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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
DECEMBER 24, 1998
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Date of Report (Date of earliest event reported)
DATAMETRICS CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
0-8567 95-3545701
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(Commission File Number) (I.R.S. Employer
Identification No.)
25B HANOVER ROAD, FLORHAM PARK, NJ 07932
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(Address of principal executive offices) (Zip Code)
(973) 377-3900
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Registrant's telephone number, including area code
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(Former name or former address, if changed since last report)
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ITEM 5
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On December 24, 1998 and December 28, 1998, several investors (the
"Investors") purchased $3,450,000 in aggregate principal amount of 10%
Subordinated Notes due 2000 (the "Notes") of Datametrics Corporation (the
"Registrant") pursuant to 10% Subordinated Note Subscription Agreements (the
"Note Agreements"). The Notes are subject to repurchase by the Registrant at
102% of the principal amount of Notes repurchased, plus accrued interest.
The aggregate cash consideration paid was $1,200,000, and the
remainder of the consideration paid was by tender back to Registrant of
$1,750,000 of 7% Convertible Debentures issued by the Registrant earlier in 1998
(the "7% Debentures") and $500,000 of Senior Subordinated Debentures, including
accrued interest and unpaid interest in each case. As a result of the
transaction, all of Registrant's 7% Debentures were retired.
In connection with the sale of the Notes, the Investors received a
total of 2,075,560 warrants (the "Warrants") to purchase the Common Stock of the
Registrant for an exercise price of $1.50 per share. A total of 1,229,800 of the
Warrants are immediately exercisable and the remainder vest ratably as of the
end of each calendar quarter through the quarter ending September 30, 2000 at
the rate of 3000 warrants per $100,000 in principal amount of Notes then
outstanding.
The principal amount of the Notes bears interest at the rate of 10% per
annum and matures on December 24, 2000. The Debentures are unsecured and
subordinate and junior to the prior payment in full of all senior bank
indebtedness of the Registrant.
The Note Agreements contain certain covenants and restrictions and a
related Registration Rights Agreement grants the Investors certain registration
rights with respect to the shares of Common Stock which may be acquired upon
exercise of the Warrants.
On December 24, 1998, the Registrant sold in a private placement
1,559,375 shares (the "Shares") of the Registrant's Common Stock at $1.00 per
share pursuant to a Subscription Agreement with certain investors (the "Common
Stock Subscription Agreement"). The Shares cannot be sold or transferred for six
months from the date of issue and are otherwise restricted shares.
Proceeds of the sale of the Notes and Shares are to be used for
repayment of debt (including repayment in full of the Registrant's senior credit
facility with Imperial Bank) and for working capital.
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The above discussion is qualified in its entirety by reference to the
Note Agreements, the Notes, the Common Stock Subscription Agreement and the
Registration Rights Agreement, which are substantially the same as Exhibits 4.4,
4.5, 4.6 and 4.7, respectively, and are incorporated herein by this reference.
ITEM 7
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(c) EXHIBITS
Exhibits which, in their entirety, are incorporated by reference to any
report, exhibit or other filing previously made with the Securities and Exchange
Commission are designated by an asterisk (*) and the location of such material
is included in its description.
<TABLE>
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EXHIBIT NO. DESCRIPTION PAGE NO.
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3.1 Restated Certificate of Incorporation of Registrant, as
currently in effect. *
3.2 Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of Series *
B Preferred Stock and Qualifications, Limitations and
Restrictions thereof dated August 10, 1993 (incorporated
by reference to Exhibit 4.1 to Registrant's Form 8-K dated
August 10, 1993).
3.3 Bylaws of Registrant, as currently in effect (incorporated
by reference to Exhibit 3.2 to Registrant's Form 10-K for *
the year ended October 28, 1990).
3.4 First Amendment to the Restated By-Laws of the Registrant,
dated August 6, 1996 (incorporated by reference to Exhibit *
3.0 to the Registrant's Form 8-K dated August 6, 1996).
4.1 7% Convertible Debenture Subscription Agreement dated as
of July 24, 1998 between the Registrant and the Investors
named therein (incorporated by reference to Exhibit 4.1 to *
the Registrant's Form 8-K dated July 24, 1998).
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EXHIBIT NO. DESCRIPTION PAGE NO.
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4.2 Form of 7% Convertible Debenture (incorporated by *
reference to Exhibit 4.2 to the Registrant's Form 8-K
dated July 24, 1998).
4.3 Registration Rights Agreement dated as of July 24, 1998 *
between the Registrant and the Investors named therein
(incorporated by reference to Exhibit 4.3 to the
Registrant's Form 8-K dated July 24, 1998).
4.4 Form of 10% Subordinated Note Subscription Agreement. Filed
herewith
4.5 Form of 10% Subordinated Note. Filed
herewith
4.6 Form of Registration Rights Agreement. Filed
herewith
4.7 Form of Subscription Agreement. Filed
herewith
10.1 Line of Credit Agreement, Security Agreement, Addendum to *
Line of Credit Agreement, and Loan Disbursement
Instructions dated September 8, 1993 (incorporated by
reference to Exhibit 10.1 to Registrant's Form 10-K for
the year ended October 31, 1993).
10.3 Lease for Woodland Hills facility between the Company and *
Manufacturers Life Insurance Company dated as of December
19, 1993, as amended on August 31, 1994 (incorporated by
reference to Exhibit 10.2 to Registrant's Form 10-K for
the year ended October 30, 1994).
10.4 Agreement between the Company and Sidney E. Wing dated *
March 17, 1989 (incorporated by reference to Exhibit 10.4
to Registrant's Form 10-K for the year ended October 29,
1989).
10.5 Deferred Compensation Agreement between the Company and *
Garland S. White dated October 18, 1989 (incorporated by
reference to Exhibit 10.5 to Registrant's Form 10-K for
the year ended October 29, 1989).
</TABLE>
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<TABLE>
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EXHIBIT NO. DESCRIPTION PAGE NO.
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<S> <C> <C>
10.6 Amended and Restated Agreement and Plan of Merger dated as *
of May 12, 1993 between Registrant and Rugged Digital
Systems, Inc. ("Rugged Digital") (incorporated by
reference to Exhibit 2 to Registrant's Form 8-K dated May
12, 1993).
10.7 Escrow Agreement dated August 10, 1993 among the *
Registrant and others relating to the acquisition of
Rugged Digital (incorporated by reference to Exhibit 4.3
to Registrant's Form 8-K dated August 10, 1993).
10.8 Debt Exchange Agreement dated August 10, 1993 among *
Registrant and debt holders of Rugged Digital
(incorporated by reference to Exhibit 4.2 to Registrant's
Form 8-K dated August 10, 1993).
10.9 Security and Loan Agreement between Registrant and *
Imperial Bank executed March 21, 1995, as amended May 15,
1995 (incorporated by reference to Exhibit 10.1 to
Registrant's Form 10-Q for the period ended April 30,
1995), and as amended March 4, 1996 (incorporated by
reference to period ended April 30, 1995) and as amended
March 4, 1966 (incorporated by reference to Exhibit 10.1
to Registrant's Form 10-Q for the period ended April 28,
1996).
10.10 Agreement between the Company and the Angeloff Company *
dated February 15, 1995 (incorporated by reference to
Exhibit 10.2 to Registrant's Form 10-Q for the period
ended April 30, 1995).
21 List of Subsidiaries (incorporated by reference to Exhibit *
21 to the Registrant's Form 10-K for the year ended
October 27, 1996).
99.1 The Datametrics Employee Savings Plan And The Trust *
Agreement Pursuant To The Datametrics Employee Savings
Plan (incorporated by reference to Exhibit 28 to
Registrant's Statement on Form S-8 filed on November 12,
1985 SEC File No. 33-01469.
</TABLE>
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<TABLE>
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EXHIBIT NO. DESCRIPTION PAGE NO.
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99.2 The Amended and Restated 1993 Stock Option Plan of *
Datametrics Corporation (incorporated by reference to
Exhibit 28.2 to Registrant's Form 10-K for the year ended
October 31, 1993).
99.3 The 1986 Stock Option Plan of Datametrics Corporation, as *
amended (incorporated by reference to Exhibit 28.1 to
Registrant's Registration Statement on Form S-8 filed on
June 10, 1987, SEC File No. 33-14969 and Exhibit 28.5 to
Registrant's Form 10-K for the year ended October 29,
1988).
99.4 The 1982 Stock Option Plan of Datametrics Corporation, as *
amended (incorporated by reference to Exhibit 28.2 to
Registrant's Registration Statement on Form S-8 filed on
June 10, 1987, SEC File No. 33-14969).
99.5 The 1993 Directors' Option Plan of Datametrics Corporation *
(incorporated by reference to Exhibit 28.5 to Registrant's
Form 10-K for the year ended October 31, 1993).
99.6 Datametrics Corporation Supplemental Executive Retirement
Plan and Master Trust Agreement (incorporated by reference
to Exhibit 28.6 to Registrant's From 10-K for the year
ended October 30, 1994).
99.7 The 1995 Stock Option Plan of Datametrics Corporation *
(incorporated by reference to Exhibit 28.7 to Registrant's
Form S-8 Filed May 30, 1996, SEC File No. 333-04815).
99.8 The Datametrics Corporation Employee Qualified Stock *
Purchase Plan (incorporated by reference to Exhibit 28.8
to Registrant's Form S-8 filed on May 30, 1996, SEC File
No. 333-04815).
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATAMETRICS CORPORATION
By: /s/ Daniel P. Ginns
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Daniel P. Ginns
Chairman and Chief Executive Officer
Dated December 24, 1998
EXHIBIT 4.4
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THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION") OR THE SECURITIES COMMISSION OF ANY STATE
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND APPLICABLE STATE SECURITIES LAWS. THIS SUBSCRIPTION
AGREEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER
TO BUY THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
WOULD BE UNLAWFUL. THE SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR
ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS, OR IN A TRANSACTION
WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT AND
UNDER PROVISIONS OF APPLICABLE STATE SECURITIES LAWS.
10% SUBORDINATED NOTE
SUBSCRIPTION AGREEMENT
DATAMETRICS CORPORATION
THIS 10% SUBORDINATED NOTE SUBSCRIPTION AGREEMENT (this "Agreement") is
executed in reliance upon an exemption under the Securities and Exchange
Commission ("SEC"), under the Securities Act of 1933, as amended (the "Act").
This Agreement has been executed by the undersigned in connection with
the private placement of the 10% Subordinated Notes (the "Notes") and Warrants
to purchase 797,760 shares of common stock of DATAMETRICS CORPORATION (American
Stock Exchange symbol "DC"), with an address at 25B Hanover Road, No. 3305,
Florham Park, NJ 07932, a corporation organized under the laws of the State of
Delaware, USA (the "Company"). The terms of the Notes are set forth in the form
of the 10% Subordinated Note due 2000 annexed hereto as Exhibit A (the "Form of
Note"). The terms of the Warrants are set forth in the form annexed hereto as
Exhibit B (the "Form of Warrant"). The offer and sale of the Notes and the
Warrants (collectively the "Securities"), are being made in reliance upon an
exemption under the Act. The Form of Note and Form of Warrant are referred to
herein as the "Forms of Securities". The Closing Date shall be determined in
accordance with Section 2 hereof.
Each of the entities listed on SCHEDULE A annexed hereto (the
"Subscribers") hereby represents and warrants to, and agrees with the Company as
follows:
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SECTION 1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE.
1.1 CLOSING. The Company will sell and the Subscribers will buy, in
reliance upon the representations and warranties of the Company and Subscribers
contained in this Agreement and the Forms of Securities, upon the terms and
conditions set forth herein and therein, that principal amount of Notes set
forth next to their names on SCHEDULE A for an aggregate purchase price of Three
Million Three Hundred Twenty-Four Thousand ($3,324,000) U.S. Dollars (the
"Purchase Price") payable as set forth on SCHEDULE A. A portion of the Purchase
price in the case of certain Subscribers ("Existing Securityholders") consists
of the surrender and cancellation of 7% Convertible Debentures and Senior
Subordinated Debentures of the Company (the "Existing Notes") held by the
Existing Securityholders, the instruments for which shall be delivered to the
Company at the Closing together with bond powers endorsed in blank. The cash
portion of the Purchase Price shall be paid on the Closing Date by federal funds
wire transfer to the Company's account as follows:
First Union National Bank
Chatham, New Jersey Branch
ABA #031201467
Account No. 203 0000 490222
Account Name: Datametrics Corporation
In addition, the Company will pay a closing fee ("Closing Fee")
consisting of additional warrants to purchase Common Stock having the form set
forth in EXHIBIT D and in the amounts set forth on SCHEDULE A. The closing
("Closing") of such purchase and sale shall occur on December __, 1998 (the
"Closing Date"). The proceeds of the sale of the Notes will be used for working
capital purposes and for the payment of indebtedness of the Company other than
Senior Debt (as defined in the Notes).
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBERS.
Subscribers each acknowledge, represent, warrant and agree as follows:
2.1 ORGANIZATION AND AUTHORIZATION. Each of the Subscribers is duly
incorporated or organized and validly existing in the state or country of its
incorporation or organization and has all requisite power and authority to
subscribe for and purchase and hold the Securities and to enter into this
Agreement. The decision to subscribe for the Securities and the execution and
delivery of this Agreement by the Subscribers, the performance by the
Subscribers of their obligations hereunder and the consummation by the
Subscribers of the transactions contemplated hereby have been duly authorized
and require no other proceedings on the part of the Subscribers. The undersigned
signatories have all right, power and authority to execute and deliver this
Agreement on behalf of the Subscribers. This Agreement has been duly executed
and delivered by the Subscribers and, assuming the execution and delivery hereof
and acceptance hereof by the Company, constitutes the legal, valid and binding
obligations of the Subscribers, enforceable against the Subscribers in
accordance with its terms. Each Existing Securityholder represents and warrants
to the Company
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that it is the legal and beneficial owner of the Existing Notes free of all
liens and encumbrances both on the date hereof and at the Closing.
2.2 EVALUATION OF RISKS. Each of the Subscribers has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of, and bearing the economic risks entailed by, an
investment in the Company and of protecting its interests in connection with
this transaction. They each recognize that their investment in the Company
involves a high degree of risk and could result in the complete loss of their
investment.
2.3 INDEPENDENT COUNSEL. Each of the Subscribers acknowledge that
they have been advised to consult with their own attorney regarding legal
matters concerning the Company and their investment in the Securities and to
consult with their tax advisor regarding the tax consequences of acquiring the
Securities.
2.4 DISCLOSURE DOCUMENTATION. Each of the Subscribers has each
received and reviewed copies of the Company's reports and registration
statements filed under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and the Act, including the Company's 10-Ks, 10-Qs, 8-K's, and
registration statements filed by the Company since June 1, 1997 (collectively,
the "Reports"). Except for the Reports, the Subscribers are not relying on any
other information relating to the offer and sale of the Securities. Subscribers
acknowledge that the Company has offered to make available any additional public
information that the Subscribers may reasonably request, including technical
information, and other material public information about the Company and
Subscribers have been offered the Company's full and unconditional cooperation
in making such information available to Subscribers and acknowledge that the
Company has recommended that the Subscribers request and review such information
prior to making an investment decision. Except as set forth in herein, no oral
or written representations have been made, or oral or written information
furnished to the undersigned, the Subscribers or their advisors, if any, in
connection with the offering of the Securities which were or are in any way
inconsistent with the Reports.
2.5 OPPORTUNITY TO ASK QUESTIONS. Each of the Subscribers has had a
reasonable opportunity to ask questions of and receive answers from the Company
concerning the Company and the offering of the Securities, and all such
questions, if any, have been answered to the full satisfaction of each of the
Subscribers.
2.6 REPORTS CONSTITUTE SOLE REPRESENTATIONS. Except as set forth in
the Reports and elsewhere herein, no representations or warranties have been
made to Subscribers by (a) the Company or any agent, employee or affiliate of
the Company or (b) any other person, and in entering into this transaction
Subscribers are not relying upon any information, other than that contained in
the Reports and the results of independent investigation by Subscribers.
2.7 EACH OF THE SUBSCRIBERS IS AN ACCREDITED INVESTOR. All of the
Subscribers are "Accredited Investors", as defined under Regulation D, and
represent and warrant that they are included within one or more of the following
categories of "Accredited Investors."
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(i) Any bank as defined in Section 3(a)(2) of the Act, or any
savings and loan associated or other institution as defined in
Section 3(a)(5)A of the Act whether acting in its individual
or fiduciary capacity; any broker or dealer registered
pursuant to Section 15 of the 1934 Act; any insurance company
as defined in Section 2(13) of the Act; any investment company
registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of
that Act; any Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or
(d) of the Small Business Act of 1958; any plan established
and maintained by a state, its political subdivisions, or any
agency or instrumentality of a state or its political
subdivision, for the benefits of its employees if such plan
has total assets in excess of $5,000,000; and employee benefit
plan within the meaning of Title I of the Employee Retirement
Income Security Act of 1974 if the investment decision is made
by a plan fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, savings and loan association,
insurance company, or registered investment advisor, or if the
employee benefit plan has total assets in excess of
$5,000,000;
(ii) Any private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(iii) Any organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific
purpose of acquiring the securities offered, with total assets
in excess of $5,000,000;
(iv) Any director, executive officer, or general partner of the
Company, or any director, executive officer, or general
partner of a general partner of that issuer;
(v) Any natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his purchase
exceeds $1,000,000;
(vi) Any natural person who had an individual income in excess of
$200,000 in each of the two (2) most recent years or joint
income with that person's spouse in excess of $300,000 in each
of those years and has a reasonable expectation of reaching
that same income level in the current year;
(vii) Any trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities
offered, whose purchase is directed by a sophisticated person
as described in Section 230.506(b)(2)(ii) of Regulation D
under the Act;
(viii) Any entity in which all of the equity owners are accredited
investors; and
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(ix) Any self-directed employee benefit plan with investment
decisions made solely by persons that are accredited investors
within the meaning of Rule 501 of Regulation D promulgated
under the Act.
2.8 NO REGISTRATION, REVIEW OR APPROVAL. Each of the Subscribers
acknowledges and understands that the limited private offering and sale of
Securities pursuant to this Agreement has not been reviewed or approved by the
SEC or by any state securities commission, authority or agency, and is not
registered under the Act or under the securities or "blue sky" laws, rules or
regulations of any state. Each of the Subscribers acknowledges, understands and
agrees that the Securities are being offered and sold hereunder pursuant to (i)
a private placement exemption to the registration provisions of the Act pursuant
to Section 3(b) or Section 4(2) of such Act, and (ii) a similar exemption to the
registration provisions of applicable state securities laws. Each of the
Subscribers understands that the Company is relying upon the truth and accuracy
of the representations, warranties, agreements, acknowledgments and
understandings of the Subscribers set forth herein in order to determine the
applicability of such exemptions and the suitability of the Subscribers to
acquire the Securities.
2.9 INVESTMENT INTENT. Without limiting their ability to resell
the Securities pursuant to an effective registration statement under the Act,
each of the Subscribers is acquiring the Securities solely for its own account
and not with a view to the distribution, assignment or resale to others. Each of
the Subscribers understands and agrees that it may have to bear the economic
risk of its investment in the Securities for an indefinite period of time.
2.10 NO ADVERTISEMENTS. The Subscribers are not subscribing for the
Securities as a result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine, or similar media or
broadcast over television or radio, or presented at any seminar or meeting.
2.11 REGISTRATION RIGHTS. The parties have entered into a
Registration Rights Agreement in the form of EXHIBIT C.
2.12 EXISTING NOTES. The Existing Securityholders hereby agree to
execute all documents and instruments reasonably required to terminate all liens
and encumbrances on assets of the Company in favor of the holders of Senior
Secured Debentures of the Company.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
acknowledges, represents, warrants and agrees as follows:
3.1 ORGANIZATION/QUALIFICATION. The Company is a corporation duly
organized and validly existing under the laws of the State of Delaware and is in
good standing under such laws. The Company has all requisite corporate power and
authority to own, lease and operate its properties and assets, and to carry on
its business as presently conducted. The Company is qualified to do business as
a foreign corporation in each jurisdiction in which the ownership of its
property or the
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nature of its business requires such qualification, except where its failure to
be so qualified would not have a material adverse effect on the Company.
3.2 ACCURACY OF REPORTS AND INFORMATION. Except as otherwise
disclosed herein or in any schedule hereto, the Company is in compliance, to the
extent applicable, with all reporting obligations under either Section 12(b),
12(g) or 15(d) of the 1934 Act, and shall maintain such status on a timely
basis. The Company has registered its Common Stock pursuant to Section 12 of the
1934 Act and the Common Stock is listed and trades on the American Stock
Exchange. The Company has filed all material required to be filed pursuant to
all reporting obligations, under either Section 13(a) or 15(d) of the 1934 Act
during the twelve (12) months immediately preceding the offer and sale of the
Securities (or for such shorter period that the Company has been required to
file such material).
3.3 SEC FILINGS/FULL DISCLOSURE. None of the Company's filings with
the Securities and Exchange Commission contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances under
which they were made, not misleading. The Company has timely filed all requisite
forms, reports and exhibits thereto with the Securities and Exchange Commission.
There is no fact known to the Company (other than general economic conditions
known to the public generally) that has not been publicly disclosed by the
Company or disclosed in writing to each of the Subscribers which (i) could
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise) or on the earnings, business affairs, properties, or
assets of the Company (a "Material Adverse Effect"), or (ii) could reasonably be
expected materially and adversely to affect the ability of the Company to
perform its obligations pursuant to this Agreement.
3.4 AUTHORIZATION. The Company has all requisite corporate right,
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. All corporate action on the part of the
Company, its directors and stockholders necessary for the authorization,
execution, delivery and performance of this Agreement by the Company, the
authorization, sale, issuance and delivery of the Securities and the performance
of the Company's obligations hereunder has been taken. This Agreement has been
duly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company enforceable in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies, and to limitations of public
policy as they may apply to the indemnification provisions set forth in this
Agreement. Upon their issuance and delivery in accordance with this Agreement,
the Securities will be validly issued, fully paid and nonassessable and will be
free of any liens or encumbrances; provided, however, that the Securities are
subject to restrictions on transfer under state and/or federal securities laws.
The issuance and sale of the Securities will not give rise to any preemptive
right or right of first refusal or right of participation on behalf of any
person.
3.5 NO CONFLICT. The execution and delivery of this Agreement do
not, and the consummation of the transactions contemplated hereby will not
result in any violation of, or default,
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or give rise to a right of termination, cancellation or acceleration of any
material obligation or to a loss of a material benefit, under, any provision of
the Certificate of Incorporation, and any amendments thereto, Bylaws, and any
amendments thereto of the Company or any material mortgage, indenture, lease or
other agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to the
Company, its properties or assets and which (i) would reasonably be expected to
have a Material Adverse Effect, or (ii) could reasonably be expected materially
and adversely to affect the ability of the Company to perform its obligations
pursuant to this Agreement.
3.6 NO UNDISCLOSED LIABILITIES OR EVENTS. The Company has no
liabilities or obligations, other than those disclosed in the Reports, this
Agreement or those incurred in the ordinary course of the Company's business
since June 15, 1998, which individually or in the aggregate, would (i)
reasonably be expected to have a Material Adverse Effect, or (ii) reasonably be
expected materially and adversely to affect the ability of the Company to
perform its obligations pursuant to this Agreement. Except as set for in Section
3.24, to the knowledge of the Company, no event or circumstance has occurred or
exists with respect to the Company which (i) could reasonably be expected to
have a Material Adverse Effect, or (ii) could reasonably be expected materially
and adversely to affect the ability of the Company to perform its obligations
pursuant to this Agreement.
3.7 NO DEFAULT. Except as set forth in Section 3.24, the Company
is not in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of
trust or other material instrument or agreement to which it is a party or by
which it is or its property is bound, and neither the execution, nor the
delivery by the Company, nor the performance by the Company of its obligations
under this Agreement or the Exhibits annexed hereto, will result in the breach
or violation of any of the terms or provisions of, or constitute a default or
result in the creation or imposition of any lien or charge on any assets or
properties of the Company under, any material indenture, mortgage, deed of trust
or other agreement applicable to the Company or instrument to which the Company
is a party or by which it is bound or any statute or the Certificate of
Incorporation or by-laws of the Company, or any decree, judgment, order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or its properties, or the Company's listing agreement for its Common
Stock, which individually or in the aggregate (i) could reasonably be expected
to have a Material Adverse Effect, or (ii) could reasonably be expected
materially and adversely to affect the ability of the Company to perform its
obligations pursuant to this Agreement.
3.8 ABSENCE OF EVENTS OF DEFAULT. Except as set forth in the
Reports and this Agreement and on Schedule 3.8 attached hereto (including all
Exhibits annexed hereto), no default, as defined in the respective agreement to
which the Company is a party, and no event which, with the giving of notice or
the passage of time or both, would become a default, has occurred and is
continuing, which would (i) reasonably be expected to have a Material Adverse
Effect, or (ii) could reasonably be expected materially and adversely to affect
the ability of the Company to perform its obligations pursuant to this
Agreement.
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<PAGE>
3.9 GOVERNMENTAL CONSENT, ETC. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority on the part of the Company is required in connection with the valid
execution and delivery of this Agreement (including all Exhibits annexed
hereto), or the offer, sale or issuance of the Securities, or the consummation
of any other transaction contemplated hereby, except as may be required by
applicable securities laws.
3.10 INTELLECTUAL PROPERTY RIGHTS. Except as disclosed in the
Reports, the Company has sufficient trademarks, trade names, patent rights,
copyrights and licenses to conduct its business as presently conducted in the
Reports. Except as disclosed in the Reports, to the knowledge of the Company,
neither the Company nor its services is infringing or will infringe any
trademark, trade name, patent right, copyright, license, trade secret or other
similar right of others currently in existence; and there is no claim being made
against the Company regarding any trademark, trade name, patent, copyright,
license, trade secret or other intellectual property right which could (i)
reasonably be expected to have a Material Adverse Effect, or (ii) could
reasonably be expected materially and adversely to affect the ability of the
Company to perform its obligations pursuant to this Agreement.
3.11 MATERIAL CONTRACTS. Except as set forth in the Reports and in
Section 3.24, the agreements to which the Company is a party described in the
Reports are valid agreements, in full force and effect, and the Company is not
in breach or default under any of such agreements which could (i) reasonably be
expected to have a Material Adverse Effect, or assets of the Company, or (ii)
could reasonably be expected materially and adversely to affect the ability of
the Company to perform its obligations pursuant to this Agreement.
3.12 LITIGATION. Except as disclosed in the Reports, there is no
action, proceeding or investigation pending, or to the Company's knowledge
threatened, against the Company which might result, either individually or in
the aggregate, in any Material Adverse Effect. Except as set forth on Schedule
3.8, the Company is not a party to or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or government agency or
instrumentality which could (i) reasonably be expected to have a Material
Adverse Effect, or (ii) could reasonably be expected to materially and adversely
affect the ability of the Company to perform its obligations pursuant to this
Agreement.
3.13 TITLE TO ASSETS. Except as set forth in Reports, the Company
has good and marketable title to all properties and material assets described in
the Reports as owned by it, free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest other than such as are not
material to the business of the Company.
3.14 SUBSIDIARIES. Except as disclosed in the Reports, the Company
does not presently own or control, directly or indirectly, any interest in any
other corporation, partnership, association or other business entity.
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<PAGE>
3.15 REQUIRED GOVERNMENTAL PERMITS. The Company is in possession of
and operating in material compliance with all authorizations, licenses,
certificates, consents, orders and permits from state, federal and other
regulatory authorities which are material to the conduct of its business, all of
which are valid and in full force and effect.
3.16 LISTING. The Company will use reasonable efforts to maintain
the listing of its Common Stock on the American Stock Exchange, the successors
thereto, or other organized United States market or quotation system. The
Company has not received any notice, oral or written, affecting its continued
listing on such Exchange and the Company will take no action which would impact
its continued listing or eligibility of the Company for such listing.
3.17 OTHER OUTSTANDING SECURITIES/FINANCING RESTRICTIONS. Except as
disclosed in the Reports, the Company has no outstanding restricted shares, or
shares of Common Stock sold under Regulation S, Regulation D or outstanding
under any other exemption from registration, which are available for sale as
unrestricted ("free trading") stock.
3.18 REGISTRATION ALTERNATIVE. The Company covenants and agrees
that for so long as any of the Common Stock issuable upon conversion of the
Notes remains outstanding and continues to be "restricted securities" within the
meaning of Rule 144 under the Act, the Company shall cooperate in all reasonable
respects in order to permit resales of the underlying Common Stock pursuant to
Rule 144 under the Act.
3.19 CAPITALIZATION. The authorized capital stock of the Company
consists of 40,000,000 shares of Common Stock, $0.01 par value per share, of
which 15,397,830 are outstanding. There are 5,000,000 shares of Preferred Stock
authorized and none outstanding. All issued and outstanding shares of Common
Stock have been duly authorized, validly issued and fully paid and
nonassessable.
3.20 DILUTION. The parties are aware and acknowledge that exercise
of the Warrants would cause dilution to existing stockholders and could
significantly increase the outstanding number of shares of Common Stock.
3.21 EMPLOYEE RELATIONS. The Company is not involved in any labor
dispute, nor, to the knowledge of the Company, is any such dispute threatened.
None of the Company's employees is a member of a union and the Company believes
that its relations with its employees are good.
3.22 ENVIRONMENTAL LAWS. To its knowledge, the Company is (i) in
compliance with any and all foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants and which the Company knows are applicable to it ("Environmental
Laws"), (ii) has received all permits, licenses or other approvals required
under applicable Environmental Laws to conduct its business, and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval, except in each case where one failure to do so could reasonably be
expected to have a Material Adverse Effect.
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<PAGE>
3.23 INSURANCE. The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the businesses
in which the Company is engaged. The Company has no reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires, or obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operation of the Company.
3.24 REPRESENTATIONS. Notwithstanding any other provision hereof,
the Subscribers understand and acknowledge that the Company is in material
default under its senior bank facility with Imperial Bank and under certain
indebtedness that is intended be repaid with the proceeds hereof. The Company is
currently in default under its agreement governing Senior Debt (as defined in
the Notes).
Section 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
SUBSCRIBERS. Each of the Subscribers, and the Company represent, warrant,
covenant, and agree to the other the following with respect to itself:
4.1 SUBSCRIPTION AGREEMENT. This Agreement has been duly
authorized, validly executed and delivered on behalf of the Company and each of
the Subscribers, and is a valid and binding agreement, enforceable in accordance
with its terms, subject to general principles of equity and to bankruptcy or
other laws affecting the enforcement of creditors' rights generally.
4.2 NO-CONFLICT. The execution and delivery of this Agreement do
not, and the consummation of the transactions contemplated hereby will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both), or give rise to a right of termination, cancellation
or acceleration of any obligation or to a loss of a material benefit, under any
provision of the Certificate of Incorporation, and any amendments thereto,
bylaws and any amendments thereto of any Subscriber or any material mortgage,
indenture, lease or other agreement or instrument, permit, concession,
franchise, license, judgment, order, decree statute, law, ordinance, rule or
regulation applicable to any Subscriber, or its respective properties or assets.
4.3 APPROVALS. Neither the Company, nor any Subscriber, is aware
of any authorization, approval or consent of any governmental body which is
legally required for the Company's issuance and sale of the Securities to the
Subscribers.
4.4 INDEMNIFICATION. The Company and each of the Subscribers
agrees to indemnify the other, and to hold the other harmless, from and against
any and all losses, damages, liabilities, costs and expenses (including
reasonable attorneys' fees) which the other may sustain or incur in connection
with the breach by the indemnifying party of any representation, warranty or
covenant made by it in this Agreement.
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<PAGE>
Section 5. REGISTRATION OR EXEMPTION REQUIREMENTS. Each of the
Subscribers acknowledges and understands that the Securities (and any shares of
Common Stock issued upon exercise of the Warrants) may not be resold or
otherwise transferred except in a transaction registered under the Act and any
applicable state securities laws or unless an exemption from such registration
is available. Each of the Subscribers understands that the Securities will be
imprinted with a legend that prohibits the transfer of the Securities unless (i)
they are registered under applicable securities laws or such registration is not
required, or (ii) if the transfer is pursuant to an exemption from registration,
an opinion of counsel reasonably satisfactory to the Company is obtained to the
effect that the transaction is so exempt.
Section 6. LEGEND. The certificates representing the Securities shall
be subject to a legend restricting transfer under the Act, such legend to be
substantially as follows:
"THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). SUCH SECURITIES MAY NOT BE OFFERED OR SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT."
The certificates representing these Securities, and each certificate
issued in transfer thereof, will also bear any legend required under any
applicable state securities law.
Section 7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. Each of the
Subscribers understands that the Company's obligation to sell the Securities is
conditioned upon:
(i) The receipt and acceptance by the Company of this Subscription
Agreement and all Exhibits duly executed by all other parties
thereto;
(ii) Delivery by each of the Subscribers of the Purchase Price set
forth in Schedule A as payment in full for the purchase of the
Securities;
(iii) All representations and warranties of each of the Subscribers
contained herein shall remain true and correct as of the
Closing Date; and
(iv) The Company shall have obtained all permits and qualifications
required by any state for the offer and sale of the Notes, or
shall have the availability of exemptions therefrom. At the
Closing Date, the sale and issuance of the Securities shall be
legally permitted by all laws and regulations to which each of
the Subscribers and the Company are subject.
Section 8. CONDITIONS TO SUBSCRIBER'S OBLIGATION TO PURCHASE. The
Company understands that each of the Subscriber's obligation to purchase the
Securities is conditioned upon:
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<PAGE>
(i) Acceptance by the Company of each of the Subscriber's
Subscription Agreement in the form hereof and due execution by
all parties of the Exhibits hereto;
(ii) Delivery into escrow of the original Securities as described
herein;
(iii) All representations and warranties of the Company contained
herein shall remain true and correct in all material respects
as of the Closing Date;
(iv) The Company shall have obtained all permits and qualifications
required by any state for the offer and sale of the Securities
or shall have the availability of exemptions therefrom. At the
Closing Date, the sale and issuance of the Securities shall be
legally permitted by all laws and regulations to which the
Company and each of the Subscribers are subject.
Section 9. MISCELLANEOUS.
9.1 GOVERNING LAW/JURISDICTION. This Agreement will be construed
and enforced in accordance with and governed by the laws of the State of New
York, except for matters arising under the Act, without reference to principles
of conflicts of law. Each of the parties consents to the jurisdiction of the US
District Court for the Southern District of the State of New York in connection
with any dispute arising under this Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum
non conveniens, to the bringing of any such proceeding in such jurisdiction.
Each party hereby agrees that if another party to this Agreement obtains a
judgment against it in such a proceeding, the party which obtained such judgment
may enforce same by summary judgment in the courts of any state or country
having jurisdiction over the party against whom such judgment was obtained, and
each party hereby waives any defenses available to it under local law and agrees
to the enforcement of such a judgment. Each party to this Agreement irrevocably
consents to the service of process in any such proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to such party
at its address set forth herein. Nothing herein shall affect the right of any
party to serve process in any other manner permitted by law.
9.2 CONFIDENTIALITY. The Company and each of the Subscribers
agrees to keep confidential and not to disclose to or use for the benefit of any
third party the terms of this Agreement (including the names of the Subscribers)
or any other information which at any time is communicated by the other party as
being confidential without the prior written approval of the other party;
provided, however, that this provision shall not apply to information which, at
the time of disclosure, is already part of the public domain (except by breach
of this Agreement) and information which is required to be disclosed by law. If
for any reason the transactions contemplated by this Agreement are not
consummated, each of the parties hereto shall keep confidential any such
information obtained from any other party, including the names of the
Subscribers (except information publicly available or in such party's domain
prior to the date hereof, and except as required by court order) and shall
promptly return to the other parties all schedules, documents, instruments, work
papers or other
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<PAGE>
written information, without retaining copies thereof, previously furnished by
it as a result of this Agreement or in connection herewith.
9.3 FACSIMILE/COUNTERPARTS/ENTIRE AGREEMENT. Except as otherwise
stated herein, in lieu of the original, a facsimile transmission or copy of the
original shall be as effective and enforceable as the original. This Agreement
may be executed in counterparts which shall be considered an original document
and which together shall be considered a complete document. This Agreement and
Exhibits hereto constitute the entire agreement between the Subscribers and the
Company with respect to the subject matter hereof.
9.4 SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to any
party.
9.5 RELIANCE BY COMPANY. Each of the Subscribers represents to the
Company that the representations and warranties of each Subscriber contained
herein are complete and accurate and may be relied upon by the Company in
determining the availability of an exemption from registration under federal and
state securities laws in connection with a private offering of securities.
9.6 LEGAL FEES AND EXPENSES. Each of the parties shall pay its own
fees and expenses (including the fees of any accountants, appraisers or others
engaged by such party) in connection with this Agreement and the transactions
contemplated hereby.
9.7 AUTHORIZATION. Each of the parties hereto represents that the
individual executing this Agreement on its behalf has been duly and
appropriately authorized to execute the Agreement.
9.8 NOTICES. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received), (b) on the second business day following the date of mailing by
reputable courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur or (c) on the fifth
business day following date of mailing by registered or certified mail, return
receipt requested, postage prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
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<PAGE>
(i) If to the Company:
Datametrics Corporation
25B Hanover Road No. 3305
Florham Park, NJ 07932
Attn: Daniel P. Ginns, CEO
Telephone: (973) 377-3900
Facsimile: (973) 377-5736
With a copy to:
Lane Altman & Owens LLP
101 Federal Street
Boston, MA 02110
Attn: Jeffrey S. Wieand
Telephone: (617) 345-9800
Facsimile: (617) 345-0400
(ii) If to the Subscribers, at the addresses and numbers listed on
Schedule A annexed hereto.
Any party hereto may from time to time change its address or
facsimile number for notices under this Section by giving at
least ten (10) days' prior written notice of such changed
address or facsimile number to the other party hereto.
9.9 AMENDMENTS AND WAIVERS. Any term of this Agreement or of the
Notes may be amended and the observance of any term of this Agreement or of the
Notes may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Company and
the holders of at least seventy-five percent (75%) in principal amount of the
Notes at the time outstanding, provided that (a) without the prior written
consent of the holders of all the Notes at the time outstanding, no such
amendment or waiver shall (i) extend the fixed maturity or reduce the principal
amount of, or reduce the rate or extend the time of payment of interest on, or
reduce the amount or extend the time of payment of any principal or premium
payable on any redemption or prepayment of, any Note or (ii) reduce the
aforesaid percentage of the principal amount of the Notes the holders of which
are required to consent to any such amendment or waiver.
9.10 PRO RATA PAYMENTS. All interest payments and payments,
redemptions or prepayments of principal (and premium, if any) on the Notes shall
be made and applied pro rata on all Notes outstanding.
[Remainder of Page Intentionally Left Blank]
[Signature Page Follows]
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<PAGE>
IN WITNESS WHEREOF, this 10% Subordinated Note Subscription Agreement
was duly executed on the date first written below.
Agreed to and Accepted as of
this ____ day of December, 1998
DATAMETRICS CORPORATION
DATAMETRICS CORPORATION
By:
-------------------------------
Name:
Title:
LITTLE WING, L.P.
By:
----------------------------------
Name:
Title:
TRADEWINDS FUND LTD.
By:
----------------------------------
Name:
Title:
LITTLE WING TOO, L.P.
By:
----------------------------------
Name:
Title:
THE CUTTYHUNK FUND LIMITED
By:
----------------------------------
Name:
Title:
TONGA PARTNERS, L.P.
By:
----------------------------------
Name:
Title:
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<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
<S> <C> <C> <C>
PURCHASERS PURCHASE PRICE CLOSING FEE NUMBER OF WARRANTS
LITTLE WING, L.P.
Little Wing, L.P. $933,750 of 7%
c/o Quilcap Corp. Convertible Debentures
375 Park Avenue, Suite 1404
New York, New York 10152 $263,000 of Senior
Subordinated Debentures
($39,220 Interest Due on Notes
and Debentures) 526,152 296,634
------- -------
TRADEWINDS FUND LTD.
Tradewinds Fund Ltd. $715,000 of 7%
c/o Quilcap Corp. Convertible Debentures
375 Park Avenue, Suite 1404
New York, New York 10152 $210,000 of Senior
Subordinated Debentures
($30,340 Interest Due on Notes
and Debentures) 406,735 229,281
------- -------
LITTLE WING TOO, L.P.
Little Wing Too, L.P. $101,250 of 7%
c/o Quilcap Corp. Convertible Debentures
375 Park Avenue, Suite 1404
New York, New York 10152 $27,000 of Senior
Subordinated Debentures
($4,440 Interest Due on Notes
and Debentures) 56,913 31,845
------ ------
THE CUTTYHUNK FUND LIMITED
The Cuttyhunk Fund Limited $350,000
73 Front Street Cash 70,000 84,000
---- ------ ------
Hamilton, HM 12 Bermuda
TONGA PARTNERS, L.P.
Tonga Partners, L.P. $650,000 130,000 156,000
------- -------
600 California Street, Floor 14 Cash
San Francisco, California 94108
Totals: $3,324,000 1,189,800 warrants 797,760
</TABLE>
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SCHEDULE 3.8
A judgment against the Company was entered on September 28, 1998 in the
amount of approximately $1,300,000 in favor of certain former officers of the
Company. The Company plans to appeal the judgment.
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EXHIBIT 4.5
-----------
THIS NOTE IS ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF, IN WHOLE OR IN PART, IN THE ABSENCE
OF SUCH REGISTRATION UNLESS DATAMETRICS CORPORATION (THE "COMPANY") HAS RESERVED
THE WRITTEN OPINION OF THE COMPANY'S COUNSEL OR OTHER COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT, AFTER INVESTIGATION OF THE RELEVANT FACTS,
SUCH COUNSEL IS OF THE OPINION THAT SUCH TRANSACTION DOES NOT REQUIRE
REGISTRATION OF SUCH SECURITIES UNDER THE ACT OR APPLICABLE STATE SECURITIES
LAWS.
DATAMETRICS CORPORATION
10% SUBORDINATED NOTE DUE 2000
$_______ Issue Date: December 24, 1998
The undersigned, DATAMETRICS CORPORATION, a Delaware corporation having
its chief executive office at 25B Hanover Road, Florham Park, NJ 07932 (the
"Company"), for value received, hereby promises to pay to ____________________,
or registered assigns (the "Holder"), at the principal office of the Holder or
at such other place as the Holder may designate by written notice to the
Company, the principal sum of ____________________________________ ($_______),
together with all accrued interest from and after the date hereof then unpaid,
on December 24, 2000, (the"Maturity Date"), or earlier as shall be provided
herein. The unpaid principal amount hereof shall accrue interest at the rate of
ten percent (10%) per annum from and after the issue date hereof until all
unpaid principal and interest shall be paid in full. The Company hereby promises
to pay interest on the principal amount of this Note quarterly in arrears on
each March 24, June 24, September 24 and December 24 of each year prior to the
Maturity Date, unless prepaid earlier at the option of the Company in accordance
with Section 3 hereof. Interest will be computed on the basis of a 360-day year
of twelve 30-day months. If any payment shall become due hereunder on a
Saturday, Sunday or other day on which banking institutions in the State of New
York are authorized to close, the due date hereof shall be extended to the next
day on which such banking institutions are not authorized to close.
The Company has also issued this day in connection with the issue of
the 10% Subordinated Notes due 2000, warrants to purchase an aggregate of
797,760 shares of Common Stock of the Company exercisable 3,000 shares per
quarter for each $100,000 in principal amount of 10% Subordinated Notes due 2000
purchased and then outstanding.
SECTION 1. DEFINITION OF SENIOR DEBT. The term "Senior
Debt" shall mean and consist of all present and future indebtedness and
liabilities of the Company (contingently or otherwise) to Imperial Bank (the
"Senior Lender") pursuant to the terms of that certain Loan and
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<PAGE>
Security Agreement dated March 4, 1996, by and between the Company and the
Senior Lender as amended from time to time, and related agreements and
instruments (collectively, the "LOAN DOCUMENTS") and any increase, refinancing,
refunding or replacement of all or any part of such indebtedness.
SECTION 2. SUBSCRIPTION AGREEMENT. This Note is issued
pursuant to a 10% Subordinated Note Subscription Agreement dated as of December
___, 1998 among the Company and the Holders (the "Subscription Agreement").
SECTION 3. SUBORDINATION OF NOTES. The Company, for
itself, its successors and assigns, covenants and agrees, and each holder of
this Note, by its acceptance hereof likewise covenants and agrees, that the
obligations, liability and indebtedness of the Company evidenced by this Note
and the payment of the principal amount hereof and interest thereon shall be
subordinate in right of payment, to the extent and in the manner hereinafter set
forth, to the prior payment and satisfaction in full of all Senior Debt, and
each holder of this Note will not, without the express prior written consent of
the Senior Lender, take or receive, and the Company will not make, give or
permit, directly or indirectly, by set-off, redemption, purchase or in any other
manner, any payment on, whether of interest or principal or security for the
whole or any part of, the obligations evidenced by this Note; PROVIDED, HOWEVER
that so long as no event of default under the Senior Debt shall have occurred
and then be continuing or would occur as a result of, or after giving effect to,
such payment, the Company may make, and the holder of this Note may receive,
quarterly payments in arrears of interest accrued under this Note. Except for
payments permitted by this Section 3, no payment or distribution of any kind or
character, whether in cash, property or securities (including, without
limitation, proceeds or collateral for the obligations evidenced by this Note),
which, but for the subordination provisions contained herein, would otherwise be
payable or deliverable to the Holder upon or in respect of the obligations
evidenced by this Note, shall be paid to the Holder, and, except for payments
permitted by this Section 3, the Holder shall not receive or accept any such
payment or distribution or any benefit therefrom unless and until the Senior
Debt shall have been fully paid and satisfied. Without limiting the generality
of the foregoing provisions of this Section 3, in the event of any liquidation,
termination, revocation or other winding-up of the Company, or in the event of
any receivership, insolvency, reorganization or bankruptcy proceedings,
assignment for the benefit of creditors or any proceeding by or against the
Company for any relief under any bankruptcy, reorganization or insolvency law or
laws, federal or state, or any law, federal or state, relating to the relief of
debtors, readjustment of indebtedness, reorganization, composition or extension
of indebtedness, then, and in any such event, all Senior Debt shall first be
paid in full, before any payment or distribution is made in respect of this
Note, and any payment or distribution of any kind or character, whether in cash,
property or securities (including, without limitation, proceeds or collateral
for this Note), which, but for the subordination provisions contained herein,
would otherwise be payable or deliverable to the Holder upon or in respect of
this Note, shall instead by paid over or delivered to the Senior Lender or its
representatives if the Senior Debt has not been paid in full and satisfied, and
the Holder shall not receive any such payment or distribution or any benefit
therefrom unless and until the Senior Debt shall have been fully paid and
satisfied.
SECTION 4. PREPAYMENTS. Subject to the restrictions
contained in Section 3 hereof, the Company may prepay at any time all or any
part of the principal amount owing with respect to this
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<PAGE>
Note, which payment of principal shall include the unpaid interest on the
principal amount repaid through the date of repayment, without penalty, but at a
premium equal to 102% of the principal amount so repaid, provided that the
Company may not prepay less than 25% of the principal amount of this Note then
outstanding.
SECTION 5. EXCHANGE OF NOTES. The Company shall keep at
its office a register in which the Company shall provide for the registration of
this Note and for the registration of exchange of this Note. Subject to the
restrictions on this Note provided elsewhere herein, and subject to the
restrictions of applicable securities and other laws, the registered holder of
this Note may, at its option and either in person or by duly authorized
attorney, surrender the same at such office, and without expense to such holder
(other than transfer taxes, if any), receive in exchange therefor a Note, dated
as of the date from which unpaid interest has been accrued on the Note so
exchanged, in the principal amount hereof, and registered in the name of such
person or registered assign, as may be designated by such holder. Every Note so
made and delivered in exchange for this Note shall in all other respects be in
the same form and have the same terms as this Note. The Company may treat the
person in whose name this Note is registered as the owner and holder of this
Note for the purpose of making payment of principal of, and interest on, this
Note and for all other purposes whatsoever, whether or not this Note shall be
overdue, and the Company shall not be affected by notice to the contrary.
SECTION 6. LOSS, THEFT, DESTRUCTION OR MUTILATION OF
THIS NOTE. Upon receipt by the Company of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Note, and, in
the case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to the Company, and upon reimbursement to the Company of all
reasonable expenses incidental thereto, or, in case of mutilation, upon
surrender and cancellation of this Note, the Company will make and deliver a new
Note of like tenor, in lieu of this Note. Any Note made and delivered in
accordance with the provisions of this Section 6 shall be dated as of the date
to which interest has been paid on this Note.
SECTION 7. TRANSFER OF NOTE. The holder of this Note, by
its acceptance hereof, agrees that it will not sell, transfer or otherwise
dispose of this Note, in whole or in part, in the absence of registration under
the Securities Act of 1933, as amended (the "Act"), and applicable state
securities laws, unless the Company has received the written opinion of its
counsel (or other counsel reasonably satisfactory to the Company) that, after
investigation of the relevant facts, that such transaction does not require
registration under said Act or applicable state securities laws.
SECTION 8. EVENTS OF DEFAULT. The entire unpaid portion
of this Note may be declared immediately due and payable by a holder of this
Note, by written notice from such holder to the Company upon the happening and
continuing of any of the following events (each an "Event of Default"):
(a) The Company shall default in the payment of principal or
interest under this Note when the same shall become due and payable and such
default shall remain uncured for ten (10) days or more after notice of such
default is given to the Company by such holder;
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<PAGE>
(b) The Company or any present or future subsidiary of the
Company shall make an assignment for the benefit of creditors or shall admit in
writing its inability to pay its debts as they become due, or shall file a
voluntary petition in bankruptcy, or shall be adjudicated a bankrupt or
insolvent, or shall file any arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation pertaining to insolvency or creditors' rights, or shall file
any answer admitting the material allegations of a petition filed against it in
any such proceeding, or shall seek or consent to or acquiesce in the appointment
of any trustee, receiver or liquidator of it or all or any substantial part of
its properties; or
(c) Any proceeding is filed against the Company or any present
or future subsidiary of the Company, seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation pertaining to solvency or
creditors' rights, and such proceeding continues for sixty (60) days
undismissed, unstayed, unbonded and discharged.
SECTION 9. REIMBURSEMENT. The Company agrees to reimburse
the holder of this Note for all its costs and expenses, including reasonable
attorneys' fees and disbursements, expended in collecting any amounts due
hereunder or in otherwise enforcing any of its rights hereunder.
SECTION 10. NOTICES. All notices and other communications
required or permitted to be given in respect of this Note shall be in writing
and shall be given as provided in the Debt Exchange Agreement.
SECTION 11. GOVERNING LAW. This Note has been executed and
delivered in the State of New York and shall be governed by and construed in
accordance with the laws of the State of New York without reference to the
principles of conflicts of law thereof.
SECTION 12. JURISDICTION. The Company hereby irrevocably
consents and submits to, and each holder of this Note, by its acceptance hereof,
likewise hereby irrevocably consents and submits to, the exclusive jurisdiction
of the United States District Court for the Southern District of New York in
connection with any proceeding arising out of or relating to this Note, waives
any objection to venue in such District (unless such court lacks jurisdiction
with respect to such proceeding in which case, the Company irrevocably consents
and submits to, and each holder of this Note, by its acceptance hereof, likewise
irrevocably consents and submits to, the jurisdiction of the Supreme Court of
the State of New York in connection with such proceeding and waives any
objection to venue in New York County, State of New York), and agrees that
service of any summons, complaint, notice or other process relating to such
proceeding may be effected in the manner provided by Section 10 hereof.
SECTION 13. SUCCESSORS AND ASSIGNS. All of the covenants,
stipulations, proses and agreements of the Company set forth in this Note shall
be binding on its successor and assigns, whether so expressed or not.
SECTION 14. HEADINGS. The section headings contained in
this Note are inserted for reference purposes only and shall not be deemed to
constitute a part hereof.
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<PAGE>
SECTION 15. WAIVERS. The terms of this Note may not be
amended, modified, waived or eliminated except by a written instrument duly
executed by the Company and the holder of this Note.
IN WITNESS WHEREOF, the Company has caused this Note to be
signed in its corporate name by a duly authorized officer and to be dated as of
the day and year first above written.
DATAMETRICS CORPORATION
By:
------------------------------
Name: Daniel P. Ginns
Title: Chairman and CEO
-5-
EXHIBIT 4.6
-----------
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of the ____ day of
December, 1998, among the entities listed on Schedule A (collectively referred
to as the "Holders"), and DATAMETRICS CORPORATION, a corporation incorporated
under the laws of the state of Delaware, and having its principal place of
business at 25B Hanover Road, No. 3305, Florham Park NJ 07932 (the "Company").
WHEREAS, the Holders are purchasing from the Company, pursuant to a 10%
Note Subscription Agreement dated the date hereof (the "Subscription
Agreement"), an aggregate of $3,324,000 Dollars principal amount of the
Company's 10% Subordinated Notes ("Notes") and warrants to purchase 797,760
shares of common stock of the Company ("Common Stock"); and
WHEREAS, as a condition to such purchase, the Holders have required
that the Company grant to the Holders the registration rights set forth herein
with respect to the shares of Common Stock (collectively hereinafter referred to
as the "Stock" or "Securities" of the Company) purchasable upon exercise of the
Warrants.
NOW, THEREFORE, the parties hereto mutually agree as follows:
Section 1. REGISTRABLE SECURITIES. As used herein the term "Registrable
Security" means the Securities and any other shares of Common Stock issued upon
exercise of any other warrants held by Holders on the date hereof issued by the
Company; provided, however, that with respect to any particular Registrable
Security, such security shall cease to be a Registrable Security when, as of the
date of determination, (i) it has been registered under the Securities Act of
1933, as amended (the "1933 Act"), (ii) registration under the 1933 Act is no
longer required for the immediate public distribution of such security as a
result of the provisions of Rule 144 promulgated under the 1933 Act, or (iii) it
has ceased to be outstanding. The term "Registrable Securities" means any and/or
all of the Securities falling within the foregoing definition of a "Registrable
Security." In the event of any merger, reorganization, consolidation,
recapitalization or other change in corporate structure affecting the Common
Stock, such adjustment shall be made in the definition of "Registrable Security"
as is appropriate in order to prevent any dilution or enlargement of the rights
granted pursuant to this Section 1.
Section 2. RESTRICTIONS ON TRANSFER. The Holders acknowledge and
understand that prior to the registration of the Securities as provided herein,
the Securities are "restricted securities" as defined in Rule 144 promulgated
under the Act. The Holders understand that no disposition or transfer of the
Securities may be made by the Holders in the absence of (i) an opinion of
counsel to the Company that such transfer may be made without registration under
the 1933 Act or (ii) such registration.
<PAGE>
Section 3. REGISTRATION RIGHTS.
(a) The Company agrees that it will use its best efforts to
prepare and file with the Securities and Exchange Commission
("Commission"), within ninety (90) days after the date hereof
(the "Subscription Date"), a registration statement under the
1933 Act (the "Registration Statement"), at the sole expense
of the Company (except as provided in Section 3(c) hereof), in
respect of all holders of Registrable Securities, so as to
permit a registered issuance of the Registrable Securities
under the Act. The Company shall cause the Registration
Statement to become effective within one hundred eighty (180)
days from Subscription Date. The number of shares designated
in the Registration Statement to be registered shall be one
hundred (100%) percent (or such higher number as the Company
determines) of the number of Securities that would be required
if all the Registrable Securities were issued on the day
before the filing of the Registration Statement.
(b) The Company will maintain the effectiveness of the
Registration Statement or post-effective amendment filed under
this Section 3 hereof current under the 1933 Act until the
earlier of (i) the date that all of the Registrable Securities
have been sold pursuant to the Registration Statement, (ii)
the date the holders thereof receive an opinion of counsel
that all of the Registrable Securities may be sold under the
provisions of Rule 144 (without volume limitation) or (iii)
five years after the Subscription Date.
(c) All fees, disbursements and out-of-pocket expenses and costs
incurred by the Company in connection with the preparation and
filing of the Registration Statement under subparagraph 3(a)
and in complying with applicable securities and Blue Sky laws
(including, without limitation, all attorneys' fees) shall be
borne by the Company. The Holders shall bear the cost of
underwriting discounts and commissions, if any, applicable to
the Registrable Securities being registered and the fees and
expenses of its counsel. The Company shall qualify any of the
Registrable Securities for sale in such states as each Holder
reasonably designates and shall furnish indemnification in the
manner provided in Section 6 hereof. However, the Company
shall not be required to qualify any of the Registrable
Securities for sale in any state which will require an escrow
or other restriction relating to the Company and/or the
sellers. The Company at its expense will supply the Holder
with copies of the Registration Statement and the prospectus
or offering circular included therein and other related
documents in such quantities as may be reasonably requested by
the Holders.
(d) The Company shall not be required by this Section 3 to include
a Holder's Registrable Securities in any Registration
Statement which is to be filed if, in the opinion of counsel
for both the Holders and the Company (or, should they not
agree,
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<PAGE>
in the opinion of another counsel experienced in securities
law matters acceptable to counsel for the Holders and the
Company) the proposed offering or other transfer as to which
such registration is requested is exempt from applicable
federal and state securities laws and would result in all
transferees obtaining securities which are not "restricted
securities," as defined in Rule 144 under the 1933 Act.
(e) In the event the Registration Statement to be filed by the
Company pursuant to Section 3(a) above is not filed with the
Commission within ninety (90) days from the Subscription Date
and/or the Registration Statement is not declared effective by
the Commission within one hundred eighty (180) days from the
Subscription Date, then the Company will pay Holder (pro rated
on a daily basis), as liquidated damages for such failure and
not as a penalty, three (3%) percent of the Purchase Price of
the then outstanding Notes held by such Holder each month
until such time as the Registration Statement has been filed
and/or declared effective. Such payment of the liquidated
damages shall be made to the Holders in cash, immediately upon
demand, provided, however, that the payment of such liquidated
damages shall not relieve the Company from its obligations to
register the Securities pursuant to this Section and shall not
relieve the Company from any obligation to pay liquidated
damages.
If the Company does not remit the damages to the Holders as set forth
above, the Company will pay the Holders' reasonable costs of collection,
including reasonable attorneys fees, in addition to the liquidated damages. The
registration of the Securities pursuant to this provision shall not affect or
limit Holders' other rights or remedies as set forth in this Agreement.
(f) No provision contained herein shall preclude the Company from
selling securities pursuant to any Registration Statement in
which it is required to include Registrable Securities
pursuant to this Section 3.
(g) If at any time or from time to time after the effective date
of the Registration Statement, the Company notifies the
Holders in writing of the existence of a Potential Material
Event (as defined in Section 3(h) below), the Holders shall
not offer or sell any Registrable Securities or engage in any
other transaction involving or relating to Registrable
Securities, from the time of the giving of notice with respect
to a Potential Material Event until such Holder receives
written notice from the Company that such Potential Material
Event either has been disclosed to the public or no longer
constitutes a Potential Material Event; provided, however,
that the Company may not so suspend the right to such holders
of Securities for more than one (1) twenty (20) day period
during any twelve month period, during the periods the
Registration Statement is required to be in effect. If a
Potential Material Event shall occur prior to the date the
Registration Statement is filed, then the Company's obligation
to file the Registration Statement shall be delayed without
penalty for not more than twenty (20) days. The Company must
give each Holder notice in writing at least two (2)
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<PAGE>
business days prior to the first day of the blackout period
relating to any potential material event.
(h) "Potential Material Event" means any of the following: (a) the
possession by the Company of material information not ripe for
disclosure in a registration statement; (b) any material
engagement or activity by the Company which would be adversely
affected by disclosure in a registration statement at such
time; or (c) the Registration Statement would be materially
misleading absent the inclusion of such information.
Section 4. COOPERATION WITH COMPANY. Holders will cooperate with the
Company in all respects in connection with this Agreement, including timely
supplying all information reasonably requested by the Company and executing and
returning all documents reasonably requested in connection with the registration
and sale of the Registrable Securities.
Section 5. REGISTRATION PROCEDURES. If and whenever the Company is
required by any of the provisions of this Agreement to effect the registration
of any of the Registrable Securities under the Act, the Company shall (except as
otherwise provided in this Agreement), as expeditiously as possible:
(a) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the
provisions of the Act with respect to the sale or other
disposition of all securities covered by such registration
statement whenever the Holder of such securities shall desire
to sell or otherwise dispose of the same (including prospectus
supplements with respect to the sales of securities from time
to time in connection with a registration statement pursuant
to Rule 415 promulgated under the Act);
(b) furnish to each Holder such numbers of copies of a summary
prospectus or other prospectus, including a preliminary
prospectus or any amendment or supplement to any prospectus,
in conformity with the requirements of the Act, and such other
documents, as such Holder may reasonably request in order to
facilitate the public sale or other disposition of the
securities owned by such Holder;
(c) register and qualify the securities covered by the
Registration Statement under such other securities or blue sky
laws of such jurisdictions as the Holders shall reasonably
request (subject to the limitations set forth in Section 3(d)
above), and do any and all other acts and things which may be
necessary or advisable to enable each Holder to consummate the
public sale or other disposition in such jurisdiction of the
securities owned by such Holder, except that the Company shall
not for any such purpose be required to qualify to do business
as a foreign corporation in any jurisdiction wherein it is not
so qualified or to file therein any general consent to service
of process;
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<PAGE>
(d) list such securities on the American Stock Exchange or other
national securities exchange on which any securities of the
Company are then listed, if the listing of such securities is
then permitted under the rules of such exchange;
(e) notify each Holder of Registrable Securities covered by the
Registration Statement, at any time when a prospectus relating
thereto covered by the Registration Statement is required to
be delivered under the Act, of the happening of any event of
which it has knowledge as a result of which the prospectus
included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing.
Section 6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Holders,
and each officer, director or person, if any, who controls
each Holder within the meaning of the 1933 Act ("Distributing
Holder") against any losses, claims, damages or liabilities,
joint or several (which shall, for all purposes of this
Agreement, include, but not be limited to, all costs of
defense and investigation and all attorneys' fees), to which
the Distributing Holder may become subject, under the 1933 Act
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, or any related preliminary prospectus, final
prospectus, offering circular, notification or amendment or
supplement thereto, or arise out of or are based upon 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; provided, however, that the
Company (i) will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the
Registration Statement, preliminary prospectus, final
prospectus, offering circular, notification or amendment or
supplement thereto in reliance upon, and in conformity with,
written information furnished to the Company by the
Distributing Holder, specifically for use in the preparation
thereof, or (ii) will not pay any amounts paid in settlement
of any loss, claim, damage or liability if such settlement is
effected without the consent of the Company, which consent
shall not be unreasonably withheld. This Section 6(a) shall
not inure to the benefit of any Distributing Holder with
respect to any person asserting such loss, claim, damage or
liability who purchased the Registrable Securities which are
the subject thereof if the Distributing older failed to send
or give (in violation of the 1933 Act or the rules and
regulations promulgated thereunder) a copy of the prospectus
contained in such Registration Statement to such person at or
prior to the written confirmation of such person of the sale
of such Registrable Securities, where the Distributing Holder
was
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<PAGE>
obligated to do so under the 1933 Act or the rules and
regulations promulgated thereunder. This indemnity provision
will be in addition to any liability which the Company may
otherwise have.
(b) Each Distributing Holder agrees that it will indemnify and
hold harmless the Company, and each officer, director, or
person, if any, who controls the Company within the meaning of
the 1933 Act, against any losses, claims, damages or
liabilities (which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and
investigation and all attorneys' fees) to which the Company or
any such officer, director or controlling person may become
subject under the 1933 Act or otherwise, insofar as such
losses claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in
the Registration Statement, or any related preliminary
prospectus, final prospectus, offering circular, notification
or amendment or supplement thereto, or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but
in each case only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was
made in the Registration Statement, preliminary prospectus,
final prospectus, offering circular, notification or amendment
or supplement thereto in reliance upon, and in conformity
with, written information furnished to the Company by such
Distributing Holder, specifically for use in the preparation
thereof. This indemnity provision will be in addition to any
liability which the Distributing Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 6,
notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not
relieve the indemnifying party from any liability which it may
have to any indemnified party otherwise than as to the
particular item as to which indemnification is then being
sought solely pursuant to this Section 6. In case any such
action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, assume the defense
thereof, subject to the provisions herein stated and after
notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified
party under this Section 6 for any legal or other expenses
subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue
the action to its final conclusion. The
6
<PAGE>
indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall not
be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with
counsel reasonably satisfactory to the indemnified party;
provided that if the indemnified party is the Distributing
Holder, the fees and expenses of such counsel shall be at the
expense of the indemnifying party if (i) the employment of
such counsel has been specifically authorized in writing by
the indemnifying party, or (ii) the named parties to any such
action (including any impleaded parties) include both the
Distributing Holder and the indemnifying party and the
Distributing Holder shall have been advised by such counsel
that there may be one or more legal defenses available to the
indemnifying party different from or in conflict with any
legal defenses which may be available to the Distributing
Holder (in which case the indemnifying party shall not have
the right to assume the defense of such action on behalf of
the Distributing Holder, it being understood, however, that
the indemnifying party shall, in connection with any one such
action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable only for the
reasonable fees and expenses of one separate firm of attorneys
for the Distributing Holder, which firm shall be designated in
writing by the Distributing Holder). No settlement of any
action against an indemnified party shall be made without the
prior written consent of the indemnified party, which consent
shall not be unreasonably withheld.
Section 7. CONTRIBUTION. In order to provide for just and equitable
contribution under the 1933 Act in any case in which (i) the indemnified party
makes a claim for indemnification pursuant to Section 6 hereof but is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 6 hereof provide
for indemnification in such case, or (ii) contribution under the 1933 Act may be
required on the part of any indemnified party, then the Company and the
applicable Distributing Holder shall contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (which shall, for all
purposes of this Agreement, include, but not be limited to, all costs of defense
and investigation and all attorneys' fees), in either such case (after
contribution from others) on the basis of relative fault as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the applicable
Distributing Holder on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Distributing Holder agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in this
Section 7. The amount paid or
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<PAGE>
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party 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 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
Section 8. NOTICES. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received), (b) on the second business day following the date of mailing by
reputable courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur, or (c) on the fifth
business day following the date of mailing by certified or registered mail,
return receipt requested, postage prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:
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<PAGE>
If to Datametrics Corporation:
Datametrics Corporation
25B Hanover Road
#3305
Florham Park, NJ 07932
Attn: Daniel P. Ginns, CEO
Facsimile: (973) 377-5736
Telephone: (973) 377-3900
With a copy to:
Lane Altman & Owens LLP
101 Federal Street
Boston, MA 02110
Attn: Jeffrey S. Wieand
Facsimile: (617) 345-0400
Telephone: (617) 345-9800
If to the Holders at the addresses set forth on SCHEDULE A attached
hereto.
Any party hereto may from time to time change its address or facsimile
number for notices under this Section by giving at least ten (10) days' prior
written notice of such changed address or facsimile number to the other party
hereto.
Section 9. ASSIGNMENT. This Agreement is binding upon and inures to the
benefit of the parties hereto and their respective heirs, successors and
permitted assigns. The rights granted the Holders under this Agreement shall not
be assigned without the written consent of the Company, which consent shall not
be unnecessarily withheld. In the event of a transfer of the rights granted
under this Agreement, the Holder agrees that the Company may require that the
transferee comply with reasonable conditions as determined in the discretion of
the Company.
Section 10. COUNTERPARTS; FACSIMILE; AMENDMENTS. This Agreement may be
executed in multiple counterparts, each of which may be executed by less than
all of the parties and shall be deemed to be an original instrument which shall
be enforceable against the parties actually executing such counterparts and all
of which together shall constitute one and the same instrument. Except as
otherwise stated herein, in lieu of the original documents, a facsimile
transmission or copy of the original documents shall be as effective and
enforceable as the original. This Agreement may be amended only by a writing
executed by all parties.
Section 11. TERMINATION OF REGISTRATION RIGHTS. The rights granted
pursuant to this Agreement shall terminate as to each Holder (and permitted
transferees or assignees) upon the
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<PAGE>
occurrence of any of the following:
(a) all Holder's Securities subject to this Agreement have been
registered;
(b) all of such Holder's Securities subject to this Agreement may
be sold without such registration pursuant to Rule 144
promulgated by the SEC pursuant to the Securities Act;
(c) all of such Holder's Securities subject to this Agreement can
be sold pursuant to Rule 144(k).
Section 12. HEADINGS. The headings in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
Section 13. GOVERNING LAW: VENUE; JURISDICTION. This Agreement will be
construed and enforced in accordance with and governed by the laws of the State
of New York, except for matters arising under the Act, without reference to
principles of conflicts of law. Each of the parties consents to the jurisdiction
of the U.S. District Court sitting in the Southern District of the State of New
York in connection with any dispute arising under this Agreement and hereby
waives, to the maximum extent permitted by law, any objection, including any
objection based on forum non conveniens, to the bringing of any such proceeding
in such jurisdiction. Each party hereby agrees that if another party to this
Agreement obtains a judgment against it in such a proceeding, the party which
obtained such judgment may enforce same by summary judgment in the courts of any
country having jurisdiction over the party against whom such judgment was
obtained, and each party hereby waives any defenses available to it under local
law and agrees to the enforcement of such a judgment. Each party to this
Agreement irrevocably consents to the service of process in any such proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to such party at its address set forth herein. Nothing herein shall
affect the right of any party to serve process in any other manner permitted by
law.
Section 14. SEVERABILITY. If any provision of this Agreement shall for
any reason be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision hereof and this Agreement shall be
construed as if such invalid or unenforceable provision had never been contained
herein.
Section 15. CAPITALIZED TERMS. All capitalized terms not otherwise
defined herein shall have the meaning assigned to them in the Subscription
Agreement.
Section 16. ENTIRE AGREEMENT. This Agreement, together with all
documents referenced herein, embody the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all prior oral or written agreements and understandings relating to
the subject matter hereof. No statement, representation, warranty, covenant or
agreement
10
<PAGE>
of any kind not expressly set forth in this Agreement shall affect, or be used
to interpret, change or restrict, the express terms and provisions of this
Agreement.
[The Rest of this Page Intentionally Left Blank]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed, on the day and year first above written.
DATAMETRICS CORPORATION
By:
--------------------------------------
Daniel P. Ginns, Chief Executive Officer
LITTLE WING, L.P.
By:
--------------------------------------
Name: Bic Nguyen
Title: Authorized Signatory
TRADEWINDS FUND LTD.
By:
--------------------------------------
Name: Bic Nguyen
Title: Authorized Signatory
LITTLE WING TOO, L.P.
By:
--------------------------------------
Name: Bic Nguyen
Title: Authorized Signatory
THE CUTTYHUNK FUND LIMITED
By:
--------------------------------------
Name:
Title:
TONGA PARTNERS, L.P.
By:
--------------------------------------
Name:
Title:
12
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SCHEDULE A
LITTLE WING, L.P.
Little Wing, L.P.
c/o Quilcap Corp.
375 Park Avenue, Suite 1404
New York, New York 10152
TRADEWINDS FUND LTD.
Tradewinds Fund Ltd.
c/o Quilcap Corp.
375 Park Avenue, Suite 1404
New York, New York 10152
LITTLE WING TOO, L.P.
Little Wing Too, L.P.
c/o Quilcap Corp.
375 Park Avenue, Suite 1404
New York, New York 10152
THE CUTTYHUNK FUND LIMITED
The Cuttyhunk Fund Limited
73 Front Street
Hamilton, HM 12 Bermuda
TONGA PARTNERS, L.P.
Tonga Partners, L.P.
600 California Street, Floor 14
San Francisco, California 94108
13
EXHIBIT 4.7
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SUBSCRIPTION AGREEMENT
Datametrics Corporation
25B Hanover Road, No. 3305
Florham Park, NJ 07932
Attn: Mr. Daniel P. Ginns
Chairman
Ladies and Gentlemen:
The undersigned ("Subscriber") hereby tenders this Subscription
Agreement ("Agreement") in accordance with and subject to the terms and
conditions set forth herein and in the Confidential Private Placement Memorandum
of even date herewith (the "Memorandum").
1. SUBSCRIPTION.
1.1. The undersigned hereby irrevocably subscribes for and agrees to
purchase the number of shares (the "Shares") of common stock, par value $.01 per
share ("Common Stock"), of Datametrics Corporation, a Delaware corporation (the
"Company"), indicated on the signature page hereto at the purchase price per
share set forth on such signature page. The undersigned encloses herewith a
check or money order payable to the Company (or has made payment by wire
transfer of funds in accordance with instructions from the Company) in the full
amount of the purchase price of the Shares for which the undersigned is
subscribing (the "Payment").
1.2. The undersigned understands that each Payment by check or money
order as provided in Section 1.1 above shall be delivered to the Company and,
thereafter, such Payment will be held for the undersigned's benefit by the
Company, but the undersigned will not earn interest on any funds so held. The
Company may hold an initial closing of the Offering (the "Initial Closing")
after subscriptions for at least 1,000,000 Shares have been accepted by the
Company (the "Minimum Offering"). The Company may hold additional interim
closings after the Initial Closing. Any such interim closings together with the
Initial Closing are each hereinafter referred to as an "Additional Closing" and
shall occur on one or more dates each hereinafter referred to as an "Additional
Closing Date." Upon receipt by the Company of the requisite payment for all
Shares to be purchased by the subscribers whose subscriptions are accepted by
the Company (each, a "Purchaser") at the Additional Closing Dates and subject to
the satisfaction of certain conditions, the Shares so purchased will be issued
in the name of each such Purchaser, and the name of such Purchaser will be
registered on the stock transfer books of the Company as the record owner of
such Shares. The Company will issue to each Purchaser a stock certificate for
the Shares purchased.
1.3. The undersigned hereby agrees to be bound hereby upon execution
and delivery to the Company of the signature page to this Subscription
Agreement. The undersigned understands that the Company will not be bound to
issue any shares of Common Stock to the undersigned, unless and until the
Company accepts, on the Initial Closing Date or an Additional Closing Date, as
the case may be, the undersigned's subscription to purchase shares of Common
Stock (the "Subscription").
1.4. The undersigned agrees that the Company may, in its sole and
absolute discretion, reduce the undersigned's subscription to any number of
shares of Common Stock that in the aggregate does not
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exceed the number of Shares of Common Stock hereby applied for without any prior
notice to or further consent by the undersigned. The undersigned hereby
irrevocably constitutes and appoints the Chairman or the President of the
Company acting singly, in each case with full power of substitution, the true
and lawful agent and attorney-in-fact of the undersigned, with full power and
authority in the undersigned's name, place and stead to amend this Subscription
Agreement, including, in each case, the undersigned's signature page thereto, to
effect any of the foregoing provisions of this Section 1.4.
OFFERING MATERIAL.
2.1. The Subscriber represents and warrants that it is in receipt of
and that it has carefully read and understands the following items:
(a) the Memorandum;
(b) Annual Reports to the Securities and Exchange Commission
on Form 10-K of the Company for its fiscal years ended October 26, 1997 and
October 29, 1996. The Form 10-K for the fiscal year ended October 26, 1997 is
hereinafter referred to as the "Form 10-K;"
(c) Quarterly Reports to the Securities and Exchange
Commission on Form 10-Q of the Company for the quarters ended July 26,1998,
April 26,1998, January 25, 1998. The July 26, 1998 Form 10- Q is hereinafter
referred to as the "Form 10-Q";
(d) The Company's Current Reports on Form 8-K filed August 7,
1998 and April 30, 1998.
Collectively, the Form 10-K, the Form 10-Q and the Form 8-Ks are
referred to herein as the "Public Reports."
3. CONDITIONS TO SUBSCRIBER'S OBLIGATIONS.
3.1. The obligation of the Subscriber to close the transactions
contemplated by this Agreement (the "Transaction") is subject to the
satisfaction on or prior to the Initial Closing Date, or any Additional Closing
Date, as applicable, of the following conditions set forth in Sections 3.2 and
3.3 hereof.
3.2. The representations and warranties made by Company herein shall
be true in all material respects on and as of the Initial Closing Date or any
Additional Closing Date, as applicable, with the same effect as if they had been
made on and as of such date.
3.3. All proceedings to be taken in connection with the consummation
of the Transaction or prior to the Initial Closing Date or any Additional
Closing Date, as applicable, have been taken, and all documents incident thereto
shall be reasonably satisfactory in form and substance to the Subscriber and its
counsel, and the Subscriber and its counsel shall have received copies of all
documents and information which it may have reasonably requested in connection
with the Transaction and of all corporate proceedings in connection therewith,
in form and substance reasonably satisfactory to Subscriber and its counsel.
4. REPRESENTATIONS AND WARRANTIES; COVENANTS; SURVIVAL.
4.1. The Company represents and warrants that, at the date of this
Agreement:
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(a) The Company is a corporation duly organized and validly
existing and in good standing under the laws of the State of Delaware, entitled
to own its property of a material nature and to carry on its business of a
material nature as and in places where such property is now owned or operated
and such business is conducted;
(b) Each of the subsidiaries of the Company is a
corporation duly organized and validly existing and in good standing under the
laws of the jurisdiction of their respective place of organization, entitled to
own their respective properties of a material nature and to carry on their
respective businesses of a material nature in places where such properties are
now owned or operated and such businesses are conducted, and, except as
disclosed in the Public Reports, there is no action or proceeding pending or to
the Company's best knowledge threatened, brought by or before any federal or
state agency having jurisdiction over the operations of a material nature of the
Company which threatens in any material respect the continued operation of any
material phase of the Company's business now conducted by it or its
subsidiaries;
(c) The Company has furnished the Subscriber with its
certified consolidated financial statements as of October 26, 1997, contained in
the Form 10-K, and such financial statements, including the notes contained
therein, fairly present the consolidated financial position of the Company at
the date thereof and the results of its consolidated operations for the period
purported to be covered thereby. Such financial statements have been prepared in
conformity with generally accepted accounting principles consistently applied
with prior periods subject to any comments and notes contained therein;
(d) The Company by appropriate and required corporate
action, has duly authorized the execution of this Agreement and the issuance and
delivery of the Common Stock. Such shares of Common Stock are not subject to
preemptive or other rights of any stockholders and, when issued in accordance
with the terms of this Agreement, the shares of Common Stock will be validly
issued, fully paid and nonassessable;
(e) Performance of this Agreement and compliance with the
provisions hereof will not violate any provision of any applicable law or of the
Certificate of Incorporation or By-Laws of the Company, or of any of its
subsidiaries, and will not conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon, any of the
properties or assets of a material nature of the Company, or of any of its
subsidiaries, pursuant to the terms of any indenture, mortgage, deed of trust or
other agreement of instrument binding upon the Company, or any of its
subsidiaries.
5. TRANSFER.
5.1. Subscriber acknowledges that it is acquiring the Common Stock
for its own account and for the purpose of investment and not with a view to any
distribution or resale thereof within the meaning of the Securities Act of 1933,
as amended (the "Act"), and any applicable state or other securities laws
("State Acts"). The Subscriber further agrees that it will not sell, assign or
transfer any of the Common Stock in violation of the Act or State Acts and
acknowledges that, in taking unregistered securities, it must continue to bear
the economic risk of its investment for an indefinite period of time because of
the fact that such Common Stock has not been registered under the Act or State
Acts and further realizes that such Common Stock cannot be sold unless it is
subsequently registered under the Act and State Acts or an exemption from such
registration is available. The Subscriber further understands that it is
acquiring Common Stock at a price below the price at which such Common Stock is
being traded on the American Stock Exchange at the time of this Agreement, and
therefore, such Common Stock will contain a restriction on transferabiity for a
period of six months from the date of purchase, regardless of any subsequent
registration under the Act. The Subscriber further recognizes that the Company
is not assuming any obligation to register such Common Stock except as set forth
herein. The Subscriber also acknowledges that appropriate legends reflecting the
status of the Common Stock under the Act and State Acts may be placed on the
face of the certificates for such Common Stock at the time of their transfer and
delivery to the holder thereof.
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5.2. The Common Stock issued pursuant to this Agreement may not be
transferred except in a transaction which is in compliance with the Act and
State Acts. Except as provided in Section 6.1, it shall be a condition to any
such transfer that the Issuer shall be furnished with an opinion of counsel to
the holder of such Common Stock, reasonably satisfactory to the Company, to the
effect that the proposed transfer would be in compliance with the Act and State
Acts.
6. PIGGYBACK REGISTRATION RIGHTS.
6.1. The Subscriber shall be entitled to certain "piggyback"
registration rights under the Act with respect to the Shares, upon the terms and
subject to the conditions hereinafter set forth:
(a) If the Company shall determine to register under the Act any of
its Common Stock either for its own account or for the account of its
shareholders, other than a registration relating solely to employee benefit
plans, or a registration relating to a corporate reorganization or other
transaction under Rule 145 promulgated under the Act, or a registration on any
registration form that does not permit secondary sales, the Company will:
(i) promptly give to the Subscriber written notice thereof; and
(ii) except as set forth in Section 6.1 (b), below, use its best
efforts to include in such registration (and any related qualification under
State Acts or other compliance), and in any underwriting involved therein, such
of the Shares being delivered to the Subscriber pursuant to this Agreement as
are specified in a written request made by the Subscriber and received by the
Company within ten (10) days after the written notice from the Company described
in clause (i) above is mailed or delivered by the Company. Such written request
may specify all or a part of the Shares to be so included in such registration.
(b) If the registration of which the Company gives notice is for
a registered public offering involving an underwriting, then the Company shall
so advise the Subscriber as a part of the written notice given pursuant to
Section 6.1(a). In such event, the right of the Subscriber to registration
pursuant to this Section 6.1 shall be conditioned upon participation by the
Subscriber in such underwriting and the inclusion of the Shares in the
underwriting to the extent provided therein. All Subscribers proposing to
distribute their shares of Common Stock through such underwriting shall
(together with the Company and the other holders of securities of the Company
with registration rights to participate therein distributing their shares of
Common Stock through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected by the Company.
Notwithstanding any other provision of this Section 6.1, if the
representative of the underwriters advises the Company in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
representative may (subject to the limitation set forth below) exclude all
Shares from, or limit the number of Shares to be included, in the registration
and underwriting. The Company shall so advise all holders of shares of Common
Stock requesting registration, and the number of shares of shares of Common
Stock that are entitled to be included in the registration and underwriting
shall be allocated first to the Company for shares being issued and sold for its
own account and then to such other holders (including the Subscriber) pro rata
based upon the relative number of shares sought to be included in such
registration by such holders. If any Subscriber does not agree to the terms of
any such underwriting, such Subscriber shall be excluded therefrom by written
notice from the Company or the underwriter. Any Shares excluded or withdrawn
from such underwriting shall be withdrawn from such registration.
(c) Except as provide above, the Company shall not be required
to register any Shares under the Act.
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7. CLOSING.
7.1. The closing of the sale of Common Stock ("Closing") to
Subscriber shall take place at the offices of the Company, on or before December
31, 1998 (the "Closing Date"), at such time as the Company and Subscriber shall
mutually agree. The Company may, in its sole discretion, extend the Closing
Date. Any payments tendered herewith in connection with Subscriptions that have
not been accepted by the Closing Date, as extended, shall promptly be returned
to the Subscriber tendering such payments.
8. SUBSCRIBER REPRESENTATIONS. The undersigned hereby represents and warrants
to and agrees with the Company as follows:
8.1. The undersigned has been furnished with and has carefully read
the Form 10-K, Form 10-Q and Form 8-Ks and is familiar with and understands the
terms of the offering described herein (the "Offering"). With respect to
individual or partnership tax and other economic considerations involved in this
investment, the undersigned is not relying on the Company (or any agent or
representative of the Company). The undersigned has carefully considered and
has, to the extent the undersigned believes such discussion necessary, discussed
with the undersigned's professional legal, tax, accounting and financial
advisers, the suitability of an investment in the Common Stock for the
undersigned's particular tax and financial situation and has determined that the
Common Stock being subscribed for by the undersigned is a suitable investment
for the undersigned.
8.2. The undersigned acknowledges that all documents, records and
books pertaining to this investment which the undersigned has requested have
been made available for inspection by the undersigned and the undersigned's
attorney, accountant and other adviser(s).
8.3. The undersigned and/or the undersigned's advisor(s) has/have
had a reasonable opportunity to ask questions of and receive answers from a
person or persons acting on behalf of the Company concerning the Offering and
all such questions have been answered to the full satisfaction of the
undersigned.
8.4. The undersigned is not aware of any material information
regarding the Company, any of its subsidiaries, or their respective business,
prospects, financial condition or results of operations which has not been
disseminated generally to the public.
8.5. The undersigned is not subscribing for shares of Common Stock
as a result of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or meeting.
8.6. The undersigned is an "accredited investor," within the meaning
of Rule 501(a) of Regulation D under the Act. The undersigned, by reason of the
undersigned's business or financial experience or the business or financial
experience of the undersigned's professional advisers who are unaffiliated with
and who are not being compensated by the Company or any affiliate of the
Company, directly or indirectly, can be reasonably assumed to have the capacity
to protect its interests in connection with an investment in the shares of
Common Stock.
8.7. If the undersigned is a natural person, the undersigned has
adequate means of providing for the undersigned's current financial needs and
contingencies, is able to bear the substantial economic risks of an investment
in the shares of Common Stock for an indefinite period of time, has no need for
liquidity in such investment and, at the present time, could afford a complete
loss of such investment.
8.8. The undersigned or the undersigned's purchaser representative,
as the case may be, has such knowledge and experience in financial, tax and
business matters so as to enable the undersigned to utilize the information made
available to the undersigned in connection with the Offering to evaluate the
merits and risks of an investment in the Common Stock and to make an informed
investment decision with respect
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thereto.
8.9. The undersigned acknowledges the Shares of Common Stock herein
submitted for have not been registered under the Act or under any State Acts.
The undersigned will not sell, transfer or otherwise dispose of the Shares
unless they are registered under the Act and any applicable State Acts or
pursuant to available exemptions from such registration; provided that the
undersigned shall be required to deliver to the Company an opinion of counsel
satisfactory to the Company confirming the availability of such exemption. The
undersigned represents that the undersigned is purchasing the Common Stock for
the undersigned's own account, for investment and not with a view to resale or
distribution except in compliance with the Act and the restrictions contained in
the immediately preceding sentence. The undersigned has not offered or sold any
portion of the Shares of Common Stock being acquired nor does the undersigned
have any present intention of selling, distributing or otherwise disposing of
the shares of Common Stock either currently or after the passage of a fixed or
determinable period of time or upon the occurrence or nonoccurrence of any
predetermined event or circumstance in violation of the Act or any State Acts.
8.10. The undersigned recognizes that investment in the Shares
involves substantial risks, including loss of the entire amount of such
investment. Further, the undersigned has carefully read and considered the
matters set forth in the Memorandum, and has taken full cognizance of and
understands all of the risks related to a purchase of the Shares.
8.11. The undersigned acknowledges that each certificate representing
the Shares shall be stamped or otherwise imprinted with a legend substantially
in the following form:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE "SECURITIES ACT") OR UNDER APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AVAILABLE
EXEMPTIONS FROM SUCH REGISTRATION, PROVIDED THAT THE SELLER
DELIVERS TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY CONFIRMING THE AVAILABILITY OF SUCH EXEMPTION.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR
THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME.
The undersigned acknowledges and agrees that it shall not be entitled
to seek any remedies with respect to the Offering from any party other than the
Company.
8.13. If this Subscription Agreement is executed and delivered on
behalf of a partnership, corporation, trust or estate: (i) such partnership,
corporation, trust or estate has the full legal right and power and all
authority and approval required (a) to execute and deliver, or authorize
execution and delivery of, this Subscription Agreement and all other instruments
executed and delivered by or on behalf of such partnership, corporation, trust
or estate in connection with the purchase of the Shares, (b) to delegate
authority pursuant to a power of attorney and (c) to purchase and hold such
Shares; (ii) the signature of the party signing on behalf of such partnership,
corporation, trust or estate is binding upon such partnership, corporation,
trust or estate; and (iii) such partnership, corporation or trust has not been
formed for the specific purpose of acquiring the Shares, unless each beneficial
owner of such entity is qualified as an "accredited investor" within the meaning
of Rule 501(a) of Regulation D under the Act and has submitted information
substantiating such individual qualification.
8.14. If the undersigned is a retirement plan or is investing on
behalf of a retirement plan, the undersigned acknowledges that investment in the
Shares poses risks in addition to those associated with other investments,
including the inability to use losses generated by an investment
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in the Shares to offset taxable income.
8.15. The undersigned shall indemnify and hold harmless the Company
and each of its subsidiaries and each officer, director or control person of any
such entity, who is or may be a party or is or may be threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of or
arising from any actual or alleged misrepresentations or misstatement of facts
or omission to represent or state facts made or alleged to have been made by the
undersigned to the Company (or any agent or representative of the Company) or
omitted or alleged to have been omitted by the undersigned, concerning the
undersigned or the undersigned's authority to invest or financial position in
connection with the Offering, including, without limitation, any such
misrepresentation, misstatement or omission contained in any document submitted
by the undersigned in connection with the Offering, against losses, liabilities
and expenses actually and reasonably incurred by the Company or any officer,
director or control person of the Company in connection with such action, suit
or proceeding for which the Company or such officer, director or control person
has not otherwise been reimbursed (including attorneys' fees, judgments, fines
and amounts paid in settlement).
9. UNDERSTANDINGS
The undersigned understands, acknowledges and agrees with the Company
as follows:
9.1. This Subscription may be rejected, in whole or in part, by the
Company, in its sole and absolute discretion, at any time before an Initial
Closing Date or any Additional Closing Date, as the case may be, notwithstanding
prior receipt by the undersigned of notice of acceptance of the undersigned's
Subscription.
9.2. Except as set forth in paragraph 8.1 above, the undersigned
hereby acknowledges and agrees that the Subscription hereunder is irrevocable by
the undersigned, that, except as required by law, the undersigned is not
entitled to cancel, terminate or revoke this Subscription Agreement or any
agreements of the undersigned hereunder and that this Subscription Agreement and
such other agreements shall survive the death or disability of the undersigned
and shall be binding upon and inure to the benefit of the parties and their
heirs, executors, administrators, successors, legal representatives and
permitted assigns. If the undersigned is more than one person, the obligations
of the undersigned hereunder shall be joint and several and the agreements,
representations, warranties and acknowledgments herein contained shall be deemed
to be made by and be binding upon each such person and his/her heirs, executors,
administrators, successors, legal representatives and permitted assigns.
9.3. No Federal or state agency has made any findings or
determination as to the accuracy or adequacy of the Memorandum or as to the
fairness of the terms of this Offering for investment nor any recommendations or
endorsement of the Shares of Common Stock.
9.4. The Offering is intended to be exempt from registration under
the Securities Act by virtue of Section 4(2) of the Act and the provisions of
Regulation D thereunder, which is in part dependent upon the truth, completeness
and accuracy of the statements made by the undersigned herein.
9.5. There can be no assurance that the undersigned will be able to
sell or dispose of all or a portion of the Shares. It is understood that in
order not to jeopardize the Offering's exempt status under Section 4(2) of the
Securities Act and Regulation D, any transferee may, at a minimum, be required
to fulfill the investor suitability requirements thereunder.
9.6. The representations, warranties and agreements of the
undersigned contained herein
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and in any other writing delivered in connection with the transactions
contemplated hereby shall be true and correct in all respects on and as of the
date of the sale of the Shares as if made on and as of such date and shall
survive the execution and delivery of this Subscription Agreement and the
purchase of the Shares.
9.7. IN MAKING AN INVESTMENT DECISION, PURCHASERS MUST RELY ON THEIR
OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THE SHARES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL
OR STATE SECURITIES COMMISSION ON REGULATORY AUTHORITY. FURTHERMORE, THE
FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY
OF THE MEMORANDUM OR THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
9.8. The Offering and sale of the Shares is intended to be exempt
from registration under the securities laws of certain U.S. states. A purchaser
residing in one or more of the following states shall note the language set
forth below, which is required to be included in this Agreement by the
securities laws of those states. The Purchaser must note that there are
restrictions on transfer of all Shares.
ALL STATES: THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR
THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH
LAWS. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT,
AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
FOR NEW YORK RESIDENTS ONLY:
THE MEMORANDUM HAS NOT BEEN FILED WITH OR REVIEWED BY THE ATTORNEY GENERAL OF
THE STATE OF NEW YORK PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE
STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THE MEMORANDUM DOES NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT
TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS MADE, IN LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY ARE MADE, NOT MISLEADING. IT CONTAINS A FAIR
SUMMARY OF THE MATERIAL TERMS OF DOCUMENTS PURPORTED TO BE SUMMARIZED HEREIN.
MISCELLANEOUS.
10.1. Except as set forth elsewhere herein, any notice or demand to
be given or served
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in connection herewith shall be deemed to be sufficiently given or served for
all purposes by being sent as registered or certified mail, return receipt
requested, postage prepaid, in the case of the Company, addressed to it at the
address set forth above; and in the case of Subscriber to the address for
correspondence set forth in the Company's books and records.
10.2. This Subscription Agreement shall be enforced, governed and
construed in all respects in accordance with the laws of the State of
California, as such laws are applied by California courts to agreements entered
into and to be performed in California by and between residents of California,
and shall be binding upon the undersigned, the undersigned's heirs, estate,
legal representatives, successors and assigns and shall inure to the benefit of
the Company, the Placement Agents, and their respective successors and assigns.
If any provision of this Subscription Agreement is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed to
be modified to conform with such statute or rule of law. Any provision hereof
that may prove invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision hereof.
10.3. This Agreement shall be binding upon and inure to the benefit
of the Company, and Subscriber and their respective successors and assigns.
10.4. In any action, proceeding or counterclaim brought to enforce
any of the provisions without of this Agreement or to recover damages, costs and
expenses in connection with any breach of the Agreement, the prevailing party
shall be entitled to be reimbursed by the opposing party for all of the
prevailing party's attorneys' fees, costs and other out-of-pocket expenses
incurred in connection with such action, proceeding or counterclaim.
11. SIGNATURE. The signature of this Subscription Agreement is contained as
part of the applicable Subscription Package, entitled "Signature Page."
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SUBSCRIPTION AGREEMENT GENERAL INSTRUCTIONS
GENERAL INSTRUCTIONS
These Subscription Documents contain all documents necessary to
subscribe for Shares ("Shares") of Common Stock, par value $.01 per Share
("Common Stock") of Datametrics Corporation, a Delaware corporation (the
"Company").
You may subscribe for Shares by completing the Subscription Agreement
in the following manner:
1. On line(a) state the number of Shares you wish to purchase.
2. On line (b) state the total cost of the Shares you wish to
purchase. To obtain the cost, multiply the number of Shares you desire to
purchase by the purchase price per Share set forth.
3. Please complete the detailed investment and other
representations in the Subscription Agreement to evidence your suitability for
an investment in the Company. All Purchasers must complete and sign the
Subscription Agreement.
4. Sign and state your address, telephone number and social
security or other taxpayer identification number on the lines provided on the
signature page to the Subscription Agreement, have your signature acknowledged
by a notary public and deliver the completed Subscription Agreement to the
Company with payment of the entire purchase price of the Shares subscribed for.
Payment should be made in United States Dollars, in cash or by check, bank draft
or postal or express money order payable to "Datametrics Corporation" or by wire
transfer to an account to be designated by the Company. The Subscription
Agreement Signature Page must be completed and signed by each investor and all
signatures must be acknowledged by a notary public. Send all documents and
payments to :
Datametrics Corporation
25B Hanover Road, No. 3305
Florham Park, NJ 07932
Attn: Daniel P. Ginns
Chairman of the Board
THE COMPLETED SUBSCRIPTION AGREEMENT SHOULD BE RETURNED IN ITS ENTIRETY
TO THE PLACEMENT AGENT DESIGNATED ABOVE.
ACCEPTANCE OF DELIVERY
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of the completed Subscription Agreement will be
determined by the Company, which determination will be final and binding. The
Company reserves the absolute right to reject any completed Subscription
Agreement, in its sole and absolute discretion. The Company also reserves the
right to waive any irregularities in, or conditions of, the submission of
completed Subscription Agreements, and the Company's interpretation of the terms
and conditions for the purchase of Shares (including these instructions) shall
be final and binding. The Company shall be under no duty to give any
notification of irregularities in connection with any attempted subscription for
Shares or incur any liability for failure to give such notification. Until such
irregularities have been cured
<PAGE>
or waived, no subscription for Shares shall be deemed to have been made. Any
Subscription Agreement that is not properly completed and as to which defects
have not been cured or waived will be returned by the Company to the subscriber
as soon as practicable. Unless an aggregate of 1,559,374 Shares are subscribed
for and purchased, no Shares will be sold and all subscriptions for Shares will
be returned, without interest or deduction.
<PAGE>
SUBSCRIPTION AGREEMENT SIGNATURE PAGE
PLEASE PRINT OR TYPE, USE INK ONLY.
(ALL PARTIES MUST SIGN)
The undersigned investor hereby certifies that he (i) has received and
relied solely upon the Offering Documents, (ii) agrees to all the terms and
conditions of this Subscription Agreement (iii) meets the suitability standards
set forth in this Subscription Agreement and (iv) is a resident of the state or
foreign jurisdiction indicated below.
<TABLE>
(A) THE UNDERSIGNED IRREVOCABLY SUBSCRIBES FOR_________________SHARES OF COMMON STOCK.
(B) THE TOTAL COST OF THE SHARES SUBSCRIBED FOR, AT $1.00 PER SHARE, IS $____________.
<S> <C>
If other than individual check one and indicate
Name of Subscriber (Print) capacity of signatory under the signature:
Trust
Estate
Name of Joint Subscriber (if any) (Print) Uniform Gifts to Minors Act of State of ___
Attorney-in-fact
Corporation
Signature of Subscriber Other
If Joint Ownership, check one:
Signature of Joint Subscriber (if any)
Joint Tenants with Right of Survivorship
Tenants in Common
Capacity of Signatory (if applicable) Tenants by the Entirety
Community by Property
Social Security or Taxpayer identification Backup Withholding Statement:
Number Please check this box only if the investor is
subject to backup withholding
Residence Address Foreign Person:
Please check this box only if the investor is a
nonresident alien, foreign corporation,
City State Zip Code foreign partnership, foreign trust or foreign
estate.
Telephone ( )
</TABLE>
The investor agrees to the terms of this Subscription Agreement and, as required
by the Regulations pursuant to the Internal Revenue Code, certifies under
penalty of perjury that (1) the Social Security Number or Taxpayer
Identification Number and address provided above is correct, (2) the investor is
not subject to backup withholding (unless the Backup Withholding Statement box
is checked) either because he has not been notified that he is subject to backup
withholding as a result of a failure to report all interest or dividends or
because the Internal Revenue Service has notified him that he is no longer
subject to backup withholding and (3) the investor (unless the Foreign Person
box above is checked) is not a nonresident alien, foreign partnership, foreign
trust or foreign estate.
<PAGE>
THE SUBSCRIPTION FOR_____SHARES OF DATAMETRICS CORPORATION BY THE ABOVE
NAMED SUBSCRIBER(S) IS ACCEPTED THIS_____DAY OF DECEMBER, 1998.
DATAMETRICS CORPORATION
By:
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