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EXHIBIT 1.1
NOTE PURCHASE AGREEMENT
DATED AS OF SEPTEMBER 20, 2000
BY AND BETWEEN
AXYS PHARMACEUTICALS, INC.
AND
DELTA OPPORTUNITY FUND, LTD.
----------------
8% SENIOR SECURED CONVERTIBLE NOTES DUE 2004
AND
COMMON STOCK PURCHASE WARRANTS
----------------
AGENT:
XXXX & XXXXXXXX CAPITAL, LLC
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AXYS PHARMACEUTICALS, INC.
NOTE PURCHASE AGREEMENT
8% SENIOR SECURED CONVERTIBLE NOTES DUE 2004
AND
COMMON STOCK PURCHASE WARRANTS
TABLE OF CONTENTS
PAGE
1. DEFINITIONS..................................................................1
2. PURCHASE AND SALE; PURCHASE PRICE............................................8
(a) Purchase..............................................................8
(b) Form of Payment.......................................................9
(c) Closing...............................................................9
3. REPRESENTATIONS, WARRANTIES, COVENANTS, ETC.
OF THE BUYER.................................................................9
(a) Note Purchase Agreement...............................................9
(b) Documents and Information.............................................9
(c) Buyer Status..........................................................10
(d) Absence of Brokers, Finders, Etc......................................10
4. REPRESENTATIONS, WARRANTIES, COVENANTS, ETC.
OF THE COMPANY...............................................................10
(a) Organization and Authority............................................10
(b) Qualifications........................................................10
(c) Capitalization........................................................10
(d) Concerning the Shares and the Common Stock............................12
(e) Corporate Authorization...............................................12
(f) Non-contravention.....................................................13
(g) Approvals, Filings, Etc...............................................14
(h) Information Provided..................................................14
(i) Conduct of Business...................................................14
(j) SEC Filings...........................................................15
(k) Absence of Certain Proceedings........................................15
(l) Financial Statements; Liabilities.....................................15
(m) Material Losses.......................................................16
(n) Absence of Certain Changes............................................16
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(o) Intellectual Property.................................................16
(p) Internal Accounting Controls..........................................16
(q) Compliance with Law...................................................16
(r) Properties............................................................17
(s) Labor Relations.......................................................17
(t) Insurance.............................................................17
(u) Tax Matters...........................................................17
(v) Investment Company....................................................17
(w) Absence of Brokers, Finders, Etc......................................18
(x) Registration Statement, Indenture, Etc................................18
(y) ERISA Compliance......................................................19
(z) Concerning the Collateral and the Akkadix Shares......................19
(aa) Rights Agreement......................................................21
5. CERTAIN COVENANTS............................................................21
(a) Nasdaq Listing; Reporting Status......................................21
(b) State Securities Laws.................................................22
(c) Limitation on Certain Actions.........................................22
(d) Indenture; Supplemental Indenture;
Financing Statements, Etc.............................................22
(e) Use of Proceeds.......................................................22
(f) Concerning the Registration Statement.................................23
(g) Best Efforts..........................................................24
(h) Debt Obligation.......................................................24
6. CONDITIONS TO COMPANY'S OBLIGATION TO SELL...................................24
7. CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE.................................25
8. INDEMNIFICATION AND CONTRIBUTION.............................................27
(a) Indemnification.......................................................27
(b) Notice of Claim, Defense, Etc.........................................27
(c) Contribution..........................................................28
(d) Other Rights..........................................................28
9. MISCELLANEOUS................................................................28
(a) Governing Law.........................................................28
(b) Headings..............................................................28
(c) Severability..........................................................29
(d) Notices...............................................................29
(e) Counterparts..........................................................29
(f) Entire Agreement; Benefit.............................................29
(g) Waiver................................................................30
(h) Amendment.............................................................30
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(i) Further Assurances....................................................30
(j) Expenses..............................................................30
(k) Termination...........................................................31
(l) Survival..............................................................31
(m) Public Statements, Press Releases, Etc................................31
(n) Construction..........................................................31
DISCLOSURE SCHEDULE
4(a) List of Subsidiaries
4(c) Capitalization
4(f) Non-contravention
4(i) Conduct of Business
4(j) SEC Filings
4(k) Certain Proceedings
4(l) Liabilities
4(n) Certain Changes
4(q) Compliance With Law
4(r) Properties
4(z) Certain Filings and Notices
ANNEXES
ANNEX I Form of Indenture
ANNEX II Form of Issuing Agent Instruction
ANNEX III Form of Common Stock Purchase Warrants
ANNEX IV Form of First Supplemental Indenture
ANNEX V Form of Opinion of Xxxxxx & Xxxxxxx to Be Delivered on
the Closing Date
ANNEX VI Form of Opinion of Xxxxxxx Xxxxxx, Esq. to Be Delivered
on the Closing Date
ANNEX VII Form of Prospectus Supplement
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NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT, dated as of September 20, 2000
(this "Agreement"), by and between AXYS PHARMACEUTICALS, INC., a Delaware
corporation (the "Company"), with headquarters located at 000 Xxxxxxx Xxx, Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, and DELTA OPPORTUNITY FUND, LTD., a British
Virgin Islands corporation (the "Buyer").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Buyer wishes to purchase from the Company and the
Company wishes to sell to the Buyer, upon the terms and subject to the
conditions of this Agreement, the Note (such capitalized term and all other
capitalized terms used in this Agreement having the meanings provided in Section
1) in the principal amount set forth on the signature page of this Agreement and
which will be convertible into shares of Common Stock;
WHEREAS, the Company has filed the Registration Statement with
the SEC relating to debt securities, warrants and Common Stock, which has been
declared effective by the SEC, and is offering a portion of such securities to
the Buyer to be purchased pursuant to this Agreement and the Prospectus;
WHEREAS, on or before the Closing Date the Company and the
Trustee shall execute and deliver, one to the other, the Supplemental Indenture
in the form referred to herein, which provides, among other things, for the
grant to the Trustee for the ratable benefit of the holders from time to time of
the Note and the Other Notes of a first priority security interest in certain
collateral upon the terms and with the effect as provided therein; and
WHEREAS, in connection with the issuance of the Note, the Company
is issuing to the Buyer the Warrants on the terms provided herein;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. DEFINITIONS.
(a) As used in this Agreement, the terms "Agreement", "Buyer"
and "Company" shall have the respective meanings assigned to such terms in the
introductory paragraph of this Agreement.
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(b) All the agreements or instruments herein defined shall mean
such agreements or instruments as the same may from time to time be supplemented
or amended or the terms thereof waived or modified to the extent permitted by,
and in accordance with, the terms thereof and of this Agreement.
(c) The following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Account" shall have the meaning to be provided or provided in
the Supplemental Indenture.
"Affiliate" means, with respect to any Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the subject Person. For purposes
of this definition, "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise.
"Akkadix" means Akkadix Corporation, a California corporation.
"Akkadix Common Stock" means the Common Stock, par value $.001
per share, of Akkadix.
"Akkadix Shares" means the 3,000,000 shares of Series A Preferred
Stock, $.001 par value per share, of Akkadix registered in the name of the
Company, any other shares of capital stock of Akkadix owned by the Company from
time to time, and any shares of capital stock of Akkadix into which such shares
shall be changed or reclassified.
"Blackout Period" means the period of up to 15 consecutive
Trading Days after the date the Company notifies the Buyer as provided in
Section 5(f)(1)(B) as a result of an event or circumstance described therein
relating to or affecting the Registration Statement, during which period, by
reason of Section 5(f)(1)(B), the Company is not required to use its best
efforts to maintain the effectiveness of the Registration Statement.
"Business Day" means any day other than a Saturday, Sunday or a
day on which commercial banks in The City of New York or the State of California
are authorized or required by law or executive order to remain closed.
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"California UCC" means the Uniform Commercial Code as in effect
in the State of California.
"Chattel Paper" shall have the meaning to be provided or provided
in the Supplemental Indenture.
"Claim" means, with respect to any Person, any losses, claims,
damages or liabilities incurred by such Person.
"Closing Date" means 12:00 noon, New York City time, on September
23, 2000, or such other date and time as is mutually agreed between the Company
and the Buyer.
"Code" means the Internal Revenue Code of 1986, as amended, and
the regulations thereunder and published interpretations thereof.
"Collateral" shall have the meaning to be provided or provided in
the Supplemental Indenture.
"Common Stock" means the Common Stock, par value $.001 per share,
of the Company.
"Common Stock Purchase Agreement" means the Common Stock Purchase
Agreement, dated as of July 21, 2000, between the Company and Acqua Wellington
North American Equities Fund, Ltd.
"Contracts" shall have the meaning to be provided or provided in
the Supplemental Indenture.
"Conversion Price" shall have the meaning to be provided or
provided in the Supplemental Indenture.
"Conversion Shares" means the shares of Common Stock and the
related Preferred Share Purchase Rights issuable upon conversion of the Note.
"Disclosure Schedule" means the Disclosure Schedule prepared by
the Company and furnished to the Buyer prior to the date of execution and
delivery of this Agreement by the Buyer.
"DPI" means Discovery Partners International, Inc., a Delaware
corporation.
"DPI Common Stock" means the Common Stock, $.001 par value, of
DPI.
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"DPI Contracts" shall have the meaning to be provided or provided
in the Supplemental Indenture.
"Encumbrances" means all mortgages, deeds of trust, claims,
security interests, liens, pledges, leases, subleases, charges, escrows,
options, proxies, rights of occupancy, rights of first refusal, preemptive
rights, covenants, conditional limitations, hypothecations, prior assignments,
easements, title retention agreements, indentures, security agreements or any
other encumbrances of any kind.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations thereunder and published interpretations
thereof.
"Event of Default" shall have the meaning to be provided or
provided in the Supplemental Indenture.
"Holder" shall have the meaning to be provided or provided in the
Indenture.
"Indemnified Person" means the Buyer and its Affiliates.
"Indenture" means the Indenture, to be dated as of September 23,
2000, by and between the Company and the Trustee in the form attached as ANNEX I
to this Agreement.
"Instrument" shall have the meaning to be provided or provided in
the Supplemental Indenture.
"Intellectual Property" means all franchises, patents, patent
rights, trademarks, service marks, trade names (whether registered or
unregistered), copyrights, corporate names, licenses, trade secrets, proprietary
software or hardware, proprietary technology, technical information,
discoveries, designs and other proprietary rights, whether or not patentable,
and confidential information (including, without limitation, know-how, processes
and technology).
"Interest Shares" means the shares of Common Stock and the
related Preferred Share Purchase Rights issuable in payment of interest on the
Note.
"Issuing Agent Instruction" means the letter from the Company to
the Transfer Agent in the form attached as ANNEX II to this Agreement.
"June 10-Q" means the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 2000, as filed with the SEC.
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"Lien" shall have the meaning to be provided or provided in the
Supplemental Indenture.
"Margin Stock" shall have the meaning provided in Regulation U of
the Board of Governors of the Federal Reserve System (12 C.F.R. Part 221).
"Maturity Date" shall have the meaning to be provided or provided
in the Supplemental Indenture.
"Nasdaq" means the Nasdaq National Market.
"NASD" means the National Association of Securities Dealers, Inc.
"1999 10-K" means the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1999 (including any information or documents
incorporated therein by reference).
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"1939 Act" means the Trust Indenture Act of 1939, as amended.
"1939 Act Rules and Regulations" means the rules and regulations
of the SEC under the 1939 Act.
"1933 Act" means the Securities Act of 1933, as amended.
"New York UCC" means the Uniform Commercial Code as in effect in
the State of New York.
"Note" means the 8% Senior Secured Convertible Note due 2004 of
the Company to be issued or issued pursuant to this Agreement.
"Other Buyers" means the buyers named in the Other Note Purchase
Agreements.
"Other Note Purchase Agreements" means the several Note Purchase
Agreements, dated as of the date hereof, by and between the Company and the
Other Buyers, relating to the Other Notes.
"Other Notes" means the several 8% Senior Secured Convertible
Notes due 2004 issued by the Company pursuant to the Other Note Purchase
Agreements.
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"Permitted Liens" shall have the meaning to be provided or
provided in the Supplemental Indenture.
"Person" means any natural person, corporation, partnership,
limited liability company, trust, incorporated organization, unincorporated
association, or similar entity or any government, governmental agency or
political subdivision.
"Placement Agent" means Xxxx & Xxxxxxxx Capital, LLC.
"Pledged Securities" shall have the meaning to be provided or
provided in the Supplemental Indenture.
"Preferred Share Purchase Rights" means the Preferred Share
Purchase Rights issued or issuable pursuant to the Rights Agreement (or any
similar rights hereafter issued by the Company with respect to the Common
Stock).
"Prospectus" means the prospectus forming part of the
Registration Statement at the time the Registration Statement is declared
effective and any amendment or supplement thereto (including the Prospectus
Supplement), including any documents or information incorporated therein by
reference.
"Prospectus Supplement" means the Prospectus Supplement in the
form attached as ANNEX VII to this Agreement, to be filed with the SEC as
provided in Section 5(f).
"Purchase Price" means the purchase price for the Note set forth
on the signature page of this Agreement.
"register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the 1933 Act and pursuant to Rule 415, and the
declaration or ordering of effectiveness of such Registration Statement or
Statements by the SEC.
"Registered Securities" means the Warrant Shares and any stock or
other securities of any Person into which or for which the Common Stock may
hereafter be changed, converted or exchanged by the Company or its successor, as
the case may be, and any other securities issued to holders of such Common Stock
(or such stock or other securities into which or for which the Warrant Shares
are so changed, converted or exchanged) upon any reclassification, share
combination, share subdivision, share dividend, merger, consolidation or similar
transaction or event.
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"Registration Period" means the period from the SEC Effective
Date to the Warrant Expiration Date (or, such earlier date on which (x) the
Warrants shall have been fully exercised, or (y) the Warrants shall no longer
remain outstanding.)
"Registration Statement" means the Registration Statement on Form
S-3 of the Company under the 1933 Act (Registration No. 333-35828), as amended
by Post-Effective Amendment No. 1 thereto filed with the SEC on May 22, 2000 and
Post-Effective Amendment No. 2 thereto filed with the SEC on July 10, 2000,
including any documents or reports incorporated therein by reference.
"Repurchase Event" shall have the meaning to be provided or
provided in the Supplemental Indenture.
"Rights Agreement" means the Rights Agreement, dated as of
October 8, 1998, between the Company and Computershare Investor Services LLC, as
Rights Agent.
"Rule 415" means Rule 415 under the 1933 Act or any successor
rule providing for offering securities on a delayed or continuous basis.
"Rule 144" means Rule 144 under the 1933 Act or any other similar
rule or regulation of the SEC that may at any time provide a "safe harbor"
exemption from registration under the 1933 Act so as to permit a holder of
securities to sell such securities to the public without registration under the
1933 Act.
"Rules and Regulations" means the rules and regulations of the
SEC under the 1933 Act.
"SEC" means the Securities and Exchange Commission.
"SEC Effective Date" means May 5, 2000, which was the date the
Registration Statement was declared effective by the SEC.
"SEC Filing Date" means the date the Registration Statement was
first filed with the SEC.
"SEC Reports" means (1) the 1999 10-K, (2) the Company's
definitive Proxy Statement for its 2000 Annual Meeting of Stockholders, (3) the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000 and
the June 10-Q and (4) the Company's Current Reports on Form 8-K, dated February
22, 2000, May 15, 2000, August 2, 2000, August 3, 2000 and September 13, 2000,
in each case as filed with the SEC and including the information and documents
(other than exhibits) incorporated therein by reference.
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"Securities" means, collectively, the Note, the Warrants and the
Shares.
"Security Interest" shall have the meaning to be provided or
provided in the Supplemental Indenture.
"Shares" means the Conversion Shares, the Interest Shares and the
Warrant Shares.
"Subsidiary" means any corporation or other entity of which a
majority of the capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by the
Company.
"Supplemental Indenture" means the First Supplemental Indenture,
to be dated as of September 23, 2000, by and between the Company and the Trustee
in the form attached as ANNEX IV to this Agreement.
"Trading Day" shall have the meaning to be provided or provided
in the Supplemental Indenture.
"Transaction Documents" means, collectively, this Agreement, the
Indenture, the Supplemental Indenture, the Securities, the Issuing Agent
Instruction and the other agreements, instruments and documents contemplated
hereby and thereby.
"Transfer Agent" means Computershare Investor Services LLC, or
any successor thereof, serving as transfer agent and registrar for the Common
Stock.
"Trustee" means U.S. Bank Trust National Association, as Trustee
under the Indenture and the Supplemental Indenture.
"Violation" means
(i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any
post-effective amendment thereof or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading,
(ii) any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (as amended or supplemented,
if the Company files any amendment thereof or supplement thereto with
the SEC)
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or the omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not
misleading, or
(iii) any failure by the Company to fulfill any undertaking
included in the Registration Statement or any post-effective amendment
thereof.
"Warrant Expiration Date" means the "Expiration Date" as defined
in the Warrants.
"Warrant Shares" means the shares of Common Stock and the related
Preferred Share Purchase Rights issuable or issued upon exercise of the
Warrants.
"Warrants" means the Common Stock Purchase Warrants, Class A and
the Common Stock Purchase Warrants, Class B in the form attached as ANNEX III to
this Agreement to be issued or issued pursuant to this Agreement and initially
entitling the holder to purchase the number of shares of Common Stock determined
in accordance with Section 2(a).
2. PURCHASE AND SALE; PURCHASE PRICE.
(a) PURCHASE. Upon the terms and subject to the conditions of
this Agreement, the Buyer hereby agrees to purchase from the Company, and the
Company hereby agrees to sell to the Buyer on the Closing Date, the Note in the
principal amount set forth on the signature page of this Agreement and having
the terms and conditions as set forth in the Indenture and the form of the
Supplemental Indenture attached hereto as ANNEX IV for the Purchase Price. In
connection with the purchase and sale of the Note by the Buyer, the Company
shall issue to the Buyer at the closing on the Closing Date two Warrants, each
registered in the name of the Buyer or its nominee, (1) one of which shall
initially entitle the holder to purchase a number of shares of Common Stock
equal to 25 percent of the quotient obtained by dividing (x) the original
principal amount of the Note by (y) the Conversion Price at the time of issuance
of the Note, which Warrant shall have an initial Purchase Price (as defined in
the Warrant) equal to 125 percent of the Conversion Price at the time of
issuance of the Note and (2) one of which shall initially entitle the holder to
purchase a number of shares of Common Stock equal to 25 percent of the quotient
obtained by dividing (x) the original principal amount of the Note by (y) the
Conversion Price at the time of issuance of the Note, which Warrant shall have
an initial Purchase Price (as defined in such Warrant) equal to 150 percent of
the Conversion Price at the time of issuance of the Note.
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(b) FORM OF PAYMENT. Payment by the Buyer of the Purchase Price
to the Company on the Closing Date shall be made by wire transfer of immediately
available funds to:
Bank of America
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
ABA No. 000000000
For credit to account No. 14998-04747
For credit to the account of Axys Pharmaceuticals Concentration
Account
Reference: Delta Opportunity
(c) CLOSING. The issuance and sale of the Note and the issuance
of the Warrants shall occur on the Closing Date at the Law Offices of Xxxxx X
Xxxxx, Penthouse Suite, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx. At the closing,
upon the terms and subject to the conditions of this Agreement, (1) the Company
shall issue and deliver to the Buyer the Note and the Warrants against payment
by the Buyer to the Company of an amount equal to the Purchase Price, and (2)
the Buyer shall pay to the Company an amount equal to the Purchase Price against
delivery by the Company to the Buyer of the Note and the Warrants.
3. REPRESENTATIONS, WARRANTIES, COVENANTS, ETC. OF THE BUYER.
The Buyer represents and warrants to, and covenants and agrees
with, the Company as follows:
(a) NOTE PURCHASE AGREEMENT. The Buyer has all requisite power
and authority, corporate or otherwise, to execute, deliver and perform its
obligations under this Agreement and the other agreements executed or to be
executed on behalf of the Buyer in connection herewith and to consummate the
transactions contemplated hereby and thereby; and this Agreement has been duly
and validly authorized, duly executed and delivered by the Buyer and, assuming
due execution and delivery by the Company, is a valid and binding agreement of
the Buyer enforceable in accordance with its terms, except as the enforceability
hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and general principles of equity, regardless of
whether enforcement is considered in a proceeding in equity or at law.
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(b) DOCUMENTS AND INFORMATION. The Buyer has received the
Registration Statement and the Prospectus, including the SEC Reports
incorporated by reference therein (but excluding certain exhibits thereto), and
has had an opportunity to review and to ask questions of the Company regarding
the Registration Statement and the Prospectus.
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(c) BUYER STATUS. The Buyer is not a "broker" or "dealer" as
those terms are defined in the 1934 Act which is required to be registered with
the SEC pursuant to Section 15 of the 1934 Act.
(d) ABSENCE OF BROKERS, FINDERS, ETC. (1) the Buyer has not
dealt with any broker, finder or similar Person who is entitled to any
commission, for or other compensation by reason of the transactions contemplated
by this Agreement, other than the Placement Agent, and (2) the Buyer shall pay,
and indemnify and hold harmless the Company from, any claim made against the
Company by any such broker, finder or similar Person in the event of a breach of
the Buyer's representation and warranty set forth in clause (1) of this Section
3(d).
4. REPRESENTATIONS, WARRANTIES, COVENANTS, ETC. OF THE COMPANY.
The Company represents and warrants to, and covenants and agrees
with, the Buyer that:
(a) ORGANIZATION AND AUTHORITY. Each of the Company and PPGx
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and (i) each of the Company and
PPGx has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as described in the SEC Reports and
as currently conducted, and (ii) the Company has all requisite corporate power
and authority to execute, deliver and perform its obligations under this
Agreement and the other Transaction Documents to be executed and delivered by
the Company in connection herewith, and to consummate the transactions
contemplated hereby and thereby; and the Company does not have any Subsidiaries
or equity investment in any other Person other than the Subsidiaries and other
Persons listed in SECTION 4(a) of the Disclosure Schedule.
(b) QUALIFICATIONS. Each of the Company and PPGx is duly
qualified to do business as a foreign corporation and is in good standing in all
jurisdictions where such qualification is necessary except where the failure so
to qualify would not be reasonably expected to have a material adverse effect on
the business, properties, operations, condition (financial or other), results of
operations or prospects of the Company and the Subsidiaries, taken as a whole.
(c) CAPITALIZATION. (1) The authorized capital stock of the
Company consists of (A) 50,000,000 shares of Common Stock, of which 37,086,800
shares were outstanding at the close of business on September 19, 2000 and (B)
10,000,000 shares of Preferred Stock, $.001 par value, of which 500,000 shares
have been designated Series A Junior Participating Preferred Stock, none of
which
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shares were outstanding at the close of business on September 19, 2000; from
September 19, 2000 to the Closing Date there will be (x) no material increase in
the number of shares of Common Stock outstanding (except for shares of Common
Stock issued upon exercise of options and warrants outstanding on the date
hereof, or options or similar rights granted subsequent to the date of this
Agreement pursuant to the Company's stock option plans currently in effect, in
each case under the Company's stock option plans disclosed in the SEC Reports)
and (y) no issuance of securities convertible into, exchangeable for, or
otherwise entitling the holder to acquire, shares of Common Stock (except for
securities issued pursuant to the Other Note Purchase Agreements and except for
Preferred Share Purchase Rights issuable in connection with the issuance of
shares of Common Stock issued in accordance with the immediately preceding
clause (x). The 1999 10-K discloses as of December 31, 1999 all outstanding
options or warrants for the purchase of, or other rights to purchase or
subscribe for, or securities convertible into, exchangeable for, or otherwise
entitling the holder to acquire, Common Stock or other capital stock of the
Company, or any contracts or commitments to issue or sell Common Stock or other
capital stock of the Company or any such options, warrants, rights or other
securities and, except as set forth in SECTION 4(c) of the Disclosure Schedule
or except as contemplated by the Common Stock Purchase Agreement, from December
31, 1999 to the date hereof there has been, and to the Closing Date there will
be, no change in the amount or terms of any of the foregoing except for the
grant of options to purchase shares of Common Stock pursuant to the Company's
stock option plans in effect on the date of this Agreement, which plans are
disclosed in the SEC Reports.
(2) (A) As of September 19, 2000, the Company owned
beneficially and of record 7,425,000 shares of DPI Common Stock and to the
Company's knowledge the authorized capital stock of DPI consists of 100,000,000
shares of DPI Common Stock and 1,000,000 shares of Preferred Stock, par value
$.001 per share;
(B) As of September 19, 2000, the Company owned
beneficially and of record 3,000,000 shares of Series A Preferred Stock of
Akkadix and to the Company's knowledge the authorized capital stock of Akkadix
consists of (x) 30,000,000 shares of Akkadix Common Stock (of which 1,710,106
shares were outstanding on such date) and 15,340,000 shares of Preferred Stock,
$.001 par value, of which (I) 8,200,000 shares have been designated Series A
Preferred Stock, (II) 3,350,000 shares have been designated Series B Preferred
Stock and 100,000 shares have been designated Series C Preferred Stock.
(3) The Company has duly reserved from its authorized and
unissued shares of Common Stock the full number of shares required for (A) all
options, warrants, convertible securities and other rights to acquire shares of
Common Stock which are outstanding and (B) all shares of Common Stock and
options and other rights to acquire shares of Common Stock which may be issued
or
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granted under the stock option and similar plans which have been adopted by the
Company or any Subsidiary; and, immediately following the Closing Date, after
giving effect to any antidilution or similar adjustment arising by reason of
issuance of the Note, the Other Notes, the Warrants and the warrants issuable to
the purchasers of the Other Notes, the total number of shares of Common Stock
reserved and required to be reserved from the authorized and unissued shares of
Common Stock for purposes of all such options, warrants, convertible securities,
other rights, and stock option and similar plans (excluding the Note, the Other
Notes, the Warrants and the warrants issuable to the purchasers of the Other
Notes) will be 5,964,828. Each outstanding class or series of securities of the
Company for which any such antidilution adjustment will occur is identified in
SECTION 4(c) of the Disclosure Schedule, together with the amount of such
antidilution adjustment for each such class or series. The outstanding shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable and all outstanding options, warrants, rights
and other securities entitling the holders to purchase or otherwise acquire
Common Stock have been duly authorized by the Company. None of the holders of
such outstanding shares of capital stock is subject to personal liability solely
by reason of being such a holder. None of the outstanding shares of capital
stock or options, warrants and other rights to acquire Common Stock has been
issued in violation of the preemptive rights of any security holder of the
Company. The offers and sales of the outstanding shares of capital stock of the
Company and options, warrants and other rights to acquire Common Stock were at
all relevant times either registered under the 1933 Act and applicable state
securities laws or exempt from such requirements. No holder of any of the
Company's securities had any rights, "demand," "piggy-back" or otherwise, to
have such securities registered by reason of the intention to file, filing or
effectiveness of the Registration Statement, except as set forth in SECTION 4(c)
of the Disclosure Schedule.
(d) CONCERNING THE SHARES AND THE COMMON STOCK. The Shares
have been duly authorized and (x) the Conversion Shares, when issued upon
conversion of the Note in accordance with its terms, (y) the Interest Shares, if
and when issued in payment of interest on the Note, and (z) the Warrant Shares,
when issued upon exercise of the Warrants against payment, if any, therefor in
accordance with its terms, in each such case will be duly and validly issued,
fully paid and non-assessable and will not subject the holder thereof to
personal liability by reason of being such holder. There are no preemptive or
similar rights of any stockholder of the Company or any other Person to acquire
any of the Securities. The Company has duly reserved at least 5,524,080 shares
of Common Stock for issuance upon conversion of the Note and the Other Notes and
exercise of the Warrants and the warrants to be issued pursuant to the Other
Note Purchase Agreements, and such shares shall remain so reserved, and the
Company shall from time to time reserve such additional shares of Common Stock
as shall be required to be reserved pursuant to the Supplemental Indenture, the
Warrants and such
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warrants as long as the Note may be converted or the Warrants may be exercised.
The Common Stock is listed for trading on Nasdaq and (1) the Company and the
Common Stock meet the criteria for continued listing and trading on Nasdaq; (2)
the Company has not been notified in writing since January 1, 1998 by the NASD
or the Nasdaq Stock Market of any failure or potential failure to meet the
criteria for continued listing and trading on Nasdaq and (3) no suspension of
trading in the Common Stock is in effect. The Company knows of no reason that
the Warrant Shares will not be eligible for listing on Nasdaq.
(e) CORPORATE AUTHORIZATION. This Agreement and the other
Transaction Documents have been duly and validly authorized by the Company; this
Agreement has been duly executed and delivered by the Company and, assuming due
execution and delivery by the Buyer, this Agreement is, and, when executed and
delivered by the Company and the Trustee, the Indenture and Supplemental
Indenture will be, and when executed by the Company, authenticated by the
Trustee and issued to the Buyer against payment therefor to the Company of the
Purchase Price in accordance with this Agreement, the Note will be and, when
executed by the Company, the Warrants will be, valid and binding obligations of
the Company enforceable in accordance with their respective terms, except as the
enforceability hereof or thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and general principles of
equity, regardless of whether enforcement is considered in a proceeding in
equity or at law and except as rights to indemnification and contribution under
Section 8 of this Agreement may be limited by applicable securities laws or the
public policy related to such laws.
(f) NON-CONTRAVENTION. Except as disclosed in SECTION 4(f) of
the Disclosure Schedule, the execution and delivery of the Transaction Documents
by the Company and the consummation by the Company of the transactions
contemplated by the Transaction Documents do not and will not, with or without
the giving of notice or the lapse of time, or both, (i) result in any violation
of any provision of the certificate of incorporation or by-laws of the Company
or any Subsidiary, (ii) conflict with or result in a breach by the Company or
any Subsidiary of any of the terms or provisions of, or constitute a default
under, or result in the modification of, or result in the creation or imposition
of any lien, security interest, charge or encumbrance (other than pursuant to
the Supplemental Indenture) upon any of the properties or assets of the Company
or any Subsidiary pursuant to, any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary or any of their respective properties or
assets are bound or affected, in any such case which would have a material
adverse effect on the business, properties, operations, condition (financial or
other), results of operations or prospects of the Company and the Subsidiaries,
taken as a whole, or the validity or enforceability of, or the ability
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of the Company to perform its obligations under, the Transaction Documents,
(iii) conflict with or result in a breach by the Company or any Subsidiary of
the terms or provisions of, or constitute a default under, or result in the
modification of, or entitle any party other than the Company to terminate, or
require any consent or approval of any such party with respect to, any material
agreement to which the Company is a party that relates to any Subsidiary, DPI or
Akkadix, (iv) violate or contravene any applicable law, rule or regulation or
any applicable decree, judgment or order of any court, federal or state
regulatory body, administrative agency or other governmental body in the United
States or in any other country having jurisdiction over the Company or any
Subsidiary or any of their respective properties or assets which (x) relates to
or affects the Collateral or (y) would have a material adverse effect on the
business, properties, operations, condition (financial or other), results of
operations or prospects of the Company and the Subsidiaries, taken as a whole,
or the validity or enforceability of, or the ability of the Company to perform
its obligations under, the Transaction Documents, or (v) have any adverse effect
on any material permit, certification, registration, approval, consent, license
or franchise necessary for the Company or any Subsidiary to own or lease and
operate any of its properties and to conduct any of its business or the ability
of the Company or any Subsidiary to make use thereof.
(g) APPROVALS, FILINGS, ETC. No authorization, approval or
consent of, or filing with, any United States or foreign court, governmental
body, regulatory agency, self-regulatory organization, or stock exchange or
market or the stockholders of the Company is required to be obtained or made by
the Company or any Subsidiary for (A) the execution, delivery and performance by
the Company of the Transaction Documents, (B) the issuance and sale of the
Securities as contemplated by the Transaction Documents, (C) for the grant by
the Company of the Lien on the Collateral pursuant to the Supplemental
Indenture, (D) to perfect the Lien purported to be created by the Supplemental
Indenture and (E) the performance by the Company of its other obligations under
the Transaction Documents, other than (1) listing of the Shares on Nasdaq, (2)
effectiveness of the Registration Statement under the 1933 Act, (3)
qualification of the Indenture under the 1939 Act, (4) as may be required under
applicable state securities or "blue sky" laws, and (5) filing of financing
statements under the provisions of applicable state Uniform Commercial Codes.
(h) INFORMATION PROVIDED. The Transaction Documents, the
Registration Statement and the Prospectus, taken as a whole, do not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, it being understood that for purposes of
this Section 4(h), any statement contained in such information shall be deemed
to be modified or superseded for purposes of this Section 4(h) to the extent
that a statement in any document included in such information which was prepared
or filed with the SEC
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on a later date modifies or replaces such statement, whether or not such later
prepared or filed statement so states.
(i) CONDUCT OF BUSINESS. Except as set forth in the SEC
Reports or SECTION 4(i) of the Disclosure Schedule, since June 30, 2000, neither
the Company nor any Subsidiary has (i) incurred any obligation or liability
(absolute or contingent), other than in the ordinary course of business, which
individually or in the aggregate is material to the Company and the
Subsidiaries, taken as a whole; (ii) canceled, without payment in full, any
note, loan or other obligation receivable or other debt or claim held by it
other than in the ordinary course of business, which individually or in the
aggregate is material to the Company and the Subsidiaries, taken as a whole;
(iii) sold, assigned, transferred, abandoned, mortgaged, pledged or subjected to
lien any of its properties, tangible or intangible, or rights under any material
contract, permit, license, franchise or other agreement which individually or in
the aggregate is material to the Company and the Subsidiaries, taken as a whole;
(iv) conducted its business in a manner different from its business as conducted
on such date which individually or in the aggregate is material to the Company
and the Subsidiaries, taken as a whole; (v) declared, made or paid or set aside
for payment any cash or non-cash distribution on any shares of its capital
stock; or (vi) consummated, or entered into any agreement with respect to, any
transaction or event which would constitute a Repurchase Event. Except as
disclosed in the Registration Statement or the Prospectus, the Company and each
Subsidiary owns, possesses or has obtained all governmental, administrative and
third party licenses, permits, certificates, registrations, approvals, consents
and other authorizations necessary to own or lease (as the case may be) and
operate its properties, whether tangible or intangible, and to conduct its
business or operations as currently conducted, except such licenses, permits,
certificates, registrations, approvals, consents and authorizations the failure
of which to obtain would not reasonably be expected to have a material adverse
effect on the business, properties, operations, condition (financial or other),
results of operations or prospects of the Company and the Subsidiaries, taken as
a whole.
(j) SEC FILINGS. The Company has timely filed all reports
required to be filed under the 1934 Act and any other material reports or
documents required to be filed with the SEC since January 1, 1998. Except as
disclosed in SECTION 4(j) of the Disclosure Schedule, all of such reports and
documents complied, when filed, in all material respects, with all applicable
requirements of the 1933 Act and the 1934 Act. The Company meets the
requirements for the use of Form S-3 for the registration of the sale of the
Securities as described in the Registration Statement. The Company has not filed
any reports with the SEC under the 1934 Act since December 31, 1999 other than
the SEC Reports.
(k) ABSENCE OF CERTAIN PROCEEDINGS. Except as disclosed in the
Registration Statement or the Prospectus or SECTION 4(k) of the Disclosure
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Schedule, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board or body, or governmental agency pending or, to the
knowledge of the Company and the Subsidiaries, threatened against or affecting
the Company or any Subsidiary wherein an unfavorable decision, ruling or finding
would have a material adverse effect on the business, properties, operations,
condition (financial or other), results of operations or, to the knowledge of
the Company or any Subsidiary after due inquiry, prospects of the Company and
the Subsidiaries, taken as a whole, or the transactions contemplated by the
Transaction Documents or which would adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its
obligations under, the Transaction Documents; and to the best of the Company's
knowledge there is not pending or contemplated any, and there has been no,
investigation by the SEC involving the Company or any director or officer of the
Company.
(l) FINANCIAL STATEMENTS; LIABILITIES. The financial
statements included in the June 10-Q present fairly the consolidated financial
position, consolidated results of operations and consolidated cash flows of the
Company and the Subsidiaries at the dates and for the periods covered thereby,
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods covered thereby and on a
basis consistent with the audited financial statements appearing in the 1999
10-K, and include all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the consolidated financial position,
consolidated results of operations and consolidated cash flows of the Company
and the Subsidiaries at the dates of for the periods covered thereby. Except as
and to the extent disclosed, reflected or reserved against in the financial
statements of the Company and the notes thereto included in the SEC Reports or
as disclosed in SECTION 4(l) of the Disclosure Schedule, to the knowledge of the
Company after due inquiry, subsequent to June 30, 2000 neither the Company nor
any Subsidiary has incurred any liability, debt or obligation, whether accrued,
absolute, contingent or otherwise, and whether due or to become due which,
individually or in the aggregate, are material to the Company and the
Subsidiaries, taken as a whole.
(m) MATERIAL LOSSES. Since the date as of which information is
given in the Registration Statement and the Prospectus, neither the Company nor
any Subsidiary has sustained any loss or interference with its business or
properties from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, which loss or interference would be material to the
business, properties, operations, condition (financial or other), results of
operations or prospects of the Company and the Subsidiaries, taken as a whole.
(n) ABSENCE OF CERTAIN CHANGES. Since June 30, 2000, except as
disclosed or contemplated in the Registration Statement, the Prospectus and
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SECTION 4(n) of the Disclosure Schedule, there has been no material adverse
change and no material adverse development in the business, properties,
operations, condition (financial or other), results of operations or, to the
knowledge of the Company or any Subsidiary after due inquiry, prospects of the
Company and the Subsidiaries, taken as a whole.
(o) INTELLECTUAL PROPERTY. Except as disclosed in the
Registration Statement and the Prospectus, each of the Company and each
Subsidiary (1) to the knowledge of the Company and the Subsidiaries after
reasonable investigation for the purposes hereof, owns, or possesses adequate
rights to use, all Intellectual Property owned or used by it or in which it has
an interest or which are necessary for the conduct of its business or which is
described in the SEC Reports as being owned or used by it, except for such
Intellectual Property the failure of which to own or possess such rights or have
such interest would not individually or in the aggregate be reasonably expected
to have a material adverse effect on the business, properties, operations,
condition (financial or other) or results of operations of the Company and the
Subsidiaries, taken as a whole, and (2) has not received written notice of any
claim, that the conduct of its business will conflict with any Intellectual
Property rights of others which conflict or claim is material to the business,
properties, operations, condition (financial or other) or results of operations
of the Company and the Subsidiaries, taken as whole.
(p) INTERNAL ACCOUNTING CONTROLS. The Company maintains a
system of internal accounting controls for the Company and the Subsidiaries
which meets the requirements of Section 13(b)(2) of the 1934 Act in all material
respects.
(q) COMPLIANCE WITH LAW. Except as disclosed in SECTION 4(q)
of the Disclosure Schedule, the Company and its Subsidiaries are in substantial
compliance with all applicable statutes, laws and ordinances and all applicable
rules and regulations of all governmental agencies and bodies and all applicable
decisions and orders of all courts, domestic or foreign, and governmental
authorities including, without limitation, those relating to the use, operation,
handling, transportation, disposal or release of hazardous or toxic substances
or wastes or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances or wastes, except where the
failure to comply would not individually or in the aggregate be reasonably
expected to have a material adverse effect on the business, properties,
operations, condition (financial or other), results of operations or prospects
of the Company and the Subsidiaries, taken as a whole; and neither the Company
nor any Subsidiary has received written notice of any pending investigation
which would reasonably be expected to lead to such a claim.
(r) PROPERTIES. Except as disclosed in SECTION 4(r) of the
Disclosure Schedule, the Company and each Subsidiary has good title to all
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property, real and personal (tangible and intangible), and other assets owned by
it which are individually or in the aggregate material to the Company and the
Subsidiaries, taken as a whole, free and clear of all security interests,
pledges, charges, mortgages, liens or other encumbrances, except for Permitted
Liens. The leases, licenses or other contracts or instruments under which the
Company and each Subsidiary leases, holds or is entitled to use any property,
real or personal, which individually or in the aggregate are material to the
Company and the Subsidiaries, taken as a whole, are valid, subsisting and
enforceable with only such exceptions as do not materially interfere with the
use of such property made, or proposed to be made by the Company or any
Subsidiary. Neither the Company nor any Subsidiary has received written notice
of any material violation of any applicable law, ordinance, regulation, order or
requirement relating to its owned or leased properties.
(s) LABOR RELATIONS. No material labor problem exists or, to
the knowledge of the Company or any Subsidiary, is imminent with respect to any
of the employees of the Company or any Subsidiary.
(t) INSURANCE. The Company and each Subsidiary maintains
insurance against loss or damage by fire or other hazard and such other
insurance, including but not limited to, product liability insurance, in such
amounts and covering such risks as the Company reasonably believes is adequate
for the conduct of its business and the value of its properties.
(u) TAX MATTERS. The Company and each Subsidiary has filed all
federal, state and local income and franchise tax returns required to be filed
and has paid all taxes shown by such returns to be due, and no tax deficiency
has been determined adversely to the Company or any Subsidiary which has had
(nor does the Company or any Subsidiary have any knowledge of any tax deficiency
which, if determined adversely to the Company or any Subsidiary, would have) a
material adverse effect on the business, properties, operations, condition
(financial or other), results of operations, or prospects of the Company and the
Subsidiaries, taken as a whole.
(v) INVESTMENT COMPANY. Neither the Company nor any Subsidiary
is an "investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended, and the rules and regulations of the SEC
thereunder.
(w) ABSENCE OF BROKERS, FINDERS, ETC. No broker, finder, or
similar Person is entitled to any commission, fee, or other compensation by
reason of the transactions contemplated by this Agreement, other than the
Placement Agent, and the Company shall pay, and indemnify and hold harmless the
Buyer
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from, any claim made against the Buyer by any Person for any such commission,
fee or other compensation.
(x) REGISTRATION STATEMENT, INDENTURE, ETC. (1) The
Registration Statement has been declared effective under the 1933 Act and no
stop order or other proceeding relating to the Registration Statement is pending
or threatened. The Indenture has been qualified under the 1939 Act.
(2) The Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein), on the SEC Filing Date,
on the SEC Effective Date, on the date of execution and delivery of this
Agreement by the parties hereto and on the Closing Date (and each such amendment
and supplement at the time of its filing with the SEC and on the Closing Date)
did not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(3) The Prospectus as of its date(s), on the date of execution
and delivery of this Agreement by the parties hereto, on the date(s) the
Prospectus was first filed with SEC pursuant to Rule 424(b) under the 1933 Act,
and on the Closing Date, did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they are made, not misleading.
(4) On the SEC Effective Date, the date(s) the Prospectus was
first filed with the SEC pursuant to Rule 424(b) under the 1933 Act, on the date
of execution and delivery of this Agreement by the parties hereto, on the
Closing Date and when any amendment or supplement to the Prospectus is filed
with the SEC, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the SEC any amendment or
supplement thereto), did and will comply with the applicable provisions of the
1933 Act, the Rules and Regulations, the 1934 Act and the rules and regulations
thereunder, the 1939 Act and the 1939 Act Rules and Regulations and will contain
all statements required to be stated therein in accordance with the 1933 Act,
the Rules and Regulations, the 1934 Act and the rules and regulations
thereunder.
(5) On the date of execution and delivery of this Agreement by
the parties hereto and on the Closing Date, the Indenture and the Supplemental
Indenture complied and will comply with all applicable provisions of the 1939
Act and the 1939 Act Rules and Regulations.
(6) The Company meets the requirements for use of Form S-3 for
registration of the offer and sale of the Securities to the Buyer in accordance
with
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Rule 415 of the Rules and Regulations. Copies of the Registration Statement and
all amendments thereto and the Prospectus Supplement, a copy of which Prospectus
Supplement is attached hereto as ANNEX VII, have been delivered to the Buyer.
(7) The Securities conform to the description thereof in the
Registration Statement and the Prospectus.
(y) ERISA COMPLIANCE. The Company and each Subsidiary is in
substantial compliance with all presently applicable provisions of ERISA except
for such non-compliance as would not reasonably be expected to have a material
adverse effect on the Company and Subsidiaries, taken as a whole; no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company or any Subsidiary would have any
liability; neither the Company nor any Subsidiary has incurred or expects to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Code;
and each "pension plan" for which the Company or any Subsidiary would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.
(z) CONCERNING THE COLLATERAL AND THE AKKADIX SHARES. (1) Each
DPI Contract has been duly executed and delivered by the Company and, to the
best of the Company's knowledge, DPI and the other parties thereto, and is a
legal, valid and binding obligation of the Company and, to the best of the
Company's knowledge, DPI and each other party thereto, enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws now or
hereafter in effect relating to or affecting creditors' rights generally and
general principles of equity, regardless of whether enforcement is considered in
a proceeding in equity or at law. The Company is not in breach, and, to the best
of the Company's knowledge, no other party to any such contract is in breach, of
its obligations thereunder nor does any such party have any right to terminate
any such contract.
(2) Upon execution and delivery of the Supplemental Indenture
by the Company and the Trustee and (A) in the case of the Collateral other than
the Pledged Securities, to the extent that a security interest in such
Collateral can be perfected by filing under the California UCC, completion of
the filings referred to in SECTION 4(z) of the Disclosure Schedule, and (B) in
the case of the Pledged Securities, to the extent a security interest therein
can be perfected by possession, possession of the Pledged Securities by the
Trustee or its authorized representative without notice of any adverse claim (as
defined in the California UCC and the New York UCC, as applicable), the Trustee
will have a perfected first priority security
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interest in all of the rights currently held by the Company to the Collateral as
provided in the Supplemental Indenture, free of adverse claims (as so defined).
(3) Except for the Lien granted to the Trustee for the ratable
benefit of the Holders pursuant to the Supplemental Indenture, the Company owns
each item of the Collateral and the Akkadix Shares free and clear of any and all
Liens or Encumbrances. No security agreement, financing statement or other
public notice with respect to all or any part of the Collateral or the Akkadix
Shares is on file or of record in any public office identified in SECTION 4(z)
of the Disclosure Schedule, except such as may have been filed in favor of the
Trustee, for the ratable benefit of the Holders, pursuant to the Supplemental
Indenture.
(4) At the time of the closing on the Closing Date, the
Pledged Securities will be duly and validly pledged under the Supplemental
Indenture in accordance with law, and the Company warrants and covenants to
defend the Trustee's right, security interest and special property interest in
and to the Pledged Securities against the claims and demands of all persons
whomsoever. The Company is the exclusive record, equitable and beneficial owner
of, and has good title to, all the Pledged Securities and the Akkadix Shares
free and clear of all adverse claims (as defined in the California UCC and the
New York UCC) (except for the Security Interest in the Pledged Securities
created in favor of the Trustee for the benefit of the holders of the Notes and
the Other Notes), and the Company has the unqualified legal right to pledge the
Pledged Securities under the Supplemental Indenture. Each certificate evidencing
any of the Pledged Securities is issued in the name of the Company and, except
as stated on SCHEDULE I to the Supplemental Indenture, bears no restrictive or
cautionary legend. The Company has delivered to the Trustee for each such
certificate three stock powers duly signed in blank by the Company with all
appropriate signature guarantees. The Security Interest created by the
Supplemental Indenture or intended so to be represents a valid lien on and
security interest in the Pledged Securities, and, so long as the Trustee
maintains possession (within the meaning of the California UCC and the New York
UCC, as applicable) of the Pledged Securities in the State of California or the
State of New York, such Security Interest is superior and prior in right to the
rights of all third persons. At such time as the Trustee is deemed to have
received possession of the Pledged Securities for purposes of the Supplemental
Indenture, no filings or recordings (including, without limitation, filings
under the California UCC or the New York UCC, as applicable) will be necessary
to be made to perfect, protect and preserve the security interest of the Trustee
in the Pledged Securities created by the Supplemental Indenture or intended so
to be; provided, however, that the Trustee may make appropriate protective
filings to evidence such security interest under the California UCC and the New
York UCC.
(5) The DPI Contracts are the only agreements to which the
Company or any Subsidiary is a party relating to the Pledged Securities (other
than
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the Transaction Documents) and, to the best of the Company's knowledge,
constitute the only agreements or instruments by or among DPI, any stockholder
thereof or any third parties relating to the rights of any stockholder of DPI to
hold, pledge, dispose or vote any securities issued by DPI.
(6) The Liens granted pursuant to the Supplemental Indenture
(1) with respect to Collateral other than the Pledged Securities, to the extent
that a security interest can be perfected by filing under the California UCC,
will constitute upon the completion of all the filings or notices listed in
SECTION 4(z) of the Disclosure Schedule and (2) with respect to the Pledged
Securities, to the extent that a security interest therein can be perfected by
possession, will constitute upon possession (within the meaning of the
California UCC and the New York UCC, as applicable) of the Pledged Securities by
the Trustee in the State of California or the State of New York, perfected Liens
on all Collateral, which are prior to all other Liens on such Collateral and
which are enforceable as such against all creditors of the Company.
(7) No amount payable to the Company under or in connection
with any Account that constitutes part of the Collateral is evidenced by any
Instrument (other than checks in the ordinary course of business) or Chattel
Paper which has not been delivered to the Trustee.
(8) No consent (other than consents that have been obtained)
of any party (other than the Company) to any Contract that constitutes part of
the Collateral is required, or purports to be required, in connection with the
execution, delivery and performance of the Supplemental Indenture.
(9) The Company's chief executive office and chief place of
business is located at 000 Xxxxxxx Xxx, Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
(10) The Company has full power, authority and legal right to
grant the Trustee the Lien on the Collateral pursuant to the Supplemental
Indenture.
(aa) RIGHTS AGREEMENT. Assuming that the Buyer does
not hold any shares of Common Stock other than as acquired upon conversion of
the Note and exercise of the Warrants, the execution and delivery of this
Agreement by the Company, the issuance of the Securities as contemplated by the
Transaction Documents and the other transactions contemplated by the Transaction
Documents will not result in the Buyer becoming an "Acquiring Person," as
defined in the Rights Agreement; and the holders of the Note and the Warrants
will be entitled, with respect to the Conversion Shares and the Warrant Shares,
and the holders of the Conversion Shares and the Warrant Shares will be
entitled, in each case to the benefits available to the holders of Common Stock
under the Rights Agreement.
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5. CERTAIN COVENANTS.
(a) NASDAQ LISTING; REPORTING STATUS. Prior to the Closing
Date, the Company will file with Nasdaq an application or other document
required by Nasdaq for the listing of the Shares with Nasdaq and shall provide
evidence of such filing to the Buyer. So long as the Buyer beneficially owns any
portion of any of the Securities the Company will use its best efforts to
maintain the listing of the Common Stock on Nasdaq or another national
securities exchange. During the Registration Period, the Company shall timely
file all reports required to be filed with the SEC pursuant to Section 13 or
15(d) of the 1934 Act, and the Company shall not terminate its status as an
issuer required to file reports under the 1934 Act even if the 1934 Act or the
rules and regulations thereunder would permit such termination.
(b) STATE SECURITIES LAWS. On or before the Closing Date, the
Company shall take such action as shall be necessary to qualify, or to obtain an
exemption for, the offer and sale of the Securities to the Buyer as contemplated
by the Transaction Documents under such of the securities laws of jurisdictions
in the United States as shall be applicable thereto. In connection with the
foregoing obligations of the Company in this Section 5(b), the Company shall not
be required (1) to qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 5(b), (2) to subject
itself to general taxation in any such jurisdiction, (3) to file a general
consent to service of process in any such jurisdiction, (4) to provide any
undertakings that cause more than nominal expense or burden to the Company or
(5) to make any change in its charter or by-laws which the Company determines to
be contrary to the best interests of the Company and its stockholders.
(c) LIMITATION ON CERTAIN ACTIONS. From the date of execution
and delivery of this Agreement by the parties hereto to the date of issuance of
the Note, the Company (1) shall comply with Article Five of the Supplemental
Indenture as if the Supplemental Indenture had been executed and delivered by
the Company and the Trustee and the Note were outstanding, (2) shall not take
any action which, if the Note were outstanding, (A) would constitute an Event of
Default or, with the giving of notice or the passage of time or both, would
constitute an Event of Default or (B) would constitute a Repurchase Event or,
with the giving of notice or the passage of time or both, would constitute a
Repurchase Event.
(d) INDENTURE; SUPPLEMENTAL INDENTURE; FINANCING STATEMENTS,
ETC. The Company agrees to execute and deliver to the Trustee on or before the
Closing Date the Indenture in the form filed as Exhibit 4.1 to the Registration
Statement and the Supplemental Indenture in the form of ANNEX IV
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to this Agreement. The Company shall prepare and on or before the date that is
two Business Days prior to the Closing Date execute and deliver to the Trustee
Uniform Commercial Code financing statements on Form UCC-1 relating to the
Collateral in which the Company is granting a security interest to the Trustee
for the benefit of the holders of the Note and the Other Notes pursuant to the
Supplemental Indenture for filing with the appropriate officials.
(e) USE OF PROCEEDS. The Company represents and agrees that:
(1) the proceeds of sale of the Note, the Warrants and the Warrant Shares will
be used for general working capital purposes and in the operation of the
Company's business; (2) none of such proceeds will be used, directly or
indirectly (A) to make any loan to or investment in any other Person that is
principally engaged in any business other than the types of business permitted
by Section 5.04 of the Supplemental Indenture or that would otherwise fail to
comply with the Indenture or the Supplemental Indenture or (B) for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any Margin
Stock or for the purpose of maintaining, reducing or retiring any indebtedness
which was originally incurred to purchase or carry any stock that is currently a
Margin Stock or for any other purpose which would constitute the transactions
contemplated by this Agreement as a "purpose credit" within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System; and (3)
neither the Company nor any agent acting on its behalf has taken or will take
any action which would cause this Agreement or the transactions contemplated
hereby to violate Regulation T, Regulation U or any other regulation of the
Board of Governors of the Federal Reserve System or to violate the 1934 Act, in
each case as in effect now or as the same may hereafter be in effect.
(f) CONCERNING THE REGISTRATION STATEMENT.
(1) (A) The Company shall use its reasonable best efforts to
keep the Registration Statement effective pursuant to Rule 415 with respect to
the Registered Securities at all times during the Registration Period, subject
to Section 5(f)(1)(B).
(B) Notwithstanding Section 5(f)(1)(A), if at any time the
Company notifies the Buyer as contemplated by clause (C) of the first sentence
of Section 5(f)(3) the Company also notifies the Buyer that the event giving
rise to such notice related to a development involving the Company which
occurred subsequent to the later of (x) the Closing Date and (y) the latest date
prior to such notice on which the Company has amended or supplemented the
Registration Statement, then the Company shall not be required to use best
efforts to keep the Registration Statement effective during a Blackout Period;
provided, however, that in any period of 365 consecutive days the Company shall
not be entitled to avail itself of its rights under this Section 5(f)(1)(B) with
respect to more than an aggregate of 20 Trading
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Days, whether or not consecutive; and provided further, however, that at any
time prior to the Maturity Date the Company shall be entitled to an aggregate of
20 Trading Days, in addition to those provided by the immediately preceding
proviso, during which it is entitled to avail itself of its rights under this
Section 5(f)(1)(B).
(2) The Company will file the Prospectus Supplement, in the
form attached as ANNEX VII to this Agreement, with the SEC within the time
provided by Rule 424 of the 1933 Act Rules and Regulations. The Company will
not, on or prior to the Closing Date, file any amendment or supplement to the
Registration Statement or the Prospectus, or any document under the 1934 Act
which would be deemed to be incorporated by reference into the Registration
Statement Prospectus, unless in each such case a copy thereof shall first have
been submitted to the Buyer within a reasonable period of time prior to the
filing thereof.
(3) The Company will notify the Buyer promptly, and will
confirm such advice in writing (A) of any request by the SEC for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information, (B) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose or the threat thereof, (C) of the happening of any event that
makes any statement made in the Registration Statement or the Prospectus untrue
or that requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading and (D) of receipt by the
Company or any representative or attorney of the Company of any other
communication from the SEC relating to the Company, the Registration Statement,
any preliminary prospectus or the Prospectus. If the SEC shall issue any order
suspending the effectiveness of the Registration Statement, the Company will
make every reasonable effort to obtain the withdrawal of such order at the
earliest possible time. The Company will use its best efforts to comply with the
provisions of and make all requisite filings with the SEC pursuant to Rule 430A
and to notify the Buyer promptly of all such filings.
(4) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(5) The Company shall make generally available to its security
holders as soon as practical, but not later than 90 days after the close of the
period covered thereby, an earning statement (in form complying with the
provisions of Rule 158 under the 0000 Xxx) covering a 12-month period beginning
not later than the first day of the Company's fiscal quarter next following the
SEC Effective Date and the first day of the Company's final quarter next
following the date the Prospectus Supplement is filed with the SEC.
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(g) BEST EFFORTS. Each of the parties shall use its best
efforts timely to satisfy each of the conditions to the other party's
obligations to sell and purchase the Note and issue and acquire the Warrants set
forth in Section 6 or 7, as the case may be, of this Agreement on or before the
Closing Date.
(h) DEBT OBLIGATION. So long as any portion of the Note is
outstanding, the Company shall cause its books, records and financial statements
to reflect the Note as a debt of the Company in its unpaid principal amount and,
whenever appropriate, as a valid senior, secured debt obligation of the Company
for money borrowed.
6. CONDITIONS TO COMPANY'S OBLIGATION TO SELL.
The Company's obligation to sell to the Buyer the Note and to
issue to the Buyer the Warrants on the Closing Date is conditioned upon
satisfaction of the following conditions precedent on or before the Closing Date
(any or all of which may be waived by the Company in its sole discretion):
(a) On the Closing Date, no legal action, suit or proceeding
shall be pending or threatened which seeks to restrain or prohibit the
transactions contemplated by this Agreement;
(b) The representations and warranties of the Buyer contained
in this Agreement shall have been true and correct on the date of this Agreement
and on the Closing Date as if made on the Closing Date (except for
representations given as of a specific date, which representations shall be true
and correct as of such date); and on or before the Closing Date the Buyer shall
have performed all covenants and agreements of the Buyer contained in the
Transaction Documents and required to be performed by the Buyer on or before the
Closing Date; and
(c) The Registration Statement shall have been declared
effective by the SEC and no stop order or similar proceeding relating to the
Registration Statement shall be pending or threatened.
7. CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE.
The Buyer's obligation to purchase the Note and acquire the
Warrants from the Company on the Closing Date is conditioned upon satisfaction
of the following conditions precedent on or before the Closing Date (any or all
of which may be waived by the Buyer in its sole discretion):
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(a) The Trustee shall have executed and delivered to the
Company the Indenture and the Supplemental Indenture and copies thereof, as so
executed and duly executed and delivered by the Company, shall have been
furnished to the Buyer;
(b) The Buyer shall have received customary search reports of
the relevant Uniform Commercial Code filing offices, the content of which
reports shall be reasonably satisfactory to the Buyer;
(c) All filings of financing statements necessary or
appropriate under the Uniform Commercial Code in connection with the
Supplemental Indenture shall have been made and the Buyer shall have received
reasonably satisfactory evidence of such filings;
(d) On the Closing Date, no legal action, suit or proceeding
shall be pending or threatened which seeks to restrain or prohibit the
transactions contemplated by this Agreement;
(e) The representations and warranties of the Company
contained in the Transaction Documents shall have been true and correct on the
date of this Agreement and shall be true and correct on the Closing Date as if
given on and as of the Closing Date (except for representations given as of a
specific date, which representations shall be true and correct as of such date
and except for the approvals and filings referred to in clauses (3) and (5) of
Section 4(g), which shall have been obtained or made on or before the Closing
Date); provided, however, that the truth and correctness thereof on the Closing
Date shall be determined without regard to any report or document filed by the
Company with the SEC on or after the date of execution and delivery of this
Agreement and on or prior to the Closing Date, notwithstanding that any such
report or document may be incorporated by reference into the Registration
Statement or the Prospectus; and on or before the Closing Date the Company shall
have performed all covenants and agreements of the Company contained herein or
in any of the other Transaction Documents required to be performed by the
Company on or before the Closing Date;
(f) No event which, if the Note were outstanding, (1) would
constitute an Event of Default or which, with the giving of notice or the
passage of time, or both, would constitute an Event of Default shall have
occurred and be continuing or (2) would constitute a Repurchase Event or, with
the giving of notice or the passage of time, or both, would constitute a
Repurchase Event shall have occurred and be continuing;
(g) No stop order or similar proceeding relating to the
Registration Statement shall be pending or threatened; the Company shall have
filed the Prospectus Supplement with the SEC; and, on or after the date of
execution and
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delivery of this Agreement but on or before the Closing Date, the Company shall
not have made or filed with the SEC any amendment or supplement to the
Registration Statement or the Prospectus other than the Prospectus Supplement;
(h) The Company shall have delivered to the Buyer a
certificate, dated the Closing Date, duly executed by its Chief Executive
Officer or Chief Financial Officer, to the effect set forth in subparagraphs
(d), (e), (f) and (g) of this Section 7;
(i) The Company shall have delivered to the Buyer a
certificate, dated the Closing Date, of the Secretary of the Company certifying
(1) the Certificate of Incorporation and By-Laws of the Company as in effect on
the Closing Date, (2) all resolutions of the Board of Directors (and committees
thereof) of the Company relating to this Agreement and the Transaction Documents
and the transactions contemplated hereby and thereby and (3) such other matters
as reasonably requested by the Buyer;
(j) The Transfer Agent shall have acknowledged in writing
receipt of the Issuing Agent Instruction and a copy of such acknowledgment shall
have been furnished to the Buyer;
(k) On the Closing Date, the Buyer shall have received an
opinion of Xxxxxx & Xxxxxxx, counsel for the Company, dated the Closing Date,
addressed to the Buyer, in form, scope and substance reasonably satisfactory to
the Buyer, substantially in the form attached as ANNEX V to this Agreement;
(l) On the Closing Date, the Buyer shall have received an
opinion of Xxxxxxx Xxxxxx, Esq., General Counsel of the Company, dated the
Closing Date, addressed to the Buyer, in form, scope and substance reasonably
satisfactory to the Buyer, substantially in the form attached as ANNEX VI to
this Agreement;
(m) On the Closing Date, (i) trading in securities on the New
York Stock Exchange, Inc., the American Stock Exchange, Inc., or the Nasdaq
shall not have been suspended or materially limited and (ii) a general
moratorium on commercial banking activities in the State of California or the
State of New York shall not have been declared by either federal or state
authorities; and
(n) The Company, the Trustee and DPI shall have executed and
delivered, one to the other, the agreement in the form of Schedule IV to the
Supplemental Indenture and a copy thereof as so executed and delivered shall
have been furnished to the Buyer.
8. INDEMNIFICATION AND CONTRIBUTION.
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(a) INDEMNIFICATION. The Company agrees to indemnify and hold
harmless each Indemnified Person from and against any Claim to which such
Indemnified Person may become subject (under the 1933 Act or otherwise) insofar
as such Claim (or actions or proceedings in respect thereof) arise out of, or
are based upon any Violation, and the Company will reimburse such Indemnified
Person for any reasonable legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such Claim; provided,
however, that the Company shall not be liable in any such case to the extent
that such Claim arises out of, or is based upon, an untrue statement made in the
Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Indemnified Person
specifically for use in preparation of the Registration Statement. The Company
shall reimburse each Indemnified Person for the amounts provided for herein on
demand as such amounts are incurred.
(b) NOTICE OF CLAIM, DEFENSE, ETC. Promptly after receipt by
any Indemnified Person of a notice of a Claim or the commencement of any action
in respect of which indemnity is to be sought against the Company pursuant to
this Section 8, such Indemnified Person shall notify the Company in writing of
such Claim or of the commencement of such action, but the omission to so notify
the Company will not relieve it from any liability which it may have to any
Indemnified Person under this Section 8 (except to the extent that such omission
materially and adversely affects the Company's ability to defend such action) or
from any liability otherwise than under this Section 8. Subject to the
provisions hereinafter stated, in case any such action shall be brought against
an Indemnified Person, the Company shall be entitled to participate therein,
and, to the extent that it shall elect by written notice delivered to the
Indemnified Person promptly after receiving the aforesaid notice from such
Indemnified Person, shall be entitled to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Person. After notice from
the Company to such Indemnified Person of the Company's election to assume the
defense thereof, the Company shall not be liable to such Indemnified Person for
any legal expenses subsequently incurred by such Indemnified Person in
connection with the defense thereof; provided, however, that if there exists or
shall exist a conflict of interest that would make it inappropriate, in the
opinion of counsel to such Indemnified Person, for the same counsel to represent
both such Indemnified Person and the Company or any Affiliate or associate
thereof, such Indemnified Person shall be entitled to retain its own counsel at
the expense of the Company; provided further, however, that the Company shall
not be responsible for the fees and expenses of more than one separate counsel
(together with appropriate local counsel) for all Indemnified Persons in
connection with such Claim or action. In no event shall the Company be liable in
respect of any amounts paid in settlement of any action unless the Company shall
have approved the terms of such settlement; provided that such consent shall not
be unreasonably withheld. The Company shall not, without the
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prior written consent of the Indemnified Persons, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnification could have been sought hereunder
by such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
(c) CONTRIBUTION. If the indemnification provided for in this
Section 8 is unavailable to or insufficient to hold harmless an Indemnified
Person under Section 8(a) above in respect of any Claim (or actions or
proceedings in respect thereof) referred to therein, then the Company shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such Claim (or actions or proceedings in respect thereof) in such proportion
as is appropriate to reflect the relative fault of the Company on the one hand
and the Buyer on the other in connection with the statements or omissions or
other matters which resulted in such Claim (or actions or proceedings in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, in the case of an
untrue statement, whether the untrue statement relates to information supplied
by the Company on the one hand or the Buyer on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement. The Company and the Buyer agree that it would not
be just and equitable if contribution pursuant to this Section 8(c) were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to above in
this Section 8(c). The amount paid or payable by the Company as a result of the
Claims (or actions or proceedings in respect thereof) referred to in this
Section 8(c) shall be deemed to include any legal or other expenses reasonably
incurred by such Indemnified Person in connection with investigating or
defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(d) OTHER RIGHTS. The indemnification and contribution
provided in this Section shall be in addition to any other rights and remedies
available at law or in equity.
9. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York.
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(b) HEADINGS. The headings, captions and footers of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement.
(c) SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.
(d) NOTICES. Any notices required or permitted to be given
under the terms of this Agreement shall be in writing and shall be sent by mail,
personal delivery, telephone line facsimile transmission or courier and shall be
effective five days after being placed in the mail, if mailed, or upon receipt,
if delivered personally, by telephone line facsimile transmission or by courier,
in each case addressed to a party at such party's address (or telephone line
facsimile transmission number) shown in the introductory paragraph or on the
signature page of this Agreement or such other address (or telephone line
facsimile transmission number) as a party shall have provided by notice to the
other party in accordance with this provision. In the case of any notice to the
Company, such notice shall be addressed to the Company at its address shown in
the introductory paragraph of this Agreement, Attention: Chief Financial Officer
(telephone line facsimile number (000) 000-0000), and a copy shall also be given
to: Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
Attention: Xxxxxx X. Xxxxxxx, Esq. (telephone line facsimile number (212)
751-4864), and in the case of any notice to the Buyer, a copy shall be given to:
Law Offices of Xxxxx X Xxxxx, Penthouse Suite, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (telephone line facsimile transmission number (000) 000-0000), in
each case with a copy to: Xxxx & Altschul Advisors, LLC, 000 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (telephone line facsimile transmission number
(000) 000-0000).
(e) COUNTERPARTS. This Agreement may be executed in
counterparts and by the parties hereto on separate counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same instrument. A telephone line facsimile transmission of this Agreement
bearing a signature on behalf of a party hereto shall be legal and binding on
such party. Although this Agreement is dated as of the date first set forth
above, the actual date of execution and delivery of this Agreement by each party
is the date set forth below such party's signature on the signature page hereof.
Any reference in this Agreement or in any of the documents executed and
delivered by the parties hereto in connection herewith to (1) the date of
execution and delivery of this Agreement by the Buyer shall be deemed a
reference to the date set forth below the Buyer's signature on the signature
page hereof, (2) the date of execution and delivery of this Agreement by the
Company shall be deemed a reference to the date set forth below the Company's
signature on the signature page hereof and (3) the
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date of execution and delivery of this Agreement, or the date of execution and
delivery of this Agreement by the Buyer and the Company, shall be deemed a
reference to the later of the dates set forth below the signatures of the
parties on the signature page hereof.
(f) ENTIRE AGREEMENT; BENEFIT. This Agreement, including the
Annexes and Schedules, constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties, or undertakings, other than those set forth or referred to
herein and therein. This Agreement, including the Annexes and Schedules,
supersedes all prior agreements and understandings, whether written or oral,
between the parties hereto with respect to the subject matter hereof. This
Agreement and the terms and provisions hereof are for the sole benefit of only
the Company, the Buyer and their respective successors and permitted assigns and
in no event shall the Buyer have any liability to any stockholder or creditor of
the Company or any other Person (other than the Company) in any way relating to
or arising from this Agreement or the transactions contemplated hereby.
(g) WAIVER. Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, or course of dealing between the parties, shall not operate as
a waiver thereof or an amendment hereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or exercise of any other right or power.
(h) AMENDMENT. No amendment, modification, waiver, discharge
or termination of any provision of this Agreement nor consent to any departure
by the Buyer or the Company therefrom shall in any event be effective unless the
same shall be in writing and signed by the party to be charged with enforcement,
and then shall be effective only in the specific instance and for the purpose
for which given. No course of dealing between the parties hereto shall operate
as an amendment of this Agreement.
(i) FURTHER ASSURANCES. Each party to this Agreement will
perform any and all acts and execute any and all documents as may be necessary
and proper under the circumstances in order to accomplish the intents and
purposes of this Agreement and to carry out its provisions.
(j) EXPENSES. The Company shall be responsible for its
expenses (including, without limitation, the legal fees and expenses of its
counsel) incurred by the Company in connection with the negotiation and
execution of, and closing under, and performance of, this Agreement. Whether or
not the closing occurs, the Company will pay, or reimburse the Buyer for, the
fees and expenses of the Buyer's
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legal counsel not in excess of $50,000 in connection with the negotiation and
execution of, and closing under, this Agreement and the Other Note Purchase
Agreements. All reasonable expenses incurred in connection with registrations,
filings or qualifications pursuant to this Agreement shall be paid by the
Company, including, without limitation, all registration, listing and
qualifications fees, printers fees, accounting fees, and the fees and
disbursements of counsel for the Company but excluding (a) fees and expenses of
investment bankers retained by the Buyer and (b) brokerage commissions incurred
by the Buyer. The Company shall promptly pay upon presentation of reasonably
satisfactory documentation all expenses incurred by the Buyer, including
reasonable fees and disbursements of counsel, as a consequence of, or in
connection with the negotiation, preparation or execution of any amendment,
modification or waiver of any of the Transaction Documents. Except as otherwise
provided in this Section 9(j), each of the Company and the Buyer shall bear its
own expenses in connection with this Agreement and the transactions contemplated
hereby. Nothing herein shall limit the rights of the Placement Agent under its
Engagement Agreement with the Company.
(k) TERMINATION. The Buyer shall have the right to terminate
this Agreement by giving notice to the Company at any time prior to the closing
on the Closing Date if:
(1) the Company shall have failed, refused, or been unable at or
prior to the date of such termination of this Agreement to perform any
of its obligations hereunder;
(2) any other condition of the Buyer's obligations hereunder is
not fulfilled at the closing on the Closing Date; or
(3) the closing shall not have occurred on a Closing Date on or
before September 28, 2000, other than solely by reason of a breach of
this Agreement by the Buyer.
Any such termination shall be effective upon the giving of notice thereof by the
Buyer. Upon such termination, the Buyer shall have no further obligation to the
Company hereunder and the Company shall remain liable for any breach of this
Agreement or the other documents contemplated hereby which occurred on or prior
to the date of such termination.
(l) SURVIVAL. The respective representations, warranties,
covenants and agreements of the Company and the Buyer contained in this
Agreement and the other Transaction Documents shall survive the execution and
delivery of this Agreement and the other Transaction Documents and the closing
hereunder and delivery of and payment for the Note and issuance of the Warrants,
and shall remain in full force and effect regardless of any investigation made
by or
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on behalf of the Buyer or any Person controlling or acting on behalf of the
Buyer or by the Company or any Person controlling or acting on behalf of the
Company.
(m) PUBLIC STATEMENTS, PRESS RELEASES, ETC. The Company and the
Buyer shall have the right to approve before issuance any press releases or any
other public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior
approval of the Buyer, to make any press release or other public disclosure with
respect to such transactions as is required by applicable law and regulations,
including the 1933 Act and the rules and regulations promulgated thereunder
(although the Buyer shall be consulted by the Company prior to the release or
making of any such press release or other public disclosure that identifies the
Buyer and shall be provided with a copy thereof).
(n) CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed by their respective officers or other representatives thereunto
duly authorized as of the date first set forth above and on the dates set forth
below their respective signatures.
Principal Amount of Note: $5,600,000.00
Purchase Price of Note: $5,600,000.00
AXYS PHARMACEUTICALS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
Date: September 20 , 2000
DELTA OPPORTUNITY FUND, LTD.*
BY: XXXX & XXXXXXXX ADVISORS, LLC, AS
INVESTMENT ADVISOR
By: /s/ Xxxxxxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxxxxxx X. Xxxxxx
Chief Financial Officer
Address:
c/o International Fund
Administration, Ltd.
Suite 464
48 Par La Xxxxx Xxxx
Xxxxxxxx XX00, Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
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Xxxx & Xxxxxxxx Advisors, LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Date: September 20 , 2000
* The Company also executed a Note Purchase Agreement with each of the
following parties:
Delta Opportunity Fund (Institutional), LLC
Omicron Partners, L.P.
Otato Limited Partnership
Gatx Ventures, Inc.
Alexander Enterprise Holdings, Corp.
Cumberland Partners
Xxxxxx International S.A.
Xxxxx X. Xxx
Longview Partners
Xxxxxxx X. Xxxxxxxx Xx.
Longview Partners B, L.P.
Delta Associates Limited Partnership
Longview Partners C, L.P.
Cumberland Benchmarked Partners, L.P.
Longview Partners A, L.P.
38
