1
Exhibit 10.2
================================================================================
OMNIS TECHNOLOGY CORPORATION
OMNIS SOFTWARE, INC.
NOTE PURCHASE AGREEMENT
October 31, 1997
================================================================================
2
TABLE OF CONTENTS
PAGE
----
1. The Credit...............................................................................1
1.1 The Advance of Funds..............................................................1
1.2 Closing Date......................................................................2
1.3 Delivery..........................................................................2
1.4 Interest Rate.....................................................................2
1.5 Term..............................................................................2
1.6 Prepayment........................................................................3
1.7 No Usury..........................................................................3
2. Representations and Warranties of the Lender.............................................3
2.1 Experience........................................................................3
2.2 Tax Consequences..................................................................4
2.3 Authority.........................................................................4
2.4 Access to Data....................................................................4
2.5 Reverse Stock Split...............................................................4
3. Representations and Warranties of the Company, Parent and Omnis Foreign Subsidiaries.....5
3.1 Corporate Organization and Authority of the Company...............................5
3.2 Corporate Power...................................................................5
3.3 Capitalization....................................................................6
3.4 Authorization.....................................................................7
3.5 No Conflict.......................................................................7
3.6 Accuracy of Reports...............................................................8
3.7 Changes...........................................................................8
3.8 Governmental Consent, etc.........................................................9
3.9 Full Disclosure..................................................................10
3.10 Direct and Indirect Benefits.....................................................10
4. Conditions of Lender's Obligations at Closing...........................................10
4.1 Representations and Warranties...................................................10
4.2 Performance......................................................................10
4.3 Proceedings Satisfactory; Compliance Certificate.................................11
4.4 Other Agreements.................................................................11
4.5 No Actions Pending...............................................................11
5. Miscellaneous...........................................................................11
5.1 Governing Law....................................................................11
5.2 Successors and Assigns...........................................................11
5.3 Entire Agreement.................................................................11
5.4 Notices, etc.....................................................................12
-i-
3
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
5.5 Counterparts.....................................................................12
5.6 Severability.....................................................................12
5.7 Headings.........................................................................12
5.8 Survival of Representations and Warranties.......................................13
5.9 Amendment of Agreement...........................................................13
5.10 Finder's Fees....................................................................13
5.11 Expenses.........................................................................13
EXHIBITS
Exhibit A - Form of Promissory Note
Exhibit B - Guarantees
Exhibit C - Schedule of Exceptions
-ii-
4
Note Purchase Agreement
This Note Purchase Agreement (the "Agreement") is entered into as of
October 31, 1997, by and among Omnis Technology Corporation (f/k/a Blyth
Holdings Inc.) ("Parent"); its wholly-owned direct and indirect subsidiaries
Omnis Software, Inc., a California corporation (the "Company"), Omnis Holdings
Limited, a corporation organized under the laws of England, and Omnis Software
Limited, a corporation organized under the laws of England; 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 guaranteed
by (i) Omnis Holdings Limited, a corporation organized under the laws of England
(registered in England under number 1539713) and a wholly-owned subsidiary of
Parent ("Omnis Holdings UK") and (ii) Omnis Software Limited, a corporation
organized under the laws of England (registered in England under
5
number 1474483) and a wholly-owned subsidiary of Omnis Holdings UK ("Omnis
Software UK") (collectively the "Omnis Foreign Subsidiaries") in the form
attached hereto as Exhibit B (the "Guarantees"). The obligations of the Omnis
Foreign Subsidiaries under the Guarantees are secured by (a) in the case of
Omnis Holdings UK's Guarantee, a lien/charge on property of Omnis Holdings UK as
specified in that certain Legal Charge of even date herewith by Omnis Holdings
UK in favor of Lender, and (b) in the case of Omnis Software UK's Guarantee, a
lien/charge on property of Omnis Software UK as specified in that certain
Debentue of even date herewith by Omnis Software UK in favor of Lender. Said
Legal Charge and Debenture hereinafter are collectively referred to as the
"Security Documents."
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
31, 1997 (the "Closing") or at such other time and place upon 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 eight percent (8.0%) 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.
-2-
6
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 Guarantees, the
Security Documents, and any 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 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, the Parent
and Omnis Foreign Subsidiaries 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 and Parent.
-3-
7
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
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 each of
the Company's, the Parent's and Omnis Foreign Subsidiaries' (collectively
"Omnis") business, management, and financial affairs with its management and the
opportunity to review Omnis' facilities. It understands that such discussions,
as well as any written information issued by Omnis, were intended to describe
the aspects of Omnis' 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 Parent
consummated a 1:10 reverse stock split of all of the outstanding Common Stock of
the Parent, and such reverse stock split was effective October 10, 1997 (the
"Reverse Stock Split").
-4-
8
3. Representations and Warranties of the Company, Parent and Omnis
Foreign Subsidiaries.
For purposes of this Section 3, unless the context otherwise
requires, the term "Parent" shall include the Parent and its direct and indirect
subsidiaries, including the Company, 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 C, the Company, the Parent and Omnis
Foreign Subsidiaries each represents and warrants to the Lender, as of the
Closing Date, as follows:
3.1 Corporate Organization and Authority of the Company. The
Parent and each of its subsidiaries, including the Company and Omnis Foreign
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;
(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, the Parent and Omnis Foreign
Subsidiaries will have at the Closing Date all requisite legal and corporate
power and authority to execute and deliver the
-5-
9
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.
(a) The authorized capital stock of the Parent 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 Parent'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 Parent had
reserved 201,876 shares of Common Stock (taking into account the Reverse Stock
Split) for future issuance to employees, officers, directors, and consultants of
the Parent 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 Parent's capital stock or other securities
(whether or not authorized).
(b) The authorized capital stock of the Company consists
of 4,900,000 shares of Common Stock, no par value, of which 100,010 shares are
issued and outstanding, and 100,000 shares of Preferred Stock, no par value,
none of which are outstanding.
-6-
10
(c) Parent owns all outstanding capital stock of the
Company and Omnis Holdings UK.
3.4 Authorization. All corporate action on the part of the
Company, the Parent, Omnis Foreign Subsidiaries and their respective officers,
directors and stockholders necessary for the authorization, execution, delivery
and performance by the Company and Omnis Foreign Subsidiaries of all its
obligations under this Agreement, the Guarantees, the Note and any other
Transaction Agreement has been taken; and this Agreement, the Guarantees and the
Note, once executed by the Company, Omnis Foreign Subsidiaries and the Lender,
will constitute legally binding valid obligations of the Company and Omnis
Foreign Subsidiaries 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 Parent or the Articles of Incorporation or By-Laws of the Company or any
corporate charter document of either of the Omnis Foreign Subsidiaries. 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
-7-
11
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 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, the Parent, either of
the Omnis Foreign Subsidiaries or their respective properties or assets, the
effect of which could have a material adverse effect on the Parent and its
subsidiaries taken as a whole, or materially impair or restrict its power to
perform the obligations of the Company and either of the Omnis Foreign
Subsidiaries as contemplated hereby.
3.6 Accuracy of Reports. The Parent'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 Parent 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 Parent under the Exchange Act, and other than continuing financial
losses of the Parent, the Company and Omnis Foreign Subsidiaries since March 31,
1997, there has not been:
-8-
12
(i) any material change in the assets, liabilities,
financial condition, prospects or operations of the Company or Parent from that
reflected in the reports described in Section 3.6 above, except changes in the
ordinary course of business which have not been, either in any individual case
or in the aggregate, materially adverse to the Parent and its subsidiaries,
taken as a whole;
(ii) any change, except in the ordinary course of
business, in the contingent obligations of the Parent, the Company, or either of
the Omnis Foreign Subsidiaries, 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 Parent, the Company or either of the Omnis Foreign Subsidiaries;
(iv) any declaration or payment of any dividend or other
distribution of the assets of the Parent, the Company or either of the Omnis
Foreign Subsidiaries;
(v) any labor organization activity affecting the
Company, the Parent or either of the Omnis Foreign Subsidiaries; or
(vi) to the best of the Parent's, Company's or Omnis
Foreign Subsidiaries' knowledge, any other event or condition of any character
which has materially adversely affected the assets, liabilities, financial
condition, prospects or operations of the Parent and its subsidiaries, taken as
a whole.
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 Parent, the Company or Omnis Foreign Subsidiaries
is required in connection with the valid execution and delivery
-9-
13
of the Transaction Agreements, or the offer, sale or issuance of the Note, or
the consummation of any other transaction contemplated hereby.
3.9 Full Disclosure. The representations and warranties of the
Parent, the Company and Omnis Foreign Subsidiaries contained in this Agreement,
the Schedule of Exceptions and the other exhibits, or any other Transaction
Agreement (including, without limitation, the Guarantees and the Security
Documents) when read together, do not contain any untrue statement of a material
fact or omit to state any 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.
3.10 Direct and Indirect Benefits. The Company and each of the
Omnis Foreign Subsidiaries expects to receive and will receive both direct and
indirect benefits from the $500,000 Credit being extended to the Company by the
Lender pursuant to this Agreement and the Note, and such benefits are real and
material to the Company and each of the Omnis Foreign Subsidiaries.
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 Parent, the Company and Omnis Foreign Subsidiaries in this
Agreement (and, as to the Omnis Foreign Subsidiaries, in the Guarantees and the
Security Documents) 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, the Parent and Omnis Foreign
Subsidiaries shall have performed or fulfilled all agreements, obligations and
conditions contained herein and in the
-10-
14
Guarantees and Security Documents required to be performed or fulfilled by the
Parent, Company and either of the Omnis Foreign Subsidiaries, as the case may
be, before such Closing.
4.3 Proceedings Satisfactory; Compliance Certificate. All
corporate and legal proceedings taken by the Parent, the Company and Omnis
Foreign Subsidiaries 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.
4.4 Other Agreements. The Omnis Foreign Subsidiaries shall have
executed and delivered the Guarantees, the Security Agreements and a "comfort"
letter from their U.K. counsel, the Cobbetts firm, in form and substance
satisfactory to Lender.
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
-11-
15
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 to the Company or the Parent, at their addresses or fax numbers 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.
-12-
16
5.8 Survival of Representations and Warranties. The
representations and warranties of the parties contained in or made pursuant to
this 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 understanding with such party, as a
finder or broker in connection with the sale and purchase of the Note hereunder.
Each of the Company, the Parent and Omnis Foreign Subsidiaries, on the one hand,
and the Lender, on the other hand, 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, the Parent, the Omnis Foreign
Subsidiaries and Lender will each bear their own legal and other fees and
expenses in connection with the transactions contemplated by this Agreement.
-13-
17
The foregoing agreement is hereby executed as of the date first above
written.
OMNIS TECHNOLOGY CORPORATION ASTORIA CAPITAL PARTNERS, L.P.
A DELAWARE CORPORATION BY: ASTORIA CAPITAL MANAGEMENT, INC.
By:_____________________________ By:________________________________
Xxxx Xxx, President
Name: __________________________ Address: 0000 Xxxxxxxxx 00xx Xxxxxx
Xxxxx 000
Title: _________________________ Xxxxxxxx, XX 00000
Fax No.: (000) 000-0000
Address: 000 Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Fax No.: (000) 000-0000
OMNIS HOLDINGS LIMITED
A CORPORATION ORGANIZED UNDER THE
OMNIS SOFTWARE, INC. LAWS OF ENGLAND
A CALIFORNIA CORPORATION
By:________________________________
By: ___________________________ Name: _____________________________
Name: _________________________ Title:_____________________________
Title: ________________________ Address: Xxxxxxx Xxxxx,
Xxxxxxx Xxxxxxxxxx,
Address: 000 Xxxxxxx Xxxxxx Xxxxxxx XX00 0XX, Xxxxxxx
Xxx Xxxxx, XX 00000 Fax No.: (000) 000-0000
Fax No.: (000) 000-0000
OMNIS SOFTWARE LIMITED
A CORPORATION ORGANIZED UNDER THE
LAWS OF ENGLAND
By: _______________________________
Name:______________________________
Title:_____________________________
Address: Xxxxxxx Xxxxx,
Xxxxxxx Xxxxxxxxxx,
Xxxxxxx XX00 0XX, Xxxxxxx
Fax No.: (000) 000-0000
-14-
18
EXHIBIT A
FORM OF PROMISSORY NOTE
19
EXHIBIT B
GUARANTEES
20
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 31, 1997, (the "Agreement") by
and among Omnis Technology Corporation, a Delaware corporation (the "Parent"),
Omnis Software, Inc. (the "Company"), Omnis Foreign Subsidiaries, as defind in
the Agreement, 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 Parent expects
to report a significant financial loss, which shall not be greater than the loss
reported for the quarter ended June 30, 1997.
