporation by fax or other written communication, not
more than 2 days prior to the date fixed by the board of directors of the
Corporation for redemption (herein called the "redemption date"), to the holders
of record of the shares to be redeemed at their respective addresses then
appearing on the records of the Corporation. The notice of the redemption shall
state:
(A) the redemption date,
(B) the redemption price (which must be paid within 5 business
days after the date of redemption),
(C) whether the redemption is an optional redemption or a
mandatory redemption,
(D) if less than all outstanding Series C Preferred Shares are
to be redeemed, the identification of the Series C Preferred Shares to be
redeemed,
(E) the conversion rate on the date of the notice,
(F) that on the redemption date the redemption price will
become due and payable upon each Series C Preferred Share to be redeemed and the
right to convert each share of Series C Preferred Share shall cease as of the
close of business on the business day prior to the redemption date, unless
default shall be made in the payment of the redemption price, and
(G) the place or places where such Series C Preferred Shares
to be redeemed are to be surrendered for payment of the redemption price.
(4) Failure to Redeem. If the Corporation fails to pay the redemption
price after calling any Series C Preferred Shares for optional redemption under
Section F(1), the Corporation shall have no further right to redeem Series C
Preferred Shares under Section F(1).
G. Corporate Events. In the event of (i) any declaration by the
Corporation of a record date of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than cash dividend) or other distribution or (ii) any capital
reorganization of the Corporation, any reclassification or recapitalization of
the capital stock of the Corporation, any merger or consolidation of the
Corporation, and any transfer of all or substantially all of the assets of the
Corporation to any other Corporation, or any other entity or person, or any
voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, the Corporation shall mail to each holder of Series C Preferred
Shares at least 20 days prior to the record date specified therein, a notice
specifying (A) the date on which any such record is to be declared for the
purpose of such dividend or distribution and a description of such dividend or
distribution, (B) the date on which any such reorganization, reclassification,
transfer, consolidation, merger, dissolution, liquidation or winding up is
expected to become effective and (C) the time, if any, that is to be fixed, as
to when the holders of record of Common Stock (or
<PAGE> 6
other securities) will receive for securities or other property deliverable upon
such reorganization, reclassification, transfer, consolidation, merger,
dissolution or winding up.
H. Voting Rights. (1) The Holders of the Series C Preferred Shares
shall not have any voting rights except as set forth below or as otherwise from
time to time required by law.
(2) To the extent that under Colorado law the vote of the holders of
the Series C Preferred Shares, voting separately as a class, is required to
authorize a given action of the Corporation, the affirmative vote or consent of
the holders of at least a majority of the outstanding Series C Preferred Shares
shall constitute the approval of such action by the class. To the extent that
under Colorado law the holders of the Series C Preferred Shares are entitled to
vote on a matter with holders of Common Stock voting together as one class, each
Series C Preferred Shares shall be entitled to a number of votes equal to the
number of shares of Common Stock into which it is then convertible using the
record date for the taking of such vote of stockholders as the date as of which
the Conversion Price is calculated. Holders of the Series C Preferred Shares
shall be entitled to notice of all shareholder meetings or written consents with
respect to which they would be entitled to vote, which notice would be provided
pursuant to the Corporation's bylaws and applicable statutes.
I. Protective Provisions. So long as the Series C Preferred Shares are
outstanding, the Corporation shall not take any action that would impair the
rights of the holders of the Series C Preferred Shares set forth herein and
shall not without first obtaining the approval (by vote or written consent, as
provided by law) of the holders of at least a majority in aggregate principal
amount of the Series C Preferred Shares then outstanding:
(1) Alter or change the rights, preferences or privileges of the Series
C Preferred Shares so as to affect adversely the Series C Preferred Shares.
(2) Create any new class or series of stock which ranks prior to or
pari passu to the Series C Preferred Shares with respect to dividends other than
the Dividend Party Stock, without the express written permission of the holders
of the Series C Preferred Shares for a period of not to exceed 90 days from the
date of issuance of the Series C Preferred Shares.
(3) Do any act or thing which would result in taxation of the holders
of Series C Preferred Shares under Section 305 of the Internal Revenue Code of
1986, as amended (or any comparable provision of the Internal Revenue Code as
hereafter from time to time amended).
J. Status of Converted or Redeemed Stock. In the event any Series C
Preferred Shares shall be converted pursuant to Section D hereof or shall be
redeemed pursuant to Section E hereof, the shares so converted or redeemed shall
be canceled and shall not be reissuable by the Corporation.
<PAGE> 7
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by its authorized officer as of March 10, 1998.
[Corporate Seal] CONSOLIDATED CAPITAL OF
NORTH AMERICA, INC.
By: /s/ Paul Yett
-------------------------------------
Paul Yett
Assistant Secretary
<PAGE> 1
EXHIBIT 10.53
THE OFFER AND SALE OF THE SECURITIES 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 SECURITIES 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 SECURITIES 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.
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
6% CONVERTIBLE PREFERRED STOCK - SERIES C
- --------------------------------------------------------------------------------
THIS OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT (hereinafter the
"Agreement") has been executed by the undersigned (collectively the "Buyer") in
connection with the sale of certain Securities designated as 6% Convertible
Preferred Stock - Series C (hereinafter the "Preferred Shares"), which are
convertible into shares of common stock (hereinafter the "Common Shares") of
Consolidated Capital of North America, Inc. (the "Seller").
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE
A. Each Buyer hereby subscribes for the number of Preferred Shares set
forth below on the signature page of this Agreement which Preferred Shares shall
be convertible into Common Shares of the Seller in accordance with the terms set
forth in the Articles of Amendment attached as Exhibit A to this Agreement (the
"Conversion Shares"), at a purchase price of $10,000 per Preferred Share payable
in United States Dollars.
B. Buyer shall pay the purchase price by delivering same day funds in
United States Dollars to the Seller upon delivery of the Preferred Shares by the
Seller to Buyer.
C. This Agreement has been executed in connection with an offering (the
"Offering") by Seller of Preferred Shares convertible into Common Shares
(together, the "Securities")
<PAGE> 2
pursuant to Regulation S ("Regulation S") as promulgated under the Securities
Act of 1933, as amended (the "Securities Act").
2. BUYER'S REPRESENTATIONS
Buyer represents and warrants to Seller as follows:
A. Buyer is not a "U.S. Person" as defined by Rule 902 of Regulation S
(See Exhibit B), was not organized under the laws of any U.S. jurisdiction, and
was not formed for the purpose of investing in securities not registered under
the Securities Act.
B. Buyer is not a "distributor" as defined by Rule 902 of Regulation S
(See Exhibit B).
C. At the time the purchase order for this transaction was originated,
the Buyer was physically outside of the United States and such purchase order
was not the result of directed selling efforts by the Seller in the United
States.
D. No offer to purchase the Securities was made by the Buyer while in
the United States.
E. Buyer is purchasing the Securities for its own account for
investment purposes and not with a view towards distribution.
F. Buyer acknowledges and agrees that the offer and sale of the
Securities by Seller has not been registered under the Securities Act and agree
that all subsequent offers and sales of the Securities will be made (i) outside
the United States in compliance with Rule 903 or Rule 904 of Regulation S, (ii)
pursuant to registration of the Securities under the Securities Act, or (iii)
pursuant to an exemption from such registration. Buyer understands the
conditions of the exemption from registration afforded by Regulation S and
Section 4(l) of the Securities Act and acknowledges that there can be no
assurance that it will be able to rely on either exemption. Furthermore, Buyer
will not resell the Securities to U.S. Persons or within the United States until
after the end of the forty (40) day period commencing on the Closing Date of the
Offering (as defined below in Section 3) (the "Restricted Period") and
thereafter only pursuant to registration of the Securities under the Securities
Act or pursuant to an exemption from such registration.
G. Buyer agrees that, at all times after the execution of this
Agreement by Buyer and prior to the expiration of the Restricted Period, it will
keep its purchase of the Preferred Shares confidential, except as required by
law and except as necessary in the ordinary course of Buyer's business.
H. Buyer understands that the Securities are being offered and sold to
it in reliance on specific provisions of United States Federal and State
securities laws and that Seller is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
Buyer set forth herein in order to determine the applicability of such
provisions. Accordingly, Buyer agrees to notify Seller of any events which would
cause the representations and warranties of Buyer to be untrue or breached at
any time after the execution of this Agreement by Buyer and prior to the
expiration of the Restricted Period.
<PAGE> 3
I. This Agreement has been duly authorized, validly executed, and
delivered on behalf of Buyer and is a valid and binding agreement enforceable in
accordance with its terms, subject to general principles of equity and to
bankruptcy or other laws affecting the enforcement of creditors' rights
generally.
J. All offering documents received by Buyer include statements to the
effect that the Securities have not been registered under the Securities Act and
may not be offered or sold in the United States or to U.S. Persons during the
Restricted Period and thereafter only pursuant to registration of the Securities
under the Securities Act or pursuant to an exemption from such registration.
K. Buyer, in making the decision to purchase the Securities subscribed
for, has relied upon independent investigations made by it and has not relied on
any information or representations made by third parties. Notwithstanding, the
Buyer has relied upon the accurateness and completeness of the companies public
filings and reports filed with the Securities and Exchange Commission.
L. Buyer has not taken any action that would cause Seller to be subject
to any claim for commission or other fee or remuneration by any broker, finder,
or other person and Buyer indemnifies Seller against any such claim caused by
the actions of Buyer or any of its employees or agents.
M. Buyer is an "Accredited Investor" as defined in Rule 502 of
Regulation D.
N. Buyer understands that the Seller makes no representation regarding
the fulfillment on the future of any reporting requirements under the Exchange
Act (as hereinafter defined), or the dissemination to the public of any current
information concerning the Seller. Other than as described herein, Buyer
understands and hereby acknowledges that except for the registration rights set
forth in Section 5 of this Agreement, the Seller is under no obligation to
register the Preferred Shares or the Conversion Shares under the Securities Act.
O. Buyer acknowledges receipt and review of the Disclosure Documents
(as herein delivered) and the exhibits to this Agreement, and hereby represents
that Buyer has been furnished by the Seller during the course of this
transaction with all information regarding the Seller which the Buyer has
requested or desired to know; that all documents which could be reasonably
provided have been made available for inspection and review, and that such
information and documents have, in Buyer's opinion, afforded Buyer with all of
the same information that would be provided in a registration statement filed
under the Securities Act; that Buyer has been afforded the opportunity to ask
questions of and receive answers form duly authorized officers or other
representatives of the Seller concerning the terms and conditions of the
Offering, and any additional information which Buyer has requested.
P. Buyer acknowledges that it has directly or through Seller's agent,
Stone Pine Investment Banking LLC, negotiated the terms of the Preferred Shares
with the Seller.
Q. Buyer agrees to hold the Seller and its directors, officers and
controlling persons and their respective heirs, representatives, successors and
assigns harmless and to indemnify them against all liabilities, costs and
expenses incurred by them as a result of any misrepresentation
<PAGE> 4
made by Buyer contained herein or any sale or distribution of the Securities by
the Buyer in violation of applicable federal and state securities laws. This
indemnification agreement shall survive the closing of this transaction.
R. Seller did not attempt to, and did not induce Buyer to purchase the
Securities.
3. SELLER'S REPRESENTATIONS
Seller represents and warrants to Buyer as follows:
A. Seller is a "Domestic Issuer" and a "Reporting Issuer," as such
terms are defined by Rule 902 of Regulation S. Seller has registered its common
stock pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") is in full compliance with all reporting
requirements of either Section 13(a) or 15(d) of the Exchange Act. The Seller's
common stock trades on the OTC Bulletin Board under the symbol CDNO. The Seller
shall use to its best efforts to maintain the listing of the Common Stock on the
OTC Bulletin Board or such other stock exchange listing the common stock. The
Seller has not received any notice or other communication regarding the removal
of the common stock from the OTC Bulletin Board.
B. Seller has furnished Buyer with copies of Sellers most recent Annual
Report, on Form 10-KSB filed with the Securities and Exchange Commission and all
forms 10-QSB and 8-K filed thereafter (collectively, the "Disclosure
Documents").
C. Seller has not offered the Preferred Shares to any person in the
United States, any identifiable group of U.S. citizens abroad, or to any U.S.
Person.
D. At the time the buy order was originated, Seller and/or its agents
reasonably believed Buyer was outside the United States and was not a U.S.
Person.
E. Seller and/or its agents reasonably believe that the sale of the
Preferred Shares has not been prearranged with a Buyer in the United States.
F. Seller has not conducted any "directed selling efforts" with respect
to the Preferred Shares nor has Seller conducted any general solicitation (as
that term is used in Regulation D under the Securities Act) with respect to the
Preferred Shares.
G. The Securities when issued and delivered will be duly and validly
authorized and issued, fully-paid and nonassessable and will not subject the
holders thereof to personal liability by reason of being such holders. There are
no preemptive rights of any shareholder of Seller with respect to the
Securities.
H. This Agreement has been duly authorized, validly executed and
delivered on behalf of Seller and is a valid and binding agreement in accordance
with its terms, subject to general principles of equity and to bankruptcy or
other laws affecting the enforcement of creditors' rights generally.
<PAGE> 5
I. The execution and delivery of this Agreement and the consummation of
the issuance of the Securities and the transactions contemplated by this
Agreement do not and will not conflict with or result in a breach by Seller of
any of the terms or provisions of, or constitute a default under, the articles
of incorporation or bylaws of Seller, or any indenture, mortgage, deed of trust,
credit arrangement or other material agreement or instrument to which Seller is
a part of by which it or any of its properties or assets are bound, or any
existing applicable decree, judgment or order of any court, Federal or State
regulatory body, administrative agency or other governmental body having
jurisdiction over Seller or any of its properties or assets. All outstanding
securities convertible into Common Shares of the Seller are set forth on
Schedule 3.I. hereto. There is no material litigation pending against the Seller
or any of its properties nor to the knowledge of the Seller is there any
litigation threatened against the Seller.
J. Seller is not aware of any authorization, approval or consent of any
governmental body which is legally required for the issuance and sale of the
Preferred Shares as contemplated by this Agreement. Seller shall file all
necessary documents with respect to the Preferred Shares with any applicable
regulatory authority;
K. Seller will issue one or more Certificates representing the
Preferred Shares in the name of Buyer with the following restrictive legend set
forth below (the "Restrictive Legend") in such denominations to be specified by
Buyer:
"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 Buyer, 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."
L. Within two full business days of receipt by the Seller of a properly
executed request for conversion accompanied by the Preferred Shares to be
converted, Seller will deliver to its transfer agent its directive and
authorization to execute the conversion and to issue to Buyer the common stock
shares so authorized. The Seller acknowledges that a delay in issuance of its
authorization and directive for the conversion could result in economic loss to
the Buyer. Therefore, as compensation to the Buyer for such loss, in the event
that the Seller fails to deliver said authorization and directive within two
full business days, the Seller agrees to pay liquidated damages to the Buyer for
late issuance of said authorization and directive in the amount of $500 per day
for each day of delay after three days, up to a maximum of $10,000 per
conversion request. Nothing herein shall create a liability to the Seller for
actions or delays of the transfer agent once the authorization and directive
have been delivered to it by the Seller. Any liquidated damages due Buyer will
be paid within seven (7) days of issuance of the shares resulting from the
conversion.
M. Upon conversion of the Preferred Shares, Seller will issue one or
more certificates representing the Common Shares in the name of the Buyer
without restrictive legend, except as may otherwise be required by applicable
law, rule or regulation, and in DTC eligible form, in such denominations to be
specified by the Buyer prior to conversion provided Buyer represents
<PAGE> 6
to Seller that resale of the Common Shares will be made only in compliance with
applicable securities laws. Seller further warrants that no instructions other
than these instructions, and instructions for a "stop transfer" until the end of
the Restricted Period, have been given to the transfer agent and also warrants
that the Common Shares shall otherwise be freely transferable on the books and
records of Seller subject to compliance with Federal and State securities laws.
Seller will notify the transfer agent of the Closing Date or Closing Dates of
the Offering and of the date of expiration of the Restricted Period or Periods.
Nothing in this section shall affect in any way Buyer's obligations and
agreement to comply with all applicable securities laws upon resale of the
Common Shares.
N. Seller has not taken and will take no action that will affect in any
way the running of the Restricted Period or the ability of Buyer to freely
resell the Common Shares in accordance with applicable securities laws and this
Agreement.
O. Seller will comply with all applicable securities laws with respect
to the sale of the Securities, including but not limited to the filing of all
reports required to be filed in connection therewith the Securities and Exchange
Commission or any stock exchange or any other regulatory authority.
P. Seller, nor agents of the Seller, have purchased any shares of
Common Stock of the Seller in the open market during the 30 days immediately
preceding the date of this Agreement.
4. CLOSING
A. Buyer understands that Seller's obligation to sell the Preferred
Shares is conditioned upon delivery by Buyer to Seller of the purchase price set
forth in Section 1 herein.
B. Seller understands that Buyers obligation to purchase the Preferred
Shares is conditioned upon delivery of certificate(s) representing the Preferred
Shares as described herein, and provision of an opinion of counsel as provided
in Subsection D (ii) herein below.
C. For this transaction to close, Buyer must:
(i) Wire funds to the Seller, in the amount of US dollars
($2,000,000.00) no later than 72 hours after receipt by Seller of the
Subscription Agreement executed by Buyer and Seller.
(ii) Deliver a signed Offshore Securities Subscription
Agreement.
D. For this transaction to close, Seller must:
(i) Deliver to Buyer Certificate(s) for the Preferred
Shares.
(ii) Deliver to the Buyer the Seller's Articles of Amendment
set forth in Exhibit A hereto.
(iii) Deliver to the Buyer an opinion letter from Sellers
counsel stating that (a) the Seller is duly incorporated and validly
existing; (b) this Agreement, the issuance of
<PAGE> 7
the Preferred Shares, and the issuance of the Common Stock upon
conversion of the Preferred Shares up to the number of shares of common
stock authorized in the Seller's Certificate of Incorporation, have
been duly approved by all required corporate action, and that all such
securities upon due issuance, shall be validly issued and outstanding,
fully paid and nonassessable, and in each case, having the rights,
preferences and privileges set forth in the Certificate of
Incorporation; and (c) this Agreement is a valid and binding obligation
of the Company, enforceable in accordance with its terms, except as
enforceability of any indemnification provisions may be limited by
principles of public policy, and subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules
of laws governing specific performance and other equitable remedies;
(iv) Deliver to the Buyer a signed Offshore Securities
Subscription Agreement which shall be signed after execution of such
Subscription Agreement by Buyer; and
(v) Deliver to the Buyer executed warrants to purchase
common stock of the Seller in the form attached hereto as Exhibit C.
E. Stone Pine Investment Banking, LLC., shall serve as agent (the
"Agent") in the transaction contemplated by this Agreement. Agent's fee
is solely the responsibility of the Seller and Seller expressly agrees
to pay Agent said fee as such is agreed upon between the Seller and the
Agent. Neither the Seller nor the Agent has any recourse of any kind
whatsoever against the Buyer for any monies owed the Agent by the
Seller or for any monies paid by the Seller to the Agent. Seller
expressly indemnifies Buyer against any monies owed the Agent.
5. REGISTRATION OF CONVERSION SHARES
In the event that the Securities and Exchange Commission terminates or
modifies Regulation S from its present format, and such modifications apply to
the present transaction(s), Buyer shall have the right on one occasion to
require Seller to file a Registration Statement covering the Conversion Shares
and keep such registration statement effective for up to one hundred eighty
(180) days. If such Registration Statement is not declared effective by the
Securities and Exchange Commission within 90 days of the delivery of notice by
the Buyer demanding registration of the Conversion Shares (the "Demand Notice"),
the Seller shall pay to the Buyer a penalty equal to 2% of the Stated Value of
the Preferred Shares on the 91st day after the delivery of the Demand Notice and
on every 30th day thereafter until such time as the Registration Statement is
declared effective.
6. RIGHT OF FIRST OFFER
Subject to the terms and conditions specified in this paragraph 6,
until September 10, 1998 the Seller hereby grants to the Buyer a right of first
offer with respect to future sales by the Seller of its Shares (as hereinafter
defined). Each time the Seller proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares"), the Seller shall first make an offering of such Shares to the
Buyer or in accordance with the following provisions:
<PAGE> 8
(a) The Seller shall deliver a notice pursuant to Section 10
("Notice") to the Buyer stating (i) its bona fide intention to offer
such Shares, (ii) the number of such Shares to be offered, and (iii)
the price for which it proposes to offer such Shares.
(b) Within five (5) calendar days after mailing of the Notice,
the Buyer may elect to purchase, at the price and on the terms
specified in the Notice, the Shares.
(c) The Seller may, during the 120-day period following the
expiration of the period provided in subsection 6(b) hereof, offer any
Shares which have not been subscribed for pursuant to subparagraph (b)
hereof to any person or persons at a price not less than, and upon
terms no more favorable to the offeree than, those specified in the
Notice. If the Seller does not consummate the proposed sale of the
Shares within such period, the right provided hereunder shall be deemed
to be revived and such Shares shall not be offered unless first
re-offered to the Buyer in accordance herewith.
(d) The right of first offer in this paragraph 6 shall not be
applicable (i) to the issuance or sale of up to 3,000,000 shares of
Common Stock (or options therefor) (adjusted to reflect subsequent
stock dividends, stock splits or recapitalization) issued after the
date hereof to employees, directors, or consultants for the primary
purpose of soliciting or retaining their employment, (ii) to shares
issued or issuable by the Seller in connection with any merger or
reorganization transaction in which the Seller is the surviving
company, or (iii) to or after consummation of the Seller's sale of its
Common Stock in a bona fide, firm commitment underwriting pursuant to a
registration statement on Form S-1 under the Securities Act of 1933, as
amended (or any equivalent successor form).
7. CLOSING DATE
The Preferred Share certificate shall be delivered to Buyer and the
funds therefore shall be delivered to Seller on or before March 10, 1998 (the
"Closing Date") or at such other time mutually agreed to by the parties.
<PAGE> 9
8. GOVERNING LAW; INTERPRETATION
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Colorado. Facsimile signatures of this Agreement shall
be binding on all parties hereto. All terms used herein that are defined in
Regulation S under the Securities Act shall have the meanings set forth therein.
9. ENTIRE AGREEMENT; AMENDMENT
This Agreement and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof, and no party shall be liable or
bound to any other party in any manner by any warranties, representations or
covenants except as specifically set forth herein or therein. Except as
expressly provided herein, neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought.
10. NOTICES; ETC.
Any notice, demand or request required or permitted to be given by
either the Seller or the Buyer pursuant to the terms of this Agreement shall be
in writing and shall be deemed given when delivered personally or by facsimile,
with a hard copy to follow by two day courier addressed to the parties at the
addresses of the parties set forth at the end of this Agreement or such other
address as a party may request by notifying the other in writing.
11. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
12. SEVERABILITY
In the event that any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, enforceable or
void, this Agreement shall continue in full force and effect without said
provision, provided that no such severability shall be effective if it
materially changes the economic benefit of this Agreement to any party.
13. TITLES AND SUBTITLES
The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
<PAGE> 10
IN WITNESS WHEREOF, this Agreement was duly executed on the date first
written above, as confirmed by signatory below. Facsimile signatures of this
agreement shall be binding on all parties hereto.
Official Signatory of Seller:
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
410 17th Street, Suite 400
Denver, Colorado 80202
By:
----------------------------------------
Donald R. Jackson
Secretary, Treasurer and
Chief Financial Officer
Official Signatory of Buyers:
- ---------------------------------
Number of Preferred Shares
Purchased Hereunder:
<PAGE> 1
EXHIBIT 20.2
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
410 17th Street
Suite 400
Denver, Colorado 80202 March 11, 1998
Contact: Jeanette Avery
Shareholder Relations
888-313-8051
CONSOLIDATED CAPITAL OF NORTH AMERICA ANNOUNCES $2 MILLION PRIVATE FINANCING
Denver, Colorado: Consolidated Capital of North America, Inc. (NASDAQ/BB:CDNO)
announced today that it has closed a convertible preferred stock financing of $2
million with a group of institutional investors. The Company intends to use the
funds for working capital purposes. Paul Bagley, the Chairman of the Company
said, "We are pleased that these investors have demonstrated such confidence in
the Company."
The Preferred Shares are convertible into Common Shares of the Company
beginning April 20, 1998. Based on the conversion price formula the Preferred
Shares will be convertible into no less than 1.14 million Common Shares. In
connection with the financing, the investors received Warrants to purchase in
the aggregate 250,000 Common Shares of the Company at an exercise price of $2.38
per share.
Consolidated Capital of North America, Inc., through its subsidiary,
Capitol Metals Co., operates a Los Angeles - based steel service and
distribution business specializing in the processing of hot and cold rolled
steel. Consolidated's Angeles Metal Trim Co. subsidiary, fabricates and sells
steel framing for commercial and residential structures worldwide from its
plants in Los Angeles and Vancouver, Washington and from distribution facilities
located in Kent, Washington and Sacramento, California. Consolidated also
manufactures and sells low cost pre-engineered housing internationally through
its California Building Systems, Inc. subsidiary.
<PAGE> 1
EXHIBIT 20.3
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
410 17th Street
Suite 400
Denver, Colorado 80202 March 12, 1998
Contact: Jeanette Avery
Shareholder Relations
888-313-8051
CONSOLIDATED CAPITAL OF NORTH AMERICA ANNOUNCES NEW CEO AND BUSINESS STRATEGY
Denver, Colorado: Consolidated Capital of North America, Inc. (NASDAQ/BB:CDNO)
announced today that Paul Bagley, the Chairman of the Company, has been
appointed the Chief Executive Officer of the Company. Mr. Bagley succeeds
Christian Wolf, who resigned as Chief Executive Officer for personal reasons.
The Company also announced that the Board of Directors has been expanded to
seven members and that Richard Bailey has been appointed as a Class III director
of the Company. Mr. Bagley said, "We are pleased to have Mr. Bailey join the
Board. We expect that Mr. Bailey's background and experience in the steel
service business will be a great benefit to the Company."
Mr. Bagley also announced that the Board approved the implementation of
an aggressive acquisition strategy for the Company. Mr. Bagley said, "The
Company is looking to make strategic acquisitions to continue growing the
Company's business." The Angeles Metal Trim subsidiary was acquired by the
Company in January 1997 and in January 1998 the Company acquired the Capitol
Metals Co. subsidiary.
Consolidated Capital of North America, Inc., through Capitol Metals Co.
operates a Los Angeles - based steel service and distribution business
specializing in the processing of hot and cold rolled steel. Angeles Metal Trim
fabricates and sells steel framing for commercial and residential structures
worldwide from its plants in Los Angeles and Vancouver, Washington and from
distribution facilities located in Kent, Washington and Sacramento, California.
Consolidated also manufactures and sells low cost pre-engineered housing
internationally through its California Building Systems, Inc. subsidiary.
