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Exhibit 10.1
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BLYTH HOLDINGS INC.
NOTE PURCHASE AGREEMENT
October __, 1997
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TABLE OF CONTENTS
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1. The Credit...............................................................................1
1.1 The Advance of Funds..............................................................1
1.2 Closing Date......................................................................1
1.3 Delivery..........................................................................2
1.4 Interest Rate.....................................................................2
1.5 Term..............................................................................2
1.6 Prepayment........................................................................2
1.7 No Usury..........................................................................2
2. Representations and Warranties of the Lender.............................................3
2.1 Experience........................................................................3
2.2 Tax Consequences..................................................................3
2.3 Authority.........................................................................3
2.4 Access to Data....................................................................4
2.5 Reverse Stock Split...............................................................4
3. Representations and Warranties of the Company............................................4
3.1 Corporate Organization and Authority of the Company...............................4
3.2 Corporate Power...................................................................5
3.3 Capitalization....................................................................5
3.4 Authorization.....................................................................6
3.5 No Conflict.......................................................................6
3.6 Accuracy of Reports...............................................................7
3.7 Changes...........................................................................7
3.8 Governmental Consent, etc.........................................................8
3.9 Full Disclosure...................................................................8
4. Conditions of Lender's Obligations at Closing............................................9
4.1 Representations and Warranties....................................................9
4.2 Performance.......................................................................9
4.3 Proceedings Satisfactory; Compliance Certificate..................................9
4.4 Other Agreements..................................................................9
4.5 No Actions Pending...............................................................10
5. Miscellaneous...........................................................................10
5.1 Governing Law....................................................................10
5.2 Successors and Assigns...........................................................10
5.3 Entire Agreement.................................................................10
5.4 Notices, etc.....................................................................10
5.5 Counterparts.....................................................................11
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TABLE OF CONTENTS
(CONTINUED)
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5.6 Severability.....................................................................11
5.7 Headings.........................................................................11
5.8 Survival of Representations and Warranties.......................................11
5.9 Amendment of Agreement...........................................................11
5.10 Finder's Fees....................................................................11
5.11 Expenses.........................................................................12
EXHIBITS
Exhibit A - Form of Secured Promissory Note
Exhibit B - Security Agreement
Exhibit C - Schedule of Exceptions
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Note Purchase Agreement
This Note Purchase Agreement (the "Agreement") is entered into as of
October 14, 1997, by and between Blyth Holdings Inc., a Delaware corporation
(a/k/a Omnis Technology Corporation) ("Company"), and Astoria Capital Partners,
L.P., a California limited partnership, ("Lender").
In consideration of the mutual covenants and conditions herein
contained, the parties hereto agree as follows:
1. The Credit
1.1 The Advance of Funds.
(i) Under this Agreement, the Company has authorized the
borrowing of up to $500,000 (the "Credit") in principal amount from Lender.
Lender hereby agrees to make a loan to the Company in the full amount of the
Credit, to be paid to the Company by check or wire transfer on or before the
Closing (as defined below).
(ii) The Company's obligations to the Lender shall be
evidenced by a secured promissory note delivered to the Lender, in the form
attached as Exhibit A hereto (the "Note"), at the time of the Closing.
(iii) The Company's obligations to Lender are secured by
lien on collateral pursuant to a Security Agreement, dated October 14, 1997, in
the form attached hereto as Exhibit B (the "Security Agreement").
1.2 Closing Date. The closing of the purchase and sale of the
Note hereunder shall be held at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx at 10:00 a.m., local time, on October
14, 1997 (the "Closing") or at such other time and place upon
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which the Company and the Lender shall agree (the date of the Closing is
hereinafter referred to as the "Closing Date").
1.3 Delivery. At the Closing, the Company will issue to Lender
the Note, registered in the Lender's name, representing the principal amount of
the Credit to be loaned by Lender, against the loan of such funds.
1.4 Interest Rate. The outstanding principal balance of the
Credit shall bear interest from the Closing Date until payment in full is made.
The interest rate shall be six percent (6.0%) simple interest per annum;
provided that in no event shall such rate exceed the maximum rate of interest
allowed by applicable law.
1.5 Term. All outstanding principal and interest due under the
Note shall be due and payable as set forth therein.
1.6 Prepayment. The Company may prepay the principal and accrued
interest under the Note according to the terms of Section 2 of the Note.
1.7 No Usury. This Agreement, the Note, the Security Agreement,
and other agreements referred to herein (collectively the "Transaction
Agreements"), and any other agreements which may subsequently be entered into
between the Company and the Lender, are hereby expressly limited so that in no
event whatsoever, whether by reason of deferment or advancement of loan
proceeds, acceleration of maturity of the loan evidenced hereby, or otherwise,
shall the amount paid or agreed to be paid to Lender hereunder for the loan,
use, forbearance or detention of money exceed that permissible under applicable
law. If at any time the performance of any provision hereof or of any other such
agreement involves a payment exceeding the limit of the price that may be
validly charged for the loan, use, forbearance or detention of money under
applicable law, then automatically and retroactively, ipso
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facto, the obligation to be performed shall be reduced to such limit, it being
the specific intent of the Company and Lender hereof that all payments under
this Agreement or the Note are to be credited first to interest as permitted by
law, but not in excess of (i) the agreed rate of interest set forth herein, or
(ii) that permitted by law, whichever is the lesser, and the balance toward the
reduction of principal. The provisions of this paragraph shall never be
superseded or waived and shall control every other provision of the Transaction
Agreements and all other agreements between the Company and Lender.
2. Representations and Warranties of the Lender
Lender hereby represents and warrants to the Company with respect
to the issuance of the Note as follows:
2.1 Experience. It is experienced in evaluating and loaning funds
in high technology companies such as the Company.
2.2 Tax Consequences. It understands and acknowledges that any
financing structured in the manner provided for herein involves certain tax
risks, and therefore it has consulted its own tax advisors regarding all the
federal and state tax consequences of the transactions contemplated by this
Agreement.
2.3 Authority. It has all corporate rights, power and authority
to enter into this Agreement and the Note and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of the Transaction
Agreements by the Lender and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on its behalf. The Transaction Agreements to which Lender is a
signatory have been duly executed and delivered by the Lender, and, to the
extent they impose any obligations on the Lender, constitute legal, valid and
binding obligations of the Lender, enforceable in accordance with their
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respective terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies.
2.4 Access to Data. It has had an opportunity to discuss the
Company's business, management, and financial affairs with its management and
the opportunity to review the Company's facilities. It understands that such
discussions, as well as any written information issued by the Company, were
intended to describe the aspects of the Company's business and prospects which
it believes to be material but were not necessarily a thorough or exhaustive
description.
2.5 Reverse Stock Split. It understands that the Company
consummated a 1:10 reverse stock split of all of the outstanding Common Stock of
the Company, and such reverse stock split was effective October 10, 1997 (the
"Reverse Stock Split").
3. Representations and Warranties of the Company
For purposes of this Section 3, unless the context otherwise
requires, the term "Company" shall include the Company and its subsidiaries as
listed on its most recent Annual Report on Form 10-K for the year ended March
31, 1997, filed with the Securities and Exchange Commission (the "SEC"). Except
as set forth in the Schedule of Exceptions attached hereto as Exhibit D, the
Company represents and warrants to the Lender, as of the Closing Date, as
follows:
3.1 Corporate Organization and Authority of the Company. The
Company and each of its subsidiaries:
(i) is a corporation duly organized, validly existing,
authorized to exercise all its corporate powers, rights and privileges and in
good standing in the state or jurisdiction of its incorporation;
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(ii) has the corporate power and authority to own and
operate its properties and to carry on its business as presently conducted and
as proposed to be conducted; and
(iii) is qualified to do business as a foreign
corporation in each jurisdiction in which the ownership of its property or the
nature of its business requires such qualification, except where failure to so
qualify would not have a material adverse effect on the business, properties or
financial condition of the Company and its subsidiaries, taken as a whole. The
Company has made available to the Lender true and correct copies of its
Certificate of Incorporation and By-laws as amended.
3.2 Corporate Power. The Company will have at the Closing Date
all requisite legal and corporate power and authority to execute and deliver the
Transaction Agreements, to sell and issue the Note hereunder and to carry out
and perform its obligations under the terms of the Transaction Agreements.
3.3 Capitalization. The authorized capital stock of the Company
consists of:
(i) Common Stock. 4,000,000 shares of Common Stock,
$0.10 par value, of which approximately 2,121,700 shares were issued and
outstanding as of October 8, 1997, taking into account the Reverse Stock Split.
(ii) Preferred Stock. 300,000 shares of Preferred Stock
of which no shares are issued and outstanding, taking into account the Reverse
Stock Split.
(iii) All outstanding shares of the Company's Common
Stock have been duly authorized and validly issued (including, without
limitation, issued in compliance with applicable federal and state securities
laws), and are fully-paid and nonassessable.
(iv) As of September 29, 1997, the Company had reserved
201,876 shares of Common Stock (taking into account the Reverse Stock Split) for
future issuance to employees, officers,
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directors, and consultants of the Company pursuant to employee stock benefit
plans or agreements approved by the Board of Directors. There are no other
options, warrants, conversion privileges or other contractual rights presently
outstanding to purchase or otherwise acquire any shares of the Company's capital
stock or other securities (whether or not authorized).
3.4 Authorization. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution, delivery and performance by the Company of all its
obligations under this Agreement, the Security Agreement, the Note and any other
Transaction Agreement has been taken, and this Agreement, the Security Agreement
and the Note, once executed by the Company and the Lender, will constitute
legally binding valid obligations of the Company enforceable in accordance with
their respective terms, such enforceability being subject only to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
equitable remedies. The issuance of the Note will not give rise to any
preemptive rights or rights of first refusal on behalf of any person in
existence on the date hereof.
3.5 No Conflict. The execution and delivery of the Transaction
Agreements do not, and the consummation of the transactions contemplated hereby
and thereby and the performance of the obligations hereunder and thereunder will
not, conflict with, or result in any violation of, or default (with or without
notice or lapse in time, or both), or give rise to a right of termination,
cancellation or acceleration of any obligation or to a loss of a material
benefit, under, any provision of the Certificate of Incorporation or By-laws of
the Company. The execution and delivery of the Transaction Agreements do not,
and the consummation of the transactions contemplated hereby and thereby and the
performance of the obligations hereunder and thereunder will not, conflict with,
or result in any violation of, or default
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(with or without notice or lapse in time, or both), or give rise to a right of
termination, cancellation or acceleration of any obligation or to a loss of a
material benefit, under, any provision of any mortgage, indenture, lease or
other agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to the
Company, its properties or assets, the effect of which could have a material
adverse effect on the Company or materially impair or restrict its power to
perform its obligations as contemplated hereby.
3.6 Accuracy of Reports. The Company's Annual Report on Form 10-K
for the year ended March 31, 1997 filed with the SEC, and all reports required
to be filed by the Company thereafter up to the date of this Agreement under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), copies of
which have been made available to the Lender, have been duly filed, were in
substantial compliance with the requirements of their respective report forms,
were complete and correct in all material respects as of the dates at which the
information was furnished, and contained (as of such dates) no untrue statement
of a material fact nor omitted to state a material fact necessary in order to
make the statements made therein in light of the circumstances in which made not
misleading. Since the date of the latest of such reports, there has not been any
material adverse change in the condition (financial or otherwise) or results of
operations of the Company and its subsidiaries taken as a whole.
3.7 Changes. Except as otherwise disclosed herein, in the
Schedule of Exceptions attached hereto as Exhibit C, in reports filed with the
SEC by the Company under the Exchange Act, and other than continuing financial
losses of the Company, since March 31, 1997, there has not been:
(i) any material change in the assets, liabilities,
financial condition, prospects or operations of the Company from that reflected
in the reports described in Section 3.6 above, except
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changes in the ordinary course of business which have not been, either in any
individual case or in the aggregate, materially adverse;
(ii) any change, except in the ordinary course of
business, in the contingent obligations of the Company, whether by way of
guaranty, endorsement, indemnity, warranty or otherwise;
(iii) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the properties or
business of the Company;
(iv) any declaration or payment of any dividend or other
distribution of the assets of the Company;
(v) any labor organization activity; or
(vi) to the best of the Company's knowledge, any other
event or condition of any character which has materially adversely affected the
Company's assets, liabilities, financial condition, prospects or operations.
3.8 Governmental Consent, etc. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority on the part of the Company is required in connection with the valid
execution and delivery of the Transaction Agreements, or the offer, sale or
issuance of the Note, or the consummation of any other transaction contemplated
hereby, except such filings to perfect security interests pursuant to the
Security Agreement and Note.
3.9 Full Disclosure. The representations and warranties of the
Company contained in this Agreement, the other provisions of this Agreement, the
Schedule of Exceptions and the other exhibits, when read together, do not
contain any untrue statement of a material fact or omit to state any
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material fact necessary in order to make the statements contained herein or
therein in light of the circumstances under which they were made not misleading.
4. Conditions of Lender's Obligations at Closing. The obligations of the
Lender under Section 1 of this Agreement are subject to the fulfillment at or
before the Closing of each of the following conditions, any of which may be
waived in writing by the Lender:
4.1 Representations and Warranties. The representations and
warranties of the Company contained in the Security Agreement and in this
Agreement shall be true on and as of such Closing with the same effect as if
made on and as of such Closing.
4.2 Performance. The Company shall have performed or fulfilled
all agreements, obligations and conditions contained herein and in the Security
Agreement required to be performed or fulfilled by the Company before such
Closing.
4.3 Proceedings Satisfactory; Compliance Certificate. All
corporate and legal proceedings taken by the Company in connection with the
transactions contemplated by this Agreement and all documents and papers
relating to such transactions shall be satisfactory to the Lender, in the
reasonable exercise of the judgment of the Lender. The Company shall have
delivered to the Lender a certificate dated as of such Closing, signed by the
President of the Company certifying that the conditions set forth in Sections
4.1 and 4.2 have been satisfied.
4.4 Other Agreements. The Company and the Lender shall have
entered into the Security Agreement, and the Company shall have executed and
delivered such UCC-1 Financing Statements and other Transaction Agreement as the
Lender may require at or before the Closing pertaining to the perfection of the
Security interests granted to the Lender pursuant to the Security Agreement.
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4.5 No Actions Pending. There shall not then be in effect any
order enjoining or restraining the transactions contemplated by the Transaction
Agreements.
5. Miscellaneous
5.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts entered into and wholly to be performed within the State of California
by California residents.
5.2 Successors and Assigns. Except as otherwise provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
5.3 Entire Agreement. The Transaction Agreements and the other
documents delivered hereto and thereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof. None of the Transaction Agreements nor any term hereof and
thereof may be amended, waived, discharged or terminated other than by a written
instrument signed by the party against whom enforcement of any such amendment,
waiver, discharge or termination is sought.
5.4 Notices, etc. Any notice and other communications as required
or permitted under the Transaction Agreements shall be mailed, by registered or
certified mail, postage prepaid with return receipt requested, or otherwise
delivered by hand, by messenger or by facsimile (with confirmation of receipt),
addressed (a) if to Lender, at such Lender's address or fax number set forth on
the signature page hereof, or (b) at such other address or fax number as Lender
shall have furnished to the Company in writing, or, in the event someone other
than the Lender becomes the holder of the Note, then to and at the address or
fax number such holder of the Note has furnished to the Company in writing, or
(c) if
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to the Company, at its address or fax number set forth on the signature page
hereof, or at such other address or fax number as the Company shall have
furnished in writing to the Lender or any subsequent holder of the Note.
5.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which may be executed by less than all of the parties
hereto, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
5.6 Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to any
party.
5.7 Headings. Headings and the table of contents in this
Agreement are for reference purposes only and shall not be deemed to have any
substantive effect.
5.8 Survival of Representations and Warranties. The
representations and warranties of the parties contained in or made pursuant to
this Agreement and the Security Agreement shall survive the execution and
delivery of this Agreement and the Closing; provided however, that such
representations and warranties need only be accurate as of the date of such
execution and delivery and as of the Closing.
5.9 Amendment of Agreement. Any provision of this Agreement may
be modified or amended by a written instrument signed by the Company and by the
Lender.
5.10 Finder's Fees. Each of the Company and the Lender represents
and warrants to the other that no person is entitled, directly or indirectly, to
compensation by reason of any contract or
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understanding with such party, as a finder or broker in connection with the sale
and purchase of the Note hereunder. Each of the Company and the Lender will
indemnify the other against all liabilities incurred by the indemnifying party
with respect to claims related to investment banking or finders fees in
connection with the transactions contemplated by this Agreement, arising out of
arrangements between the party asserting such claims and the indemnifying party,
and all costs and expenses (including reasonable fees of counsel) of
investigating and defending such claims.
5.11 Expenses. The Company will bear its legal and other fees and
expenses in connection with the transactions contemplated by this Agreement and
will reimburse the Lender for such legal and other fees and expenses up to
$5,000.00.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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The foregoing agreement is hereby executed as of the date first above
written.
BLYTH HOLDINGS INC., ASTORIA CAPITAL PARTNERS, L.P.
A DELAWARE CORPORATION BY: ASTORIA CAPITAL MANAGEMENT, INC.
By: By:
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Xxxx Xxx, President
Name:
-------------------------
Title:
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Address: 000 Xxxxxxx Xxxxxx Address: 0000 Xxxxxxxxx 00xx Xxxxxx
Xxx Xxxxx, XX 00000 Suite 370
Fax No.: (000) 000-0000 Xxxxxxxx, XX 00000
Fax No.: (000) 000-0000
Note Purchase Agreement
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EXHIBIT A
FORM OF SECURED PROMISSORY NOTE
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EXHIBIT B
SECURITY AGREEMENT
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EXHIBIT C
SCHEDULE OF EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
This Schedule of Exceptions is made and given pursuant to Section 3 of
the Note Purchase Agreement dated as of October __, 1997, (the "Agreement") by
and among Blyth Holdings Inc., a Delaware corporation (the "Company") and the
Lender, as defined in the Agreement. Unless the context otherwise requires, all
capitalized terms shall have the meanings as defined in the Agreement. The
section numbers below correspond to the section numbers of the representations
and warranties in the Agreement which are modified by the disclosures; however,
any information disclosed herein under any section number shall be deemed to be
disclosed and incorporated into any other section number under the Agreement
where such disclosure would be appropriate.
Section 3.6 For the quarter ended September 30, 1997, the Company
expects to report a significant financial loss, which shall not be greater than
the loss reported for the quarter ended June 30, 1997.
