<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-KA
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 12, 1998
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Colorado 0-21821 93-0962072
- -------------------------------- ----------- ------------------
State or Other Jurisdiction Commission IRS Employer
Of Incorporation or Organization File Number Identification No.
410 17th Street, Suite 400 Denver, Colorado 80202
---------------------------------------------------
Address of Principal Executive Offices and Zip Code
Registrant's telephone number, including area code (888) 313-8051
----------------
<PAGE> 2
Item 7. Financial Statements and Exhibits
(c) Exhibit 10.41 Asset Purchase Agreement, dated as of
December 1, 1997, between the Company and
Capitol Metals Co., Inc. (Exhibits and
Schedules omitted.)
Exhibit 10.42 First Amendment to Asset Purchase Agreement,
dated as of January 8, 1998, among Binhad,
Inc. (formerly known as Capitol Metals Co.,
Inc.), the Company and Angeles Acquisition
Corp.
Exhibit 10.43 Assignment and Bill of Sale, dated January 9,
1998, from Binhad, Inc. (formerly known as
Capitol Metals Co., Inc.) to Angeles
Acquisition Corp.
Exhibit 10.44 Secured Promissory Note, dated January 12,
1998, in the principal amount of $1,200,000,
from the Company and Angeles Acquisition
Corp. to Binhad, Inc. (formerly known as
Capitol Metals Co., Inc.).
Exhibit 10.45 Secured Promissory Note, dated January 12,
1998, in the principal amount of $300,000,
from the Company and Angeles Acquisition
Corp. to Binhad, Inc. (formerly known as
Capitol Metals Co., Inc.)
Exhibit 10.46 Security Agreement, dated January 8, 1998,
between Binhad, Inc. (formerly known as
Capitol Metals Co., Inc.) and Angeles
Acquisition Corp.
Exhibit 10.47 Registration Agreement, dated as of January
6, 1998, between Binhad, Inc. (formerly known
as Capitol Metals Co., Inc.) and the Company.
Exhibit 10.48 Assignment and Assumption Agreement, dated as
of January 8, 1998, among the Company,
Binhad, Inc. (formerly known as Capitol
Metals Co., Inc.) and Angeles Acquisition
Corp.
Exhibit 10.49 Note Secured by Collateral Security
Agreement, dated January 12, 1998, by and
between the Company and Angeles Acquisition
Corp., and Nat and Evelyn Handel, Trustees of
the Nat and Evelyn Handel Family Trust.
Exhibit 10.50 Collateral Security Agreement, dated January
12, 1998, by and between Angeles Acquisition
Corp. and Nat and Evelyn Handel, Trustees of
the Nat and Evelyn Handel Family Trust.
Exhibit 10.51 Promissory Note, dated as of January 12,
1998, in the principal amount of $1,750,000
from the Company to Paul Bagley. [To be filed
by Amendment]
<PAGE> 3
Exhibit 10.52 Security Agreement, dated as of January 12,
1998, between the Company and Paul Bagley.
[To be filed by Amendment]
Exhibit 20.1 Press Release issued by the Company on
January 22, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
By: /s/ Donald R. Jackson
------------------------------
Donald R. Jackson
Chief Financial Officer,
Treasurer and Secretary
Date: January 29, 1998
<PAGE> 4
EXHIBIT INDEX
(c) Exhibit 10.41 Asset Purchase Agreement, dated as of
December 1, 1997, between the Company and
Capitol Metals Co., Inc. (Exhibits and
Schedules omitted.)
Exhibit 10.42 First Amendment to Asset Purchase Agreement,
dated as of January 8, 1998, among Binhad,
Inc. (formerly known as Capitol Metals Co.,
Inc.), the Company and Angeles Acquisition
Corp.
Exhibit 10.43 Assignment and Bill of Sale, dated January 9,
1998, from Binhad, Inc. (formerly known as
Capitol Metals Co., Inc.) to Angeles
Acquisition Corp.
Exhibit 10.44 Secured Promissory Note, dated January 12,
1998, in the principal amount of $1,200,000,
from the Company and Angeles Acquisition
Corp. to Binhad, Inc. (formerly known as
Capitol Metals Co., Inc.).
Exhibit 10.45 Secured Promissory Note, dated January 12,
1998, in the principal amount of $300,000,
from the Company and Angeles Acquisition
Corp. to Binhad, Inc. (formerly known as
Capitol Metals Co., Inc.)
Exhibit 10.46 Security Agreement, dated January 8, 1998,
between Binhad, Inc. (formerly known as
Capitol Metals Co., Inc.) and Angeles
Acquisition Corp.
Exhibit 10.47 Registration Agreement, dated as of January
6, 1998, between Binhad, Inc. (formerly known
as Capitol Metals Co., Inc.) and the Company.
Exhibit 10.48 Assignment and Assumption Agreement, dated as
of January 8, 1998, among the Company,
Binhad, Inc. (formerly known as Capitol
Metals Co., Inc.) and Angeles Acquisition
Corp.
Exhibit 10.49 Note Secured by Collateral Security
Agreement, dated January 12, 1998, by and
between the Company and Angeles Acquisition
Corp., and Nat and Evelyn Handel, Trustees of
the Nat and Evelyn Handel Family Trust.
Exhibit 10.50 Collateral Security Agreement, dated January
12, 1998, by and between Angeles Acquisition
Corp. and Nat and Evelyn Handel, Trustees of
the Nat and Evelyn Handel Family Trust.
Exhibit 10.51 Promissory Note, dated as of January 12,
1998, in the principal amount of $1,750,000
from the Company to Paul Bagley. [To be filed
by Amendment]
<PAGE> 5
Exhibit 10.52 Security Agreement, dated as of January 12,
1998, between the Company and Paul Bagley.
[To be filed by Amendment]
Exhibit 20.1 Press Release issued by the Company on
January 22, 1998.
<PAGE> 1
EXHIBIT 10.41
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of
December 1, 1997, is entered into between CONSOLIDATED CAPITAL OF NORTH
AMERICA, INC., a Colorado corporation ("Purchaser"), and CAPITOL METALS CO.,
INC., a California corporation ("Seller").
A. Seller is in the business of supplying and processing
flat rolled steel for use in the manufacture of consumer goods (the
"Business"). The principal customers of Seller are steel suppliers and
manufacturers throughout the United States.
B. On October 7, 1997 (the "Petition Date"), Seller
filed a voluntary petition under chapter 11 of the Bankruptcy Code. Seller's
chapter 11 case (the "Chapter 11 Case") is now pending in the U.S. Bankruptcy
Court, Central District of California, as Case No. LA 97-48259-KM. Seller
remains in possession of its assets and continues to operate the Business as a
debtor-in-possession under the Bankruptcy Code.
C. On November 26, 1997, the Bankruptcy Court entered
the Order Approving Overbid Procedures and Topping Fee Arrangements Re Sale of
Substantially All of Assets of Debtor (the "Sale Procedures Order").
Substantially all of the assets of Seller are to be sold pursuant to the Sale
Procedures Order and the terms and conditions in this Agreement.
D. Purchaser desires to purchase substantially all of
the assets of Seller and to assume certain liabilities of Seller, upon the
terms and conditions set forth in this Agreement.
E. Upon the execution and delivery of this Agreement by
Purchaser in accordance with the Sale Procedures Order, this Agreement shall
constitute an irrevocable offer by Purchaser to purchase substantially all of
the assets of Seller and assume certain liabilities of Seller upon the terms
and conditions set forth herein, which offer shall be deemed accepted by Seller
upon the entry by the Bankruptcy Court of an order approving the sale to
Purchaser and the terms and conditions of this Agreement (the "Sale Approval
Order").
NOW, THEREFORE, in consideration of the recitals and of the
terms and conditions set forth below, the parties hereby agree as follows:
1
<PAGE> 2
1. PURCHASE AND SALE
1.1 Agreement to Purchase and Sell. Subject to all of
the terms and conditions of this Agreement, at the Closing (as defined in
Section 2.1), Seller shall sell, transfer and deliver to Purchaser, and
Purchaser shall purchase, all right, title and interest of Seller in and to all
of the Assets (as defined in Section 1.2), free and clear of all mortgages,
liens, security interests and encumbrances except Permitted Liens (as defined
in Section 3.4).
1.2 Assets to be Sold. The term "Assets" shall mean all
of the assets, properties and rights of Seller used directly or indirectly in
the conduct of, or generated by or constituting, the Business, except as
expressly set forth in Section 1.3, including, without limitation:
(a) except as provided in Section 1.3(b), all cash and
cash equivalents, in transit, in hand or in bank accounts, all checks,
drafts, certificates of deposit, treasury securities and investments
(collectively, "Cash");
(b) all notes, receivables, accounts receivable and
unbilled charges and fees;
(c) all supplies, raw materials, spare parts,
work-in-process, finished goods and other inventories;
(d) all prepaid items and deposits held by third parties;
(e) all machinery, equipment, tools, vehicles, furniture,
furnishings, leasehold improvements, goods and other tangible personal
property;
(f) to the extent permitted by applicable law and except
as provided in Section 1.3(d) and 1.5(a)(ii), all rights under any
written or oral contract, agreement, lease, sublease, instrument,
license, certificate of occupancy, operating permit or any other
permit or approval of any nature, or other document, commitment,
arrangement, undertaking, practice or authorization;
(g) all of Seller's right, title and interest in and to
the name "Capitol Metals Co., Inc.";
(h) all rights under any trademark, service mark, trade
name or copyright, whether registered or unregistered, and any
applications therefor;
(i) all technologies, methods, formulations, data bases,
trade secrets, know-how, inventions and other intellectual property
used in the Business or under development;
(j) except as provided in Section 1.3, and subject to
Section 12.3, all information, files, accounts, books, records, data
and plans related to the Business, including customer and supplier
lists; and
(k) the Seller's Business as a going concern and its
goodwill.
2
<PAGE> 3
1.3 Excluded Assets. Notwithstanding the foregoing, the
term "Assets" shall not include any of the following, and the term "Excluded
Assets" shall refer collectively to:
(a) the items set forth on Schedule 1.3;
(b) an amount of Cash sufficient, in the Seller's sole
discretion, to pay (i) all expenses, liabilities and obligations of
Seller which arose in the regular and ordinary course of the Business
before the Closing Date, other than those referred to in Section
1.5(b)(i)(A) and 1.5(b)(i)(B); (ii) all liabilities and obligations of
Seller under the Contracts (as defined in Section 1.5(a)(ii)) which
arose or relate to time periods before the Closing Date, and (iii) all
expenses of Seller incurred in connection with the sale of the Assets,
including expenses incurred by Seller's counsel but not including any
professional fees;
(c) the corporate seal, certificate of incorporation,
minute books, stock transfer records, tax returns, books of account
and other records having to do with the corporate organization of
Seller;
(d) Daniel J. Eget's personal Lexus automobile;
(e) all claims, rights of action and choses in action of
Seller that arose or accrued or relate to time periods prior to
Closing;
(f) all rights accruing to Seller under this Agreement,
and
(g) any other item that Seller and Purchaser may agree is
an "Excluded Asset" and is set forth on an amendment or supplement to
Schedule 1.3 at or prior to Closing.
1.4 Purchase Price. As consideration for the purchase of
the Assets:
(a) Upon execution hereof, Purchaser shall pay to Seller
a cash deposit in the amount of $25,000 (the "Deposit"), which shall
be held by Seller's counsel in its client trust account. If the
Closing occurs, the Deposit shall be credited against the Cash Payment
(as defined in Section 1.4(b)(i)) otherwise due at Closing pursuant to
Section 1.4(b)(i). If there is no Closing as a result of a willful
breach of this Agreement by Purchaser, the Deposit shall be retained
by Seller (without limiting any other rights or remedies of Seller
under this Agreement or applicable law). If the Closing does not
occur for some other reason, the Deposit shall be returned to
Purchaser.
(b) At the Closing:
(i) Purchaser shall pay to Seller the sum of
$136,000.00, in cash or other immediately available fund (the
"Cash Payment"); subject to offset as provided in Section
1.4(a) above.
(ii) Purchaser shall execute and deliver to Seller
a secured promissory note in the amount of $1,200,000.00 in
the form attached hereto as Exhibit A ("Promissory Note I");
3
<PAGE> 4
(iii) Unless Purchaser obtains the Note Financing
as provided in Section 7.3, Purchaser shall execute and
deliver to Seller a secured promissory note in the amount of
$500,000.00, in the form attached hereto as Exhibit B
("Promissory Note II");
(iv) Purchaser shall execute and deliver to Seller
a security agreement and related UCC-1 financing statements,
all in form reasonably satisfactory to Seller (collectively,
the "Security Documents"), providing for the creation and
perfection of a lien on and security interest in the Assets,
as security for Purchaser's obligations under Promissory Note
I and Promissory Note II, which lien and security interest
shall be junior only to the liens and security interests held
by Congress and Handel (as such terms are defined in Section
1.5(a)(i));
(v) Purchaser shall transfer and deliver to
Seller shares of voting common stock of Purchaser (the
"Shares") having an aggregate value of $300,000, which value
shall be determined based on the average of the closing sale
prices of the Shares on the over-the-counter electronic
bulletin board for the 14 days immediately preceding the
public announcement of the transaction contemplated hereby;
(vi) Purchaser shall assume the Assumed
Liabilities (as defined in Section 1.5(a)) as provided in
Section 1.5(a); provided, however, that Seller shall first
apply the Cash Payment to cure any monetary defaults under the
Contracts (as defined in Section 1.5(a)(ii)) existing as of
the Closing Date.
1.5 Assumption of Liabilities; Excluded Liabilities.
(a) Subject to Section 1.5(b), at the Closing, Purchaser
shall assume and agree to pay, discharge or perform, as appropriate,
the following liabilities and obligations of Seller (collectively, the
"Assumed Liabilities"):
(i) (A) Seller's liabilities and obligations
under its existing revolving and term loan agreements with
Congress Financial Corporation ("Congress"), in an amount
equal to $6,307,048.43, plus all interest, expenses and costs
accrued thereunder from and after the Petition Date until the
Closing Date, minus all amounts paid by Seller or on Seller's
account thereunder after the Petition Date and prior to the
Closing Date, minus all cash held by Congress in account
number 3050113085 at Union Bank of California, 5855 Topanga
Cyn. Blvd., Woodland Hills, California as of the Closing Date;
and (B) all liabilities and obligations of Seller under its
note dated May 5, 1997 to the Estate of Nat Handel ("Handel"),
the outstanding principal balance of which is $600,000 as of
the date hereof;
(ii) all liabilities and obligations of Seller
pursuant to or in respect of all agreements, contracts,
commitments, purchase orders, leases, subleases, documents,
instruments and undertakings relating to the Business which
are outstanding on the Closing Date (collectively, the
"Contracts"), to the extent that such liabilities and
obligations arise in or relate to time periods on or after the
Closing Date, and
4
<PAGE> 5
(iii) all liabilities and obligations of Seller
(other than the note payable to Daniel J. Eget and the
Congress debt and Handel debt referred to in Section 1.5(a)(i)
above) arising in the regular and ordinary course of the
Business, to the extent that such liabilities and obligations
arise in or relate to time periods on or after the Closing
Date.
(b) Notwithstanding Section 1.5(a), in no event shall
Purchaser assume or incur any liability or obligation under this
Section 1.5 or otherwise in respect of any of the following
(collectively, the "Excluded Liabilities"):
(i) all liabilities and obligations of Seller
which arose in the regular and ordinary course of the Business
before the Closing Date, other than (A) the Congress debt and
Handel debt referred to in Section 1.5(a)(i), and (B) the
post-Closing liabilities and obligations under the Contracts
assumed by Purchaser pursuant to Section 1.5(a)(ii);
(ii) any liability or obligation in respect of any
claim, or any breach by Seller of any provision of any
Contract, regardless of when made or asserted, which arises
out of Seller's operation of the Business prior to the Closing
or any service performed or any product designed, sold,
manufactured or shipped by or on behalf of Seller prior to the
Closing;
(iii) any liability relating to, and any claim
which arises out of or is based upon, any unfair labor
practice, any collective bargaining agreement, any pension
plan or any employee-related matter arising in or related to
time periods prior to the Closing;
(iv) any federal, state or local income, sales or
other tax payable with respect to the (A) the Business,
assets, properties or operations of Seller for any period
prior to the Closing, or (B) incident to or arising as a
consequence of the negotiation or consummation by Seller of
this Agreement and the transactions contemplated hereby;
(v) any liability or obligation relating to the
Excluded Assets;
(vi) subject to Section 9.1, any liability or
obligation of Seller arising or incurred in connection with
the negotiation, preparation and execution of this Agreement
and the transactions contemplated hereby, including any fees
or expenses of Seller's counsel, accountants or other experts,
and any brokerage or finders fee or commission or other
payment to any entity or person in connection with the
consummation of the transactions contemplated hereby; and
(vii) any liability or obligation of Seller
identified on Schedule 1.5(b) as an "Excluded Liability".
1.6 Restricted Shares; Investment Representations;
Piggyback Registration Rights.
(a) The Shares will not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), and
accordingly will constitute "restricted securities" for purposes of
the Securities Act. Seller will not be able to transfer such Shares
except upon compliance with the registration requirements of the
Securities Act and applicable state securities laws or pursuant to an
exemption
5
<PAGE> 6
therefrom. The certificates evidencing the Shares shall contain a
legend to the foregoing effect, and Seller shall execute and deliver
at Closing an investment letter in a form reasonably satisfactory to
Seller and Purchaser (the "Investment Letter") acknowledging that the
Shares are restricted securities and consenting to the foregoing
transfer restrictions.
(b) The holders of the Shares shall have "piggyback"
registration rights as set forth in a registration rights agreement in
a form reasonably satisfactory to Seller and Purchaser (the
"Registration Rights Agreement") to be executed at Closing.
1.7 Allocation of Purchase Price. The Purchase Price
shall be allocated among the Assets as set forth in a purchase price allocation
statement (the "Purchase Price Allocation") to be executed and delivered by
each party at the Closing. The Purchase Price Allocation may be adjusted after
Closing by Purchaser and Seller in writing. The Purchase Price Allocation was
arrived at arm's length between the parties. Each party agrees to complete and
to file IRS Form 8594 with its federal income tax return consistent with the
Purchase Price Allocation for the tax year in which the Closing occurs, and no
party shall take a position on any tax return, before any governmental agency
or in any judicial proceeding that is in any manner inconsistent with the
Purchase Price Allocation without prior consent of the other party.
2. CLOSING
2.1 Time and Place of Closing. The closing (the
"Closing") of the sale and purchase of the Assets shall be held at the offices
of Sulmeyer, Kupetz, Baumann & Rothman, 300 South Grand Avenue, 14th Floor, Los
Angeles, California 90071, at 10:00 a.m. on December 31, 1997 or such other
date after entry of the Sale Approval Order as the parties may agree (the
"Closing Date").
2.2 Items to be Delivered at Closing. At the Closing,
the following documents (the "Closing Documents") shall be executed and
delivered by the parties thereto:
(a) Seller shall execute and deliver to Purchaser:
(i) an assignment and bill of sale, substantially
in the form of Exhibit C;
(ii) an assignment and assumption agreement
substantially in the form of Exhibit D (the "Assumption
Agreement");
(iii) a settlement statement prepared by Seller
(the "Settlement Statement");
(iv) the Purchase Price Allocation;
(v) the Investment Letter;
(vi) the Registration Rights Agreement; and
(vii) such other documents or instruments as
Purchaser may reasonably require.
6
<PAGE> 7
(b) Purchaser shall execute and deliver to Seller:
(i) Promissory Note I and Promissory Note II;
(ii) the Security Documents;
(iii) certificates representing the Shares duly
issued in the name of Seller;
(iv) the Assumption Agreement;
(v) the Settlement Statement;
(vi) the Purchase Price Allocation;
(vii) the Registration Rights Agreement; and
(viii) such other documents or instruments as Seller
may reasonably require.
2.3 Delivery of Possession. At the Closing, Seller shall
deliver possession of the Assets and, simultaneously with such delivery shall
take all steps as may be required to put Purchaser in actual possession and
operating control of the Assets, including, without limitation, delivery to
Purchaser of all keys to the premises on which the Business is operated or the
Assets are located, all access codes, security codes, passwords and the like.
Seller shall execute and deliver such further documents and instruments as
Purchaser may reasonably request in order to cause full possession and control
of all of the Assets and of all other things and matters pertaining to the
operation of the Business to be transferred and delivered to Purchaser.
2.4 Third Party Consents. To the extent that Seller's
rights under any Contract or other Asset to be assigned to Purchaser hereunder
may not be assigned without the consent of another person, and such consent has
not been obtained by the Closing Date, or the need for such consent has not
been obviated by Bankruptcy Court order, this Agreement shall not constitute an
agreement to assign the same if an attempted assignment would constitute a
breach thereof or be unlawful. Seller, at its expense, shall use commercially
reasonable efforts to obtain any such required consents as promptly as possible
after Closing, provided that Seller shall not be required to expend any money
for such purposes.
2.5 Further Assurances. From time to time after the
Closing, at Purchaser's request and expense, Seller shall execute, acknowledge
and deliver to Purchaser such other instruments of conveyance and transfer and
shall take such other actions and execute and deliver such other documents,
certifications and further assurances as Purchaser may reasonably require in
order to vest more effectively in Purchaser, or to put Purchaser more fully in
possession of, any of the Assets, or to better enable Purchaser to complete,
perform or discharge any of the Assumed Liabilities. Each of the parties
hereto shall cooperate with the other and execute and deliver to the other
parties hereto such other instruments and documents and take such other actions
as may be reasonably requested from time to time by any other party hereto as
necessary to carry out, evidence and confirm the intended purposes of this
Agreement and the consummation of the transactions hereunder.
7
<PAGE> 8
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
3.1 Corporate Existence. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California. Seller is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction where the conduct of the Business by
it requires it to be so qualified.
3.2 Corporate Power; Authorization; Enforceable
Obligations. Seller has the corporate power and authority to execute, deliver
and perform this Agreement. The execution, delivery and performance of this
Agreement by Seller have been duly authorized by all necessary corporate
action. This Agreement has been, and the other agreements, documents and
instruments required to be executed and delivered by Seller hereunder (the
"Seller's Documents") will be, duly executed and delivered by Seller. Subject
to approval of the Bankruptcy Court in Seller's Chapter 11 Case, this Agreement
constitutes, and the Seller's Documents when executed and delivered will
constitute, the valid and binding obligations of Seller, enforceable against
Seller in accordance with their respective terms.
3.3 No Conflicts. Except for the approval of Congress
and of the Bankruptcy Court in Seller's Chapter 11 Case, the execution,
delivery and performance of this Agreement and the Seller's Documents does not
and will not violate, conflict with or result in the breach of any term,
condition or provision of, or require the consent of any other person under:
(a) any existing law or governmental rule or regulation to which Seller is
subject, (b) any judgment, order, writ, injunction or decree of any court,
arbitrator or governmental or regulatory authority applicable to Seller, (c)
the charter documents or by-laws of, or any securities issued by Seller, or (d)
any mortgage, indenture, agreement, contract, lease or other instrument or
document to which Seller is a party, by which Seller may have rights or by
which any of the Assets may be bound or affected, or which gives any party with
rights thereunder the right to terminate, modify, accelerate or otherwise
change the existing rights or obligations of Seller thereunder. Except for
approval of the Bankruptcy Court in Seller's Chapter 11 Case, no authorization,
approval or consent of, and no registration or filing with, any governmental or
regulatory authority is required in connection with the execution, delivery or
performance of this Agreement and the Seller's Documents by Seller.
3.4 Title to Properties. As of the date of entry of the
Sale Approval Order, Seller shall have good and marketable title to all of the
Assets (except for inventory or other assets sold in the ordinary course of
business consistent with past practice), free and clear of all mortgages,
liens, security interests and other encumbrances and defects of title, except
for the following ("Permitted Liens"):
(a) liens for current real or personal property taxes not
yet due and payable;
(b) worker's, carrier's and materialman's liens;
(c) interests of lessors under any and all leases
covering equipment and other tangible personal property included in
the Assets;
8
<PAGE> 9
(d) liens and security interests in favor of Congress and
Handel, to the extent not released at Closing;
(e) liens and security interests in favor of Seller
created by the Security Documents;
(f) liens and other interests set forth on Schedule 3.4,
and
(g) liens that are immaterial in character, amount and
extent and that do not detract from the value or interfere with the
present or proposed use of the properties they affect.
3.5 Condition of Tangible Assets. Except as set forth in
Schedule 3.5, all tangible property included in the Assets, including, without
limitation, all equipment of Seller, is in good operating condition and repair,
except for normal wear and tear, and is usable in the regular and ordinary
course of business.
3.6 Litigation. Except for the Chapter 11 Case and
except for the litigation set forth in Schedule 3.6 (for which Seller shall
retain liability), no litigation, including any arbitration, investigation or
other proceeding of or before any court, arbitrator or governmental or
regulatory authority, is pending or, to Seller's knowledge, threatened against
Seller which relates to the Business, the Assets or the transactions
contemplated by this Agreement. Except for the Chapter 11 Case and except as
set forth in Schedule 3.6, Seller is not a party to or subject to any judgment,
order, writ, injunction or decree of any court, arbitrator or governmental or
regulatory authority which may adversely affect Seller, the Assets or the
transactions contemplated hereby.
3.7 Disclosure. Seller has disclosed to Purchaser any
and all of the following of which Seller has actual knowledge: (a) any existing
environmental conditions that may adversely affect Purchaser's use of the
Leased Premises or Purchaser's operation of the Business; (b) any delinquent
sales taxes or sales tax returns, and (c) any claims pending under any employee
benefit plan that may adversely affect Purchaser's operation of the Business;
provided, however, that nothing herein shall imply that Seller has any
affirmative duty of inquiry with respect to the matters referred to in
subsection (a) and (c) above. The lists of Seller's inventory previously
furnished to Purchaser do not include any of the Excluded Assets.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to Seller as follows:
4.1 Corporate Existence. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Colorado. Purchaser is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where the conduct of its business
requires it to be so qualified.
4.2 Corporate Power and Authorization. Purchaser has the
corporate power and authority to execute, deliver and perform this Agreement
and the other agreements, documents and instruments required to be delivered by
Purchaser in accordance with this Agreement (the "Purchaser's Documents"). The
execution, delivery and performance of this Agreement by Purchaser have been,
and the Purchaser's Documents when executed will be, duly authorized by all
necessary corporate action. This Agreement has been duly executed
9
<PAGE> 10
and delivered by Purchaser and this Agreement constitutes, and the Purchaser's
Documents when executed and delivered will constitute, the valid and binding
obligations of Purchaser enforceable against Purchaser in accordance with their
respective terms.
4.3 No Conflicts. The execution, delivery and
performance of this Agreement and the Purchaser's Documents by Purchaser does
not and will not violate, conflict with or result in the breach of any term,
condition or provision of, or require the consent of any other party to: (a)
any existing law, ordinance, or governmental rule or regulation to which
Purchaser is subject, (b) any judgment, order, writ, injunction or decree of
any court, arbitrator or governmental or regulatory authority which is
applicable to Purchaser, (c) the charter documents or by-laws of, or any
securities issued by, Purchaser or (d) any mortgage, indenture, agreement,
contract, lease or other instrument or document to which Purchaser is a party
or by which Purchaser is bound. No authorization, approval or consent of, and
no registration or filing with, any governmental or regulatory authority is
required in connection with the execution, delivery and performance of this
Agreement and the Purchaser's Documents by Purchaser.
4.4 Capital Structure. The authorized capital stock of
Purchaser consists of 50,000,000 shares of common stock, par value $.0001 per
share and 10,000,000 share of preferred stock, par value $.01 per share. As of
the date of this Agreement 15,867,121 shares of common stock were outstanding
(excluding the Shares); no shares of common stock were held by Purchaser in its
treasury, and no shares of preferred stock were issued or outstanding. The
Shares to be issued pursuant to this Agreement will be, when issued, validly
issued, fully paid and nonassessable and not subject to preemptive rights and
free and clear of all liens, claims and encumbrances. Except as set forth on
Schedule 4.4, there are no options, warrants, calls, agreements or other rights
to purchase or otherwise acquire from Purchaser at any time, or upon the
happening of any stated event, any shares of Purchaser's capital stock, whether
or not presently issued or outstanding.
4.5 SEC Documents. Purchaser has furnished Seller with
true and complete copies of: (a) Purchaser's 10-KSB for the fiscal year ended
December 31, 1996, (b) Consolidated's Forms 10-QSB for the quarters ended March
31, 1997, June 30, 1997 and September 30, 1997; and (c) all Forms 8-K filed by
Purchaser during 1997 (collectively, the "SEC Documents"). Since January 1,
1997, Consolidated has filed with the Securities and Exchange Commission (the
"SEC") all documents required to be filed pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
promulgated by the SEC thereunder (the "Rules"). As of their respective dates,
the SEC Documents complied in all material respects with applicable
requirements of the Exchange Act and the Rules, and none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Purchaser's financial statements included in the SEC Documents
comply in all material respects with applicable accounting requirements and
with the Rules.
5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made by the parties in this
Agreement or in any certificate, schedule, statement, document or instrument
furnished hereunder shall survive the Closing for the period of time specified
in Sections 9.1 and 9.2.
10
<PAGE> 11
6. AGREEMENTS OF SELLER PENDING THE CLOSING.
Seller covenants and agrees that, pending the Closing and
unless otherwise agreed by Purchaser:
6.1 Conduct of Business and Maintenance of Physical
Assets. The Business shall be conducted in the ordinary course consistent with
Seller's past practices. Seller shall maintain and service the physical assets
used in the conduct of the Business in a manner consistent with Seller's past
practices.
6.2 Sale of Assets. Seller shall not, directly or
indirectly, sell or encumber all or any part of the Assets, other than in the
ordinary course of business consistent with Seller's past practices.
6.3 Access.
(a) Upon reasonable prior notice to Seller, Seller shall
give Purchaser's officers, employees, counsel, accountants and other
representatives full access to and the right to inspect, during normal
business hours and subject to Section 7.2, all of the premises,
properties, assets, records, contracts and other documents relating to
the Business and shall permit them (subject to prior clearance from
Les Juhos or Daniel Eget) to consult with Seller's officers,
employees, accountants, counsel and agents for the purpose of making
such investigation of the Business and the Assets as Purchaser desires
to make, provided that such investigation shall not unreasonably
interfere with Seller's business operations. Subject to Section 7.2,
Seller shall furnish to Purchaser all such documents and copies of
documents and records and information with respect to the affairs of
the Business and copies of any working papers relating thereto as
Purchaser may from time to time reasonably request and shall permit
Purchaser and its agents to make such physical inventories and
inspections of the Assets as Purchaser may request from time to time.
(b) Seller shall cooperate with Purchaser and its
representatives and agents in their efforts to produce an
environmental assessment of the real property on which the Business is
conducted and an environmental audit of the Business. Upon reasonable
prior notice to Seller, and provided that consent of the property
owner is obtained, Seller shall allow Purchaser and its
representatives and agents access to such real property at all
reasonable times prior to Closing for the purposes for conducting such
inspections, reviews, inventories, observations, tests, analyses,
examinations and investigations as Purchaser may reasonably desire.
To the extent that the following are within Seller's possession or
control, Seller shall allow Purchaser and its representatives and
agents access to all plans and specifications for the improvements on
such real property and all current and historical maintenance records,
licenses, permits, reports and certificates relating to the real
property and any environmental audit of the Business. Purchaser shall
pay all costs and expenses of Purchaser's investigation and hold
harmless Seller and Seller's officers, directors, employees,
representatives and agents from all such costs and expenses and from
any damages incurred or claims or demands made in connection with such
investigation.
7. AGREEMENTS OF PURCHASER PENDING THE CLOSING
7.1 Actions of Purchaser. Purchaser shall not knowingly
take any action which would result in a breach of any of its representations
and warranties hereunder. Purchaser shall cooperate with Seller and use
11
<PAGE> 12
its best efforts to cause all of the conditions to the obligations of Purchaser
and Seller under this Agreement to be satisfied on or prior to the Closing
Date.
7.2 Confidentiality. Unless and until the Closing has
been consummated, Purchaser will hold, and shall cause its officers, directors,
employees, counsel, independent certified public accountants, bankers,
appraisers and other agents to hold, in confidence all documents, records, data
and information made available to Purchaser in connection with this Agreement
with respect to the Business (the "Confidential Information"). Prior to the
Closing Date, Purchaser shall not use any Confidential Information or other
information relating to the Business which is not otherwise publicly available
for any purpose unrelated to the consummation of the transactions contemplated
hereby. Prior to the Closing Date or in the event this Agreement is
terminated, Purchaser shall not disclose any such Confidential Information or
other information to any person, unless and until such time as such
Confidential Information or other information is otherwise publicly available
or as Purchaser is advised by counsel that such Confidential Information or
other information is required by law to be disclosed (in which cases Seller
shall be promptly notified). In the event this Agreement is terminated,
Purchaser agrees to return promptly every document furnished to Purchaser by
Seller in connection with the transactions contemplated hereby, any copies
thereof Purchaser may have made, and any documents prepared primarily based
upon information contained therein, and Purchaser shall cause its
representatives and agents to whom such documents were furnished promptly to
return such documents and any copies thereof any of them may have made.
7.3 Financing. Purchaser has received financial
commitments from financial institutions and other parties to refinance the
Seller's existing indebtedness to Congress Financial Corporation, and to pay
related fees and expenses (the "Acquisition Financing"). Purchaser shall use
its best efforts to satisfy, on or before the Closing Date, all requirements of
such financing arrangements which are conditions to closing such financing. In
addition, Purchaser shall use reasonable efforts to obtain financing for that
portion of the consideration evidenced by Promissory Note II (the "Note
Financing"). If Purchaser is able to obtain the Note Financing, Purchaser
shall pay $500,000.00 in cash or other immediately available funds to Seller at
Closing in lieu of execution and delivery of Promissory Note II to Seller.
8. CONDITIONS PRECEDENT TO THE CLOSING
8.1 Conditions Precedent to the Obligations of Purchaser.
The obligations of Purchaser to consummate the transactions contemplated by
this Agreement are subject to the satisfaction, or waiver by Purchaser, prior
to or at the Closing, of each of the following conditions precedent:
(a) Representations and Warranties. The representations
and warranties of Seller contained in this Agreement and in any
certificate or document delivered by Seller to Purchaser under this
Agreement shall have been true in all material respects on the date
hereof (except as set forth in any amended Schedule furnished by
Seller after the date hereof) and shall be true in all material
respects on the Closing Date with the same effect as though such
representations and warranties were made as of such date.
(b) Compliance with this Agreement. Seller shall have
performed and complied with all agreements and conditions required by
this Agreement to be performed or complied with by Seller prior to or
at the Closing.
12
<PAGE> 13
(c) Lease Agreement, Non-Disturbance Agreement. The
lease agreement between Danat Investment Company, a California general
partnership ("Lessor"), and Purchaser, for the premises at 20000 South
Western Avenue, Torrance, California (the "Leased Premises"), in form
reasonably satisfactory to Purchaser (the "Lease Agreement") shall
have been executed and delivered by Lessor to Purchaser. The
beneficiary under any mortgage or deed of trust encumbering the Leased
Premises and the landlord under any ground lease affecting the Leased
Premises shall have executed and delivered to Purchaser a
non-disturbance agreement, in recordable form and otherwise in form
reasonably satisfactory to Purchaser (the "Non-Disturbance
Agreement").
(d) Handel Debt Extension. Seller shall have obtained an
extension of the due date of Seller's indebtedness to Handel to June
30, 1998 or any time thereafter, provided that Seller shall not be
required to pay any consideration to Handel or to increase Seller's
liability to Handel in order to obtain such an extension.
8.2 Conditions Precedent to the Obligations of Seller.
All obligations of Seller under this Agreement are subject to the satisfaction,
or waiver by Seller, prior to or at the Closing, of each of the following
conditions precedent:
(a) Representations and Warranties. The representations
and warranties of Purchaser contained in this Agreement and in any
certificate or document delivered by Purchaser to Seller under this
Agreement shall have been true in all material respects on the date
hereof and shall be true on the Closing Date with the same effect as
though such representations and warranties were made as of such date.
(b) Compliance with this Agreement. Purchaser shall have
performed and complied with all agreements and conditions required by
this Agreement to be performed or complied with by Purchaser prior to
or at the Closing.
8.3 Conditions Precedent to the Obligations of Both
Parties. The obligations of both Seller and Purchaser to consummate the
transactions contemplated by this Agreement are subject to the satisfaction, or
waiver by both parties, of each of the following conditions precedent:
(a) No Pending Litigation. On the Closing Date, no suit,
action or other proceeding, or injunction or final judgment relating
thereto, shall be pending before any court or governmental or
regulatory authority in which it is sought to restrain or prohibit or
to obtain damages or other relief in connection with this Agreement or
the consummation of the transactions contemplated hereby.
(b) Consents and Approvals; Release of Liens. All
required consents, approvals, authorizations or orders required in
connection with the sale of the Assets (the "Consents") shall have
been obtained and shall be in effect on the Closing Date, including,
without limitation, approval by the Bankruptcy Court in Seller's
Chapter 11 Case of the sale of the Assets by Seller to Purchaser
pursuant to the terms and conditions of this Agreement and the Sale
Approval Order, or else the need for any such Consent shall have been
obviated by Bankruptcy Court order. The Sale Approval Order shall be
in form and substance reasonably acceptable to Seller and Purchaser,
shall have been entered on the docket of
13
<PAGE> 14
the Bankruptcy Court and shall be in full force and effect and shall
not have been stayed by any court. All existing liens on the Assets
shall have been released except (i) any lien in favor of Congress in
the event that Congress provides a portion of the Acquisition
Financing as of the Closing; (ii) any lien of Handel securing the
Handel note, and (iii) Permitted Liens.
(c) Closing Documents. The closing documents set forth
in Section 2.2 hereof shall have been executed and delivered by the
parties thereto.
9. INDEMNIFICATION
9.1 Indemnification Obligation of Seller. If the Closing
occurs, then from and after the Closing, for a period of six months, Seller
shall reimburse, indemnify and hold harmless and defend Purchaser, its
officers, directors, employees, representatives and other agents, and their
successors and assigns, against and in respect of:
(a) Except for the Assumed Liabilities, any and all
claims, demands, causes of action, damages, losses, liabilities,
costs, expenses, fees (including, without limitation, reasonable
attorneys' fees), judgments and good faith settlements of claims or
judgments arising out of or resulting from:
(i) the operations or assets of the Business
prior to the Closing, or the actions or omissions of Seller's
officers, directors, employees and agents relating to the
Business or the Assets prior to the Closing;
(ii) any misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part of
Seller under this Agreement or any Closing Document to which
Seller is a party, and
(iii) the Excluded Liabilities; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs
and other expenses (including, without limitation, reasonable
attorneys' fees and expenses) incident to any of the foregoing or to
the enforcement of this Section 9.1.
9.2 Indemnification Obligation of Purchaser. If the
Closing occurs, then from and after the Closing, for a period of six months,
Purchaser shall reimburse, indemnify and hold harmless Seller, its officers,
directors, employees, representatives and other agents, and their successors or
assigns, against and in respect of:
(a) Except for the Excluded Liabilities, any and all
claims, demands, causes of action, damages, losses, liabilities,
costs, expenses, fees (including, without limitation, reasonable
attorneys' fees), judgments and good faith settlements of claims or
judgments arising out of or resulting from:
(i) the operations or assets of the Business
after the Closing, or the actions or omissions of Purchaser's
officers, directors, employees and agents relating to the
Business or the Assets after the Closing;
14
<PAGE> 15
(ii) any misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part of
Purchaser under this Agreement or any Closing Document to
which Purchaser is a party, and
(iii) the Assumed Liabilities; and
(b) any and all actions, suits, claims, proceeding,
investigations, demands, assessments, audits, fines, judgments, costs
and other expenses (including, without limitation, reasonable
attorneys' fees and expenses) incident to any of the foregoing or to
the enforcement of this Section 9.2.
9.3 Method of Asserting Claims, Etc.
(a) In the event that any claim or demand ("Claim") for
which a party (the "Indemnifying Party") would be liable to another
party (the "Indemnified Party") is asserted against or sought to be
collected from the Indemnified Party by a third party, the Indemnified
Party shall promptly notify the Indemnifying Party of such Claim,
specifying the nature of the Claim and the amount or estimated amount
thereof (which estimate shall not be conclusive of the final amount of
such Claim) (the "Claim Notice"). The Indemnifying Party shall have
30 days from of the Claim Notice (the "Notice Period") to notify the
Indemnified Party (i) whether or not it disputes liability to the
Indemnified Party with respect to such Claim, and (ii) notwithstanding
any such dispute, whether or not it desires, at its sole cost and
expense, to defend the Indemnified Party against such Claim.
(b) If the Indemnifying Party disputes its liability with
respect to the Claim (whether or not the Indemnifying Party desires to
defend the Indemnified Party against such Claim as provided below),
the Claim shall be resolved in accordance with Section 9.6 hereof.
Pending resolution of the dispute, such Claim shall not be settled
without prior consent of the Indemnified Party.
(c) In the event that the Indemnifying Party notifies the
Indemnified Party within the Notice Period that it desires to defend
the Indemnified Party against such Claim then the Indemnifying Party
shall have the right to defend the Indemnified Party by appropriate
proceedings. If the Indemnified Party desires to participate in (but
not control) any such defense, it may do so at its sole cost and
expense.
(d) If the Indemnifying Party does not dispute its
liability with respect to such Claim, the amount of such Claim, or if
the same be defended by the Indemnifying Party then that portion
thereof as to which such defense is unsuccessful, shall be
conclusively deemed to be a liability of the Indemnifying Party.
(e) In the event an Indemnified Party has a Claim against
the Indemnifying Party hereunder that is not being asserted against or
sought to be collected from the Indemnified Party by a third party,
the Indemnified Party shall promptly send a Claim Notice with respect
to such Claim to the Indemnifying Party. If the Indemnifying Party
disputes its liability with respect to such Claim, such dispute shall
be resolved in accordance with Section 9.6 hereof. If the
Indemnifying Party does not notify the Indemnified Party within the
Notice Period that it disputes such Claim, the amount of such Claim
shall be conclusively deemed a liability of the Indemnifying Party
hereunder.
15
<PAGE> 16
9.4 Payment. Upon the determination of liability of the
Indemnifying Party hereunder, the Indemnifying Party shall pay to the
Indemnified Party, within 10 days after such determination, the amount of the
liability. The Indemnifying Party shall receive a credit for any insurance
proceeds or other third-party payments received or receivable by the
Indemnified Party with respect to the Claim. Upon payment in full, the
Indemnifying Party shall be subrogated to the rights of the Indemnified Party
against any third person, firm or corporation with respect to the Claim. If it
is determined that Purchaser is entitled to indemnification under this
Agreement, Purchaser shall be entitled to set off the amount of the Claim as
finally determined against the balance owing under the Promissory Note I.
9.5 Limitation on Indemnification. Notwithstanding
anything to the contrary herein, no Indemnified Party shall be entitled to be
indemnified until the amount of the Claims against such Indemnifying Party
equals or exceeds $25,000. Once the amount of such Claims equals or exceeds
$25,000, then the Indemnified Party shall be entitled to full indemnification
for all Claims against the Indemnifying Party. Notwithstanding anything to the
contrary herein, Seller's total obligation to indemnify Purchaser in respect of
Purchaser's claims for indemnification hereunder shall not exceed $200,000.
9.6 Arbitration. All disputes under this Section 9 shall
be settled by arbitration in Los Angeles County, California before a single
arbitrator pursuant to the rules of the American Arbitration Association
("AAA"). Arbitration may be commenced at any time by any party hereto giving
written notice to each other party to a dispute that such dispute has been
referred to arbitration under this Section 9.6. The arbitrator shall be
selected by the joint agreement of Seller and Purchaser, but if they do not so
agree within 20 days after the date of the notice referred to above, the
selection shall be made pursuant to AAA rules. Any award rendered by the
arbitrator shall be accompanied by a written opinion of the arbitrator giving
the reasons for the award, and shall be conclusive and binding upon the
parties. This provision for arbitration shall be specifically enforceable by
the party. The decision of the arbitrator shall be final and binding, and
there shall be no right of appeal therefrom. Any arbitration award shall be
enforceable in the Superior Court of the State of California, County of Los
Angeles. The prevailing party in such arbitration, as determined by the
arbitrator, shall be entitled to reasonable attorneys' fees and costs of such
arbitration, costs of suit to enforce such arbitration award and all costs of
collection of such arbitration award.
10. PUBLICITY
Each party hereto agrees not to issue any press release or to
make any public statement with respect to the transactions contemplated hereby
without the consent, which shall not be unreasonably withheld, of Seller (in
the case of releases or statements issued or made by Purchaser) or Purchaser
(in the case of releases or statements issued or made by Seller), except as may
be required by law, in which event such press release or public statement shall
be made only after consultation with Seller or Purchaser, as the case may be.
11. TERMINATION
11.1 Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) By mutual agreement of Purchaser and Seller; or
16
<PAGE> 17
(b) By Seller or Purchaser by notice to the other,
without liability to the terminating party on account of such
termination, if the Closing shall not have occurred on or before
January 8, 1998; provided that if a party's willful breach of this
Agreement has prevented the consummation of the transactions
contemplated hereby, such party shall not be entitled to terminate
this Agreement under this Section 11.1(b); or
(c) By Seller by notice to Purchaser, if any of the
conditions set forth in Section 8.2 or 8.3 (to the extent applicable
to Purchaser) shall not have been complied with or performed in any
material respect by Purchaser and such noncompliance or nonperformance
shall not have been cured or eliminated (or by its nature cannot be
cured or eliminated) on or before January 8, 1998;
(d) By Purchaser by notice to Seller, if any of the
conditions set forth in Section 8.1 or 8.3 (to the extent applicable
to Seller) shall not have been complied with or performed in any
material respect by Seller and such noncompliance or nonperformance
shall not have been cured or eliminated (or by its nature cannot be
cured or eliminated) on or before January 8, 1998.
11.2] Effect of Termination. Termination of this Agreement
pursuant to Section 11.1 shall terminate all obligations of the parties under
this Agreement except the parties' obligations under Section 7.2; provided,
however, that termination shall not relieve a defaulting or breaching party
from any liability to the other party under this Agreement.
12. POST-CLOSING MATTERS
12.1 Hiring of Seller's Employees. As of the Closing
Date, Purchaser shall offer employment to, and Seller shall use reasonable
efforts to assist Purchaser in employing as new employees of Purchaser, those
persons presently employed by Seller who are identified by Purchaser (the
"Employees"). As of the Closing Date, Seller shall terminate any employment
agreements it has with any of the Employees.
12.2 Employee Benefits. All Employees who are employed by
Purchaser on or after the Closing Date shall be new employees of Purchaser, and
any prior employment by Seller of such Employees shall not affect entitlement
to, or the amount of, salary or other cash compensation which Purchaser may
make available to them. All Employees employed by Purchaser shall no longer be
considered employees of Seller for any purposes.
12.3 Access to Records. After the Closing, upon
reasonable prior notice to Purchaser, Seller shall have full access to and the
right to inspect and copy, during normal business hours, all files, accounts,
books and records related to the Business which Seller transferred to Purchaser
at the Closing.
12.4 Payments Received. After Closing, Seller and
Purchaser shall hold and shall promptly transfer and deliver to the other, from
time to time as and when received by them, any cash, checks with appropriate
endorsements (using their best efforts not to convert such checks into cash),
or other property that they may receive on or after the Closing which properly
belongs to the other party, including, without limitation, any insurance
proceeds, and shall account to the other for all such receipts.
17
<PAGE> 18
12.5 Use of Name. From and after the Closing Date, Seller
shall sign such consents and take such other action as Purchaser may reasonably
request in order to permit Purchaser to use the name "Capitol Metals Co., Inc."
From and after the Closing Date, Seller shall not use the name "Capitol Metals
Co., Inc." or any names deceptively similar thereto. Promptly after the
Closing, Seller shall change its corporate name to a name which is dissimilar
to "Capitol Metals Co., Inc."
12.6 Duferco and Ferrostaal Inventory. After Closing,
Purchaser agrees to store, without charge, on behalf of Seller, the Duferco and
Ferrostaal inventory described on Schedule 1.3 until the pending litigation
concerning such inventory is concluded. Upon conclusion of such litigation,
Purchaser shall deliver such inventory as directed by (and at the expense of)
the owner thereof.
13. MISCELLANEOUS
13.1 Brokers', Finders' and Related Fees. Except as set
forth in Schedule 13.1, Seller and Purchaser each represent and warrant to the
other that no person, firm, corporation or other entity is entitled to any
brokerage fee or other commission from the other party in respect of the
execution of this Agreement or the consummation of the transactions
contemplated hereby, and each party shall indemnify and hold harmless the other
and any affiliate of them against any and all claims, losses, liabilities or
expenses that may be asserted against any of them as a result of any dealings,
arrangements or agreements by the indemnifying party with any such person,
firm, corporation or other entity. Seller shall retain sole responsibility and
liability for the fees and costs of the broker(s) identified on Schedule 13.1.
13.2 Expenses. Except as set forth in Section 9, each
party hereto shall pay its own expenses incidental to the negotiation,
preparation, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby.
13.3 Integration; Amendments. This Agreement sets forth
the entire understanding of the parties with respect to the subject matter
hereof. Any and all previous agreements and understandings between the parties
regarding the subject matter hereof, whether written or oral, are superseded by
this Agreement. This Agreement shall not be amended or modified except by an
instrument duly executed by each of the parties hereto, subject to the approval
of the Bankruptcy Court in the Seller's Chapter 11 Case.
13.4 Assignment; Binding Effect. This Agreement may not
be assigned by any party hereto without prior consent of the other, which
consent may be granted or withheld in the sole and absolute discretion of the
party whose consent is requested. Subject to the foregoing, all of the terms
and provisions of this Agreement shall be binding upon and inure to the benefit
of, and be enforceable by, the successors and assigns of Seller and Purchaser.
13.5 Waiver. Any term or provision of this Agreement
may be waived at any time by the party entitled to the benefit thereof by an
instrument duly executed by such party, subject to any approval of the
Bankruptcy Court that may be required by law.
13.6 Notices. Any notice, request, demand, waiver,
consent, approval or other communication which is required or permitted
hereunder shall be in writing and shall be deemed given only if
18
<PAGE> 19
delivered personally, by facsimile (which is confirmed), by courier or sent by
certified mail, postage prepaid, addressed as follows:
If to Purchaser, to:
CONSOLIDATED CAPITOL OF NORTH AMERICA, INC.
436 Seneca Lane
Boca Raton, Florida 33487
Facsimile No.: (561) 988-3046
Attention: Mr. Chris Wolf
With a copy to:
GALLAGHER BRIODY & BUTLER
212 Carnegie Center, Suite 402
Princeton, New Jersey 08540
Facsimile No.: (609) 452-0090
Attention: Barbara J. Comly, Esq.
If to Seller, to:
BINHAD, INC.
2850 Benedict Canyon Road
Beverly Hills, California 90210
Facsimile No.: (310) 275-9197
Attention: Mr. Daniel J. Eget
With a copy to:
SULMEYER, KUPETZ, BAUMANN & ROTHMAN
300 South Grand Avenue
Los Angeles, California 90071
Facsimile No.: (213) 629-4520
Attention: Victor A. Sahn, Esq.
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication shall be deemed to have been given as
of the date so delivered.
13.7 Governing Law. This Agreement shall be governed by
and interpreted and enforced in accordance with the laws of the State of
California, without regard to choice-of-law principles. The parties hereby
agree that subject to Section 9.6, any proceeding to enforce of this Agreement
shall be brought in Los Angeles County, California.
19
<PAGE> 20
13.8 No Benefit to Others. The representations, warranties
and covenants in this Agreement are for the sole benefit of the parties hereto
and, in the case of Section 9 hereof, the indemnified parties, and their heirs,
executors, administrators, legal representatives, successors and assigns, and
shall not be construed as conferring any rights on any other persons.
13.9 Headings and "Persons". All section headings contained
in this Agreement are for convenience of reference only, do not form a part of
this Agreement and shall not affect in any way the meaning or interpretation of
this Agreement. Any references to a "person" herein shall include an
individual, firm, corporation, partnership, trust, governmental authority or
body, association, unincorporated organization and any other entity.
13.10 Schedules and Exhibits. All Exhibits and Schedules
referred to herein are intended to be and hereby are specifically made a part
of this Agreement
13.11 Severability. Any provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall be ineffective to the extent
of such invalidity or enforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13.12 Counterparts. This Agreement may be executed in any
number of counterparts, each of which when executed and delivered shall be
deemed to be an original and all of which counterparts taken together shall
constitute but one and the same instrument. It shall not be necessary in
making proof of this Agreement or any counterpart hereof to produce or account
for any of the other counterparts.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
PURCHASER:
CONSOLIDATED CAPITAL OF
NORTH AMERICA, INC.
By: /s/ Christian Wolf
---------------------------------
Christian Wolf
Chief Executive Officer
20
<PAGE> 21
SELLER:
CAPITOL METALS CO., INC.
By: /s/ Daniel J. Eget
---------------------------------
Daniel J. Eget
Chairman of the Board
21
<PAGE> 1
EXHIBIT 10.42
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this
"Amendment") dated as of January 8, 1998, is among BINHAD, INC. (formerly known
as CAPITOL METALS CO., INC.), a California corporation ("Seller"), 20000 S.
Western Ave., Torrance, California 90501; CONSOLIDATED CAPITAL OF NORTH
AMERICA, INC., a Colorado corporation ("CCNA"), 410 - 17th Street, Suite 410,
Denver, Colorado 80202, and ANGELES ACQUISITION CORP., a Delaware corporation
("AAC"), 410 - 17th Street, Suite 410, Denver, Colorado 80202. This Amendment
is made with reference to the following facts:
WHEREAS, Seller and CCNA have entered into that certain Asset
Purchase Agreement, dated as of December 1, 1997 (the "Asset Purchase
Agreement"), as amended by that certain Order Approving Sale of Substantially
All Property of the Estate Free and Clear of Liens and Interests (the "Sale
Approval Order"), entered December 29, 1997 by the U.S. Bankruptcy Court in
Seller's pending chapter 11 case;
WHEREAS, the Asset Purchase Agreement as amended by the Sale
Approval Order provides, among other things, for the sale by Seller and the
purchase by CCNA of the Assets (as defined in the Asset Purchase Agreement);
WHEREAS, CCNA, with the consent of Seller, desires to assign
to AAC all of CCNA's rights under the Asset Purchase Agreement as amended by
the Sale Approval Order, and AAC desires to assume the obligations of CCNA
under the Asset Purchase Agreement, on condition that CCNA remains liable,
jointly and severally with AAC, for all of CCNA's obligations under the Asset
Purchase Agreement as amended by the Sale Approval Order; and
WHEREAS, the parties further desire to amend Schedule 1.3 to
the Asset Purchase Agreement in its entirety as provided herein;
NOW, THEREFORE, in consideration of the foregoing recitals,
the mutual promises herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:
1. Definitions. Except as otherwise indicated herein,
capitalized terms used herein and not otherwise defined shall have the meanings
ascribed thereto in the Asset Purchase Agreement.
2. Assignment. CCNA hereby assigns, transfers and
conveys to AAC all of CCNA's rights and interests in, to and under the Asset
Purchase Agreement as amended by the Sale Approval Order. AAC, and its
successors and assigns, shall be entitled to exercise and receive all rights
and benefits inuring to, and shall be subject to all obligations and
liabilities of, CCNA as "Purchaser" under the Asset Purchase Agreement as
amended by the Sale Approval Order, as though AAC was initially a party to the
Asset Purchase Agreement.
1
<PAGE> 2
3. Acceptance of and Consent to Assignment. AAC hereby
accepts the foregoing assignment from CCNA. Seller hereby consents to such
assignment upon all of the terms and conditions provided in this Amendment.
4. Assumption of Obligations. AAC hereby agrees to
assume, pay, perform, discharge and fulfill all of the duties, liabilities and
obligations of CCNA under the Asset Purchase Agreement as amended by the Sale
Approval Order; provided, however, that CCNA remains liable, jointly and
severally with AAC, to pay, perform, discharge and fulfill all of the duties,
liabilities and obligations of CCNA as "Purchaser" under the Asset Purchase
Agreement as amended by the Sale Approval Order, as if this Amendment had never
been made.
5. Further Assurances. Each party agrees to execute and
deliver such additional instruments and to take such further actions as may
reasonably be required by another party to fully effectuate the assignment of
rights and interests and the assumption of obligations and liabilities intended
hereby, including, without limitation, the execution and delivery by any party
of additional instruments of assignment and assumption.
6. Amendment to Schedule 1.3. The existing Schedule 1.3
to the Asset Purchase Agreement as amended by the Sale Approval Order shall be
deemed to be deleted in its entirety, and a new Schedule 1.3, in the form
attached to this Amendment, shall be substituted therefor.
7. Binding Effect. This Amendment shall bind and inure
to the benefit of the parties hereto and their respective successors and
assigns.
8. No Release. Nothing contained in this Amendment
shall, or shall be deemed to, release Seller or CCNA from any of their
respective obligations under the Asset Purchase Agreement. The parties hereby
ratify and confirm all of the provisions of the Asset Purchase Agreement, as
amended by the Sale Approval Order and this Amendment.
2
<PAGE> 3
IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed by their duly authorized officers as of the date first set forth
above.
SELLER:
BINHAD, INC. (formerly known as
CAPITOL METALS CO., INC.)
By: /s/ Daniel J. Eget
-------------------------------
Daniel J. Eget
Chief Executive Officer
CCNA:
CONSOLIDATED CAPITAL OF NORTH
AMERICA, INC.
By: /s/ Christian Wolf
-------------------------------
Christian Wolf
Chief Executive Officer
AAC:
ANGELES ACQUISITION CORP.
By: /s/ Christian Wolf
-------------------------------
Christian Wolf
Chief Executive Officer
3
<PAGE> 1
EXHIBIT 10.43
ASSIGNMENT AND BILL OF SALE
FOR VALUE RECEIVED, BINHAD, INC. (formerly known as CAPITOL
METALS CO., INC.), a California corporation ("Seller"), with its principal
place of business located at 20000 S. Western Avenue, Torrance, California
90501, hereby bargains, sells, grants, conveys, transfers, assigns and delivers
unto ANGELES ACQUISITION CORP., a Delaware corporation ("Assignee"), with its
principal place of business located at 410 - 17th Street, Suite 400, Denver,
Colorado 80202, and Assignee's successors and assigns, all of Seller's right,
title and interest in and to the assets, properties and rights of Seller used
directly or indirectly in the conduct of, or generated by or constituting, the
Seller's steel processing and supply business and located or deemed located at
Seller's place of business at the address above (collectively, the "Assets"),
including, without limitation:
(a) except as provided below, all cash and cash
equivalents, in transit, in hand or in bank accounts, all checks,
drafts, certificates of deposit, treasury securities and investments;
(b) all notes, receivables, accounts receivable and
unbilled charges and fees;
(c) all supplies, raw materials, spare parts,
work-in-process, finished goods and other inventories;
(d) all prepaid items and deposits held by third parties;
(e) all machinery, equipment, tools, vehicles, furniture,
furnishings, leasehold improvements, goods and other tangible personal
property;
(f) to the extent permitted by applicable law and except
as provided below and in Section 1.5(a)(ii) of the Asset Purchase
Agreement, dated as of December 1, 1997, between Seller and
Consolidated Capital of North America, Inc., a Colorado corporation
(the "Asset Purchase Agreement"), all rights under any written or oral
contract, agreement, lease, sublease, instrument, license, certificate
of occupancy, operating permit or any other permit or approval of any
nature, or other document, commitment, arrangement, undertaking,
practice or authorization;
(g) all of Seller's right, title and interest in and to
the name "Capitol Metals Co., Inc.";
(h) all rights under any trademark, service mark, trade
name or copyright, whether registered or unregistered, and any
applications therefor;
(i) all technologies, methods, formulations, data bases,
trade secrets, know-how, inventions and other intellectual property
used in the Business or under development;
1
<PAGE> 2
(j) except as provided below and subject to Section 12.3
of the Asset Purchase Agreement, all information, files, accounts,
books, records, data and plans related to the Business, including
customer and supplier lists; and
(k) the Seller's Business as a going concern and its
goodwill.
NOTWITHSTANDING THE FOREGOING, the Assets transferred
hereunder shall not include any of the following:
(a) the items set forth on Schedule 1.3 attached hereto;
(b) an amount of Cash sufficient, in the Seller's sole
discretion, to pay (i) all expenses, liabilities and obligations of
Seller which arose in the regular and ordinary course of the Business
before the Closing Date, other than those referred to in Section
1.5(b)(i)(A) and 1.5(b)(i)(B) of the Asset Purchase Agreement; (ii)
all liabilities and obligations of Seller under the Contracts (as
defined in Section 1.5(a)(ii) of the Asset Purchase Agreement) which
arose or relate to time periods before the Closing Date, and (iii) all
expenses of Seller incurred in connection with the sale of the Assets,
including expenses incurred by Seller's counsel but not including any
professional fees;
(c) the corporate seal, certificate of incorporation,
minute books, stock transfer records, tax returns, books of account
and other records having to do with the corporate organization of
Seller;
(d) Daniel J. Eget's personal Lexus automobile;
(e) all claims, rights of action and choses in action of
Seller that arose or accrued or relate to time periods prior to
Closing, and
(f) all rights accruing to Seller under the Asset
Purchase Agreement, and any and all documents and instruments executed
or delivered in connection with the transaction contemplated thereby.
2
<PAGE> 3
TO HAVE AND TO HOLD the Assets unto Assignee, its successors
and assigns, forever.
The Bill of Sale shall be, and shall be deemed to be, subject
to that certain Order Approving Sale of Substantially All Property of The
Estate Free and Clear of Liens and Interests, entered by the Bankruptcy Court
in Seller's pending chapter 11 case on or about December 29, 1997 (the "Sale
Approval Order").
ASSIGNEE ACKNOWLEDGES THAT SELLER HAS NOT MADE AND DOES NOT
HEREBY MAKE ANY REPRESENTATION OR WARRANTY, WRITTEN OR ORAL, STATUTORY, EXPRESS
OR IMPLIED, AS TO ANY MATTER WHATSOEVER INCLUDING, WITHOUT LIMITATION, THE
DESIGN, QUALITY, CAPACITY, MATERIAL, WORKMANSHIP, OPERATION, CONDITION,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR HIDDEN OR LATENT DEFECTS
OF THE ASSETS SOLD HEREUNDER OR ANY PORTION OF EITHER THEREOF OR AS TO PATENT
INFRINGEMENT, COPYRIGHT INFRINGEMENT, TRADEMARK INFRINGEMENT OR THE LIKE,
EXCEPT AS EXPRESSLY SET FORTH IN THE SALE APPROVAL ORDER OR THE ASSET PURCHASE
AGREEMENT.
EXCEPT AS EXPRESSLY SET FORTH IN THE SALE APPROVAL ORDER OR
THE ASSET PURCHASE AGREEMENT, SELLER SHALL NOT BE RESPONSIBLE FOR THE DELIVERY,
INSTALLATION, MAINTENANCE, USE, OPERATION, PERFORMANCE, SERVICE, OR CONDITION
OF ANY ASSET OR FOR ANY DELAY IN, OR INADEQUACY OF, ANY OR ALL OF THE
FOREGOING. IN NO EVENT SHALL SELLER HAVE ANY LIABILITY TO ASSIGNEE, ASSIGNEE'S
CUSTOMERS OR THIRD PARTIES, FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION ANY PERSONAL INJURY
DAMAGES, LOSS OF PROFITS OR SAVINGS, LOSS OF USE, OR ANY OTHER LOSS OR DAMAGES
OF ANY KIND OR NATURE, RESULTING FROM THE DELIVERY, INSTALLATION, MAINTENANCE,
USE, OPERATION, PERFORMANCE, SERVICE OR CONDITION OF ANY ASSET OR ANY PORTION
THEREOF, OR ANY DELAY OR FAILURE BY ANY VENDOR OR MANUFACTURER IN DELIVERING,
INSTALLING AND/OR MAINTAINING ANY PERSONAL PROPERTY, OR ANY PORTION THEREOF,
PERFORMING ANY SERVICE FOR ASSIGNEE, OR FOR ANY DAMAGES BASED ON STRICT OR
ABSOLUTE
3
<PAGE> 4
TORT LIABILITY OR SELLER'S NEGLIGENCE, OR FOR CONSEQUENTIAL DAMAGES OF ANY
NATURE WHATSOEVER, EXCEPT AS EXPRESSLY SET FORTH IN THE ASSET PURCHASE
AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this instrument to
be executed by their duly authorized officers on the dates set forth below.
SELLER
BINHAD, INC. (formerly known as CAPITOL
METALS CO., INC.)
By: /s/ Daniel J. Eget
-----------------------------------
Daniel J. Eget
Chief Executive Officer
Date: January 9, 1998
ASSIGNEE
ANGELES ACQUISITION CORP.
By: /s/ Christian Wolf
-----------------------------------
Christian Wolf
Chief Executive Officer
Date: January 9, 1998
4
<PAGE> 1
EXHIBIT 10.44
SECURED PROMISSORY NOTE
$1,200,000.00 Los Angeles, California
January 12, 1998
FOR VALUE RECEIVED, the undersigned, CONSOLIDATED CAPITAL OF
NORTH AMERICA, INC., a Colorado corporation ("CCNA"), and ANGELES ACQUISITION
CORP., a Delaware corporation ("AAC"), jointly and severally promise to pay to
the order of BINHAD, INC. (formerly known as CAPITOL METALS CO., INC.), a
California corporation ("Holder"), c/o Daniel J. Eget, 2850 Benedict Canyon
Drive, Beverly Hills, California 90210, or at such other place as Holder may
from time to time designate in writing, in legal tender of the United States of
America, the principal sum of ONE MILLION TWO HUNDRED THOUSAND AND NO/100
DOLLARS ($1,200,000.00), on the terms and conditions set forth below. CCNA and
AAC are referred to collectively herein as "Borrowers".
From and after the date of this Note, the unpaid principal
balance from time to time outstanding under this Note shall bear interest at
the rate of nine percent (9%) per annum (or, if less, the maximum rate
permitted by law).
Interest on the outstanding principal balance under this Note
shall be due and payable quarterly in arrears, without grace, notice, demand,
deduction or offset, beginning April 12, 1998, and continuing thereafter on
July 12, and October 12, 1998, and January 12, April 12 and July 12, 1999 (the
"Maturity Date").
In addition to the payments of interest set forth above, two
(2) quarterly installments of principal in the amount of One Hundred Thousand
and no/100 Dollars ($100,000.00) each, and thereafter, four (4) quarterly
installments of principal in the amount of Two Hundred Fifty Thousand and
no/100 Dollars ($250,000.00) each shall be due and payable, without grace,
notice, demand, deduction or offset, beginning April 12, 1998, and continuing
thereafter on the same dates that interest is payable hereunder until the
Maturity Date, whereupon the entire amount of principal outstanding and all
accrued but unpaid interest and other charges owed under this Note shall be due
and payable. Borrowers may prepay any principal outstanding under this Note,
in whole or in part, at any time without penalty or fee.
Whenever any payment on this Note is due on a day which is a
Saturday, Sunday or legal holiday, such payment shall be made on the next
succeeding day which is not a Saturday, Sunday or legal holiday, and such
extension of time shall be included in the computation of payment of interest
on this Note.
This Note is secured pursuant to the terms of a Security
Agreement between AAC and Holder, of even date herewith.
1
<PAGE> 2
All payments made by Borrowers under this Note shall be
applied first to the payment of delinquent or late charges or other expenses
payable to Holder, then to accrued and unpaid interest then due and owing, then
to the payment of principal then due and owing, and then to outstanding
principal.
Should Borrowers fail to make any payment of principal,
interest or other amounts hereunder within five (5) days after the due date
thereof, the overdue but unpaid amount thereof shall thereafter bear interest
at the rate of twelve percent (12%) per annum (or, if less, the maximum rate
permitted by law) until paid. The payment of such interest shall in no way
limit or affect any of Holder's rights or remedies, at law or equity, under
this Note.
This Note is subject to the limitation that in no event shall
interest or any other amount paid or agreed to be paid to Holder for the use,
forbearance or detention of money to be advanced hereunder exceeds the highest
lawful rate permissible under applicable usury laws. If fulfillment of any
provision hereof shall be deemed by a court of competent and final jurisdiction
to violate any applicable usury restrictions then ipso facto, the obligation to
be fulfilled shall be reduced to the limit of such validity, and any amount
received in excess of such limit shall be applied to reduce the unpaid
principal balance hereof and not to the payment of interest.
Upon any breach or default in the payment of any amount owed
under this Note, or any breach or default in the performance of any term,
covenant, condition or agreement under this Note, the entire amount of
principal, interest, charges and fees hereunder shall, at the sole and absolute
option of Holder, become immediately due and payable.
Borrowers jointly and severally promise to pay to Holder all
costs (including without limitation, all attorneys' fees and costs) incurred by
Holder in collecting on this Note, whether or not litigation is commenced,
including without limitation, all attorneys' fees and costs incurred by Holder
in any bankruptcy or foreclosure proceedings or related proceedings, such as an
action for relief from an automatic stay in bankruptcy. Borrowers agree that
Holder shall have all rights and remedies available to a creditor under, and
that this Note shall be construed in accordance with the laws of the State of
California, without reference to the choice of law principles thereof.
Borrowers consent to the personal jurisdiction of the state or federal courts
located in Los Angeles County, California, for proceedings in respect of this
Note. BORROWERS WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT THEY
HAVE TO A JURY TRIAL.
Borrowers and each endorser, guarantor and surety hereof
hereby waive presentment, notice and protest and all other demands and notices
in connection with the delivery, acceptance, performance, default or
enforcement of this Note and agree to any extension of the time of payment or
other indulgence permitted by Holder and to the addition or release of any
other party or person primarily or secondarily liable for the payment of this
Note. Borrowers agree that the rights granted to Holder under this Note shall
accrue to any endorsee of this Note who is lawfully in possession of this Note.
2
<PAGE> 3
In the event that any provision of this Note is deemed to be
invalid, void or otherwise unenforceable by any court of competent
jurisdiction, the fact that such provision is invalid, void or otherwise
unenforceable shall in no way affect the validity or enforceability of any
other provision contained in this Note.
No delay or omission on the part of Holder in exercising any
right or remedy to enforce this Note shall operate as a waiver of such right or
remedy under this Note. No waiver by Holder of any right or remedy shall be
effective unless in writing and signed by Holder on the reverse side of the
original of this Note, and no such waiver on one occasion shall be construed as
a waiver on any other occasion. No modification of this Note shall be
effective unless the modification is in writing, and is signed by Holder and is
affixed to the original of this Note.
IN WITNESS WHEREOF, Borrowers have caused this Note to be
executed and delivered by their respective duly authorized officers as of the
date first set forth above.
CONSOLIDATED CAPITAL OF NORTH
AMERICA, INC.
By: /s/ Christian Wolf
-----------------------------------
Christian Wolf
Chief Executive Officer
ANGELES ACQUISITION CORP.
By: /s/ Christian Wolf
-----------------------------------
Christian Wolf
Chief Executive Officer
3
<PAGE> 1
EXHIBIT 10.45
SECURED PROMISSORY NOTE
$300,000.00 Los Angeles, California
January 12, 1998
FOR VALUE RECEIVED, the undersigned, CONSOLIDATED CAPITAL OF
NORTH AMERICA, INC., a Colorado corporation ("CCNA"), and ANGELES ACQUISITION
CORP., a Delaware corporation ("AAC"), jointly and severally promise to pay to
the order of CAPITOL METALS CO., INC., a California corporation ("Holder"), c/o
Daniel J. Eget, 2850 Benedict Canyon Drive, Beverly Hills, California 90210, or
at such other place as Holder may from time to time designate in writing, in
legal tender of the United States of America, the principal sum of THREE
HUNDRED THOUSAND AND NO/100 DOLLARS ($300,000.00), on the terms and conditions
set forth below. CCNA and AAC are referred to collectively herein as
"Borrowers".
From and after the date of this Note, the unpaid principal
balance from time to time outstanding under this Note shall bear interest at
the rate of nine percent (9%) per annum (or, if less, the maximum rate
permitted by law).
The entire principal balance of this Note and all interest on
the unpaid principal balance hereunder shall be due and payable in full,
without grace, notice, demand, deduction or offset, on July 12, 1998.
Borrowers may prepay any principal or interest outstanding under this Note, in
whole or in part, at any time without penalty or fee.
Whenever any payment on this Note is due on a day which is a
Saturday, Sunday or legal holiday, such payment shall be made on the next
succeeding day which is not a Saturday, Sunday or legal holiday, and such
extension of time shall be included in the computation of payment of interest
on this Note.
This Note is secured pursuant to the terms of a Security
Agreement between AAC and Holder of even date herewith.
All payments made by Borrowers under this Note shall be
applied first to the payment of delinquent or late charges or other expenses
payable to Holder, then to accrued and unpaid interest then due and owing, then
to the payment of principal then due and owing, and then to outstanding
principal.
Should Borrowers fail to make any payment of principal,
interest or other amounts hereunder within five (5) days after the due date
thereof, the overdue but unpaid amount thereof shall thereafter bear interest
at the rate of twelve percent (12%) per annum (or, if less, the maximum rate
permitted by law) until paid. The payment of such interest shall in no way
limit or affect any of Holder's rights or remedies, at law or equity, under
this Note.
1
<PAGE> 2
This Note is subject to the limitation that in no event shall
interest or any other amount paid or agreed to be paid to Holder for the use,
forbearance or detention of money to be advanced hereunder exceeds the highest
lawful rate permissible under applicable usury laws. If fulfillment of any
provision hereof shall be deemed by a court of competent and final jurisdiction
to violate any applicable usury restrictions then ipso facto, the obligation to
be fulfilled shall be reduced to the limit of such validity, and any amount
received in excess of such limit shall be applied to reduce the unpaid
principal balance hereof and not to the payment of interest.
Upon any breach or default in the payment of any amount owed
under this Note, or any breach or default in the performance of any term,
covenant, condition or agreement under this Note, the entire amount of
principal, interest, charges and fees hereunder shall, at the sole and absolute
option of Holder, become immediately due and payable.
Borrowers jointly and severally promise to pay to Holder all
costs (including without limitation, all attorneys' fees and costs) incurred by
Holder in collecting on this Note, whether or not litigation is commenced,
including without limitation, all attorneys' fees and costs incurred by Holder
in any bankruptcy or foreclosure proceedings or related proceedings, such as an
action for relief from an automatic stay in bankruptcy. Borrowers agrees that
Holder shall have all rights and remedies available to a creditor under, and
that this Note shall be construed in accordance with the laws of the State of
California, without reference to the choice of law principles thereof.
Borrowers consent to the personal jurisdiction of the state or federal courts
located in Los Angeles County, California, for proceedings in respect of this
Note. BORROWERS WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT THEY
HAVE TO A JURY TRIAL.
Borrowers and each endorser, guarantor and surety hereof
hereby waive presentment, notice and protest and all other demands and notices
in connection with the delivery, acceptance, performance, default or
enforcement of this Note and agree to any extension of the time of payment or
other indulgence permitted by Holder and to the addition or release of any
other party or person primarily or secondarily liable for the payment of this
Note. Borrowers agree that the rights granted to Holder under this Note shall
accrue to any endorsee of this Note who is lawfully in possession of this Note.
In the event that any provision of this Note is deemed to be
invalid, void or otherwise unenforceable by any court of competent
jurisdiction, the fact that such provision is invalid, void or otherwise
unenforceable shall in no way affect the validity or enforceability of any
other provision contained in this Note.
No delay or omission on the part of Holder in exercising any
right or remedy to enforce this Note shall operate as a waiver of such right or
remedy under this Note. No waiver by Holder of any right or remedy shall be
effective unless in writing and signed by Holder on the reverse side of the
original of this Note, and no such waiver on one occasion shall be construed as
a waiver on any other occasion. No modification of this Note shall be
effective unless the modification is in writing, and is signed by Holder and is
affixed to the original of this Note.
2
<PAGE> 3
IN WITNESS WHEREOF, Borrowers have caused this Note to be
executed and delivered by their respective duly authorized officers as of the
date first set forth above.
CONSOLIDATED CAPITAL OF NORTH
AMERICA, INC.
By: /s/ Christian Wolf
-----------------------------------
Christian Wolf
Chief Executive Officer
ANGELES ACQUISITION CORP.
By: /s/ Christian Wolf
-----------------------------------
Christian Wolf
Chief Executive Officer
3
<PAGE> 1
EXHIBIT 10.46
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement"), dated January 8, 1998, is
between ANGELES ACQUISITION CORP., a Delaware corporation ("Debtor"), located
at 410 - 17th Street, Suite 400, Denver, Colorado 80202, and BINHAD, INC., a
California corporation (formerly known as CAPITOL METALS CO., INC.) ("Secured
Party"), located at 2850 Benedict Canyon Road, Beverly Hills, California 90210.
This Agreement is made with reference to the following facts:
WHEREAS, Secured Party, as seller, and CONSOLIDATED CAPITAL OF
NORTH AMERICA, INC., a Colorado corporation ("CCNA"), as purchaser, entered
into that certain Asset Purchase Agreement, dated as of December 1, 1997 (the
"Asset Purchase Agreement"), pursuant to which Secured Party agreed to sell to
CCNA, and CCNA agreed to purchase, the Assets (as defined in the Asset Purchase
Agreement) upon the terms and conditions provided therein;
WHEREAS, the Asset Purchase Agreement has been amended by that
certain Order Approving Sale of Substantially All Property of the Estate Free
and Clear of Liens and Interests (the "Sale Approval Order"), entered December
29, 1997, by the U.S. Bankruptcy Court in Secured Party's pending Chapter 11
case, and by that certain First Amendment to Asset Purchase Agreement of even
date herewith (the "Amendment"), among Secured Party, CCNA and Debtor, a wholly
owned subsidiary of CCNA;
WHEREAS, pursuant to the Amendment and that certain Assignment
and Bill of Sale of even date herewith (the "Bill of Sale"), from Secured Party
to Debtor, Secured Party has assigned, transferred and conveyed the Assets to
Debtor, in lieu of CCNA, in order to accommodate CCNA's desire to hold and
operate the Assets in a separate corporate subsidiary wholly owned by CCNA;
WHEREAS, pursuant to the Asset Purchase Agreement, CCNA agreed
to grant a security interest to Secured Party in and to the Assets, to secure
payment and performance of certain promissory notes to be delivered by CCNA to
Secured Party under the Asset Purchase Agreement;
WHEREAS, pursuant to the Amendment, Debtor is now jointly and
severally liable with CCNA under such promissory notes, and Debtor desires to
grant a security interest in the Assets to Secured Party as provided in the
Asset Purchase Agreement to facilitate the closing of the transactions
contemplated by the Asset Purchase Agreement and to enable Debtor to realize
all of the rights and benefits accrued and to be accrued by the purchaser of
the Assets under the Asset Purchase Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals,
the mutual promises herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:
1
<PAGE> 2
1. Grant of Security Interest. Debtor hereby grants to
Secured Party a continuing lien on and security interest in the property
described or referred to in Paragraph 2 below (collectively, the "Collateral")
to secure prompt payment and full performance of the liabilities described in
Paragraph 3 below (collectively, the "Liabilities").
2. Collateral. The Collateral consists of all of
Debtor's now owned and hereafter acquired accounts, inventory, equipment,
fixtures, contract rights, general intangibles, chattel paper, instruments,
documents, and other property; including without limitation, all of the Assets
conveyed to Debtor pursuant to the Amendment and the Bill of Sale, all of the
property described below, and all of the proceeds and products thereof:
(a) all goods of Debtor, including without
limitation, machinery, equipment, furniture, furnishings, fixtures, tools,
parts, supplies and motor vehicles of every kind and description and all
improvements thereto which Debtor now owns or in which Debtor may have or may
hereafter acquire any interest, together with all customer lists and records of
Debtor's business;
(b) all of Debtor's inventory, including, but not
limited to, all goods intended for sale or lease by Debtor, or for display or
demonstration, all work in process, all raw materials and other materials and
supplies of every nature and description used or which might be used in
connection with the manufacture, printing, packing, shipping, advertising,
selling, leasing or furnishing of such goods or otherwise used or consumed in
Debtor's business, and all documents evidencing and general intangibles
relating to any of the foregoing, whether now owned or hereafter acquired by
Debtor;
(c) all contract rights and general intangibles
of Debtor, including without limitation, goodwill, trademarks, trade styles,
trade names, patents, patent applications, copyrights, bank deposits, deposit
accounts, income tax refunds and property in the possession, deposited with or
under the control of Secured Party or any of its affiliates;
(d) all present and future accounts, accounts
receivable and other receivables and all books and records relating thereto;
(e) all documents, instruments, pledged assets
and chattel paper; and
(f) all the products and proceeds of the
foregoing, and any replacements, additions, accessions, or substitutions
thereof or thereto, all after-acquired property, all accounts and proceeds
arising from the sale or disposition of any inventory of Debtor including any
returns thereof and including, where applicable, the proceeds of insurance
covering said Collateral or tort claims in connection with the Collateral;
whether such Collateral shall be presently in existence or whether it shall be
acquired or created by Debtor at any time hereafter, wherever located, to
remain in force so long as Debtor is, in any manner, obligated to Secured
Party.
2
<PAGE> 3
3. Liabilities. The liabilities ("Liabilities") secured
under this Agreement are all liabilities of Debtor to Secured Party from time
to time, including, without limitation:
(a) the Secured Promissory Note of even date
herewith from CCNA and Debtor to Secured Party in the principal amount of
$1,200,000.00;
(b) the Secured Promissory Note of even date
herewith from CCNA and Debtor to Secured Party in the principal amount of
$300,000.00, and
(c) any and all expenditures made or incurred by
Secured Party to protect and maintain the Collateral and to enforce the rights
of Secured Party under this Agreement.
4. Covenants of Debtor. Until the Liabilities are paid
in full, Debtor agrees that it shall:
(a) not sell or otherwise dispose of the
Collateral except for the sale of inventory in the ordinary course of business
or dispositions of obsolete or worn-out equipment in the ordinary course of
business;
(b) except for "Permitted Liens" (as defined
below), not create, incur, assume or, permit to exist any liens, encumbrances,
security interests, levies, assessments or charges on or in any of the
Collateral, without Secured Party's prior consent;
(c) appear in and defend, at Debtor's own
expense, any action or proceeding which may affect Debtor's title to or Secured
Party's interest in the Collateral;
(d) procure or execute and deliver, from time to
time, in form and substance satisfactory to Secured Party, any endorsements,
assignments, financing statements or other writings deemed necessary or
appropriate by Secured Party to perfect, maintain or protect Secured Party's
security interest in the Collateral and the priority thereof, and take such
other action and deliver such other documents, instruments and agreements
pertaining to the Collateral as Secured Party may request to effectuate the
intent of this Agreement;
(e) notify Secured Party in writing at least
thirty (30) days prior to any change in Debtor's name, identity or corporate
structure, or any addition or change to the address of Debtor specified in the
introductory paragraph hereof;
(f) keep accurate and complete records of the
Collateral and provide Secured Party during normal business hours and upon
reasonable notice with access thereto and to Debtor's financial records, in
each case with the right to make extracts therefrom;
3
<PAGE> 4
(g) provide Secured Party during normal business
hours and upon reasonable notice with access to the Collateral, and with such
other information as Secured Party may reasonably request from time to time;
(h) maintain and preserve its corporate
existence, and all rights, privileges, franchises and other authority necessary
for the conduct of its business; and
(i) continue operations in the same form and
structure of business as currently conducted, and not merge or consolidate with
or acquire or be acquired by any other corporation, partnership, entity or
person, without Secured Party's prior written consent.
"Permitted Liens" means (i) liens of carriers, warehousemen, mechanics and
materialmen incurred in the ordinary course of Debtor's business securing sums
not overdue; (ii) liens incurred in the ordinary course of Debtor's business in
connection with worker's compensation, unemployment insurance or other forms of
governmental insurance or benefits, relating to employees, securing sums not
overdue or being diligently contested in good faith provided that adequate
reserves with respect thereto are maintained on the books of Debtor in
conformity with GAAP; (iii) liens in favor of Secured Party; (iv) liens for
taxes not yet due or being diligently contested in good faith, provided that
adequate reserves with respect thereto are maintained on the books of Debtor in
conformity with GAAP; provided, that, the foregoing liens shall have no effect
on the priority of the liens in favor of Secured Party or the value of the
assets in which Secured Party has such a lien and a stay of enforcement of any
such lien shall be in effect; (v) liens in favor of Congress Financial
Corporation (Western) securing an aggregate loan amount not exceeding
$6,400,000.00, and (iv) liens in favor of the Nat and Evelyn Handel Family
Trust securing an aggregate loan amount not exceeding $625,000.00.
5. Authorized Action By Secured Party. (a) After the
occurrence of any "Event of Default" (as defined below) and while it is
continuing, Debtor hereby irrevocably appoints Secured Party as its
attorney-in-fact to do (but Secured Party shall not be obligated to and shall
not incur any liability to Debtor or any third party for failure so to do) any
act which Debtor is obligated by this Security Agreement to do, and to exercise
such rights and powers as Debtor might exercise with respect to the Collateral,
including, without limitation, the right to:
(i) collect by legal proceedings or otherwise and
endorse, receive and receipt for all payments, proceeds and
other sums and property now or hereafter payable on or on
account of the Collateral;
(ii) enter into any extension, deposit or other
agreement pertaining to, or deposit, surrender, accept, hold
or apply other property in exchange for, the Collateral;
(iii) process and preserve the Collateral; and
(iv) make any compromise, settlement or
adjustment, and take any action it deems advisable, with
respect to the Collateral.
4
<PAGE> 5
(b) Debtor agrees to reimburse Secured Party upon
demand for any costs and expenses, including attorneys' fees, Secured Party may
incur while acting as Debtor's attorney-in-fact hereunder, all of which costs
and expenses are included in the Liabilities secured hereby and are payable
upon demand, with interest thereon at the rate applicable to the obligations
under the note referred to in Paragraph 3(a) above.
(c) It is further agreed and understood between
the parties hereto that such care as Secured Party gives to the safekeeping of
its own property of like kind shall constitute reasonable care of the
Collateral when in Secured Party's possession; provided, however, that Secured
Party shall not be required to make any presentment, demand or protest, or give
any notice and need not take any action to preserve any rights against any
prior party or any other person in connection with the Liabilities or with
respect to the Collateral.
(d) Whether or not Debtor is in default, Debtor
agrees that Secured Party may at any time send verification requests, and so
long as an Event of Default has not occurred, such requests will not identify
Secured Party to any account debtor on any Collateral.
(e) If Debtor's records are prepared or retained
by a computer service company or any accountant or accounting service, so long
as any Liabilities are outstanding, Debtor grants Secured Party the absolute
and irrevocable right, with reasonable notice to Debtor, to inspect such
records (including Debtor's internal work papers), receive duplicate copies of
all information furnished to Debtor and prepared by such company, accountant or
accounting service, and agrees to furnish such consents as may be necessary to
effectuate the same. Debtor further agrees to promptly notify Secured Party of
the name and address of such company, accountant or accounting service and of
any change in respect thereof.
(f) All the foregoing powers authorized herein,
being coupled with an interest, are irrevocable so long as any Liabilities are
outstanding.
6. Default. The occurrence of any of the following
events or conditions (herein "Events of Default") shall constitute an Event of
Default hereunder:
(a) Debtor fails to perform, keep or observe any
covenant (other than for payment of Liabilities) within 5 calendar days of the
date Debtor is required to perform, keep or observe such covenant;
(b) non-payment of any of the Liabilities as and
when due and payable to Secured Party; or
(c) any bankruptcy or other insolvency proceeding
is commenced by Debtor, or any such proceeding is commenced against Debtor and
remains undischarged or unstayed for forty-five (45) days.
5
<PAGE> 6
7. Remedies. Upon the occurrence and during the
continuation of any Event of Default, Secured Party may, at its option, without
notice to or demand on Debtor, declare all Liabilities immediately due and
payable, and Secured Party shall have all the default rights and remedies of a
secured party under Chapter 5 of Division 9 of the California Uniform
Commercial Code and other applicable law as well as the following rights and
remedies, all of which may be exercised with or without further notice to
Debtor:
(a) to the extent permitted by law, to notify any
and all obligors and account debtors on the Collateral that the same has been
assigned to Secured Party and that all payments thereon are to be made directly
to Secured Party;
(b) to settle, compromise or release, on terms
acceptable to Secured Party, in whole or in part, any amounts owing on the
Collateral, and to extend the time of payment, make allowances and adjustments
and to issue credits in Secured Party's name or in the name of Debtor in
respect thereof;
(c) to enter any premises where any Collateral
may be located and to take possession of and remove the Collateral, with or
without judicial process;
(d) to sell or otherwise dispose of the
Collateral or any part thereof, for cash, on credit or otherwise, with or
without representations or warranties, and upon such terms as shall be
acceptable to Secured Party;
(e) to remove from any premises where the same
may be located, any and all documents, instruments, files and records relating
to the collateral, and Secured Party may, at Debtor's expense, use the supplies
and space of Debtor at its places of business as may be necessary to properly
administer and control the Collateral or the handling of collections and
realizations thereon;
(f) receive, open and dispose of all mail
addressed to Debtor and notify postal authorities to change the address for
delivery thereof to such address as Secured Party may designate; and
(g) take or bring, in Secured Party's name or in
the name of Debtor, all steps, actions, suits or proceedings deemed by Secured
Party necessary or desirable to effect collection of or to realize upon the
Collateral;
all at Secured Party's sole option and as Secured Party in its sole discretion
may deem advisable.
8. Application of Proceeds of Collateral. The net cash
proceeds resulting from the collection, liquidation, sale or other disposition
of the Collateral shall be applied first to the expenses (including all
attorneys' fees) of retaking, holding, processing and preparing for sale,
selling, collecting, liquidating and the like, and then to the satisfaction of
all Liabilities secured hereby, application as to any particular obligation or
indebtedness or against principal or interest to be in Secured Party's
discretion. The balance, if any, shall be paid in accordance with
6
<PAGE> 7
applicable law or as a court of competent jurisdiction may direct. Debtor
shall be liable to Secured Party and shall pay to Secured Party on demand any
deficiency which may remain after such sale, disposition, collection or
liquidation of Collateral.
9. Cumulative Rights. The rights, powers and remedies
of Secured Party under this Agreement shall be in addition to all rights,
powers and remedies given to Secured Party under any statute or rule of law or
any other document, instrument or agreement, all of which rights, powers and
remedies shall be cumulative and may be exercised successively or concurrently.
10. Waiver. Any forbearance, failure or delay by Secured
Party in exercising any right, power or remedy shall not preclude the further
exercise thereof, and every right, power or remedy of Secured Party shall
continue in full force and effect until such right, power or remedy is
specifically waived in a writing executed by Secured Party. Debtor waives any
right to require Secured Party to proceed against any person or to exhaust any
Collateral or to pursue any remedy in Secured Party's power prior to pursuing
Debtor in respect of the Liabilities.
11. Setoff. Debtor agrees that Secured Party may
exercise its rights of setoff with respect to the Liabilities in the same
manner as if the Liabilities were unsecured.
12. Binding Upon Successors. All rights of Secured Party
under this Agreement shall inure to the benefit of Secured Party and its
successors and assigns, and all obligations of Debtor shall bind the Debtor and
its successors and assigns.
13. Entire Agreement; Severability. This Agreement
contains the entire security agreement between Secured Party and Debtor with
respect to the Collateral. If any of the provisions of this Agreement shall be
held invalid or unenforceable, this Agreement shall be construed as if not
containing those provisions and the rights and obligations of the parties
hereto shall be construed and enforced accordingly.
14. References. The captions or titles of the paragraphs
of this Agreement are for convenience of reference only and shall not define or
limit the provisions hereof.
15. Choice of Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of California, and, where
applicable and except as otherwise defined herein, terms used herein shall have
the meanings given them in the California Uniform Commercial Code. DEBTOR
IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF THE SUPERIOR
COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES OR THE UNITED
STATES DISTRICT COURT OF THE CENTRAL DISTRICT OF CALIFORNIA, AS SECURED PARTY
MAY DEEM APPROPRIATE, OR IF REQUIRED, THE MUNICIPAL COURT OF THE STATE OF
CALIFORNIA FOR THE COUNTY OF LOS ANGELES IN CONNECTION WITH ANY LEGAL ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND DEBTOR WAIVES ANY
OBJECTION RELATING TO THE BASIS FOR PERSONAL OR IN REM JURISDICTION OR TO VENUE
WHICH IT MAY
7
<PAGE> 8
NOW OR HEREAFTER HAVE IN ANY SUCH SUIT, ACTION OR PROCEEDING. BOTH DEBTOR AND
SECURED PARTY WAIVE ANY RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW.
16. Attorneys' Fees. If any legal action or proceeding
shall be commenced at any time by any party to this Agreement in connection
with the interpretation of this Agreement or the enforcement of any rights or
remedies hereunder, the prevailing party or parties in such action or
proceeding shall be entitled to reimbursement of its reasonable attorneys' fees
and costs in connection therewith, in addition to all other relief to which the
prevailing party or parties may be entitled.
17. Notice. Any written notice, consent or other
communication provided for in this Agreement shall be delivered personally
(effective upon delivery), via overnight courier (effective the next day after
dispatch) or via U.S. Mail (effective 3 days after mailing, postage prepaid,
first class) to each party at its address set forth above, or to such other
address as either party shall specify to the other; provided, that all notices
to Secured Party shall be copied to any assignee of Secured Party's rights
hereunder.
18. Counterparts. This Agreement may be executed in any
number of counterparts, and by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same
instrument.
DEBTOR:
ANGELES ACQUISITION CORP.
By: /s/ Christian Wolf
-----------------------------------
Christian Wolf
Chief Executive Officer
SECURED PARTY:
BINHAD, INC. (formerly known as
CAPITOL METALS CO., INC.)
By: /s/ Daniel J. Eget
-----------------------------------
Daniel J. Eget
Chief Executive Officer
8
<PAGE> 1
EXHIBIT 10.47
REGISTRATION AGREEMENT
THIS REGISTRATION AGREEMENT, dated as of January 6, 1998 (this
"Agreement") between BINHAD, INC. (formerly known as CAPITOL METALS CO.,
INC.), a California corporation (the "Holder"), and CONSOLIDATED CAPITAL OF
NORTH AMERICA, INC., a Colorado corporation (the "Company"), is made with
reference to the following facts:
A. Pursuant to the terms of an Asset Purchase Agreement
dated as of December 1, 1997 (the "Asset Purchase Agreement"), between the
Company, as purchaser ("Purchaser"), and the Holder, as seller, and the Order
Approving Sale of Substantially All Property of the Estate Free and Clear of
Liens and Interests, entered December 29, 1997, in the U.S. Bankruptcy Court
(the "Sale Order"), the Company issued 269,349 common shares of the Company to
the Holder (the "Initial Shares") and the Holder may be entitled to receive
additional common shares of the Company as set forth in the Sale Order (the
"Additional Shares"). The Initial Shares issued to the Holder on the date of
this Agreement and any and all such Additional Shares that may be issued to the
Holder pursuant to the Sale Order are referred to collectively herein as the
"Shares".
B. The Company's execution and delivery of this
Agreement with respect to the Shares is a condition of the Holder's obligation
to consummate the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual promises contained herein, the parties agree as follows:
1. Definitions. The following terms, when used herein,
shall have the meanings set forth below:
(a) "Commission" shall mean the Securities and
Exchange Commission or any other federal agency at the time administering the
Securities Act.
(b) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(c) "Holder" shall mean the person or entity set
forth above or any assignee thereof in accordance with Section 10 hereof.
(d) 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.
(e) "Registrable Securities" shall mean (i) the
Shares, and (2) any common stock of the Company issued as a dividend or other
distribution with respect to, or in
1
<PAGE> 2
exchange for or in replacement of, the Shares, excluding in all cases, however,
any Registrable Securities sold by a person in a transaction in which the
rights of such person under this Agreement are not assigned.
(f) "Securities Act" shall mean the Securities
Act of 1933, as amended.
2. Registration. The Company shall cause to be
registered all of the Registrable Securities under the Securities Act. In
connection with such registration, the Company shall:
(a) Prepare and file with the Commission a
registration statement as soon as practical but in any event no later than 90
days after the "Closing Date" as such term is defined in the Asset Purchase
Agreement (the "Filing Date"), which registration statement shall include the
Initial Shares, and thereafter use its best efforts to have such registration
statement declared effective within 30 days of the Filing Date. In the event
any Additional Shares are issued after the Effective Date the Company shall
prepare and file with the Commission an amendment to the registration statement
as soon as practical but in any event no later than 10 days after the Effective
Date and shall thereafter use its best efforts to have such amendment to the
registration statement declared effective as soon as practicable. The Company
shall keep the registration statement effective for a period of 120 days after
the Effective Date.
(b) 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 and to
keep the registration statement and any amendment and supplement thereto
effective for the period specified in Section 2(a).
(c) 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.
(d) Use its best efforts to register and qualify
the securities covered by such registration statement in the State of
California and under such other securities or Blue Sky laws of such other
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 other jurisdictions.
(e) 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, including any reasonably required opinions of counsel or cold comfort
letters. If the Holder participates in such underwriting the Holder shall also
enter into and perform its obligations under such agreement.
2
<PAGE> 3
(f) 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 Securities 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, and at the request of the Holder prepare and furnish to such
Holder a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
3. Furnish Information. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to
Section 2 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.
4. Expenses of Registration. The Company shall bear and
pay all expenses incurred in connection with the registration, filing or
qualification of Registrable Securities with respect to the registration
pursuant to Section 2 and the requirements of Section 3 for the Holder,
including (without limitation) all registration, filing, and qualification
fees, printers and accounting fees relating thereto and the fees and
disbursements of counsel for the Company, but excluding underwriting discounts
and commissions relating to Registrable Securities.
5. Adjustment for Stock Split or New Issuance. All
references to the number of Shares and their value in this Agreement shall be
appropriately adjusted to reflect any stock split, stock dividend, or new
issuance of stock or other change in the Shares which may be made by the
Company after the date of this Agreement.
6. Delay of Registration. The Holder shall not 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.
7. Indemnification. In the event any Registrable
Securities are included in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company
shall 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)
3
<PAGE> 4
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 7(a)
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.
(b) To the extent permitted by law, the Holder
shall 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 7(b), in connection with investigating or defending
any such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this Section 7(b) 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 7(b) exceed the gross proceeds from the offering received by
the Holder.
(c) Promptly after receipt by an indemnified
party under this Section 7 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
7, deliver to the indemnifying party a written notice of the commencement
4
<PAGE> 5
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 7, 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 7.
(d) The obligations of the Company and Holder
under this Section 7 shall survive the completion of any offering of
Registrable Securities in a registration statement under this Agreement.
8. 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, that, except for a
transfer to Daniel J. Eget, 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.
9. Amendment of Agreement. Any provision of this
Agreement may be amended or the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holder.
Any amendment or waiver effected in accordance with this Section shall be
binding upon the Holder, each future holder of all the Registrable Securities,
and the Company.
10. Contents of Agreement. This Agreement sets forth the
entire understanding of the parties hereto with respect to the transactions
contemplated hereby. Any and all previous agreements and understandings
between or among the parties regarding the subject matter hereof, whether
written or oral, are superseded by this Agreement.
11. Notices. Any notice, request, demand, waiver,
consent, approval or other communication which is required or permitted
hereunder shall be in writing and shall be deemed given only if delivered
personally or sent by registered or certified mail, postage prepaid, as
follows:
5
<PAGE> 6
If to the Company, to:
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
410-17th Street, Suite 400
Denver, Colorado 80202
Attention: Donald R. Jackson, Secretary
With a required copy to:
GALLAGHER, BRIODY & BUTLER
212 Carnegie Center, Suite 402
Princeton, New Jersey 08540
Attention: Barbara J. Comly
If to Holder:
BINHAD, INC. (formerly known as CAPITOL
METALS CO., INC.)
c/o Daniel J. Eget
2850 Benedict Canyon Drive
Beverly Hills, California 90210
With a required copy to:
SULMEYER, KUPETZ, BAUMANN & ROTHMAN
300 South Grand Avenue, 14th Floor
Los Angeles, California 90071
Attention: Victor A. Sahn
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have been given as
of the date so delivered.
12. California Law to Govern. This Agreement shall be
governed by and interpreted and enforced in accordance with the laws of the
State of California, without reference to conflicts-of-law principles.
13. Headings. All section headings contained in this
Agreement are for convenience of reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation of this
Agreement.
14. Severability. Any provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall be ineffective to the
extent of such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions
6
<PAGE> 7
hereof, and any such invalidity or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
15. Counterparts. This Agreement may be executed in
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered by the parties. It shall
not be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by its duly authorized officer on the date first above written.
BINHAD, INC. (formerly known as
CAPITOL METALS CO., INC.)
a California corporation
By: /s/ Daniel J. Eget
-----------------------------------
Daniel J. Eget
Chief Executive Officer
CONSOLIDATED CAPITAL OF NORTH AMERICA,
INC., a Colorado corporation
By: /s/ Christian Wolf
-----------------------------------
Christian Wolf
Chief Executive Officer
7
<PAGE> 8
January 8, 1998
Board of Directors
Consolidated Capital of North America, Inc.
410 17th Street, Suite 400
Denver, Colorado 80202
To the Board of Directors:
In connection with the issuance of 269,349 common shares (the
"Shares") of Consolidated Capital of North America, Inc., a Colorado
corporation ("Consolidated"), to Binhad, Inc. (formerly known as Capitol Metals
Co., Inc.), a California corporation ("Seller"), pursuant to the terms of an
Asset Purchase Agreement, dated as of December 1, 1997 (the "Asset Purchase
Agreement") between Consolidated ("Purchaser") and Seller, and the Order
Approving Sale of Substantially All Property of the Estate Free and Clear of
Liens and Interests, entered December 29, 1997 in the U.S. Bankruptcy Court
(the "Sale Order"), pursuant to which the Purchaser has purchased substantially
all of the assets of Seller and assumed certain liabilities of Seller, the
undersigned acknowledges, represents, warrants and agrees to the following:
1. The Seller is acquiring the Shares for investment
purpose only, and without intent to distribute the Shares, and acknowledges
that: (i) the Shares have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), nor any applicable state securities
law, and accordingly constitute "restricted securities" for purposes of the
Securities Act and such state securities laws, (ii) the Seller will not be able
to transfer the Shares except upon compliance with the registration
requirements of the Securities Act and applicable state securities laws or
exemptions therefrom; (iii) the certificates evidencing the Shares will contain
a restrictive legend to the foregoing effect (as provided below); (iv) the
purchase of the Shares is speculative and involves a high degree of risk; and
(v) the Seller is able to sustain the loss of the entire amount of its
investment in the Shares.
2. The Seller acknowledges receipt of (a) Consolidated's
Form 10-KSB for the fiscal year ended December 31, 1996, (b) Consolidated's
Form 10-QSB for the quarter ended March 31 and September 30, 1997, (c)
Consolidated's Form 10-QSB for the quarter ended June 30, 1997 and (d)
Consolidated's Form 8-Ks dated January 23, 1997 and February 7, 1997.
3. The Seller (i) has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of purchasing the Shares, or (ii) has been advised by attorneys,
accountants, or other representatives having such knowledge and experience.
The Seller acknowledges that it, its attorneys, accountants and other
representatives have, prior to its execution of the Asset Purchase Agreement
and the entry of the Sale Order, the opportunity to ask questions of, and to
receive answers from Consolidated and Purchaser concerning Consolidated and
Purchaser, its affiliates, business and financial condition.
4. The Seller will offer to sell and sell the Shares
only in accordance with the registration provisions of the Securities Act, and
accordingly, will offer to sell and sell the Shares only pursuant to an
8
<PAGE> 9
effective registration statement filed with the U.S. Securities and Exchange
Commission, or pursuant to an exemption from registration under the Securities
Act.
5. The Seller will not offer to sell or sell the Shares
in any jurisdiction except under circumstances that will result in compliance
with the applicable laws thereof, and, except as provided in the Registration
Agreement between the Purchaser and the Seller of even date herewith, the
Seller will take at its own expense whatever action is required to permit
offers, sales or the purchase and resale by it of the Shares.
6. The certificates evidencing the Shares will contain a
restricted legend substantially similar to the following:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY OTHER STATE LAWS REGULATING THE ISSUANCE OF
SECURITIES AND ARE PURCHASED PURSUANT TO AN INVESTMENT
REPRESENTATION BY THE PURCHASER THEREOF. THESE SHARES SHALL
NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, DONATED, OR
OTHERWISE TRANSFERRED, WHETHER OR NOT FOR CONSIDERATION BY THE
PURCHASER IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SHARES EXCEPT UPON THE ISSUANCE TO THE
COMPANY OF A FAVORABLE OPINION OF ITS COUNSEL TO THE EFFECT
THAT SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS.
7. The Seller shall indemnify and hold harmless
Consolidated, each person who controls Consolidated within the meaning of the
Securities Act, and each current officer and director of Consolidated, against
losses, claims, damages or liabilities, joint or several, to which Consolidated
or any of its officers or directors may become subject to under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based solely and exclusively
upon any breach or violation by the Seller of its representations and
agreements contained in this letter, and shall reimburse Consolidated, and its
officers and directors for any legal and any other expense reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage or liability or action. The rights to indemnification provided for in
this Investment Letter shall be in addition to and not in substitution of any
other rights or remedies to which Consolidated or such officer or director may
be entitled under the Asset Purchase Agreement, in equity or otherwise.
IN WITNESS WHEREOF, the Seller has executed this letter as of
the date set forth above.
BINHAD, INC. (formerly known as
CAPITOL METALS CO., INC.)
By: /s/ Daniel J. Eget
--------------------------------
Daniel J. Eget
Chief Executive Officer
9
<PAGE> 1
EXHIBIT 10.48
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment")
dated as of January 8, 1998, is among BINHAD, INC. (formerly known as CAPITOL
METALS CO., INC.), a California corporation ("Assignor"), 20000 S. Western
Ave., Torrance, California 90501; CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.,
a Colorado corporation ("CCNA"), 410 - 17th Street, Suite 410, Denver, Colorado
80202, and ANGELES ACQUISITION CORP., a Delaware corporation ("AAC"), 410 -
17th Street, Suite 410, Denver, Colorado 80202. CCNA and AAC are referred to
collectively herein as "Assignees".
For $10.00 and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Assignor and
Assignees hereby agree as follows:
1. Assignment. Assignor hereby transfers, grants,
bargains, sells, assigns and conveys to AAC all of Assignor's interests,
rights, title and estates created by, under or in connection with: (a) all
agreements, contracts, commitments, purchase orders, leases, subleases,
documents, instruments and undertakings, and all permits, licenses and
authorizations, including, without limitation, those listed on Exhibit A
attached hereto and incorporated herein by reference, relating to the
Assignor's steel processing and supply business; (b) any and all renewals,
extensions, terminations or modifications of any of the foregoing; and (c) all
property and rights incident or appurtenant thereto (all of which are referred
to herein as the "Contracts and Permits").
2. Acceptance of Assignment. AAC hereby accepts the
foregoing assignment of the Contracts and Permits from Assignor.
3. Assumption of Obligations. Assignees hereby jointly
and severally agree to assume, pay, perform, discharge and fulfill all of the
duties, liabilities and obligations of Assignor under the terms and provisions
of the Contracts and Permits which arise in or relate to time periods on and
after the Closing Date. Assignor acknowledges and agrees that it shall remain
liable for and shall pay and discharge all of its obligations and liabilities
under the Contracts and Permits which arise in or relate to time periods prior
to the Closing Date.
4. Indemnification.
a. Assignor shall reimburse, indemnify and hold
harmless and defend Assignees, their officers, directors, employees,
representatives and other agents, and their successors and assigns, against and
in respect of any and all claims, demands, causes of action, damages, losses,
liabilities, costs, expenses, fees (including, without limitation, reasonable
attorneys' fees), judgments and good faith settlements of claims or judgments
arising out of or resulting from any failure of Assignor to pay, perform,
discharge or fulfill, when due, any liability or obligation for which Assignor
has retained liability pursuant to Section 3 above, and any and all actions,
suits, claims, proceedings, investigations, demands, assessments, audits,
fines, judgments, costs and other expenses (including, without limitation,
reasonable attorneys' fees and expenses) incident to any of the foregoing or to
the enforcement of this Section 4.a.
b. Assignees shall reimburse, indemnify and hold
harmless Assignor, its officers, directors, employees, representatives and
other agents, and their successors or assigns, against and in respect of
1
<PAGE> 2
any and all claims, demands, causes of action, damages, losses, liabilities,
costs, expenses, fees (including, without limitation, reasonable attorneys'
fees), judgments and good faith settlements of claims or judgments arising out
of or resulting from any failure of Assignee to pay, perform, discharge or
fulfill, when due, any liability or obligation assumed by Assignees pursuant to
Section 3 above, and any and all actions, suits, claims, proceeding,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable attorneys' fees and
expenses) incident to any of the foregoing or to the enforcement of this
Section 4.b.
c. Any claim or demand for indemnification made
under Section 4.1 or 4.b above shall be resolved following the same procedures
as set forth in Sections 9.3, 9.4 and 9.6 of the Asset Purchase Agreement dated
as of December 1, 1997 between Assignor as seller and CCNA as purchaser (the
"Asset Purchase Agreement").
5. Further Assurances. Each party agrees to execute and
deliver such additional instruments and to take such further actions as may
reasonably be required by the other party to fully effectuate the assignment of
rights and interests and the assumption of obligations and liabilities intended
hereby, including, without limitation, the execution and delivery by either
party of additional instruments of assignment and assumption.
6. Binding Effect. This Assignment shall bind and inure
to the benefit of Assignor and Assignees and their respective successors and
assigns.
7. No Release. Nothing contained in this Assignment
shall, or shall be deemed to, release Assignor or CCNA from any of their
respective obligations under the Asset Purchase Agreement.
8. Court Orders. This Assignment shall be, and shall be
deemed to be, subject to that certain Order Approving Sale of Substantially All
Property of the Estate Free and Clear of Liens and Interests, entered December
29, 1997, by the U.S. Bankruptcy Court in Assignor's pending chapter 11 case.
IN WITNESS WHEREOF, the parties have caused this Assignment to
be executed by their duly authorized officers as of the date first set forth
above.
ASSIGNOR:
BINHAD, INC. (formerly known as
CAPITOL METALS CO., INC.)
By: /s/ Daniel J. Eget
----------------------------------
Daniel J. Eget
Chief Executive Officer
2
<PAGE> 3
ASSIGNEES:
CONSOLIDATED CAPITAL OF NORTH
AMERICA, INC.
By: /s/ Christian Wolf
----------------------------------
Christian Wolf
Chief Executive Officer
ANGELES ACQUISITION CORP.
By: /s/ Christian Wolf
----------------------------------
Christian Wolf
Chief Executive Officer
3
<PAGE> 1
EXHIBIT 10.49
NOTE SECURED BY
COLLATERAL SECURITY AGREEMENT
("NOTE")
$625,000.00 January 12, 1998
A. FOR VALUE RECEIVED, the undersigned, ANGELES ACQUISITION
CORPORATION and CONSOLIDATED CAPITAL CORPORATION OF
NORTH AMERICA, INC., collectively ("Payor"), jointly and
severally, promise to pay to the order of NAT AND EVELYN
HANDEL, TRUSTEES OF THE NAT AND EVELYN HANDEL FAMILY TRUST
dated March 18, 1993 ("Payee"), the principal sum of SIX
HUNDRED TWENTY FIVE THOUSAND DOLLARS ($625,000.00), with
interest on the unpaid principal balance at the rate of ten
percent (10%) per annum. Principal and interest shall be
payable as follows:
(1) On or before January 12, 1998, the sum of
Sixteen Thousand Dollars ($16,000.00) which
represents interest for the period from the
date hereof through March 12, 1998, shall be
due and payable.
(2) On or before January 17, 1998, a principal
payment in the sum of Twenty Five Thousand
Dollars ($25,000.00) shall be due and
payable.
(3) On or before each of April 12, 1998, May 12,
1998, June 12, 1998 and July 12, 199a, a
principal payment in the amount of One
Hundred Fifty Thousand Dollars ($150,000.00)
and all accrued interest computed on the
declining principal balance.
B. Principal and interest shall be payable in lawful money of the
United States at the offices of payee in Beverly Hills, California, or such
other place as the Payee of this Note may, from time to time, designate to the
Payor in writing.
C. Each of the following events shall constitute an "Event of
Default" under this Note:
(1) The failure of the Payor to pay any installment of
principal or interest on this note when the same becomes due and payable.
(2) The occurrence of a default or breach of any term or
provision under the Security Agreement (as defined below) securing this Note.
(3) The Payor shall make an assignment for the benefit of
creditors.
1
<PAGE> 2
(4) The Payor shall petition or apply to any tribunal for
appointment of a trustee or receiver of the Payors or commence any proceeding
relating to the Payors under any bankruptcy or reorganization statute or any
provision of the Bankruptcy Code, or under any arrangement, insolvency,
readjustment or debt, dissolution or liquidation law or any jurisdiction,
whether now or hereafter in effect.
(5) If any petition or application of the type described
above is filed or any proceedings of the type described in Subparagraph (4)
above are commenced against the Payor, and the Payor by any act indicate their
approval thereof, consent thereto or acquiescence therein, or an order is
entered appointing any such trustee or receiver, or adjudicating the Payor
bankrupt or insolvent, or approving the petition in any such proceeding, and
any such order remains in effect for more than ninety (90) days.
D. Should an Event of Default occur, the Payee of this Note may,
without notice to the Payor, declare the whole sum of principal and interest to
be, and thereafter the whole sum of principal and interest shall forthwith
become, due and payable. Should interest not be paid when due, it shall
thereafter bear like interest as the principal, but such unpaid interest so
compounded shall not exceed an amount equal to simple interest on the unpaid
principal at the maximum rate permitted by law. The failure to exercise, in
case of one or more Events of Default, any right or remedy given in this
paragraph shall not preclude the Payee of the Note from exercising any right or
remedy given in this paragraph in case of one or more subsequent Events of
Default.
E. Any payment on account of this Note shall be applied first to
accrued interest and then to principal.
F. Any notice, request, demand, instruction or other
communication to be given to any party hereunder shall be in writing and sent
by registered or certified mail as follows:
If to Payee: Nat and Evelyn Handel, Trustees of the
Nat and Evelyn Handel Family Trust
dated March 18, 1993
c/o 301 North Canon Drive, Suite 326
Beverly Hills, CA 90210
With a copy to: Linda M . Blank, Attorney at Law
1925 Century Park East
Suite 1150
Los Angeles, CA 90067
If to Payor: Angeles Acquisition Corporation
20000 South Western Avenue
Torrance, CA 90501
With a copy to: John A. Lapinski, Esq.
Clark & Trevithick
800 Wilshire Blvd., 12th Floor
Los Angeles, CA 90017
2
<PAGE> 3
All notices shall be effective upon delivery or on the date delivery is refused
by the receiving party. Either party may change its notice address upon
written notice to the other parties. Unless and until such written notice is
received, the last address and addressee as stated by written notice, or
provided herein if no written notice of change has been sent or received, shall
be deemed to continue in effect for all purposes hereunder.
G. No course of dealing between the Payor and the Payee of this
Note and no delay on the part of the Payee of this Note in exercising any
rights under this Note shall operate as a waiver of the rights of the Payee of
this Note. No covenant or other provision of this note nor any default or
Event of Default in connection therewith may be waived otherwise than by a
written instrument signed by the party so waiving such covenant or other
provision or default or Event of Default; provided, however, that no such
waiver shall extend to or impair any obligation no expressly waived or impair
any right consequent thereon. Any waiver may be given subject to satisfaction
of conditions stated therein.
H. All covenants and agreements herein shall be deemed material,
and shall bind the Payor successors and assigns, whether so expressed or not,
and all such covenants and agreements shall inure to the benefit of the Payee
and its nominees, successors and assigns, whether so expressed or not.
I. No extension of time for the payment of this Note or any
installment hereof made by agreement with any person nor or hereafter liable
for the payment of this Note shall operate to release, discharge, modify,
change or affect the original liability under this Note, either in whole or in
part, of the Payor.
J. Payor and each surety, guarantor and endorser, if any, jointly
and severally and to the extent permitted by law, waive, demand, presentment
for payment, notice of dishonor, protest and notice of protest; waive any and
all lack of diligence or delays in the collection or enforcement hereof; and
consent that the time of payment may be extended or this Note may be renewed
without notice and without releasing the Payor or any such surety, or endorser.
K. If the Payee of this Note refers it to an attorney for
collection or seeks legal advice for default under this Note or under the
Security Agreement securing this Note, or if an action is instituted on this
Note, or if any other judicial or nonjudicial action is instituted by the Payee
hereof or by any person, and an attorney is employed by the Payee hereof to
appear in any action or proceeding or to reclaim, sequester, protect, preserve
or enforce the Payee's interest in the real property security or any other
security for this Note, including, but not limited to, proceedings to foreclose
the loan evidenced hereby, proceedings under the Federal Bankruptcy Code, or in
eminent domain, or under the Probate Code, or in connection with any state or
federal tax lien, or to enforce an assignment of rents, or from the appointment
of a receiver, the Payor and every endorser and guarantor hereof, and every
person who assumes the obligations evidenced by this Note, jointly and
severally promise to pay reasonable attorneys' fees for services performed by
the Payee's attorneys and paralegals and all costs and expenses incurred
incident to such employment.
L. Any interest rate provided hereunder which exceeds the maximum
rate provided by applicable law shall instead be deemed to be such maximum rate
and interest in excess of such maximum rate paid to payee shall be applied to
reduce the principal balance of this Note, so that, in no event shall Payee
receive or be entitled to receive interest in excess of the maximum amount
permitted by applicable law.
M. The Payor waives the benefits of any valuation or appraisement
rights as against such debt.
3
<PAGE> 4
N. The Note is secured by a Collateral Security Agreement
("Security Agreement") dated of even date herewith in favor of Payee.
O. Principal and interest may be prepaid in whole or in part at
any time without penalty.
P. It would be impractical or extremely difficult to fix the
amount of extra expenses involved in handling a delinquent payment if any
installment shall not be paid when due. Accordingly, Payor agrees to pay to
Payee, to cover extra expenses incurred by Payee in handling the delinquent
payment, a late charge of six percent (6%) of the installment due, which Payee
agrees is a reasonable estimate of the extra expenses Payee will incur if there
is a late payment. The late payment charge shall be imposed if all or any part
of any installment is not received by Payee within ten (10) days after the
mailing by Payee of a notice of the delinquency or default. Nothing in this
Paragraph shall limit Payee's rights to exercise any other rights or remedies
available to Payee.
Q. Reference in this Note to "Holder" or "Holder(s)" shall mean
the original Holder hereunder of this Note and thereafter, shall mean any
subsequent Holder or Holders of this Note.
R. Upon receipt of evidence reasonably satisfactory to Payor, of
the loss, theft, destruction or mutilation of this note, and in the case of any
such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory to Payor, or in the case of any such mutilation, upon
surrender and cancellation of this Note, Payor will execute and deliver to
Payee in lieu thereof, a replacement note dated as of the date of this note,
identical in form and substance to this Note and upon such execution and
delivery all references in the Security Agreement to this note shall be deemed
to refer to such replacement note.
ANGELES ACQUISITION CORPORATION
BY /s/ Christian Wolf
--------------------------------
Name Christian Wolf
-------------------------------
Title Chief Executive Officer
------------------------------
CONSOLIDATED CAPITAL CORPORATION
OF NORTH AMERICA, INC.
BY /s/ Christian Wolf
---------------------------------
Name Christian Wolf
-------------------------------
Title Chief Executive Officer
------------------------------
4
<PAGE> 1
EXHIBIT 10.50
COLLATERAL SECURITY AGREEMENT
("PERSONAL PROPERTY")
This COLLATERAL SECURITY AGREEMENT (PERSONAL PROPERTY) ("Security
Agreement") is made and entered into effective this 12th day of January, 1998,
by and between ANGELES ACQUISITION CORPORATION ("Debtor") and NAT AND EVELYN
HANDEL, TRUSTEES OF THE NAT AND EVELYN HANDEL FAMILY TRUST DATED MARCH 18, 1993
("Secured Party").
R E C I T A L S
This Security Agreement is made with reference to the following facts:
A. Debtor has executed and delivered to Secured Party a Note of
event date herewith pursuant to which Debtor has agreed to pay to Secured Party
certain sums advanced by Secured Party to Debtor in an amount not exceeding SIX
HUNDRED TWENTY FIVE THOUSAND DOLLARS ($625,000.00) ("Note").
B. The purpose of this Security Agreement is to secure the
obligations of the Debtor as more particularly described herein.
NOW THEREFORE, the parties agree as follows:
1. Creation of Security Interest: Pursuant to Division 9
of the California Uniform Commercial Code, Debtor hereby grants to Secured
Party a continuing personal property security interest in the Collateral
described in Section 2 below. Said security interest shall attach upon
execution hereof and shall secure performance by the Debtor of all of his
obligations to Secured Party described in Section 3 below.
2. Collateral: The collateral ("Collateral") shall
consist of a continuing security interest in and to Debtor's interest in the
assets of Debtor listed on Exhibit A attached hereto and incorporated herein by
reference.
3. Obligations Secured: The obligations (collectively
"Secured Obligations") secured hereby include:
a. Any and all of the indebtedness and
obligations of Debtor under the Note and this Security Agreement, and any and
all assignments, renewals, extensions, modifications and substitutions thereof,
including, but not limited to, payment of all principal and interest; and,
b. Payment of any and all attorneys' fees and
expenses incurred by Secured Party in the exercise, preservation or enforcement
of the rights of Secured Party under this Security Agreement, including any
expenses incurred by Secured Party in performing for Debtor's account any
obligation of Debtor under this Security Agreement.
1
<PAGE> 2
4. Representations and Warranties of Debtor: In order to
induce Secured Party to enter into this Security Agreement, Debtor hereby
represents and warrants that:
a. Debtor is the sole and exclusive owner of all
of the Collateral and each item of Collateral is owned by Debtor free and clear
of any and all liens, encumbrances, security interests, adverse claims or
interests of any nature whatsoever;
b. The execution and delivery by Debtor of this
Security Agreement and of the various other agreements and documents required
to be executed and delivered by Debtor to Secured Party have been, or will at
the time of delivery thereof be, duly authorized by all necessary action and
this Security Agreement and all such other agreements and documents are and
will be the valid, binding and legally enforceable obligations which they
purport to be. Neither the execution nor the delivery nor the performance of,
nor the compliance with, this Security Agreement or such other agreements and
documents will violate, or be in conflict with, or constitute or result in a
breach or default under, any indenture, mortgage, deed of trust, or any other
agreement or instrument to which Debtor is a party or by which Debtor is bound,
or any law, rule, regulation, writ, injunction, judgment or decree of any court
or governmental instrumentality having jurisdiction over Debtor or over the
business, property or assets of Debtor; and,
c. Debtor is not delinquent in the payment of
any federal, state or local income, franchise or other taxes, and no taxes of
any kind have been assessed against Debtor, other than those for which Debtor
has made due and adequate provision.
5. Reporting: Until all of the Secured Obligations owing
to Secured Party have been paid in full and all obligations of Debtor to
Secured Party have been fully satisfied:
a. Without the prior written consent of Secured
Party, Debtor shall not assign, transfer, or otherwise dispose of, all or any
part of the Collateral or any of their interest therein, nor shall Debtor
encumber, grant a security interest, nor permit any lien or encumbrance to be
imposed upon, any part of the Collateral or on their interest therein, nor
shall Debtor enter into any amendment, supplement, or other agreement, either
written or oral, or waiver, affecting or modifying the Notes or other document
or agreement now or hereafter comprising a part of the Collateral, in any
respect whatever, without the prior written consent of Secured Party, which
consent shall not be unreasonably withheld;
b. Upon the request of Secured Party from time
to time, Debtor will execute, acknowledge and deliver, or cause to be executed
by such other entity as may be required, acknowledged and delivered, all such
additional instruments and will perform any and all acts, reasonably required
or proper to carry into effect the terms, covenants, conditions and intent of
this Security Agreement;
c. Upon prior notice and at any reasonable
time(s), Debtor shall provide Secured Party and/or Secured Party's agents with
access to the Collateral for purposes of examining and inspecting the
Collateral.
6. Maintenance of Collateral: Debtor will maintain and
keep, or cause to be maintained and kept, at Debtor's own cost and expenses,
all of the Collateral and every part thereof in good order and repair, and will
replace within a reasonable time, at Debtor's own cost and expense, every part
of the Collateral which may be sold, worn out, lost, destroyed, confiscated or
rendered unfit for use with replacement Collateral which
2
<PAGE> 3
shall (i) be in good operating condition and shall have a value and quality at
least equal to that of the replaced Collateral, and (ii) be owned by Debtor
free and clear of all liens and encumbrances other than the security interest
in favor of Secured Party or as otherwise permitted by this Agreement, and in
this regard, such replacement Collateral shall forthwith be and is acknowledged
to be, subject to the provisions of this Agreement.
7. Insurance: Debtor agrees to take out, pay for, and
keep in full force and effect, a policy or policies of insurance on the
Collateral, in an amount of coverage reasonably satisfactory to Secured Party,
naming both Secured Party and Debtor as insured and naming Secured Party as
loss payee, for the hazard of fire, theft, total or partial destruction, public
liability and such other hazards as covered by an all risks type policy.
Secured Party is granted a security interest in the proceeds of any insurance
on the Collateral, whether paid by reason of loss, damages, return or refund of
premiums, or otherwise. Debtor assumes all risks of damage to or loss of the
Collateral, whether or not insured against. If Debtor should, for any reason,
fail to take out the insurance referred to above, or pay for the same, within
ten (10) days after Debtor's receipt of written notice from Secured Party
requesting Debtor to perform any of such acts, then such failure shall
constitute a default of Debtor under this Agreement, and Secured Party may, in
addition to all other remedies and at the cost and expense of the Debtor, but
without any obligation of Secured Party to do so, take out and pay for such
insurance, and any sums advanced therefor shall become part of the Secured
Obligations and shall be immediately repayable to Debtor together with interest
thereon at the maximum rate allowed by law. Any sums received on the
cancellation of any such policy may be applied by Secured Party to the Secured
Obligations.
8. Taxes, Liens and Assessments: Debtor shall pay, or
cause to be paid, all taxes, liens or assessments of any kind and description
levied against the Collateral or any part thereof when the same become due and
prior to the time when the same become delinquent. If debtor shall fail to
pay, or cause to be paid, any tax, lien or assessment levied against the
Collateral within ten (10) days after Debtor's receipt of written notice from
Secured Party requesting Debtor to perform any of such acts, then such failure
shall constitute a default of debtor under this Agreement, and Secured Party
may, at Secured Party's option, pay the same, and any amount so paid shall
become a part of the Secured Obligations and shall be immediately repayable to
Debtor, together with interest thereon at the maximum rate allowed by law.
9. Events of Default: At the sole option of the Secured
Party, and without the necessity of special demands or notice other than
Secured Party's standard delinquency notice, all of the Secured Obligations,
including, but not limited to, the entire balance due under the Note, and any
other monies, debts or obligations payable by Debtor to the Secured Party
pursuant to the Note shall become immediately due and payable upon the
happening of any one or more of the following events ("Events of Default"):
a. Failure by Debtor to pay or otherwise perform
any of the Secured Obligations;
b. Failure by Debtor to keep or perform any of
the terms or provisions of this Security Agreement;
c. The transfer of the Collateral or any
interest therein (unless the transferred Collateral is replaced by comparable
collateral) without the prior written consent of Secured Party.
10. Remedies: Upon the occurrence of an Event of Default,
and provided that such Event of Default is not cured within ten (10) days after
the occurrence of the Event of Default, if such default is a
3
<PAGE> 4
payment default, and if it is any other type of default, then within ten (10)
days after notice thereof has been given to Debtor, then, in addition to all of
the rights and remedies of Secured Party, or at law or in equity, at, or any
time after, the occurrence of such default, Secured Party may exercise each and
all of the following respective rights and remedies, all of which shall be
cumulative and not mutually exclusive, and the Debtor hereby authorizes and
empowers Secured Party so to do:
a. Enter any place where the Collateral is
located to take possession or, assemble and collect the Collateral or render it
unusable and shall have the further right and power to take possession of any
of the Collateral, and to exclude Debtor and Debtor's successors , assigns,
agents and servants wholly therefrom, and thereafter to hold, store and/or use,
operate, manage and control the same, and to collect and receive all rents,
revenues, issues, income and profits of the same and every part thereof.
b. Notify any account debtors, any buyers,
landlord or lessees of the Collateral or any other persons of Secured Party's
interest in the Collateral or any other persons of Secured Party's interest in
the Collateral and the proceeds thereof and may demand and collect any proceeds
of the Collateral. In connection therewith, Debtor irrevocably authorizes
Secured Party to endorse or sign Debtor's names on all collections, receipts or
other documents, take possession of and open the mail addressed to Debtor and
remove therefrom payments of proceeds of the Collateral.
c. Pursue and enforce all of the rights and
remedies provided in this Security Agreement and provided by the Uniform
Commercial Code - Secured Transactions and all other applicable laws. All
demand of performance, notice of sale, advertisements, manner of sale and
presence of property at sale, except only as provided in Uniform Commercial
Code Section 9504(3) are hereby specifically waived by Debtor. For the purpose
of complying with said Uniform Commercial Code Section 9504(3), the parties
agree that thirty (30) days notification of the time and place of any public
sale and that thirty (30) days notice of the time after which any private sale
or other intended disposition is to be made, constitutes reasonable
notification. Any public or private sale of Collateral, after default, may be
held in any county as may be designated by Secured Party in its notice of sale.
Any sale hereunder, after default, may be conducted by a partner or agent of
Secured Party or by any Deputy Sheriff or Secured Party, or any auctioneer
selected by Secured Party;
d. Institute any proceedings at law or in
equity, or otherwise, which Secured Party deems advisable for the enforcement
of any of Secured Party's rights hereunder, or any other document or instrument
given hereunder including, but without limitation, the appointment of a
receiver; and,
e. Enforce, compromise, sue upon or otherwise
deal with the Collateral, or any part thereof and the proceeds and avails
thereof as the sole persons rightfully entitled thereto.
11. Cumulative Rights: The various rights, options,
elections, powers and remedies of Secured Party contained in this Security
Agreement or as provided by law shall be cumulative and no one of them is
exclusive of any of the others or of any other right or priority allowed by law
or by this Agreement. Secured Party's waiver of any breach by Debtor of any
term, condition or warranty of this Security Agreement or of any Event of
Default shall not be considered to be a waiver of any preceding or succeeding
breach of the same or of any other covenants, warranty or condition or Event of
Default. Secured Party shall not be required to prosecute collection or any
other remedy against the make or any other person, or to enforce or resort to
any security, before calling upon Debtor for payment or otherwise, nor shall
any act or omission of Secured Party in any way impair or affect any of the
indebtedness or obligations of Debtor to Secured Party or the rights of
4
<PAGE> 5
Secured Party in any of the Collateral. Secured Party may take and hold
security for the indebtedness of Debtor to Secured Party or any part thereof,
other than and in addition to that described herein, without in any manner
whatever affecting the liability of Debtor, and may exchange, enforce, waive or
release all or any part of the security in which Secured Party now or hereafter
has an interest, or any part thereof, or any other security, and may apply any
and all security to the indebtedness in such manner and to such extent as
Secured Party, in Secured Party's sole discretion, may determine, subject to
the provisions of this Agreement.
12. Financing Statement and Further Assurances:
Concurrently with the execution of this Security Agreement, the Debtor and the
Secured Party shall execute an appropriate UCC-1 Financing Statement covering
the Collateral and shall file such Financing Statement with the Secretary of
State of the State of California, and with the office of the county recorder in
those counties where the Collateral may be located. The Debtor shall execute
and deliver to the Secured Party any further documents which Secured Party may
reasonably request in order to perfect or continue the security interest
created hereby.
13. General Provisions:
a. Expenses and Attorneys Fees: The Debtor
hereby agrees to pay all costs and expenses, including without limitation, all
collection agency fees and expenses, reasonable attorneys' fees, costs of suit
and costs of appeal, which Secured Party may incur in the exercise,
preservation or enforcement of Secured Party's rights, power and remedies
hereunder or otherwise under California law.
b. Successors and Assigns: Each and all of the
covenants, conditions and restrictions contained in this Security Agreement
shall inure to the benefit of and shall be binding upon the assignees, and
other successors in interest, of Secured Party and Debtor.
c. Severability: If any term, covenant,
condition or provision of this Security Agreement or portion thereof is
determined to be invalid, void or unenforceable for any reason, the remainder
of the provisions contained herein, or portions thereof, shall be considered
severable, shall remain in full force and effect, and shall in no way be
affected, impaired or invalidated.
d. Term: This Security Agreement shall remain in
full force and effect until the Secured Obligations are discharged in full.
e. Notices: All notices, demands or requests
from one party to another shall be delivered personally or overnight courier
such as Federal Express, or sent by mail, certified or registered, return
receipt requested, postage and other charges prepaid, to the addresses stated
below:
Secured Party: Nat and Evelyn Handel, Trustee of the
Nat and Evelyn Handel Family Trust
dated March 18, 1993
c/o 301 North Canon Drive, Suite 326
Beverly Hills, CA 90210
5
<PAGE> 6
With a copy to: Linda M. Blank, Attorney at Law
1925 Century Park East
Suite 1150
Los Angeles, CA 90067
Debtor: Angeles Acquisition Corporation
20000 South Western Avenue
Torrance, CA 90501
With a copy to: John A. Lapinski, Esq.
Clark & Trevithick
800 Wilshire Blvd., 12th Floor
Los Angeles, CA 90017
or to such other addresses as the parties may hereafter designate to each other
in writing, and shall be deemed given and received on the date of personal
delivery or the date shown on the return receipt.
f. Interpretation: Captions of the paragraphs of
this Security Agreement are for convenience and reference only. The words
contained therein shall in no way be held to explain, modify, amplify or aid in
the interpretation, construction or meaning of the provisions of this Security
Agreement.
g. Construction: Each party and counsel for each
party has reviewed and revised this Security Agreement and the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the construction or interpretation of
this Security Agreement or any amendments or exhibits hereto.
h. Governing Laa: This Security Agreement shall
be governed by and construed in accordance with the laws of the State of
California and specifically in accordance with Division 9 of the California
Uniform Commercial Code and venue shall be in Los Angeles County, California.
i. Facilitation: Both parties shall execute and
deliver such other documents and shall take such other action as may be
reasonably required in order to effectuate the purposes of this Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed on the day and year first above written.
DEBTOR: ANGELES ACQUISITION CORPORATION
BY /s/ Christian Wolf
---------------------------------
Name Christian Wolf
-------------------------------
Title Chief Executive Officer
------------------------------
6
<PAGE> 7
SECURED PARTY: NAT AND EVELYN HANDEL, TRUSTEES
OF THE NAT AND EVELYN HANDEL
FAMILY TRUST dated MARCH 18, 1993
BY /s/ Nat Handel
---------------------------------
Name Nat Handel
-------------------------------
Title Trustee/Self
------------------------------
7
<PAGE> 8
EXHIBIT "A"
DESCRIPTION OF COLLATERAL
The "Collateral" means and includes each and all of the following:
A. Accounts;
B. Equipment;
C. General intangibles;
D. Inventory;
E. Any money, deposit accounts or other assets of Debtor
in which Secured Party receives a security interest or which hereafter come
into the possession, custody and control of Secured Party; and,
F. All proceeds of any of the foregoing.
All terms used herein which are defined in the California Commercial Code shall
have the same meanings when used herein, unless the context requires otherwise.
8
<PAGE> 1
EXHIBIT 20.1
(BW) (Consolidated -Capital) (CDNO) Consolidated Capital of North America Inc.
Completes Acquisition of Capitol Metals Co. Inc. of Los Angeles
DENVER--(Business Wire)--Jan. 15, 1998 -Consolidated Capital of North
America, Inc. (Nasdaq/BB:CDNO) Thursday announced that it has completed its
acquisition of substantially all of the assets of Capitol Metals Co. Inc.
(CMC), a Los Angeles-based steel service and distribution organization
specializing in the processing of hot and cold rolled steel.
Consolidated acquired the assets of CMC for total consideration of
$9.2 million. A significant portion of the cash component of the consideration
in the transaction was provided by Paul Bagley, the chairman of Consolidated.
Concurrent with the acquisition, Consolidated also arranged a new $20 million
senior debt facility with Congress Financial Corp.
The assets acquired consist of 14 acres of real property in Torrance,
Calif., with on-site rail service under long-term lease, on which is located a
310,000 square-foot manufacturing facility and a 19,000 square-foot office
building.
The manufacturing facility contains a coil pickling line capable of
handling 20-ton coils, processing more than 14,000 tons per month, as well as
three slitting lines, four cut-to-length lines and one banding line for slit
coil packaging in addition to material-handling equipment.
Christian Wolf, chief executive officer of Consolidated, stated; "The
acquisition of CMC is an integral piece of our strategy for Consolidated. We
see a great opportunity to continue to grow our presence in the steel service
and steel stud business."
Consolidated Capital of North America, through its wholly owned
subsidiary Angeles Metal Trim Co., fabricates and sells steel framing for
commercial and residential structures worldwide from its 50,000 square-foot
manufacturing plant in Los Angeles and its 20,00 square-foot plant in
Vancouver, Wash., and from two distribution facilities located in Tacoma,
Wash., and Sacramento, Calif.
Consolidated also manufactures and sells low-cost pre-engineered
housing internationally through California Building Systems Inc., a wholly
owned subsidiary.
CONTACT: Consolidated Capital of North America
Jeanette Avery, 888 / 313-8051
1
