EXHIBIT 10.19
FIRST AMENDMENT TO
SECURITIES PURCHASE AGREEMENT AND SECURITY AGREEMENT
This First Amendment to Securities Purchase Agreement and Security
Agreement (this "Amendment") is dated as of the ___ day of August, 2001 and is
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by and among DVI, INC., a Delaware corporation (the "Company"), DVI FINANCIAL
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SERVICES INC., a Delaware corporation ("Financial"), and DEEPHAVEN/JE XXXXXXX I,
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LLC, a Minnesota limited liability company ("Buyer").
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W I T N E S S E T H:
WHEREAS, the Company and Buyer are parties to that certain Securities
Purchase Agreement, dated as of June 29, 2001 (the same, as it may be amended,
restated, modified or supplemented and in effect from time to time, the
"Purchase Agreement") pursuant to which it purchased a $12,000,000 9.5% Asset-
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Backed Exchangeable Term Note (the "Note") from the Company; and
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WHEREAS, in connection with the Purchase Agreement and as security for the
Note, Financial and Buyer entered into that certain Security Agreement, dated as
of June 29, 2001 (the same, as it may be amended, restated, modified or
supplemented and in effect from time to time, the "Security Agreement") pursuant
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to which Financial granted Buyer a security interest in certain of its assets as
described therein; and
WHEREAS, the Company and Financial have requested that Buyer amend the
Purchase Agreement and the Security Agreement in certain respects (including,
but not limited to reducing the required Collateral Value (as defined in the
Security Agreement)), as more fully set forth herein, and Buyer is agreeable to
such request, upon such terms and conditions set forth herein (including, but
not limited to the issuance and delivery of the August 2001 Warrant (as
hereinafter defined));
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used in this Amendment and not
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otherwise defined herein are used with the meanings given such terms in the
Purchase Agreement.
2. Amendment of the Security Agreement.
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(a) Section 5(a) of the Security Agreement is hereby amended and
restated as follows:
"Section 5. Maintenance of Collateral. (a) The Grantor shall at
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all times maintain a Collateral Value equal to not less than 225% of
the Outstanding Secured Note, plus, after the occurrence and during
the continuance of a Cash Collateral Event, the Cash Collateral
Reserve."
(b) The definition of "Contract Schedule" set forth in Section 20 of
the Security Agreement is hereby amended by deleting subsection (x)
regarding the discounted principal balance of the Contract.
3. Amendment of the Purchase Agreement.
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(a) The terms "Amendment", "Primary Registration Statement" and
"Resale Registration Statement" shall be deleted from the glossary of the
Purchase Agreement.
(b) Section 4.2 of the Purchase Agreement is hereby amended and
restated as follows:
"Section 4.2 Registration Statement.
(a) The Company shall, as soon as practicable, but in no event later
than 60 days after the date of issuance of the Note (the "Issuance
Date") file with the SEC a registration statement ("Registration
Statement") for resale to Buyer of Exchange Shares and the Warrant
Shares in an amount equal to 19.99% of the outstanding share of Common
Stock or such lesser amount equal to the maximum number of Exchange
Shares and Warrant Shares which the Company is permitted to register
under the rules, regulations and interpretations of the SEC as in
effect from time to time. The Company shall use its best efforts to
have the Registration Statement declared effective by the SEC as soon
as practicable. The Company shall use its best efforts to file post-
effective amendments and amended or supplemented prospectuses to or
with the Registration Statement from time to time so that the latest
available prospectus will continue to meet the requirements of Section
10 of the 1933 Act until the earlier of (i) the date as of which all of
the Exchange Shares and Warrant Shares that may be issued may be sold
without restriction pursuant to Rule 144(k) promulgated under the 1933
Act (or successor thereto) or (ii) the date on which (A) all the
Exchange Shares and Warrant Shares that may be issued are sold and (B)
none of the Note or any Warrants are outstanding.
(b) The Company shall permit Buyer or its assigns to review and
comment upon the Registration Statement and all other amendments and
supplements to the Registration Statement or at least seven days prior
to their filing with the SEC."
4. August 2001 Warrant. In consideration of Buyer amending the Security
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Agreement as aforesaid, the Company shall issue a Warrant to Buyer identical to
Exhibit A attached hereto (xxx "Xxxxxx 0000 Xxxxxxx"). The August 2001 Warrant
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shall be deemed to be a Warrant under the Purchase Agreement and all shares of
Common Stock purchased pursuant to the August 2001 Warrant shall be deemed to be
Warrant Shares under the Purchase Agreement.
5. Conditions. This Amendment shall become effective on the date on
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which the following conditions precedent have been satisfied or waived in
writing:
(a) The Company, Financial and Buyer shall have each executed and
delivered this Amendment to each other; and
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(b) Buyer receives the August 2001 Warrant from the Company.
(c) Buyer receives certified resolutions of the board of directors of
the Company and Financial authorizing the issuance and delivery of this
Amendment and the August 2001 Warrant.
6. Representations and Warranties. To induce Buyer to enter into this
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Amendment, the Company and Financial hereby represent and warrant to Buyer that:
(a) Since June 29, 2001, there has been no development or event,
which has had or could reasonably be expected to have a material adverse
effect on the business, properties, assets, operations, results of
operation, or financial condition of the Company and its Subsidiaries,
taken as a whole.
(b) The Company and Financial each have the corporate power and
authority, and the legal right, to make and deliver this Amendment, and
with respect to the Company, the August 2001 Warrant, and to perform all of
their respective obligations under the Security Agreement and the Purchase
Agreement, as amended by this Amendment, and each have taken all necessary
corporate action to authorize the execution and delivery of this Amendment,
and with respect to the Company, the August 2001 Warrant, and the
performance of the Security Agreement and the Purchase Agreement, as so
amended.
(c) When executed and delivered, this Amendment and the Security
Agreement and the Purchase Agreement, as amended by this Amendment, will
constitute legal, valid and binding obligations of the Company and
Financial, enforceable against them, in accordance with their terms,
except as such enforceability may be limited by general principals of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors' rights and remedies.
(d) The representations and warranties made by the Company in the
Purchase Agreement and the representations and warranties made by Financial
in the Security Agreement are true and correct in all material respects on
and as of the date hereof, before and after giving effect to the
effectiveness of this Amendment, as if made on and as of the date hereof,
other than those that relate to an earlier or specific date. The Buyer
Indemnified Parties shall be entitled to all rights to indemnification
contained in Article VIII of the Purchase Agreement with respect to
breaches of any representations or warranties made by the Company or
Financial in this Amendment notwithstanding the fact that such
representations and warranties will be made after the Closing Date;
provided, however, nothing contained herein shall require the Company to
remake any representation or warranty contained in the Purchase Agreement
after the later of (i) the date of this Amendment or (ii) the date of the
issuance and delivery of the August 2001 Warrant.
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7. Reaffirmation and Confirmation of Security Interests. Financial hereby
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confirms to Buyer that Financial has granted to Buyer a security interest in or
lien upon the assets described in the Contract Schedule (as defined in the
Security Agreement) to the Security Agreement, to secure the Secured Obligations
(as defined in the Security Agreement). Financial hereby reaffirms its grant of
such security interest and lien to Buyer for such purpose in all respects.
8. Miscellaneous.
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(a) The Company hereby agrees to pay all of Buyer's costs and
expenses, including, without limitation, attorneys' fees, related to this
Amendment.
(b) This Amendment may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which shall together
constitute but one and the same document.
(c) This Amendment shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
(d) Section captions and headings used in this Amendment are for
convenience only and are not part of and shall not affect the construction
of this Amendment.
(e) From and after the date of execution of this Amendment, any
reference to the Purchase Agreement or Security Agreement contained in any
notice, request, certificate or other instrument, document or agreement
executed concurrently with or after the execution and delivery of this
Amendment shall be deemed to include this Amendment unless the context
shall otherwise require.
(f) Except as expressly set forth herein, nothing in this Amendment
is intended to or shall be deemed to have amended the Purchase Agreement or
the Security Agreement, which are hereby reaffirmed in all respects.
Notwithstanding anything contained herein, the terms of this Amendment are
not intended to and do not serve to effect a novation as to the Purchase
Agreement or the Security Agreement. The Purchase Agreement and the
Security Agreement, as amended hereby remain in full force and effect and
are hereby reaffirmed in all respects.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first set forth above.
DVI, INC.
By: __________________________________
Its:__________________________________
DVI FINANCIAL SERVICES INC.
By: __________________________________
Its:__________________________________
DEEPHAVEN/JE XXXXXXX I, LLC
By: ______________________________
Xxxx Xxxx, President
By: ______________________________
Xxxxx Xxxxxxxxx, Chief Manager
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