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EXHIBIT 10.5
NOTE PURCHASE AGREEMENT
This Agreement, dated as of April 25, 2001, by and between
INTERSYSTEMS, INC., a Delaware corporation (the "Company"), and Coast Capital
Partners, LLC., a New Jersey limited liability company.
RECITALS
Subject to the terms and conditions set forth in this Agreement, the
Company desires to issue and sell to the Purchaser and Purchaser desires to
purchase from the Company, $750,000 principal amount of the Company's Series A
11% convertible senior subordinated secured notes due March 31, 2006 (the
"Series A 11% Convertible Notes") and $250,000 principal amount of the Company's
Series A 13% convertible senior subordinated secured notes due March 31, 2006
(the "Series A 13% Convertible Notes;" collectively, the Series A 11%
Convertible Notes and the Series A 13% Convertible Notes are referred to as the
"Notes").
In consideration of the mutual covenants contained herein, the parties
agree as follows:
1. Sales and Purchase of Notes. Subject to the terms and conditions set
forth herein, the Company shall issue and sell to Purchaser, and the Purchaser
shall purchase from the Company, $750,000 principal amount of Series A 11%
Convertible Notes and $250,000 principal amount of Series A 13% Convertible
Notes. The Series A 11% Convertible Notes and the Series A 13% Convertible
Notes, shall be substantially in the forms annexed hereto as Exhibits A and B,
respectively, and the original price that the Series A 11% Convertible Notes and
Series A 13% Convertible Notes may be converted into shares of the Company's
common stock, $.01 par value per share ("Common Stock"), shall be determined in
accordance with the formula and provisions set forth in Exhibits A and B,
respectively.
2. The Closing.
(a) The closing of the purchase and sale of the Notes (the "Closing")
shall take place at the offices of Purchaser on April 16, 2001, which may be
extended by Purchaser, but in any event to no later than April 30, 2001 without
the consent of the Company. The date of the Closing is hereinafter referred to
as the "Closing Date."
(b) At the Closing, the parties shall deliver or shall cause to be
delivered the following: (i) the Company shall deliver to the Purchaser (1) a
Series A 11% Convertible Note in the principal amount of $750,000 (or Series A
11% Convertible Notes in the aggregate principal amount of $750,000) and a
Series A 13% Convertible Note in the principal amount of $250,000 (or Series A
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13% Convertible Notes in the aggregate principal amount of $250,000), registered
in the name of Purchaser or in such names as Purchaser may specify by written
notice to the Company at least two full business days prior to the Closing Date,
(2) all other documents, instruments and writings required to have been
delivered at or prior to the Closing Date by the Company pursuant to this
Agreement, including: employment agreements, executed by each party thereto,
with each of Xxxxxxx X. Xxxxxxxx ("HMP") and Xxxxx X. Xxxx ("DSL"),
substantially in the forms of Exhibits C and D, respectively (collectively, the
"Employment Agreements"), which employment agreements shall provide for, among
other things, the resignations of HMP and DSL as officers of the Company; a
Stockholders Agreement among the Company, Helm Capital Group, Inc., Helm
Ventures, Inc., HMP, DSL and Purchaser, substantially in the form of Exhibit E
(the "Stockholders Agreement"), which Stockholders Agreement shall provide for,
among other things, the resignations of HMP and DSL from the Company's Board of
Directors; (collectively, this Agreement, the Notes, the Employment Agreements
and the Stockholders Agreement are referred to as the "Transaction Documents");
evidence, reasonably acceptable to Purchaser, that the then maximum number of
shares of Common Stock issuable upon conversion of the Notes has been listed for
issuance on the American Stock Exchange (the "AMEX") or any other market where
the Company's Common Stock is traded; and (ii) Purchaser shall deliver to the
Company (1) $1,000,000 in United States dollars in immediately available funds
by wire transfer to an account designated in writing by the Company for such
purpose prior to the Closing Date and (2) all other documents, instruments and
writings required to have been delivered at or prior to the Closing Date by the
Purchaser pursuant to this Agreement, including the Stockholders Agreement. In
addition to the preceding payments, documents and instruments that are to be
delivered at the Closing, the Company shall cause two nominees of Purchaser to
be appointed to the Company's Board of Directors to fill the vacancies created
by HMP's and DSL'S resignations.
3. Agreement regarding Annual Meeting to Elect Directors. The Company
agrees that as soon as reasonably practicable, and in any event no later than
September 15, 2001 (the "Cutoff Date"), the Company will (i) cause a meeting of
the Company's shareholders to be held for the purpose of electing the Company's
directors, among other things that might be on the agenda, and (ii) the Company
will include among the nominees for directors that are submitted to shareholders
by the Company for election at said meeting, such number of Purchaser's nominees
that when combined with Purchaser's nominees who are already members of the
Company's Board of Directors and whose positions are not up for election (and
concomitantly such directors will be continuing to be members of the Company's
Board of Directors after the election), will constitute a majority of the
Company's directors immediately after the election (the date on which
Purchaser's nominees constitute a majority of the Company's directors is
referred to as the "Control Date"). The Company agrees to use its best efforts
to obtain the election of the Purchaser's nominees so that immediately after
said election a majority of the Company's directors are nominees of the
Purchaser. The Company covenants that a majority of the Company's directors will
be nominees of Purchaser by no later than the Cutoff Date, and it is understood
and agreed by the Company that the failure of the Company's Board of Directors
to
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be so constituted by such date will be a material breach of this agreement, and
an "Event of Default" (as such term is defined in the Notes) under the Notes.
4.Agreement regarding the Conduct of the Company until the Control
Date. The Company covenants and agrees that until the Control Date, without the
prior written consent of Purchaser, the Company's business will be conducted
only in the ordinary course of business consistent with past practice. Without
limitation of the foregoing, without such consent, the Company shall:
(a) use its best efforts to maintain and preserve the physical assets
of the Company;
(b) use its best efforts to maintain all contracts and the relations
and goodwill of employees, suppliers, lessees and others having business
relations with the Company;
(c) use its best effort to maintain in full force and effect all
licenses, permits, rights and other authorizations used in the conduct of the
Company's business;
(d) use its best efforts to prevent any of the Company's assets from
being subjected to any lease, contract of sale, assignment, mortgage, pledge,
lien, charge or encumbrance, except in the ordinary course of business;
(e) (i) not to increase the amount of compensation paid to any of the
Company's employees or of any of its subsidiaries; (ii) not to pay or agree to
pay any pension, retirement allowance, collective bargaining agreement or
arrangement, to any such employee, whether past or present; and (iii) not to
commit itself to any new or renewed pension, profit-sharing, bonus, incentive,
commission, deferred compensation, stock purchase, stock option, stock
appreciation right, group insurance, retirement or other employee benefit plan,
agreement or arrangement, or to any extension thereof), with or for the benefit
of any person, or to amend or terminate any such plans or any such agreements in
existence on the date thereof; and (iv) not to enter into or renew any
collective bargaining agreements or any other employment contracts, agreements,
commitments, or arrangements which cannot be terminated at will by the Company
without penalty or recognize any new union or collective bargaining agent with
respect to any employee of the Company or of its subsidiaries;
(f) not to prepay any obligation having a maturity of more than 90 days
from the date it was issued and incurred;
(g) not to enter into any agreement or commitment that restricts the
Company or any of its subsidiaries from carrying on any business in the world;
(h) not to cancel any debts or waive any claims or rights of
substantial value;
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(j) not to enter into any loan agreements or other credit facilities
for the Company's or any of its subsidiary's benefit (except loans by the
Company to a subsidiary or vice versa), or issue any securities whatsoever;
(k) loan money to any other party, except loans by the Company to a
subsidiary or vice versa;
(m) sell, license or otherwise dispose of any assets of the Company;
(n) incur capital expenditures in excess of $50,000;
(o) not enter into any agreement that cannot be cancelled on 60 days
notice or less;
(p) not to agree or otherwise commit, whether in writing or otherwise,
to take any of the actions prohibited by this Section 4.
5. Representations and Warranties of the Company. The Company
represents, warrants and agrees as follows:
(a) Organization and Qualification. The Company is a corporation, duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. Each
of the Company and its subsidiaries is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, (x) adversely
affect the legality, validity or enforceability of this Agreement, the Notes or
the shares (the "Underlying Shares") of Common Stock issuable upon conversion
thereof (the Notes together with the Underlying Shares are referred to
collectively as the "Securities"), (y) have or result in a material adverse
effect on the results of operations, assets, prospects, or condition (financial
or otherwise) of the Company and its subsidiaries, taken as a whole, or (z)
adversely impair the Company's ability to perform fully on a timely basis its
obligations under the Transaction Documents.
(b) Corporate Action. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents, and otherwise to carry out its obligations
thereunder. The execution and delivery of each of the Transaction Documents by
the Company and the consummation by it of the transactions contemplated thereby
have been duly authorized by all necessary action on the part of the Company and
no further action is required by the Company. Each of the Transaction Documents
has been duly executed by the Company and, when delivered in accordance with the
terms hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
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(c) Beneficial Ownership. To the knowledge of the Company, except as
specifically disclosed in the Disclosure Documents (as defined below) or as may
otherwise result from the execution and performance of the Transaction
Documents, no person or group of related Persons beneficially owns (as
determined pursuant to Rule 13d-3 promulgated under the Securities Exchange Act
of 1934, as amended) or has the right to acquire by agreement with or by
obligation binding upon the Company beneficial ownership of in excess of 5% of
the Common Stock. A "Person" means an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or subdivision
thereof) or other entity of any kind.
(d) Issuance of Underlying Shares. The Notes and the Underlying Shares
are duly authorized, and, when issued and paid for in accordance with the terms
hereof and the Notes, as applicable, shall have been validly issued, fully paid
and nonassessable, free and clear of all liens, encumbrances, and rights of
first refusal of any kind (collectively, "Liens"). No shares of Common Stock are
entitled to preemptive or similar rights, nor is any holder of Common Stock
entitled to preemptive or similar rights arising out of any agreement or
understanding with the Company by virtue of any of the Transaction Documents.
The Company has on the date hereof and will, at the Closing Date and at all time
while the Notes are outstanding, maintain an adequate reserve of duly reserved
shares of Common Stock, reserved for issuance to holders of Notes, to enable it
to perform its conversion and other obligations under the Transaction Documents.
(e) Consents and Approvals. The Company is not required to obtain to
obtain the consent, waiver, approval, authorization or order of, give any notice
to, or make any filing or registration with, any court or other Federal, state,
local or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
other than (i) as have been made (in the case of filings and registrations) or
obtained (in the case of consents, waivers, orders, approvals or
authorizations), (ii) the filing of a registration statement with the Securities
and Exchange Commission (the "Commission") as contemplated in Section 6, (iii)
the application(s) to the AMEX for the listing of the Underlying Shares with the
AMEX (and with any other national securities exchange or market on which the
Common Stock is then listed), (iv) the filing of a Form D with the Commission,
and (v) in all other cases where the failure to obtain such consent, waiver,
authorization or order, or to give such notice or make such filing or
registration could not have or result in, individually or in the aggregate, a
material adverse effect to the Company.
(f) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of its certificate of incorporation, bylaws or other
charter documents (each as amended through the date hereof), or (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, credit facility,
indenture or instrument (evidencing a Company debt or otherwise) to which the
Company or any of its subsidiaries is a party or by which any
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property or asset of the Company or any of its subsidiaries is bound or
affected, or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company is subject (including Federal and state
securities laws and regulations), or by which any property or asset of the
Company is bound or affected, except in the case of each of clauses (i) and
(iii), as could not, individually or in the aggregate, have or result in a
material adverse effect on the Company. The business of the Company is not being
conducted in violation of any law, ordinance or regulation of any governmental
authority, except for violations which, individually or in the aggregate, could
not have or result in a material adverse effect on the Company.
(g) No Default or Violation. Neither the Company nor any of its
subsidiaries received notice of a claim that it is in default under or that it
is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound, (ii) is in violation of any order of any court, arbitrator
or governmental body, or (iii) is in violation of any statute, rule or
regulation of any governmental authority, except as could not individually or in
the aggregate, have or result in a material adverse effect.
(h) Disclosure Documents. In connection with the offering and sale of
the Securities, the Company has previously delivered to Purchaser those
documents listed in Schedule A ("Disclosure Documents"). The Disclosure
Documents taken as a whole do not include any untrue statement of material fact
or omit to state any material fact necessary to make the statements therein not
misleading.
6. Representations and Warranties of Purchaser. The Purchaser hereby
represents and warrants to the Company as follows:
(a) Organization; Authority. The Purchaser is a limited liability
company duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with the requisite power and authority, to
enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations thereunder. The purchase by
the Purchaser of the Notes hereunder has been duly authorized by all necessary
action on the part of the Purchaser. Each of this Agreement and the Stockholders
Agreement has been duly executed and delivered by the Purchaser and constitutes
the valid and legally binding obligation of the Purchaser, enforceable against
it in accordance with its terms.
(b) Accredited Investor. As of the date hereof, Purchaser is an
"accredited investor," as that term is defined in Rule 501(a) under the
Securities Act of 1933, as amended (the "1933 Act").
(c) Non-Registration of Securities and Restrictions on Transferability.
Purchaser is aware that (i) the Securities have not been registered under the
1933 Act or the securities laws of any state, and this Agreement has not been
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"), in
reliance upon exceptions contained in the 1933 Act and the 1939
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Act nor will the Notes otherwise be issued pursuant to an indenture; (ii) the
Securities are subject to significant restrictions on transfer, as set forth in
this Agreement and the Securities, (iii) there is no public trading market for
the Notes and there is no reason to expect that any such market will exist at
any time in the future; (iv) while the Common Stock is currently traded on the
AMEX, there is no assurance that an active trading market therein will continue;
(v) Purchaser will only have those rights to register the Securities as are set
forth in Section 8, and there is no assurance that any registration statement
filed pursuant thereto will be declared effective or will remain effective; (vi)
the Company has no obligation to qualify this Agreement under the 1939 Act and
has no present intention of doing so; and (vii) Purchaser may therefore be
precluded from selling or otherwise transferring or disposing of the Securities
for an indefinite period of time.
(d) Reliance Upon Representation and Warranties. Purchaser is aware
that the Securities are being offered and sold in reliance upon specific
exemptions from the registration and qualification requirements of Federal and
state laws and that the Company is relying upon the truth and accuracy of the
representations and warranties of the Purchaser set forth herein in determining
the availability of such exemptions.
(e) Investment Intent. Purchaser is acquiring the Securities for
investment only, for its own account, and not with view or for sale in
connection with, any distribution of securities. Purchaser has no present
intention of making a sale or distribution of any Securities.
(f) Ability to Evaluate Risks and Merits of Investment. Purchaser
acknowledges receipt of the Disclosure Documents and further acknowledges that
it has reviewed the Disclosure Documents and has been afforded the opportunity
to obtain any information necessary to verify the accuracy of any
representations or information contained in this Agreement or in the Disclosure
Documents and has had all of its inquiries to the Company answered in full, and
has been furnished all requested material relating to the Company and the
offering and sale of the Securities. Neither the Purchaser nor its investment
adviser(s), if any, has been furnished any offering literature by the Company or
any of its affiliates, associates, or agents, other than this Agreement
(including its Exhibits and Schedules) and the Disclosure Documents. The
Purchaser has evaluated the risks of investing in the Company and has
substantial experience in making investment decisions of this type or is relying
upon his professional advisers (who have such experience) in making this
investment decision.
(g) Residency and Taxpayer Identification Number. The true and correct
principal office address of Purchaser is 0000 Xxxxxxx 00, Xxxxxx Xxxx, Xxx
Xxxxxx 00000. Purchaser has no present intention of changing its principal
office address. The taxpayer identification number of Purchaser is 00-0000000.
(h) Ability of the Purchaser to Bear Risk of Investment. The Purchaser
is able to bear the economic risk of an investment in the Securities and, at the
present time, is able to afford a complete loss of such investment.
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The Company acknowledges and agrees that the Purchaser makes no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 6.
7. Legends on Securities.
(a) Legend required on Notes. The Company shall be entitled to cause a
legend in the following form to be endorsed on the face of each Note, whether
held by Purchaser or any subsequent holder:
"This Note and the Common Stock issuable upon conversion
hereof have not been registered under the Securities Act of
1933, as amended (the "Act"), nor under any state securities
law and may not be pledged, sold, assigned, hypothecated or
otherwise transferred until (1) a registration statement with
respect thereto is effective under the Act and any applicable
state securities law or (2) the company receives an opinion of
counsel to the Company or other counsel to the Holder of such
Note, which other counsel is reasonably satisfactory to the
Company, that such note and/or Common Stock may be pledged,
sold, assigned, hypothecated or transferred without an
effective registration statement under the Act or applicable
state securities laws."
(b) Legend Required on Common Stock. The Company shall be entitled to
cause a legend in the following form to be endorsed on the face of any stock
certificate representing any shares of Common Stock issuable upon conversion of
Notes, whether held by Purchaser or any subsequent holder:
"The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933, as amended,
or state securities laws and may not be sold or transferred in
the absence of such registration or an opinion of counsel, or
other evidence satisfactory to the Company, that such
registration is not required."
8. Registration Rights. The Company will, within nine months of the
date hereof, use its best efforts to: (i) prepare and file under the 1933 Act a
registration statement relating to the Underlying Shares. The term "registration
statement" as used herein being deemed to include any form which may be used to
register a distribution of securities to the public for cash; (ii) prepare and
file with the appropriate state blue sky authorities the necessary documents to
register or qualify the Underlying Shares in such states as the Purchaser or the
holders of Notes, if other than Purchaser, shall reasonably request; provided,
however, that neither the Company nor its subsidiaries shall be required in
connection therewith to qualify as a foreign corporation where they are not now
so qualified or to take any action that would subject the Company or any
subsidiary to general service of process in any such jurisdiction where it is
not then so subject or subject the Company or any subsidiary to any material tax
in any such jurisdiction where it is not
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then subject; and (iii) cause such registration statement to become effective
and to keep such registration statement and state blue sky filings current and
effective during the term of the Notes.
All expenses in connection with preparing and filing any registration
statement (and any registration or qualification under blue sky laws of the
states in which the offering will be made under such registration statement)
shall be borne in full by the Company, except that the underwriting commissions
and expenses attributable to the Underlying Shares so registered and the fees
and disbursements of counsel, if any, to the holders of the Underlying Shares or
Notes shall be borne by such holders. The Company may include other securities
in any such registration statement.
The Company agrees to indemnify and hold harmless each holder of the
Notes and Underlying Shares, and each person, if any, who controls any such
holder within the meaning of Section 15 of the 1933 Act, from and against any
and all losses, liabilities, claims, damages, actions and liabilities caused by
any untrue statement of a material fact contained in any registration statement
or contained in a prospectus furnished under the 1933 Act or caused by any
omission to state a material fact therein necessary to make the statements
therein not misleading, unless such statement or omission was made in reliance
upon or in conformity with information furnished to the Company by the holder of
Notes or Underlying Shares, who is seeking indemnification, expressly for use in
such registration statement or prospectus
Each holder of the Notes and Underlying Shares will indemnify the
Company, and each person who controls the Company within the meaning of Section
15 of the 1933 Act, from and against any and all losses, claims, damages,
expenses and liabilities caused by any untrue statement of a material fact
contained in any registration statement or contained in a prospectus furnished
under the 1933 Act or caused by any omission to state a material fact therein
necessary to make the statements therein not misleading, insofar as such losses,
claims, damages, expenses and liabilities are caused by such untrue statement or
omission based upon information furnished in writing to the Company by any such
holder expressly for use in any registration statement or prospectus. In
addition, each such holder will execute and deliver all such documents and
undertakings as the Company may deem necessary or desirable for purposes of
compliance with applicable Federal and state securities law. The Company's
obligations set forth herein with respect to each such holder are contingent on
such holder's satisfaction of its obligations.
If any action, claim, proceeding or investigation is instituted or
threatened against a party in respect of which indemnity may be sought hereunder
(the "indemnified party"), the indemnified party shall promptly notify the party
from whom indemnity is sought (the "indemnifying party") thereof in writing, but
the omission so to notify the indemnifying party shall not relieve the
indemnifying party from any other obligation or liability that the indemnifying
party may have to the indemnified party under this Agreement or otherwise unless
such failure to notify has materially prejudiced the indemnifying party. The
indemnified party will, upon notice to the indemnifying party, have the right to
retain counsel of its choice in connection with any such action, claim,
proceeding or investigation, and to be reimbursed by the indemnifying party for
the
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reasonable fees and disbursements for such counsel, provided that such counsel
shall be reasonably satisfactory to the indemnifying party. In lieu of
reimbursing the party seeking indemnification for the expenses of defending any
such action, claim, proceeding or investigation, the indemnifying party shall
have the option of assuming and paying directly for the defense thereof, in
which case the indemnifying party shall use counsel reasonably acceptable to the
indemnified party, and the indemnifying party shall have no liability for the
expenses of defending any such action, claim, proceeding or investigation
incurred by the indemnified party after the indemnifying party notifies the
indemnified party of its assumption of such defense. No such claim or action may
be settled unless the indemnified party, on the one hand, and the indemnifying
party, on the other hand, consent thereto, which consent shall not be
unreasonably withheld.
9. Listing and Reservation of Underlying Shares. The Company shall at
all times maintain a reserve of Common Stock for issuance upon conversion of the
Notes in accordance with their terms, in such amount as may be required to
perform its obligations in full under the Transaction Documents. The Company
shall also take all actions necessary to maintain at all times the listing on
the AMEX (as well as any other national securities exchange or market or trading
or quotation facility on which the Common Stock is then listed) of the total
number of Underlying Shares (as such number may be adjusted from time to time in
accordance with the provisions of the Notes), for the purpose of issuance upon
conversion of the Notes.
10. Notices, etc. All notices, requests, consents and other
communications hereunder shall be effective only if in writing and delivered
personally or transmitted by nationally recognized express delivery service
(whether governmental or otherwise) or mailed by first class registered or
certified mail, postage prepaid, and addressed as follows:
If to the Company: 0000 Xxxxxxx 00
Xxxxxx Xxxx, Xxx Xxxxxx 00000
If to the Purchaser: 0000 Xxxxxxx 00
Xxxxxx Xxxx, Xxx Xxxxxx 00000
or such other address as may be designated in writing hereafter, in the same
manner by such Person.
11. Amendments and Waivers. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally or in writing, except
with the written consent of the Company and the Purchaser.
12. Indemnification. Each party hereto agrees to indemnify and hold
harmless the other party, and each such other party's officers, directors,
partners and shareholders, from and against any loss, damage, liability or
expense (including, without limitation, reasonable attorneys' fees) due to or
arising out of a breach of such party's representations or obligations contained
herein.
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13. Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, the Purchaser
will be entitled to specific performance of the obligations of the Company under
the Transaction Documents. Each of the Company and the Purchaser agree that
monetary damages may not be adequate compensation for any loss incurred by
reason of any breach of its obligations described in the foregoing sentence and
hereby agrees to waive in any action for specific performance of any such
obligation the defense that a remedy at law would be adequate.
14. Fees and Expenses. The Company shall pay the fees and expenses of
Purchaser's attorneys and other advisors and consultants in connection with the
preparation and negotiation of the Transaction Documents. Subject to the
foregoing and except as otherwise set forth herein, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other experts, if
any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company
shall pay all stamp and other taxes and duties levied in connection with the
issuance of the Securities pursuant hereto.
15. Commitment with respect to additional Capital. On or before March
31, 2002, Coast Capital agrees to either (i) invest or otherwise obtain
investments in the Company (in addition to the $1,000,000 that Coast Capital is
investing in the $1,000,000 principal amount of Notes hereby) of at least
$750,000 (in the form of either a debt or equity investment) or (ii) obtain a
credit facility or other credit accommodation for the Company providing for
loans up to an amount of at least $750,000; provided, however, that Coast
Capital shall have no such obligation if (i) the Company is in default under
either of the Notes or a "Change of Control" (as such term is defined in the
Notes) has occurred, or (ii) the Company and Coast Capital cannot agree upon
reasonable terms for such investment or credit facility or other credit
accommodation after good- faith negotiations.
16. Miscellaneous. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New Jersey, without
giving effect to conflict of laws principles. All the terms of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto, whether so expressed or
not, and in particular shall inure to the benefit of and be enforceable by any
holder or holders at any time of the Securities. This Agreement, together with
the Exhibits and Schedules hereto, the Stockholders Agreement and the Notes
contain the entire agreement and understanding between the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules. The
headings in this Agreement are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. When the context in which
words are used in this Agreement indicates that such is the intent, singular
words shall include the plural and vice versa and masculine words shall include
the feminine and the neuter genders and vice versa. This Agreement may be
executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have
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been signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. All representations,
warranties, covenants and agreements contained herein shall survive the Closing
and the delivery and conversion of the Notes. Each person executing this
Agreement on behalf of Purchaser or the Company represents that he is duly
authorized to execute this Agreement on behalf of such entity. This Agreement is
intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person. In case any one or more of the
provisions of this Agreement shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining terms and provisions of this
Agreement shall not in any way be affected or impaired thereby and the parties
will attempt to agree upon a valid and enforceable provision which shall be a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Note Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
INTERSYSTEMS, INC.
By:_______________________________________
Name:
Title:
COAST CAPITAL PARTNERS, LLC.
By:_______________________________________
Xxxxxx X. Xxxxx, Xx., Managing Director
12
13
SCHEDULE A
The Company's Annual Report on Form 10-K for 2000.
13
