SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
September 4, 1999
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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
Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
The Company has established a $1,500,000 revolving line of credit ("Line
of Credit") with Branch Banking and Trust Company ("Branch Bank"). The Line of
Credit accrues interest at a variable rate equal to Branch Bank's Prime Rate
plus 0.5%. The Line of Credit is secured by the assets of the Company and
guarantees by two guarantors in the aggregate amount of $1,500,000
("Guarantees") that are secured by letters of credit issued on the accounts of
each of the guarantors. In consideration of the Guarantees, the guarantors
received Warrants to purchase up to an aggregate 1,500,000 shares of the Common
Stock of the Company, $.01 par value, for a purchase price of $1.00 per share
("Guarantee Warrants"), pursuant to an arrangement made in July 1999. The
Company also issued Warrants to purchase up to 75,000 shares of the Common Stock
of the Company for a purchase price of $1.10 per share to a third party as
compensation for arranging the guarantee ("Finder Warrants"). The Line of Credit
expires on August 25, 2000.
The Company applied a portion of the proceeds of its Line of Credit to
fund the payment of the remaining $750,000 in principal amount outstanding of
its 10% Senior Subordinated Secured Debentures in default, plus accrued interest
thereon. Through this payment, the Company has funded the retirement of all of
its debt to security-holders in default.
In addition to the retirement of debt to security-holders, proceeds of
the Line of Credit are to be used for working capital. It is anticipated that
any proceeds received by the Registrant upon the exercise of the Warrants will
be used for working capital.
The above discussion is qualified in its entirety by reference to a Loan
Agreement, Promissory Note, Security Agreement and the Guarantees, executed in
favor of Branch Bank, and the Guarantee Warrants and the Finder Warrants, all of
which are substantially the same as Exhibits 4.1, 4.2, 4.3, 10.1, 10.2, 10.3,
and 10.4, respectively, and are incorporated herein by this reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a. Financial statements of business acquired.
Not Applicable.
b. Pro forma financial information.
Not Applicable.
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c. Exhibits.
The following exhibits are filed with this report:
Exhibit No. Title.
4.1 Warrant issued to Carl K. Doumani.
4.2 Warrant issued to Roy Doumani.
4.3 Form of Warrant issued to finder.
10.1 Loan Agreement with Branch Bank, dated as
of August 20,1999.
10.2 Promissory Note payable to Branch Bank,
dated as of August 20, 1999
10.3 Security Agreement and Addendum with
Branch Bank, dated as of August 20, 1999.
10.4 Form of Guarantee and Addendum of each of
the guarantors.
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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: September 9, 1999
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EXHIBIT INDEX
4.1 Warrant issued to Carl K. Doumani.
4.2 Warrant issued to Roy Doumani.
4.3 Form of Warrant issued to finder.
10.1 Loan Agreement with Branch Bank, dated as of August 20, 1999.
10.2 Promissory Note payable to Branch Bank, dated as of August 20, 1999.
10.3 Security Agreement and Addendum with Branch Bank, dated as of
August 20, 1999.
10.4 Form of Guarantee and Addendum of each of the guarantors.
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NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE
UPON EXERCISE OF THIS WARRANT MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS UNLESS DATAMETRICS CORPORATION (THE "COMPANY") HAS RECEIVED THE
WRITTEN OPINION OF THE COMPANY'S COUNSEL OR OTHER COUNSEL REASONABLY
SATISFACTORY THE COMPANY THAT, AFTER INVESTIGATION OF THE RELEVANT FACTS, SUCH
COUNSEL IS OF THE OPINION THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION
UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.
Warrant No. 500,000 Shares
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WARRANT TO PURCHASE COMMON STOCK
OF
DATAMETRICS CORPORATION
VOID AFTER 5:00 P.M., EASTERN DAYLIGHT TIME, ON AUGUST 31, 2004
This certifies that, for value received, CARL K. DOUMANI or his
permissible transferees, designees, successors and assigns (collectively, the
"HOLDER"), is entitled, subject to the terms set forth below, to purchase from
Datametrics Corporation, a Delaware corporation (the "COMPANY"), SO MUCH OF FIVE
HUNDRED THOUSAND (500,000) SHARES OF THE COMPANY'S COMMON STOCK, PAR VALUE $.01
PER SHARE (THE "COMMON STOCK"), AS ARE THEN AVAILABLE PURSUANT TO THE SCHEDULE
SET FORTH IN SECTION 1 HEREOF, upon surrender hereof, as hereinafter provided,
at the exercise price of $1.00 per share of Common Stock. The number of, and
exercise price for, such shares of Common Stock are subject to adjustment as
provided herein. This Warrant is being issued in connection with and in
consideration of the initial Holder's secured guarantee ("Guarantee") of the
Company's secured revolving line of credit in the amount of $500,000 pursuant to
an Intercreditor and Reimbursement Agreement of even date between the initial
Holder and the Company. For purposes hereof, the phrase "Guarantee is
Outstanding" shall mean that the Guarantee has continuously from the date
hereof, and as of the date of such determination, (i) been in full force and
effect; (ii) been fully secured in accordance with the terms of the agreements
between the Company and the initial Holder, or the Company, the initial Holder
and the Bank; and (iii) not been breached, released, canceled, terminated or
surrendered.
1. VESTING OF WARRANTS. This Warrant is exercisable immediately by the
Holder in whole or in part, at any time and from time to time during the term
hereof, with respect to 166,667 shares of Common Stock. This Warrant also is
exercisable at any time during the term hereof with
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respect to additional shares of Common Stock increasing by 16,667 shares of
Common Stock per month, commencing on September 1, 1999 and continuing on the
first day of each month until August 1, 2000. Thereafter, if the Guarantee is
Outstanding on March 1, 2000 and this Warrant is exercisable at any time during
the term for an additional 133,333 shares of Common Stock. Notwithstanding
anything to the contrary herein contained, this Warrant shall be canceled
automatically as to all shares of Common Stock as to which it is not then
exercisable at the moment that the Guarantee is not Outstanding.
2. EXERCISE. This Warrant may be exercised by the Holder in whole or in
part from time to time commencing on the date hereof and terminating on or
before 5:00 p.m., New York time, on August 31, 2004 (the "WARRANT EXPIRATION
Date"), with respect to the shares of Common Stock from time to time available
in accordance with Section 1 hereof, upon his tendering this Warrant (with the
Notice of Exercise annexed hereto duly completed and executed on behalf of the
Holder), and payment in cash or by check acceptable to the Company, for the
purchase price of the shares to be purchased at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to the Holder at the address of the Holder appearing on the books of the
Company). To the extent not exercised prior to the Warrant Expiration Date this
Warrant shall become void and all rights thereunder and all rights in respect
thereof shall cease as of such time.
3. RIGHTS UPON EXERCISE. This Warrant shall be deemed to have been
exercised immediately prior to the close of business on the date of its
surrender for exercise as provided in Section 2 hereof, and the person entitled
to receive the shares of Common Stock issuable upon such exercise shall be
treated for all purposes as the holder of record of such shares as of the close
of business on such date. Unless exercised in connection with an underwritten
public offering, as promptly as practicable on or after such date and in any
event within seven (7) days thereafter, the Company at its expense shall issue
and deliver to the person or persons entitled to receive the same a certificate
or certificates for the number of shares issuable upon such exercise. In the
event that this Warrant is exercised in part, the Company at its expense will
execute and deliver a new Warrant of like tenor exercisable for the number of
shares for which this Warrant may then be exercised. In the event of exercise at
the time of an underwritten public offering, the Company will provide
instructions as to the exercise of this Warrant and the issuance of
certificates.
4. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the exercise price
multiplied by such fraction.
5. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company, in its sole and absolute discretion, of the loss,
theft, destruction or mutilation of this Warrant and, in the case of loss, theft
or destruction, upon delivery of an indemnity agreement reasonably satisfactory
in form and substance to the Company or, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company at its expense shall
execute and deliver, in lieu of this Warrant, a new warrant of like tenor and
amount.
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6. RIGHTS OF STOCKHOLDERS. The Holder shall not be entitled to vote or
receive dividends or be deemed the holder of Common Stock or any other
securities of the Company that may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, consolidation, merger or otherwise) or to receive
notices of meetings, or to receive dividends or subscription rights or otherwise
until the Warrant shall have been exercised and the shares of Common Stock
purchasable upon the exercise hereof shall have been issued, as provided herein.
7. COMPLIANCE WITH SECURITIES LAWS. (a) The Holder of this Warrant, by
acceptance hereof, acknowledges that the shares of Common Stock to be issued
upon exercise hereof are being acquired solely for the Holder's own account and
not as a nominee for any other party, and for investment, and that the Holder
will not offer, sell or otherwise dispose of any shares of Common Stock to be
issued upon exercise hereof, except under circumstances that will not result in
a violation of the United States Securities Act of 1933, as amended (the "ACT"),
or any foreign or state securities laws. Upon exercise of this Warrant, the
Holder shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the shares of Common Stock so purchased are
being acquired solely for the Holder's, own account and not as a nominee for any
other party, for investment, and not with a view toward distribution or resale.
(b) All shares of Common Stock issued upon exercise hereof may
be stamped or imprinted with the following legend (in addition to any legend
required by the Act and the securities laws of any state of the United States)
as determined by counsel for the Company:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER (THE "ACT"), OR APPLICABLE STATE SECURITIES
LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF REGISTRATION UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS UNLESS DATAMETRICS CORPORATION (THE "COMPANY") HAS
RECEIVED 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 UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS.
8. RESTRICTIONS ON TRANSFER OF UNDERLYING COMMON STOCK. The Holder of
this Warrant by acceptance hereof agrees that the transfer of the shares of
Common Stock issuable upon the exercise of all or any portion of this Warrant is
subject to the provisions of this Warrant, which include certain restrictions on
the transfer of such shares of Common Stock.
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9. RESERVATION OF COMMON STOCK. The Company hereby covenants and agrees
that during the term that this Warrant is exercisable, the Company will reserve
from its authorized and unissued shares of Common Stock a sufficient number of
shares to provide for the issuance of Common Stock upon the exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
Certificate of Incorporation to provide a sufficient reserve of shares of Common
Stock issuable upon exercise of the Warrant. The Company further covenants that
all shares that may be issued upon the exercise of rights represented by this
Warrant and payment of the exercise price, all as set forth herein, will be free
from all taxes, liens and charges in respect of the issue thereof (other than
taxes in respect of any transfer occurring contemporaneously or otherwise
specified herein). The Company agrees that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
shares of Common Stock upon the exercise of this Warrant.
10. NOTICES. (a) Whenever the exercise price or number of shares
purchasable hereunder shall be adjusted pursuant to Section 12 hereof, the
Company shall issue a certificate signed by its Secretary setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated and the exercise
price and number of shares purchasable hereunder after giving effect to such
adjustment, and shall cause a copy of such certificate to be mailed (by first
class mail, postage prepaid to the Holder of this Warrant.
(b) In case: (i) the Company shall take a record of the
holders of its Common Stock (or other stock or securities at the time receivable
upon the exercise of this Warrant) for the purpose of entitling them to receive
any dividend or other distribution, or any right to subscribe for or purchase
any shares of stock of any class or any other securities, or to receive any
other right; or (ii) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any sale, lease or
conveyance of all or substantially all of the assets of the Company to another
person; or (iii) of any voluntary dissolution, liquidation or winding-up of the
Company, then, and in each such case, the Company will mail or cause to be
mailed to the Holder a notice specifying, as the case may be, (A) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, or (B) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or such stock or securities at the time receivable upon
the exercise of this Warrant) shall be entitled to exchange their shares of
Common Stock (or such other stock or securities) for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up. Such notice shall be
mailed at least ten (10) days prior to the date therein specified.
(c) All such notices and communications shall be deemed to
have been received (i) in the case of personal delivery, on the date of such
delivery and (ii) in the case of mailing, on the second business day following
the date of such mailing.
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11. AMENDMENTS. (a) Any term of this Warrant may be amended with the
written consent of the Company and the holders of warrants which, if exercised
would then represent not less than a majority of the shares of Common Stock
issuable upon exercise of any and all outstanding warrants for shares of Common
Stock issued by the Company on the date hereof (the "COMMON STOCK WARRANTS"),
even without the specific consent of the Holder. An amendment effected in
accordance with this Section 11 shall be binding upon each holder of any of the
Common Stock Warrants, each future holder of all such Common Stock Warrants, and
the Company. The Company shall promptly give notice to all holders of Common
Stock Warrants of any amendment effected in accordance with this Section 11.
(b) No waivers of or exceptions to any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.
12. ADJUSTMENTS; ANTIDILUTION. The exercise prices and the number of
shares purchasable hereunder are subject to adjustment from time to time as
follows:
(a) MERGER, SALE OF ASSETS, ETC. If at any time, while this
Warrant, or any portion thereof, is outstanding and unexpired there shall be (i)
a reorganization (other than a combination, reclassification exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving person, or a reverse triangular merger in which the
Company is the surviving person but the shares of the Company's capital stock
outstanding immediately prior to the merger are converted by virtue of the
merger into other property, whether in the form of cash, securities or
otherwise, or (iii) a sale or transfer of the Company's properties and assets
as, or substantially as, an entirety to any other person, then, as a part of
such reorganization, merger, consolidation, sale or transfer, lawful provision
shall be made so that the Holder shall thereafter be entitled to receive upon
exercise of this Warrant, during the period specified herein and upon payment of
the exercise price then in effect, the number of shares of stock or other
securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer which a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 12. The foregoing provisions of this subsection (a) shall
similarly apply to successive reorganizations, consolidations, mergers, sales
and transfers and to the stock or securities of any other corporation which are
at the time receivable upon the exercise of this Warrant. If the per share
consideration payable to the Holder for shares in connection with any such
transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Company's
Board of Directors, whose determination shall be final and binding. In all
events, appropriate adjustment (as determined in good faith by the Company's
Board of Directors) shall be made in the application of the provisions of this
Warrant with respect to the rights and interests of the Holder after the
transaction, to the end that the provisions of this Warrant shall be applicable
after that event, as nearly as reasonably may be, in relation to any shares or
other property deliverable after that event upon exercise of this Warrant.
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(b) RECLASSIFICATION, etc. If the Company at any time while
this Warrant, or any portion thereof, remains outstanding and unexpired shall,
by reclassification of securities or otherwise, change any of the securities as
to which purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities which were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the exercise
price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 12.
(c) SPLIT, SUBDIVISION OR COMBINATION OF SHARES. If the
Company at any time while this Warrant, or any portion thereof, remains
outstanding and unexpired shall split, subdivide or combine the securities as to
which purchase rights under this Warrant exist, into a different number of
securities of the same class, the exercise price for such securities shall be
proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination.
(d) ADJUSTMENTS FOR DIVIDENTS IN STOCK OR OTHER SECURITIES OR
PROPERTY. If while this Warrant, or any portion thereof, remains outstanding and
unexpired the holders of the securities as to which purchase rights under this
Warrant exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to receive, without payment therefor, other or additional stock or other
securities or property (other than cash) of the Company by way of dividend, then
and in each case, this Warrant shall represent the right to acquire, in addition
to the number of shares of the security receivable upon exercise of this
Warrant, and without payment of any additional consideration therefor, the
amount of such other or additional stock or other securities or property (other
than cash) of the Company which such holder would hold on the date of such
exercise had it been the holder of record of the security receivable upon
exercise of this Warrant on the date hereof and had thereafter, during the
period from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock available by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by the provisions of this Section 12.
(e) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment pursuant to this Section 12, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each Holder a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written
request, at any time, of any such Holder, furnish or cause to be furnished to
such Holder a like certificate setting forth: (i) such adjustments and
readjustments; (ii) the exercise price at the time in effect; and (iii) the
number of shares and the amount, if any, of other property which at the time
would be received upon the exercise of the Warrant.
(f) NO IMPAIRMENT. The Company will not, by any voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed
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hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 12 and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Holders against impairment.
13. REGISTRATION RIGHTS.
(a) REGISTRATION OF ALL SHARES UNDERLYING WARRANT. Subject to the
following provisions: As soon as practicable, the Company shall register 266,667
of the shares of Common Stock to be received for issuance pursuant hereto; and
if the Guarantee is Outstanding on March 1, 2000, on or before March 15, 2000
the Company shall amend such registration, or file a new registration, to
include the remaining 233,333 shares of Common Stock reserved for issuance
hereunder.
(b) PREPARTATION AND FILING: If and whenever the Company is under an
obligation to effect the registration of any Common Stock issuable pursuant
hereto (the "Registrable Common Stock"), the Company shall, as expeditiously as
practicable:
(i) prepare and file with the Commission a
registration statement with respect to such securities and use
its best efforts to cause such registration statement to
become and remain effective in accordance with Section
13(b)(ii);
(ii) prepare and file with the Commission such
amendments and supplements to such registration statements and
the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for at
least nine months and to comply with the provisions of the
Securities Act with respect to the sale or other disposition
of all Common Stock covered by such registration statement;
(iii) furnish to each holder of Registrable Common
Stock such number of copies of a summary prospectus or other
prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other
documents as such seller may reasonably request in order to
facilitate the public sale or other disposition of such Common
Stock;
(iv) use its best efforts to register or qualify the
Common Stock covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as each
such seller shall reasonably request (PROVIDED, HOWEVER, that
the Company shall not be required to consent to general
service or process for all purposes in any jurisdiction where
it is not then qualified) and do any and all other acts or
things which may be necessary or advisable to enable such
seller to consummate the public sale or other disposition in
such jurisdiction of such securities;
(v) notify each seller of Registrable Common Stock
covered by such registration statement, at any time when a
prospectus relating thereto covered by
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such registration statement is required to be delivered under
the Securities Act within the appropriate period mentioned in
Section 13(c), of the happening of any event as a result of
which the prospectus included in such 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 and
at the request of such seller, prepare and furnish to such
seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Common Stock,
such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
and
(vi) furnish, at the request of any holder or holders
requesting registration of Common Stock pursuant to this
Section 13, on the date that such Registrable Common Stock are
delivered to the underwriters for sale in connection with a
registration described in this Section 13, if such securities
are being sold through underwriters, or, if such securities
are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes
effective, (A) an opinion, dated such date, of the counsel
representing the Company for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to
the underwriters, if any, and to the holder or holders making
such request; and (B) a letter dated such date, from the
independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters,
if any, and to the holder or holders making such request.
(c) EXPENSES. The Company shall bear all costs and expenses of
each such registration, including, but not limited to,
printing, legal and accounting fees and expenses, Securities
and Exchange Commission and NASD filing fees and "Blue Sky"
fees and expenses; provided, however, that the Company shall
have no obligation to pay or otherwise bear any portion of the
underwriters' commissions or discounts attributable to the
Common Stock being offered and sold by the holders of Common
Stock (if any), or the fees and expenses of any counsel for
the selling holders of Common Stock in connection with the
registration of the Membership Interests.
(d) ADDITIONAL COVENANTS CONCERNING SALES.
(i) If permitted by applicable law and regulation,
the Company, at the request of the holder of Registrable
Common Stock, shall file such amendments and/or supplements to
such registration statement necessary to take such other steps
as may be required to maintain such registration statement in
effect, and to keep the information therein current, so long
as any of the Registrable Common Stock included therein remain
unsold. In connection with any registration statement
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referred to in this Section 13, the Company shall furnish to
the holder of Registrable Common Stock (or to any broker or
other person at its request) a reasonable number of copies of
such registration statement, each amendment and supplement
thereto and each document included therein, and such number of
copies of the then current prospectus included therein as
either the holder of Common Stock or its brokers may from time
to time reasonably request.
(ii) In connection with any registration statement
referred to in this Section 13 of this Agreement, the holder
of Registrable Common Stock being registered will furnish to
the Company such information as the Company may reasonably
require from such holder for inclusion in the registration
statement (and the prospectus included therein).
(iv) The Company's obligations under this Section 13
shall be conditioned upon each holder of Registrable Common
Stock whose Common Stock are being registered and any
underwriter participating in such public offering executing
and delivering to the Company an appropriate agreement, if
necessary in the reasonable opinion of counsel to the Company,
in form satisfactory to counsel for the Company, that he will
comply with all anti-stabilization, manipulation, and similar
provisions of Section 10 of the Securities Exchange Act of
1934, as amended, and any rules promulgated thereunder and
will furnish to the Company information about sales made in
such public offering.
(e) BLUE SKY PROVISIONS. The Company, at its expense, shall cause
all of the Common Stock included in a registration statement
referred to in this Section 13 to be qualified under the laws
of such reasonable number of jurisdictions as the holder of
Registrable Common Stock, or the managing underwriter named
therein, may designate, and the Company will continue such
qualification in effect so long as may be necessary to comply
with all applicable laws regulating sales of securities.
(f) ADVISING THE HOLDER OF REGISTRABLE MEMBERSHIP INTERESTS. In
connection with any registration statement referred to in this
Section 13, the Company will promptly advise each holder of
Registrable Common Stock and confirm such advice in writing
(i) when the registration statement has become effective, (ii)
when any post-effective amendment to the registration
statement becomes effective, and (iii) of any request by the
SEC for any amendment or supplement to the registration
statement or prospectus or for additional information.
If at any time the SEC should institute or threaten to
institute any proceeding for the purposes of issuing, or
should issue, a stop order suspending the effectiveness of the
registration statement, the Company will promptly notify the
holder of Registrable Common Stock, and will use its best
efforts to prevent the issuance of any such stop order or to
obtain the withdrawal thereof as soon as possible; and the
Company will advise such holder of Registrable Common Stock
promptly of any order or communication of any public board or
body addressed to the Company
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<PAGE>
suspending or threatening to suspend the qualification of any
Registrable Common Stock for sale in any jurisdiction.
(g) INDEMNIFICATION.
(i) With respect to the registration rights described
in this Section 13, the Company hereby agrees to indemnify,
hold harmless and defend each holder of Registrable Common
Stock and each person, if any, who is deemed a controlling
person of such holder of Registrable Common Stock within the
meaning of the Securities Act, against any and all losses,
claims, damages or liabilities (including legal and other
expenses incurred in investigating and defending against the
same), to which they, or any of them, may become subject under
the Securities Act or other statute or common law, arising out
of or based upon:
(A) any alleged untrue statement of a
material fact contained in any registration
statement, preliminary prospectus or
prospectus included therein, any amendment
thereof of supplement thereto; or
(B) the alleged omission to state therein a
material fact required to be stated therein
or necessary to make the statements
contained therein not misleading; provided,
however, that the indemnity contained in
this Subsection (g) shall not apply to any
such alleged untrue statement or omission
made in reliance upon and in conformity with
information furnished in writing to the
Company by or on behalf of the Holder of
Registrable Common Stock. The Holder of
Registrable Common Stock agrees that as soon
as practicable, but in any event within
forty-five (45) days, after the receipt of
notice of any claim or action against it in
respect of which indemnity may be sought
from the Company hereunder, to notify the
Company thereof in writing, and the Company
shall assume the defense of such claim or
action (and the cost thereof) by counsel of
its own choosing, who shall be reasonably
satisfactory to the Holder of Registrable
Common Stock.
(ii) Each selling holder of Registrable Common Stock
shall agree to indemnify, hold harmless and defend the
Company, its directors and officers, and each person, if any,
who is deemed a controlling person of the Company with the
meaning of the Securities Act, against any and all losses,
claims, damages or liabilities, including legal or other
expenses incurred in investigating and defending against the
same, to which they or any of them may become subject under
the Securities Act or other statute or common law, arising out
of or based upon:
(A) any alleged untrue statement of a
material fact contained in any such
registration statement, or prospectus or
preliminary prospectus
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<PAGE>
included therein, or any amendment thereof
or supplement thereto, or
(B) the alleged omission to state therein a
material fact required to be stated therein
or necessary to make the statements
contained therein not misleading. The
Company, and any other person or entity in
respect of which indemnity may be sought
from the Holder of Common Stock hereunder,
agree, that as soon as practicable, but in
any event within forty-five (45) days, after
receipt of notice of any claim or action
against the Company or such other person or
entity, to notify the holder of Common Stock
thereof in writing, and the holder of Common
Stock shall assume the defense of any such
claim or action (and the cost thereof) by
counsel of their own choosing, who shall be
reasonably satisfactory to the Company.
14. [RESERVED]
15. MISCELLANEOUS PROVISIONS.
(a) GOVERNING LAW. This Warrant has been executed and
delivered in the State of New Jersey and shall be governed by and construed in
accordance with the laws of the State of New Jersey without reference to the
principles of conflicts of law thereof
(b) JURISDICTION. The Company hereby irrevocably consents and
submits to, and the Holder, by its acceptance of this Warrant, likewise hereby
irrevocably consents and submits to, the exclusive jurisdiction of the United
States District Court for the District of New Jersey in connection with any
proceeding arising out of or relating to this Warrant, 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 the Holder, by its acceptance of this Warrant, likewise irrevocably consents
and submits to, the jurisdiction of the Courts of the State of New Jersey in
connection with such proceeding and waives any objection to venue in the State
of New Jersey), 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(g) of the Rights Agreement.
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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<PAGE>
(c) ATTORNEYS' FEES. If any action at law or in equity is
necessary to enforce or interpret the terms of this Warrant, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and disbursements,
in addition to any other relief to which such party may be entitled.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed in its corporate name by a duly authorized officer and to be dated as of
the day and year written below.
Dated as of August ___, 1999
Total No. of Shares: 500,000 (subject to vesting as set forth in Section 1
above)
DATAMETRICS CORPORATION
By: /s/ Daniel P. Ginns
-----------------------
Name: Daniel P. Ginns
Title: Chairman and CEO
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<PAGE>
NOTICE OF EXERCISE
To: DATAMETRICS CORPORATION
25B Hanover Road
Suite 3305
Florham Park, NJ 07932
(1) The undersigned hereby elects to purchase __________ shares of
Common Stock of DATAMETRICS CORPORATION, pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price for such shares.
(2) In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock are being acquired solely for the
account of the undersigned and not as a nominee for any other party, and for
investment, and that the undersigned will not offer, sell or otherwise dispose
of any such shares of Common Stock, except under circumstances that will not
result in a violation of the United States Securities Act of 1933, as amended,
or any foreign or state securities laws.
(3) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:
(4) Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned or in such other name as is
specified below:
- ------------------------------ -----------------------------------
Date: Name:
-13-
EITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE
UPON EXERCISE OF THIS WARRANT MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS UNLESS DATAMETRICS CORPORATION (THE "COMPANY") HAS RECEIVED THE
WRITTEN OPINION OF THE COMPANY'S COUNSEL OR OTHER COUNSEL REASONABLY
SATISFACTORY THE COMPANY THAT, AFTER INVESTIGATION OF THE RELEVANT FACTS, SUCH
COUNSEL IS OF THE OPINION THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION
UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.
Warrant No._______ 1,000,000 Shares
WARRANT TO PURCHASE COMMON STOCK
OF
DATAMETRICS CORPORATION
VOID AFTER 5:00 P.M., EASTERN DAYLIGHT TIME, ON AUGUST 31, 2004
This certifies that, for value received, Roy Doumani or his permissible
transferees, designees, successors and assigns (collectively, the "Holder"), is
entitled, subject to the terms set forth below, to purchase from Datametrics
Corporation, a Delaware corporation (the "Company"), SO MUCH OF ONE MILLION
(1,000,000) SHARES OF THE COMPANY'S COMMON STOCK, PAR VALUE $.01 PER SHARE (THE
"COMMON STOCK"), AS ARE THEN AVAILABLE PURSUANT TO THE SCHEDULE SET FORTH IN
SECTION 1 HEREOF, upon surrender hereof, as hereinafter provided, at the
exercise price of $1.00 per share of Common Stock. The number of, and exercise
price for, such shares of Common Stock are subject to adjustment as provided
herein. This Warrant is being issued in connection with and in consideration of
the initial Holder's secured guarantee ("Guarantee") of the Company's secured
revolving line of credit in the amount of $1,000,000 pursuant to an
Intercreditor and Reimbursement Agreement of even date between the initial
Holder and the Company. For purposes hereof, the phrase "Guarantee is
Outstanding" shall mean that the Guarantee has continuously from the date
hereof, and as of the date of such determination, (i) been in full force and
effect; (ii) been fully secured in accordance with the terms of the agreements
between the Company and the initial Holder, or the Company, the initial Holder
and the Bank; and (iii) not been breached, released, canceled, terminated or
surrendered.
1. VESTING OF WARRANTS. This Warrant is exercisable immediately by the
Holder in whole or in part, at any time and from time to time during the term
hereof, with respect to 333,333 shares of Common Stock. This Warrant also is
exercisable at any time during the term hereof with
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<PAGE>
respect to additional shares of Common Stock increasing by 33,333 shares of
Common Stock per month, commencing on September 1, 1999 and continuing on the
first day of each month until August 1, 2000. Thereafter, if the Guarantee is
Outstanding on March 1, 2000 and this Warrant is exercisable at any time during
the term for an additional 266,667 shares of Common Stock. otwithstanding
anything to the contrary herein contained, this Warrant shall be canceled
automatically as to all shares of Common Stock as to which it is not then
exercisable at the moment that the Guarantee is not Outstanding.
2. ESERCISE. This Warrant may be exercised by the Holder in whole or in
part from time to time commencing on the date hereof and terminating on or
before 5:00 p.m., New York time, on August 31, 2004 (the "WARRANT EXPIRATION
Date"), with respect to the shares of Common Stock from time to time available
in accordance with Section 1 hereof, upon his tendering this Warrant (with the
Notice of Exercise annexed hereto duly completed and executed on behalf of the
Holder), and payment in cash or by check acceptable to the Company, for the
purchase price of the shares to be purchased at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to the Holder at the address of the Holder appearing on the books of the
Company). To the extent not exercised prior to the Warrant Expiration Date this
Warrant shall become void and all rights thereunder and all rights in respect
thereof shall cease as of such time.
3. RIGHTS UPON EXERCISE. This Warrant shall be deemed to have been
exercised immediately prior to the close of business on the date of its
surrender for exercise as provided in Section 2 hereof, and the person entitled
to receive the shares of Common Stock issuable upon such exercise shall be
treated for all purposes as the holder of record of such shares as of the close
of business on such date. Unless exercised in connection with an underwritten
public offering, as promptly as practicable on or after such date and in any
event within seven (7) days thereafter, the Company at its expense shall issue
and deliver to the person or persons entitled to receive the same a certificate
or certificates for the number of shares issuable upon such exercise. In the
event that this Warrant is exercised in part, the Company at its expense will
execute and deliver a new Warrant of like tenor exercisable for the number of
shares for which this Warrant may then be exercised. In the event of exercise at
the time of an underwritten public offering, the Company will provide
instructions as to the exercise of this Warrant and the issuance of
certificates.
4. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the exercise price
multiplied by such fraction.
5. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company, in its sole and absolute discretion, of the loss,
theft, destruction or mutilation of this Warrant and, in the case of loss, theft
or destruction, upon delivery of an indemnity agreement reasonably satisfactory
in form and substance to the Company or, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company at its expense shall
execute and deliver, in lieu of this Warrant, a new warrant of like tenor and
amount.
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<PAGE>
6. RIGHTS OF STOCKHOLDERS. The Holder shall not be entitled to vote or
receive dividends or be deemed the holder of Common Stock or any other
securities of the Company that may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, consolidation, merger or otherwise) or to receive
notices of meetings, or to receive dividends or subscription rights or otherwise
until the Warrant shall have been exercised and the shares of Common Stock
purchasable upon the exercise hereof shall have been issued, as provided herein.
7. COMPLIANCE WITH SECURITIES LAWS. (a) The Holder of this Warrant, by
acceptance hereof, acknowledges that the shares of Common Stock to be issued
upon exercise hereof are being acquired solely for the Holder's own account and
not as a nominee for any other party, and for investment, and that the Holder
will not offer, sell or otherwise dispose of any shares of Common Stock to be
issued upon exercise hereof, except under circumstances that will not result in
a violation of the United States Securities Act of 1933, as amended (the "ACT"),
or any foreign or state securities laws. Upon exercise of this Warrant, the
Holder shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the shares of Common Stock so purchased are
being acquired solely for the Holder's, own account and not as a nominee for any
other party, for investment, and not with a view toward distribution or resale.
(b) All shares of Common Stock issued upon exercise hereof may
be stamped or imprinted with the following legend (in addition to any legend
required by the Act and the securities laws of any state of the United States)
as determined by counsel for the Company:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER (THE "ACT"), OR APPLICABLE STATE SECURITIES
LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF REGISTRATION UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS UNLESS DATAMETRICS CORPORATION (THE "COMPANY") HAS
RECEIVED 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 UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS.
8. RESTRICTIONS ON TRANSFER OF UNDERLYING COMMON STOCK. The Holder of
this Warrant by acceptance hereof agrees that the transfer of the shares of
Common Stock issuable upon the exercise of all or any portion of this Warrant is
subject to the provisions of this Warrant, which include certain restrictions on
the transfer of such shares of Common Stock.
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<PAGE>
9. RESERVATION OF COMMON STOCK. The Company hereby covenants and agrees
that during the term that this Warrant is exercisable, the Company will reserve
from its authorized and unissued shares of Common Stock a sufficient number of
shares to provide for the issuance of Common Stock upon the exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
Certificate of Incorporation to provide a sufficient reserve of shares of Common
Stock issuable upon exercise of the Warrant. The Company further covenants that
all shares that may be issued upon the exercise of rights represented by this
Warrant and payment of the exercise price, all as set forth herein, will be free
from all taxes, liens and charges in respect of the issue thereof (other than
taxes in respect of any transfer occurring contemporaneously or otherwise
specified herein). The Company agrees that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
shares of Common Stock upon the exercise of this Warrant.
10. NOTICES. (a) Whenever the exercise price or number of shares
purchasable hereunder shall be adjusted pursuant to Section 12 hereof, the
Company shall issue a certificate signed by its Secretary setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated and the exercise
price and number of shares purchasable hereunder after giving effect to such
adjustment, and shall cause a copy of such certificate to be mailed (by first
class mail, postage prepaid to the Holder of this Warrant.
(b) In case: (i) the Company shall take a record of the
holders of its Common Stock (or other stock or securities at the time receivable
upon the exercise of this Warrant) for the purpose of entitling them to receive
any dividend or other distribution, or any right to subscribe for or purchase
any shares of stock of any class or any other securities, or to receive any
other right; or (ii) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any sale, lease or
conveyance of all or substantially all of the assets of the Company to another
person; or (iii) of any voluntary dissolution, liquidation or winding-up of the
Company, then, and in each such case, the Company will mail or cause to be
mailed to the Holder a notice specifying, as the case may be, (A) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, or (B) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or such stock or securities at the time receivable upon
the exercise of this Warrant) shall be entitled to exchange their shares of
Common Stock (or such other stock or securities) for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up. Such notice shall be
mailed at least ten (10) days prior to the date therein specified.
(c) All such notices and communications shall be deemed to
have been received (i) in the case of personal delivery, on the date of such
delivery and (ii) in the case of mailing, on the second business day following
the date of such mailing.
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<PAGE>
11. AMENDMENTS. (a) Any term of this Warrant may be amended with the
written consent of the Company and the holders of warrants which, if exercised
would then represent not less than a majority of the shares of Common Stock
issuable upon exercise of any and all outstanding warrants for shares of Common
Stock issued by the Company on the date hereof (the "COMMON STOCK WARRANTS"),
even without the specific consent of the Holder. An amendment effected in
accordance with this Section 11 shall be binding upon each holder of any of the
Common Stock Warrants, each future holder of all such Common Stock Warrants, and
the Company. The Company shall promptly give notice to all holders of Common
Stock Warrants of any amendment effected in accordance with this Section 11.
(b) No waivers of or exceptions to any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.
12. ADJUSTMENTS; ANTIDILUTION. The exercise prices and the number of
shares purchasable hereunder are subject to adjustment from time to time as
follows:
(a) MERGER, SALE OF ASSETS, ETC. If at any time, while this
Warrant, or any portion thereof, is outstanding and unexpired there shall be (i)
a reorganization (other than a combination, reclassification exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving person, or a reverse triangular merger in which the
Company is the surviving person but the shares of the Company's capital stock
outstanding immediately prior to the merger are converted by virtue of the
merger into other property, whether in the form of cash, securities or
otherwise, or (iii) a sale or transfer of the Company's properties and assets
as, or substantially as, an entirety to any other person, then, as a part of
such reorganization, merger, consolidation, sale or transfer, lawful provision
shall be made so that the Holder shall thereafter be entitled to receive upon
exercise of this Warrant, during the period specified herein and upon payment of
the exercise price then in effect, the number of shares of stock or other
securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer which a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 12. The foregoing provisions of this subsection (a) shall
similarly apply to successive reorganizations, consolidations, mergers, sales
and transfers and to the stock or securities of any other corporation which are
at the time receivable upon the exercise of this Warrant. If the per share
consideration payable to the Holder for shares in connection with any such
transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Company's
Board of Directors, whose determination shall be final and binding. In all
events, appropriate adjustment (as determined in good faith by the Company's
Board of Directors) shall be made in the application of the provisions of this
Warrant with respect to the rights and interests of the Holder after the
transaction, to the end that the provisions of this Warrant shall be applicable
after that event, as nearly as reasonably may be, in relation to any shares or
other property deliverable after that event upon exercise of this Warrant.
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<PAGE>
(b) RECLASSIFICATION, ETC. If the Company at any time while
this Warrant, or any portion thereof, remains outstanding and unexpired shall,
by reclassification of securities or otherwise, change any of the securities as
to which purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities which were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the exercise
price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 12.
(c) SPLIT, SUBDIVISION OF COMBINATION OF SHARES. If the
Company at any time while this Warrant, or any portion thereof, remains
outstanding and unexpired shall split, subdivide or combine the securities as to
which purchase rights under this Warrant exist, into a different number of
securities of the same class, the exercise price for such securities shall be
proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination.
(d) ADJUSTMENTS FOR DIVIDENDS IN STOCK OR OTHER SECURITIES OR
PROPERTY. If while this Warrant, or any portion thereof, remains outstanding and
unexpired the holders of the securities as to which purchase rights under this
Warrant exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to receive, without payment therefor, other or additional stock or other
securities or property (other than cash) of the Company by way of dividend, then
and in each case, this Warrant shall represent the right to acquire, in addition
to the number of shares of the security receivable upon exercise of this
Warrant, and without payment of any additional consideration therefor, the
amount of such other or additional stock or other securities or property (other
than cash) of the Company which such holder would hold on the date of such
exercise had it been the holder of record of the security receivable upon
exercise of this Warrant on the date hereof and had thereafter, during the
period from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock available by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by the provisions of this Section 12.
(e) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment pursuant to this Section 12, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each Holder a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written
request, at any time, of any such Holder, furnish or cause to be furnished to
such Holder a like certificate setting forth: (i) such adjustments and
readjustments; (ii) the exercise price at the time in effect; and (iii) the
number of shares and the amount, if any, of other property which at the time
would be received upon the exercise of the Warrant.
(f) NO IMPAIRMENT. The Company will not, by any voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed
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<PAGE>
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 12 and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Holders against impairment.
13. REGISTRATION RIGHTS.
(a) REGISTRATION OF ALL SHARES UNDERLYING WARRANT. Subject to the
following provisions: As soon as practicable, the Company shall register 533,333
of the shares of Common Stock to be received for issuance pursuant hereto; and
if the Guarantee is Outstanding on March 1, 2000, on or before March 15, 2000
the Company shall amend such registration, or file a new registration, to
include the remaining 466,667 shares of Common Stock reserved for issuance
hereunder.
(b) PREPARATION AND FILING: If and whenever the Company is under an
obligation to effect the registration of any Common Stock issuable pursuant
hereto (the "Registrable Common Stock"), the Company shall, as expeditiously as
practicable:
(i) prepare and file with the Commission a
registration statement with respect to such securities and use
its best efforts to cause such registration statement to
become and remain effective in accordance with Section
13(b)(ii);
(ii) prepare and file with the Commission such
amendments and supplements to such registration statements and
the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for at
least nine months and to comply with the provisions of the
Securities Act with respect to the sale or other disposition
of all Common Stock covered by such registration statement;
(iii) furnish to each holder of Registrable Common
Stock such number of copies of a summary prospectus or other
prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other
documents as such seller may reasonably request in order to
facilitate the public sale or other disposition of such Common
Stock;
(iv) use its best efforts to register or qualify the
Common Stock covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as each
such seller shall reasonably request (provided, however, that
the Company shall not be required to consent to general
service or process for all purposes in any jurisdiction where
it is not then qualified) and do any and all other acts or
things which may be necessary or advisable to enable such
seller to consummate the public sale or other disposition in
such jurisdiction of such securities;
(v) notify each seller of Registrable Common Stock
covered by such registration statement, at any time when a
prospectus relating thereto covered by
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<PAGE>
such registration statement is required to be delivered under
the Securities Act within the appropriate period mentioned in
Section 13(c), of the happening of any event as a result of
which the prospectus included in such 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 and
at the request of such seller, prepare and furnish to such
seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Common Stock,
such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
and
(vi) furnish, at the request of any holder or holders
requesting registration of Common Stock pursuant to this
Section 13, on the date that such Registrable Common Stock are
delivered to the underwriters for sale in connection with a
registration described in this Section 13, if such securities
are being sold through underwriters, or, if such securities
are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes
effective, (A) an opinion, dated such date, of the counsel
representing the Company for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to
the underwriters, if any, and to the holder or holders making
such request; and (B) a letter dated such date, from the
independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters,
if any, and to the holder or holders making such request.
(c) EXPENSES. The Company shall bear all costs and expenses of
each such registration, including, but not limited to,
printing, legal and accounting fees and expenses, Securities
and Exchange Commission and NASD filing fees and "Blue Sky"
fees and expenses; provided, however, that the Company shall
have no obligation to pay or otherwise bear any portion of the
underwriters' commissions or discounts attributable to the
Common Stock being offered and sold by the holders of Common
Stock (if any), or the fees and expenses of any counsel for
the selling holders of Common Stock in connection with the
registration of the Membership Interests.
(d) ADDITIONAL COVENANTS CONCERNING SALES.
(i) If permitted by applicable law and regulation,
the Company, at the request of the holder of Registrable
Common Stock, shall file such amendments and/or supplements to
such registration statement necessary to take such other steps
as may be required to maintain such registration statement in
effect, and to keep the information therein current, so long
as any of the Registrable Common Stock included therein remain
unsold. In connection with any registration statement
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<PAGE>
referred to in this Section 13, the Company shall furnish to
the holder of Registrable Common Stock (or to any broker or
other person at its request) a reasonable number of copies of
such registration statement, each amendment and supplement
thereto and each document included therein, and such number of
copies of the then current prospectus included therein as
either the holder of Common Stock or its brokers may from time
to time reasonably request.
(ii) In connection with any registration statement
referred to in this Section 13 of this Agreement, the holder
of Registrable Common Stock being registered will furnish to
the Company such information as the Company may reasonably
require from such holder for inclusion in the registration
statement (and the prospectus included therein).
(iv) The Company's obligations under this Section 13
shall be conditioned upon each holder of Registrable Common
Stock whose Common Stock are being registered and any
underwriter participating in such public offering executing
and delivering to the Company an appropriate agreement, if
necessary in the reasonable opinion of counsel to the Company,
in form satisfactory to counsel for the Company, that he will
comply with all anti-stabilization, manipulation, and similar
provisions of Section 10 of the Securities Exchange Act of
1934, as amended, and any rules promulgated thereunder and
will furnish to the Company information about sales made in
such public offering.
(e) BLUE SKY PROVISIONS. The Company, at its expense, shall cause
all of the Common Stock included in a registration statement
referred to in this Section 13 to be qualified under the laws
of such reasonable number of jurisdictions as the holder of
Registrable Common Stock, or the managing underwriter named
therein, may designate, and the Company will continue such
qualification in effect so long as may be necessary to comply
with all applicable laws regulating sales of securities.
(f) ADVISING THE HOLDER OF REGISTRABLE MEMBERSHIP INTERESTS. In
connection with any registration statement referred to in this
Section 13, the Company will promptly advise each holder of
Registrable Common Stock and confirm such advice in writing
(i) when the registration statement has become effective, (ii)
when any post-effective amendment to the registration
statement becomes effective, and (iii) of any request by the
SEC for any amendment or supplement to the registration
statement or prospectus or for additional information.
If at any time the SEC should institute or threaten to
institute any proceeding for the purposes of issuing, or
should issue, a stop order suspending the effectiveness of the
registration statement, the Company will promptly notify the
holder of Registrable Common Stock, and will use its best
efforts to prevent the issuance of any such stop order or to
obtain the withdrawal thereof as soon as possible; and the
Company will advise such holder of Registrable Common Stock
promptly of any order or communication of any public board or
body addressed to the Company
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<PAGE>
suspending or threatening to suspend the qualification of any
Registrable Common Stock for sale in any jurisdiction.
(g) INDEMNIFICATION.
(i) With respect to the registration rights described
in this Section 13, the Company hereby agrees to indemnify,
hold harmless and defend each holder of Registrable Common
Stock and each person, if any, who is deemed a controlling
person of such holder of Registrable Common Stock within the
meaning of the Securities Act, against any and all losses,
claims, damages or liabilities (including legal and other
expenses incurred in investigating and defending against the
same), to which they, or any of them, may become subject under
the Securities Act or other statute or common law, arising out
of or based upon:
(A) any alleged untrue statement of a
material fact contained in any registration
statement, preliminary prospectus or
prospectus included therein, any amendment
thereof of supplement thereto; or
(B) the alleged omission to state therein a
material fact required to be stated therein
or necessary to make the statements
contained therein not misleading; provided,
however, that the indemnity contained in
this Subsection (g) shall not apply to any
such alleged untrue statement or omission
made in reliance upon and in conformity with
information furnished in writing to the
Company by or on behalf of the Holder of
Registrable Common Stock. The Holder of
Registrable Common Stock agrees that as soon
as practicable, but in any event within
forty-five (45) days, after the receipt of
notice of any claim or action against it in
respect of which indemnity may be sought
from the Company hereunder, to notify the
Company thereof in writing, and the Company
shall assume the defense of such claim or
action (and the cost thereof) by counsel of
its own choosing, who shall be reasonably
satisfactory to the Holder of Registrable
Common Stock.
(ii) Each selling holder of Registrable Common Stock
shall agree to indemnify, hold harmless and defend the
Company, its directors and officers, and each person, if any,
who is deemed a controlling person of the Company with the
meaning of the Securities Act, against any and all losses,
claims, damages or liabilities, including legal or other
expenses incurred in investigating and defending against the
same, to which they or any of them may become subject under
the Securities Act or other statute or common law, arising out
of or based upon:
(A) any alleged untrue statement of a
material fact contained in any such
registration statement, or prospectus or
preliminary prospectus
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<PAGE>
included therein, or any amendment thereof
or supplement thereto, or
(B) the alleged omission to state therein a
material fact required to be stated therein
or necessary to make the statements
contained therein not misleading. The
Company, and any other person or entity in
respect of which indemnity may be sought
from the Holder of Common Stock hereunder,
agree, that as soon as practicable, but in
any event within forty-five (45) days, after
receipt of notice of any claim or action
against the Company or such other person or
entity, to notify the holder of Common Stock
thereof in writing, and the holder of Common
Stock shall assume the defense of any such
claim or action (and the cost thereof) by
counsel of their own choosing, who shall be
reasonably satisfactory to the Company.
14. [RESERVED]
15. MISCELLANEOUS PROVISIONS.
(a) GOVERNING LAW. This Warrant has been executed and
delivered in the State of New Jersey and shall be governed by and construed in
accordance with the laws of the State of New Jersey without reference to the
principles of conflicts of law thereof
(b) JURISDICTION. The Company hereby irrevocably consents and
submits to, and the Holder, by its acceptance of this Warrant, likewise hereby
irrevocably consents and submits to, the exclusive jurisdiction of the United
States District Court for the District of New Jersey in connection with any
proceeding arising out of or relating to this Warrant, 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 the Holder, by its acceptance of this Warrant, likewise irrevocably consents
and submits to, the jurisdiction of the Courts of the State of New Jersey in
connection with such proceeding and waives any objection to venue in the State
of New Jersey), 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(g) of the Rights Agreement.
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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<PAGE>
(c) ATTORNEYS' FEES. If any action at law or in equity is
necessary to enforce or interpret the terms of this Warrant, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and disbursements,
in addition to any other relief to which such party may be entitled.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed in its corporate name by a duly authorized officer and to be dated as of
the day and year written below.
Dated as of August ____, 1999
Total No. of Shares: 1,000,000 (subject to vesting as set forth in Section 1
above)
DATAMETRICS CORPORATION
By: /s/ Daniel P. Ginns
-----------------------
Name: Daniel P. Ginns
Title: Chairman and CEO
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<PAGE>
NOTICE OF EXERCISE
To: DATAMETRICS CORPORATION
25B Hanover Road
Suite 3305
Florham Park, NJ 07932
(1) The undersigned hereby elects to purchase __________ shares of
Common Stock of DATAMETRICS CORPORATION, pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price for such shares.
(2) In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock are being acquired solely for the
account of the undersigned and not as a nominee for any other party, and for
investment, and that the undersigned will not offer, sell or otherwise dispose
of any such shares of Common Stock, except under circumstances that will not
result in a violation of the United States Securities Act of 1933, as amended,
or any foreign or state securities laws.
(3) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:
(4) Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned or in such other name as is
specified below:
- ------------------------------ ------------------------------------
Date: Name:
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NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE
UPON EXERCISE OF THIS WARRANT MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS UNLESS DATAMETRICS CORPORATION (THE "COMPANY") HAS RECEIVED THE
WRITTEN OPINION OF THE COMPANY'S COUNSEL OR OTHER COUNSEL REASONABLY
SATISFACTORY THE COMPANY THAT, AFTER INVESTIGATION OF THE RELEVANT FACTS, SUCH
COUNSEL IS OF THE OPINION THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION
UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.
No. _______
WARRANT TO PURCHASE COMMON STOCK
DATAMETRICS CORPORATION
VOID AFTER 5:00 P.M., NEW YORK TIME ON AUGUST __, 2004
This certifies that, for value received, MICHAEL DOUMANI or his
permissible transferees, designees, successors and assigns (collectively, the
"HOLDER"), is entitled, subject to the terms set forth below, to purchase from
Datametrics Corporation, a Delaware corporation (the "COMPANY"), THE NUMBER OF
SHARES OF THE COMPANY'S COMMON STOCK, PAR VALUE $.0l PER SHARE (THE "COMMON
STOCK"), AS SET FORTH IN ON THE SIGNATURE PAGE HEREOF upon surrender hereof, at
the principal office of the Company referred to below, with the Notice of
Exercise attached hereto duly executed, and simultaneous payment therefor in
lawful money of the United States, or otherwise as hereinafter provided, at the
exercise price as set forth in Section 2 hereof. The number of, and exercise
price for, such shares of Common Stock are subject to adjustment as provided
herein. This Warrant is issued in connection with an agreement between the
Company and Branch Banking and Trust Company for a revolving line of credit in
the amount of $1,500,000.
1. TERM OF WARRANT. Subject to the terms and conditions set forth
herein, this Warrant shall be exercisable, in whole or in part, during the term
commencing on the date hereof (the "WARRANT ISSUE DATE" and terminating on or
before 5:00 p.m., New York time, on August __, 2004 (the "WARRANT EXPIRATION
DATE"). Outstanding Warrants not exercised prior to the Warrant Expiration Date
shall become void and all rights thereunder and all rights in respect thereof
shall cease as of such time.
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<PAGE>
2. EXERCISE PRICE. The exercise price shall be $1.10 per share of
Common Stock (the "WARRANT EXERCISE PRICE").
3. EXERCISE OF WARRANT. (a) This Warrant is exercisable by the Holder,
in whole or in part, at any time, or from time to time, during the term hereof
as described in Section 1 hereof, by the surrender of this Certificate and the
Notice of Exercise annexed hereto duly completed and executed on behalf of the
Holder, at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company), upon payment in cash or by
check acceptable to the Company, for the purchase price of the shares to be
purchased. Upon payment in full of all Notes, this Warrant shall be canceled
automatically as to all shares of Common Stock as to which it is not then
exercisable.
(b) This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided in Section 3 (a) hereof, and the person entitled to receive
the shares of Common Stock issuable upon such exercise shall be treated for all
purposes as the holder of record of such shares as of the close of business on
such date. Unless exercised in connection with an underwritten public offering,
as promptly as practicable on or after such date and in any event within ten
(10) days thereafter, the Company at its expense shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of shares issuable upon such exercise. In the event that this Warrant
is exercised in part, the Company at its expense will execute and deliver a new
Warrant of like tenor exercisable for the number of shares for which this
Warrant may then be exercised. In the event of exercise at the time of an
underwritten public offering, the Company will provide instructions as to the
exercise of this Warrant and the issuance of certificates.
4. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the exercise price
multiplied by such fraction.
5. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company, in its sole and absolute discretion, of the loss,
theft, destruction or mutilation of this Warrant and, in the case of loss, theft
or destruction, upon delivery of an indemnity agreement reasonably satisfactory
in form and substance to the Company or, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company at its expense shall
execute and deliver, in lieu of this Warrant, a new warrant of like tenor and
amount.
6. RIGHTS OF STOCKHOLDERS. The Holder shall not be entitled to vote or
receive dividends or be deemed the holder of Common Stock or any other
securities of the Company that may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, consolidation, merger or otherwise) or to receive
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<PAGE>
notices of meetings, or to receive dividends or subscription rights or otherwise
until the Warrant shall have been exercised and the shares of Common Stock
purchasable upon the exercise hereof shall have been issued, as provided herein.
7. COMPLIANCE WITH SECURITIES LAWS. (a) The Holder of this Warrant, by
acceptance hereof, acknowledges that the shares of Common Stock to be issued
upon exercise hereof are being acquired solely for the Holder's own account and
not as a nominee for any other party, and for investment, and that the Holder
will not offer, sell or otherwise dispose of any shares of Common Stock to be
issued upon exercise hereof, except under circumstances that will not result in
a violation of the United States Securities Act of 1933, as amended (the "ACT"),
or any foreign or state securities laws. Upon exercise of this Warrant, the
Holder shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the shares of Common Stock so purchased are
being acquired solely for the Holder's, own account and not as a nominee for any
other party, for investment, and not with a view toward distribution or resale.
(b) All shares of Common Stock issued upon exercise hereof may
be stamped or imprinted with the following legend (in addition to any legend
required by the Act and the securities laws of any state of the United States)
as determined by counsel for the Company:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER (THE "ACT"), OR APPLICABLE STATE SECURITIES
LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF REGISTRATION UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS UNLESS DATAMETRICS CORPORATION (THE "COMPANY") HAS
RECEIVED 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 UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS.
8. RESTRICTIONS ON TRANSFER OF UNDERLYING COMMON STOCK. The Holder of
this Warrant by acceptance hereof agrees that the transfer of the shares of
Common Stock issuable upon the exercise of all or any portion of this Warrant is
subject to the provisions of this Warrant, which include certain restrictions on
the transfer of such shares of Common Stock.
9. RESERVATION OF COMMON STOCK. The Company hereby covenants and agrees
that during the term that this Warrant is exercisable, the Company will reserve
from its authorized and unissued shares of Common Stock a sufficient number of
shares to provide for the issuance of Common Stock upon the exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
Certificate of Incorporation to provide a sufficient reserve of shares of Common
Stock issuable upon exercise of the Warrant. The Company further covenants that
all shares that may be issued upon the exercise of rights represented by this
Warrant and payment of
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<PAGE>
the exercise price, all as set forth herein, will be free from all taxes, liens
and charges in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously or otherwise specified herein). The Company
agrees that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock upon the
exercise of this Warrant.
10. NOTICES. (a) Whenever the exercise price or number of shares
purchasable hereunder shall be adjusted pursuant to Section 12 hereof, the
Company shall issue a certificate signed by its Secretary setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated and the exercise
price and number of shares purchasable hereunder after giving effect to such
adjustment, and shall cause a copy of such certificate to be mailed (by first
class mail, postage prepaid to the Holder of this Warrant.
(b) In case: (i) the Company shall take a record of the
holders of its Common Stock (or other stock or securities at the time receivable
upon the exercise of this Warrant) for the purpose of entitling them to receive
any dividend or other distribution, or any right to subscribe for or purchase
any shares of stock of any class or any other securities, or to receive any
other right; or (ii) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any sale, lease or
conveyance of all or substantially all of the assets of the Company to another
person; or (iii) of any voluntary dissolution, liquidation or winding-up of the
Company, then, and in each such case, the Company will mail or cause to be
mailed to the Holder a notice specifying, as the case may be, (A) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, or (B) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or such stock or securities at the time receivable upon
the exercise of this Warrant) shall be entitled to exchange their shares of
Common Stock (or such other stock or securities) for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up. Such notice shall be
mailed at least ten (10) days prior to the date therein specified.
(c) All such notices and communications shall be deemed to
have been received (i) in the case of personal delivery, on the date of such
delivery and (ii) in the case of mailing, on the second business day following
the date of such mailing.
11. AMENDMENTS. (a) Any term of this Warrant may be amended with the
written consent of the Company and the holders of warrants which, if exercised
would then represent not less than a majority of the shares of Common Stock
issuable upon exercise of any and all outstanding warrants for shares of Common
Stock issued by the Company on the date hereof (the "COMMON STOCK WARRANTS"),
even without the specific consent of the Holder. An amendment effected in
accordance with this Section 11 shall be binding upon each holder of any of the
Common Stock Warrants, each future holder of all such Common Stock Warrants, and
the
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<PAGE>
Company. The Company shall promptly give notice to all holders of Common Stock
Warrants of any amendment effected in accordance with this Section 11.
(b) No waivers of or exceptions to any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.
12. ADJUSTMENTS; ANTIDILUTION. The exercise prices and the number of
shares purchasable hereunder are subject to adjustment from time to time as
follows:
(a) MERGER, SALE OF ASSETS, ETC. If at any time, while this
Warrant, or any portion thereof, is outstanding and unexpired there shall be (i)
a reorganization (other than a combination, reclassification exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving person, or a reverse triangular merger in which the
Company is the surviving person but the shares of the Company's capital stock
outstanding immediately prior to the merger are converted by virtue of the
merger into other property, whether in the form of cash, securities or
otherwise, or (iii) a sale or transfer of the Company's properties and assets
as, or substantially as, an entirety to any other person, then, as a part of
such reorganization, merger, consolidation, sale or transfer, lawful provision
shall be made so that the Holder shall thereafter be entitled to receive upon
exercise of this Warrant, during the period specified herein and upon payment of
the exercise price then in effect, the number of shares of stock or other
securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer which a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 12. The foregoing provisions of this subsection (a) shall
similarly apply to successive reorganizations, consolidations, mergers, sales
and transfers and to the stock or securities of any other corporation which are
at the time receivable upon the exercise of this Warrant. If the per share
consideration payable to the Holder for shares in connection with any such
transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Company's
Board of Directors, whose determination shall be final and binding. In all
events, appropriate adjustment (as determined in good faith by the Company's
Board of Directors) shall be made in the application of the provisions of this
Warrant with respect to the rights and interests of the Holder after the
transaction, to the end that the provisions of this Warrant shall be applicable
after that event, as nearly as reasonably may be, in relation to any shares or
other property deliverable after that event upon exercise of this Warrant.
(b) RECLASSIFICATION, ETC. If the Company at any time while
this Warrant, or any portion thereof, remains outstanding and unexpired shall,
by reclassification of securities or otherwise, change any of the securities as
to which purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities which were subject to the
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<PAGE>
purchase rights under this Warrant immediately prior to such reclassification or
other change and the exercise price therefor shall be appropriately adjusted,
all subject to further adjustment as provided in this Section 12.
(c) SPLIT, SUBDIVISION OR COMBINATION OF SHARES. If the
Company at any time while this Warrant, or any portion thereof, remains
outstanding and unexpired shall split, subdivide or combine the securities as to
which purchase rights under this Warrant exist, into a different number of
securities of the same class, the exercise price for such securities shall be
proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination.
(d) ADJUSTMENTS FOR DIVIDENDS IN STOCK OR OTHER SECURITIES OR
PROPERTY. If while this Warrant, or any portion thereof, remains outstanding and
unexpired the holders of the securities as to which purchase rights under this
Warrant exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to receive, without payment therefor, other or additional stock or other
securities or property (other than cash) of the Company by way of dividend, then
and in each case, this Warrant shall represent the right to acquire, in addition
to the number of shares of the security receivable upon exercise of this
Warrant, and without payment of any additional consideration therefor, the
amount of such other or additional stock or other securities or property (other
than cash) of the Company which such holder would hold on the date of such
exercise had it been the holder of record of the security receivable upon
exercise of this Warrant on the date hereof and had thereafter, during the
period from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock available by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by the provisions of this Section 12.
(e) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment pursuant to this Section 12, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each Holder a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written
request, at any time, of any such Holder, furnish or cause to be furnished to
such Holder a like certificate setting forth: (i) such adjustments and
readjustments; (ii) the exercise price at the time in effect; and (iii) the
number of shares and the amount, if any, of other property which at the time
would be received upon the exercise of the Warrant.
(f) NO IMPAIRMENT. The Company will not, by any voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all the provisions of this Section 12
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the Holders against impairment.
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<PAGE>
13. REGISTRATION RIGHTS. The Holder of this Warrant is not entitled to
any registration rights with respect to the shares of Common Stock underlying
this Warrant, except as may be determined by the Company from time to time.
14. "CALL" BY THE COMPANY. The Warrants are subject to call and
cancellation by the Company at its option at any time prior to the Warrant
Expiration Date if:
(a) the closing sale price of the Company's Common Stock, if
listed on the American Stock Exchange or some other national exchange, or if not
listed on a national exchange, then the closing bid quotation of the Common
Stock as reported on NASDAQ, if listed thereon, or if not, some other reporting
system that provides last sale prices, shall have for a period of twenty (20)
consecutive days on which such market is open for trading (each a "TRADING DAY")
ending on the day prior to the date on which the Company gives the Call Notice
(as such term is hereinafter defined) equaled or exceeded $2.00 (as equitably
adjusted to reflect the occurrence if any of the events described in Section 12
hereof); and
(b) either: (i) the Company has on file with the Securities
and Exchange Commission (the "COMMISSION") a fully effective registration
statement under the Act covering all shares of Common Stock issuable upon
exercise of the outstanding Common Stock Warrants, or (ii) the shares of Common
Stock issuable upon exercise of the outstanding Common Stock Warrants may be
sold without any restriction pursuant to the rules of the Commission as
determined by the counsel to the Company pursuant to a written opinion letter.
Notice of the Company's exercise of its call (the "CALL NOTICE") shall be given
by the Company to the Holder in writing not less than twenty (20) Trading Days
before the date fixed for call, prior to which fixed date the Holder shall
maintain all of its rights hereunder. On and after the dated fixed for call, the
Holder shall have no rights with respect to outstanding Warrants, all of which
shall be canceled and, without more, shall be of no further force or effect.
15. MISCELLANEOUS PROVISIONS.
(a) GOVERNING LAW. This Warrant 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
(b) JURISDICTION. The Company hereby irrevocably consents and
submits to, and the Holder, by its acceptance of this Warrant, likewise hereby
irrevocably consents and submits to, the exclusive jurisdiction of the United
States District Court for the District of New Jersey in connection with any
proceeding arising out of or relating to this Warrant, 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 the Holder, by its acceptance of this Warrant, likewise irrevocably consents
and submits to, the jurisdiction of the Courts of the State of New Jersey in
connection with such proceeding and waives any objection to venue in the State
of New Jersey), and agrees that service of any summons, complaint, notice or
other process
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relating to such proceeding may be effected in the manner provided by Section
10(g) of the Rights Agreement.
(c) ATTORNEYS' FEES. If any action at law or in equity is
necessary to enforce or interpret the terms of this Warrant, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and disbursements,
in addition to any other relief to which such party may be entitled.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed in its corporate name by a duly authorized officer and to be dated as of
the day and year written below.
Dated as of August ____, 1999
Total No. of Shares: 75,000
-------
DATAMETRICS CORPORATION
By: /s/ Daniel P. Ginns
-----------------------
Name: Daniel P. Ginns
Title: Chairman and CEO
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<PAGE>
NOTICE OF EXERCISE
To: DATAMETRICS CORPORATION
25B Hanover Road
Suite 3305
Florham Park, NJ 07932
(1) The undersigned hereby elects to purchase __________ shares of
Common Stock of DATAMETRICS CORPORATION, pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price for such shares.
(2) In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock are being acquired solely for the
account of the undersigned and not as a nominee for any other party, and for
investment, and that the undersigned will not offer, sell or otherwise dispose
of any such shares of Common Stock, except under circumstances that will not
result in a violation of the United States Securities Act of 1933, as amended,
or any foreign or state securities laws.
(3) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:
(4) Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned or in such other name as is
specified below:
- ------------------------------ --------------------------------------
Date: Name:
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BB&T
Loan Agreement
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Account Number
This Loan Agreement (the "Agreement") is made this 20th day of August, 1999 by
and between BRANCH BANKING AND TRUST COMPANY, a North Carolina banking
corporation ("Bank"), and:
Datametrics Corporation, a Delaware corporation ("Borrower"), having executive
offices at Florham, New Jersey.
The Borrower has applied to Bank for and the Bank has agreed to make, subject to
the terms of this Agreement, the following loan(s):
LINE OF CREDIT ("Line of Credit") in the maximum principal amount not to exceed
$1,500,000 at any one time outstanding for the purpose of for the temporary
expansion of current assets and to repay approximately $750,000 of 1996 Sub Debt
which shall be evidenced by the Borrower's Promissory Note(s) dated on or after
the date hereof which shall mature September 25, 2000, when the entire unpaid
principal balance then outstanding plus accrued interest thereon shall be paid
in full. Prior to maturity or the occurrence of any Event of Default hereunder
and subject to any Borrowing Base limitations, the Borrower may borrow, repay,
and reborrow hereunder through maturity. Line of Credit shall bear interest at
the rate set forth in any such note evidencing all or any portion of the Line of
Credit, the terms of which are incorporated herein by reference, and shall be
secured by .
SECTION 1 CONDITIONS PRECEDENT
The Bank shall not be obligated to make any disbursement until all of the
following conditions have been satisfied by proper evidence, execution, and/or
delivery to the Bank of the following items in addition to this Agreement, all
in form and substance satisfactory to the Bank and the Bank's counsel in their
sole discretion:
NOTE(S): The Note(s) evidencing the above referenced loans duly executed by the
Borrower.
SECURITY AGREEMENT: A Security Agreement in which Borrower shall grant to Bank a
first and prior security interest in the Borrower's or other owner's
specified personal property. (If Bank will be a junior lienholder on any
personal property, Borrower must fully disclose to Bank any and all prior
security interests, and Bank must specifically approve its junior lien
position.)
UCC FINANCING STATEMENTS: Acknowledged copies of UCC Financing Statements
(UCC-1) duly filed in all jurisdictions necessary, or in the opinion of the
Bank desirable, to perfect the security interests granted in the Security
Agreement, and certified copies of Requests For Information (UCC-11)
identifying all previous financing statements on record for the Borrower
from all jurisdictions indicating that no security interest has previously
been granted in any of the collateral described in the Security Agreement,
unless prior approval has been given by the Bank.
COMMITMENT FEE: A commitment fee (or balance thereof) of $7,500.00 payable to
the Bank on the date of execution of the Loan Documents, unless a schedule
follows:
CORPORATE RESOLUTION: A Corporate Resolution duly adopted by the Board of
Directors of the Borrower authorizing the execution, delivery, and
performance of the Loan Documents on or in a form provided by or acceptable
to Bank.
ARTICLES OF INCORPORATION: A copy of the Articles of Incorporation and all other
charter documents of the Borrower, all filed with and certified by the
Secretary of State of the State of the Borrower's incorporation.
BY-LAWS: A copy of the By-Laws of the Borrower, certified by the Secretary of
the Borrower as to their completeness and
accuracy.
CERTIFICATE OF INCUMBENCY: A certificate of the Secretary of the Borrower
certifying the names and true signatures of the officers of the Borrower
authorized to sign the Loan Documents.
CERTIFICATE OF EXISTENCE: A certification of the Secretary of State of the State
of the Borrower's Incorporation or Organization as to the existence or good
standing of the Borrower and its charter documents on file.
OPINION OF COUNSEL: An opinion of counsel for the Borrower satisfactory to the
Bank's counsel, that:
i) The representations and warranties of the Borrower in Section 2
of the Agreement are true and correct in all material respects.
ii) The Loan Documents have been duly executed and delivered by the
Borrower and Guarantor(s), and constitute the legal, valid, and
binding obligations of the Borrower and Guarantor(s),
enforceable against them in accordance with their respective
terms.
iii) No registration with, consent of, approval of, or other action
is required by any Federal, State, or other governmental
authority or regulatory body for the execution and delivery of
the Loan Documents or, if so required, such registration has
been made, and consent or approval given or such other
appropriate action taken.
iv) The loan transactions entered into pursuant to this Agreement are
not usurious.
v) The Bank has a perfected security interest and/or lien in the
collateral described in the Security Agreement and/or Deed of
Trust.
Additional Documents: Receipt by the Bank of other approvals, opinions, or
documents as the Bank may reasonably request.
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BB&T
Loan Agreement
STANDBY LETTER(S) OF CREDIT: The Bank shall be in receipt of Standby Letter(s)
of Credit in the amount of One Million Five Hundred Thousand and 00/100
dollars ($1,500,000), which shall expire no sooner than 30 days after the
maturity of the line of credit.
LIMITED RECOURSE GUARANTY: Receipt by the Bank of Limted Recourse Guaranty of
Roy Doumani and Carl Doumani.
SECTION 2 REPRESENTATIONS AND WARRANTIES
The Borrower and Guarantor(s) represent and warrant to Bank that:
2.01. FINANCIAL STATEMENTS. The balance sheet of the Borrower and its
subsidiaries and the related Statements of Income and Retained Earnings of
the Borrower and its subsidiaries, the accompanying footnotes together with
the accountant's opinion thereon, and all other financial information
previously furnished to the Bank, are true and correct and fairly reflect
the financial condition of the Borrower and its subsidiaries as of the
dates thereof, including all contingent liabilities of every type, and the
financial condition of the Borrower and its subsidiaries as stated therein
has not changed materially and adversely since the date thereof. Each
Guarantor also makes the same representations and warranties as the
Borrower concerning its financial statements and condition.
2.02. CAPACITY AND STANDING. If the Borrower and/or any Guarantor is a
corporation, limited liability company, or limited liability partnership,
each warrants and represents that it is duly organized and validly existing
under the laws of its respective state of incorporation or organization, it
and its subsidiaries are duly qualified and in good standing in every other
state in which the nature of their business shall require such
qualification, and are each duly authorized by their board of directors,
managers or partners respectively to enter into and perform the obligations
under the Loan Documents.
2.03. NO VIOLATION OF OTHER AGREEMENTS. The execution of any of the Loan
Documents, and the performance by the Borrower, the Pledgor or the
Guarantors thereunder will not violate any provision of its articles of
incorporation or by-laws, articles of organization or operating agreement,
or agreement of partnership or limited partnership, as applicable or of any
law, other agreement, indenture, note, or other instrument binding upon the
Borrower or Guarantor, or give cause for the acceleration of any of the
respective obligations of the Borrower or Guarantor.
2.04. AUTHORITY. All authority from and approval by any federal, state, or
local governmental body, commission, or agency, necessary to the making,
validity, or enforceability of this Agreement or the other Loan Documents
has been obtained.
2.05. ASSET OWNERSHIP. The Borrower and each Guarantors have good and
marketable title to all of the properties and assets reflected on the
balance sheets and financial statements furnished to the Bank, and all such
properties and assets are free and clear of mortgages, deeds of trust,
pledges, liens, and all other encumbrances except as otherwise disclosed by
such financial statements.
2.06. DISCHARGE OF LIENS AND TAXES. The Borrower, its subsidiaries, and
each Guarantors have filed, paid, and/or discharged all taxes or other
claims which may become a lien on any of their respective properties or
assets, excepting to the extent that such items are being appropriately
contested in good faith and for which an adequate reserve for the payment
thereof is being maintained.
2.07. REGULATION U. None of the proceeds of the loan(s) made pursuant to
this Agreement shall be used directly or indirectly for the purpose of
purchasing or carrying any margin stock in violation of any of the
provisions of Regulation U of the Board of Governors of the Federal Reserve
System.
2.08. ERISA. Each employee benefit plan, as defined by the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), maintained by
the Borrower or by any subsidiary of the Borrower or Guarantor(s) meets, as
of the date hereof, the minimum funding standards of Section 302 of ERISA,
all applicable requirements of ERISA and of the Internal Revenue Code of
1986, as amended, and no "Reportable Event" nor "Prohibited Transaction"
(as defined by ERISA) has occurred with respect to any such plan.
2.09. LITIGATION. There is no pending or threatened action or proceeding
against or affecting the Borrower, any of its subsidiaries, except for
legal matters disclosed in the company's financial statements, or the
Guarantor(s) before any court, commission, governmental agency, whether
State or Federal, or arbitration which may materially adversely affect the
financial condition, operations, properties, or business of the Borrower,
any such subsidiary, or the Guarantor(s), or the ability of the Borrower or
the Guarantor(s) to perform their obligations under the Loan Documents.
2.10. BINDING AND ENFORCEABLE. The Loan Documents, when executed, shall
constitute valid and binding obligations of the Borrower and Guarantors
respectively and are enforceable in accordance with their terms, except as
may be limited by bankruptcy, insolvency, moratorium, or similar laws
affecting creditors' rights generally.
SECTION 3 AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that from the date hereof and until payment in
full of all indebtedness and performance of all obligations under the Loan
Documents, it will:
3.01. MAINTAIN EXISTENCE. Preserve and maintain its existence and good
standing in the state of its organization, and qualify and remain qualified
as a foreign corporation, limited partnership, LLC, or LLP in each
jurisdiction in which such qualification is required.
3.02. MAINTAIN RECORDS. Keep adequate records and books of account, in
which complete entries will be made in accordance with generally accepted
accounting principles consistently applied, reflecting all financial
transactions of the Borrower.
2
<PAGE>
3.03. MAINTAIN PROPERTIES. Maintain, keep, and preserve all of its
properties (tangible and intangible) necessary or useful in the conduct of
its business in good working order and condition, ordinary wear and tear
excepted.
3.04. CONDUCT OF BUSINESS. Continue to engage in an efficient, prudent, and
economical manner in a business of the same general type as now conducted.
3.05. MAINTAIN INSURANCE. Maintain insurance with financially sound and
reputable insurance companies or associations in such amounts and covering
such risks as are usually carried by companies engaged in the same or a
similar business, and business interruption insurance if required by Bank,
which insurance may provide for reasonable deductible. The Bank shall be
named as loss payee (Long Form) on all policies which apply to the Bank's
collateral, and the Borrower shall deliver certificates of insurance at
closing evidencing same. All such insurance policies shall provide, and the
certificates shall state, that no policy will be terminated without 20 days
prior written notice to Bank.
3.06. Comply With Laws. Comply in all respects with all applicable laws,
rules, regulations, and orders including, without limitation, paying before
the delinquency of all taxes, assessments, and governmental charges imposed
upon it or upon its property, and all Environmental Laws.
3.07. Right of Inspection. Permit the officers and authorized agents of the
Bank, at any reasonable time in the Bank's sole discretion, to examine and
make copies of the records and books of account of, to visit the properties
of the Borrower, and to discuss such matters with any officers, directors,
and the Borrower's independent accountant as the Bank deems necessary.
3.08. REPORTING REQUIREMENTS. Furnish to the Bank:
MONTHLY FINANCIAL STATEMENTS: As soon as available and not more than
twenty (20) days after the end of each month, balance sheets,
statements of income, cash flow, and retained earnings for the period
ended and a statement of changes in the financial position, all in
reasonable detail, and all prepared in accordance with GAAP
consistently applied and certified as true and correct by an officer,
general partner or manager of the Borrower.
ANNUAL FINANCIAL STATEMENTS: As soon as available and not more than
ninety (90) days after the end of each fiscal year, balance sheets,
statements of income, and retained earnings for the period ended and a
statement of changes in the financial position, all in reasonable
detail, and all prepared in accordance with GAAP consistently applied.
The financial statements must be of the following quality or better:
Audited.
NOTICE OF LITIGATION: Promptly after the receipt by the Borrower of
notice or complaint of any action, suit, and proceeding before any
court or governmental agency of any type which, if determined
adversely, could have a material adverse effect on the financial
condition, properties, or operations of the Borrower.
TAX RETURNS: As soon as available each year, complete copies
(including all schedules) of all state and federal tax returns filed
by Borrower.
OTHER INFORMATION: Such other information as the Bank may from time to
time reasonably request.
3.09. DEPOSIT ACCOUNTS. Maintain substantially all of its demand deposit/
operating accounts with the Bank.
SECTION 4 FINANCIAL COVENANTS
The Borrower covenants and agrees that from the date hereof until payment in
full of all indebtedness and the performance of all obligations under the Loan
Documents, the Borrower shall at all times maintain the following financial
covenants and ratios all in accordance with GAAP unless otherwise specified:
TANGIBLE NET WORTH. A minimum tangible net worth of not less than
$3,000,000. Tangible Net Worth is defined as net worth, plus obligations
contractually subordinated to debts owed to Bank, minus goodwill,
contract rights, and assets representing claims on stockholders or
affiliated entities.
DEBT TO WORTH. A ratio of total liabilities to tangible net worth of not
greater than 2.5 to 1.0.
SHAREHOLDER DEBT: All shareholder debt shall be and shall remain at all
times subordinate to debts owed to Bank.
SECTION 5 HAZARDOUS MATERIALS AND ENVIRONMENTAL COMPLIANCE
5.01. Investigation. Borrower hereby certifies that it has exercised due
diligence to ascertain whether its real property, including without
limitation the Mortgaged Property, is or has been affected by the presence
of asbestos, oil, petroleum or other hydrocarbons, urea formaldehyde, PCBs,
hazardous or nuclear waste, toxic chemicals and substances, or other
hazardous materials (collectively, "Hazardous Materials"), as defined in
applicable Environmental Laws. Borrower represents and warrants that there
are no such Hazardous Materials contaminating its real property, nor have
any such materials been released on or stored on or improperly disposed of
on its real property during its ownership, occupancy or operation thereof.
Borrower hereby agrees that it shall not knowingly permit any release,
storage or contamination as long as any indebtedness or obligations to Bank
under the Loan Documents remains unpaid or unfulfilled. In addition,
Borrower does not have or use any underground storage tanks on its property
which are not registered with the appropriate Federal and/or State agencies
and which are not properly equipped and maintained in accordance with all
Environmental Laws. If requested by Bank, Borrower shall provide Bank with
all necessary and reasonable assistance required
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BB&T
Loan Agreement
for purposes of determining the existence of Hazardous Materials on the
Mortgaged Property, including allowing Bank access to the Mortgaged
Property, and access to Borrower's employees having knowledge of, and to
files and records within Borrower's control relating to the existence,
storage, or release of Hazardous Materials on the Mortgaged Property.
5.02. COMPLIANCE. Borrower agrees to comply with all applicable
Environmental Laws, rules and regulations, including, without limitation,
all those relating to Hazardous Materials. Borrower further agrees to
provide Bank, and all appropriate Federal and State authorities, with
immediate notice in writing of any release of Hazardous Materials on the
Mortgaged Property and to pursue diligently to completion all appropriate
and/or required remedial action in the event of such release.
5.03. REMEDIAL ACTION. Bank shall have the right, but not the obligation,
to undertake all or any part of such remedial action in the event of a
release of Hazardous Materials on the Mortgaged Property and to add any
expenditures so made to the principal indebtedness secured by the Deed(s)
of Trust. Borrower agrees to indemnify and hold Bank harmless from any and
all loss or liability arising out of any violation of the representations,
covenants, and obligations contained in this Section 6, or resulting from
the recording of the Deed(s) of Trust.
SECTION 6 EVENTS OF DEFAULT
The following shall be Events of Default by Borrower or any Guarantor:
6.01. The failure to make prompt payment of any installment of principal or
interest on the Note(s) when due or payable.
6.02. Any representation or warranty made in the Loan Documents which shall
prove to be false or misleading in any material respect.
6.03. Any report, certificate, financial statement, or other document
furnished prior to the execution of or pursuant to the terms of this
Agreement shall prove to be false or misleading in any material respect.
6.04. The Borrower or any Guarantor shall default on the performance of any
other obligation of indebtedness when due or in the performance of any
obligation incurred in connection with money borrowed.
6.05. The breach of any covenant, condition, or agreement made by the
Borrower or any Guarantor under the Loan Documents.
6.06. If a custodian shall be appointed for or take possession of any or
all of the assets of the Borrower or any Guarantor, or should the Borrower
or any Guarantor either voluntarily or involuntarily become subject to any
insolvency proceeding, any proceeding to dissolve the Borrower or any
Guarantor, any proceeding to have a receiver appointed, or should the
Borrower or any Guarantor make an assignment for the benefit of creditors,
or should there be an attachment, execution, or other judicial seizure of
all or any portion of the Borrower's or any Guarantor's assets, including
an action or proceeding to seize any funds on deposit with the Bank, and
such seizure is not discharged within 30 days.
6.07. Final judgment for the payment of money shall be rendered against the
Borrower or any Guarantor which is not covered by insurance and shall
remain undischarged for a period of 30 days unless such judgment or
execution thereon be effectively stayed.
6.08. Upon the death of a Borrower who is an individual, or upon the
dissolution or termination of the existence of either the Borrower or any
Guarantor.
6.09. The Borrower or any Guarantor shall become a Debtor (as such term is
defined in the U.S. Bankruptcy Code), whether voluntarily or involuntarily.
6.10. Should the Bank in good faith deem itself, its liens and security
interests, if any, or any debt thereunder unsafe or insecure, or should the
Bank believe in good faith that the prospect of payment of any debt or
other performance by the Borrower or any Guarantor is impaired.
6.11. Should any lien or security interest granted to Bank to secure
payment of the Note(s) terminate, fail for any reason to have the priority
believed by Bank on the date granted, or become unperfected or invalid for
any reason.
6.12. If any Guaranty given in connection with the Loan is terminated by,
or upon the death of, any Guarantor.
6.13. Should the Borrower, any Guarantor or any Pledgor contest the
validity, legality or enforceability of any Loan Document to which it is a
party.
SECTION 7 REMEDIES UPON DEFAULT
Upon the occurrence of any of the above listed Events of Default, the Bank may
at any time thereafter, at its option, take any or all of the following actions,
at the same or at different times:
7.01. Declare the balance of the Note(s) to be immediately due and payable,
both as to principal and interest, without presentment, demand, protest, or
notice of any kind, all of which are hereby expressly waived by Borrower,
each Guarantor, and Pledgor, such balance shall accrue interest at the
Default Rate;
7.02. Require the Borrower or Guarantor(s) to pledge additional collateral
to the Bank from the Borrower's or Guarantor's assets and properties, the
acceptability and sufficiency of such collateral to be determined in the
Bank's sole discretion;
7.03. Take immediate possession of and foreclose upon any or all collateral
which may be granted to the Bank as security for the indebtedness and
obligations of Borrower or any Guarantor under the Loan Documents;
7.04. Exercise other rights and remedies as the Bank may be provided in the
Loan Documents, as a secured party under the Maryland Uniform Commercial
Code, and as provided by law;
7.05. Any obligation of the Bank to advance funds under the Note(s) and all
other obligations, if any, of the Bank under the Loan Documents shall
immediately cease and terminate unless and until Bank shall reinstate in
writing.
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SECTION 8 MISCELLANEOUS PROVISIONS
8.01. DEFINITIONS.
"DEFAULT RATE" shall mean a rate of interest equal to Bank's Prime Rate
plus five percent (5%) per annum (not to exceed the legal maximum rate)
from and after the date of an Event of Default hereunder which shall apply,
in the Bank's sole discretion, to all sums owing, including principal and
interest, on such date.
"ENVIRONMENTAL LAWS" shall mean all federal and state laws and
regulations which affect or may affect the Mortgaged Property, including
without limitation the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. Sections 9601 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Sections 1251 et seq.), the
Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances
Control Act (15 U.S.C. Section 2601 et seq.), as such laws or regulations
have been amended or may be amended.
"LOAN DOCUMENTS" shall mean this Agreement, the Note(s), the Deed(s) of
Trust, the Security Agreement(s), Assignment(s) of Leases and Rents, all
UCC-1 Financing Statements, the Guaranty Agreement(s), and all other
documents, certificates, and instruments executed in connection therewith,
and all renewals, extensions, modifications, substitutions, and
replacements thereto and therefore.
"PERSON" shall mean an individual, partnership, corporation, trust,
unincorporated organization, limited liability company, limited liability
partnership, association, joint venture, or a government agency or
political subdivision thereof.
"GAAP" shall mean generally accepted accounting principles as
established by the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants, as amended and supplemented from
time to time.
"PRIME RATE" shall mean the rate of interest per annum
announced by the Bank from time to time and adopted as its Prime Rate,
which is one of several rate indexes employed by the Bank when extending
credit, and may not necessarily be the Bank's lowest lending rate.
8.02. NON-IMPAIRMENT. If any one or more provisions contained in the Loan
Documents shall be held invalid, illegal, or unenforceable in any respect,
the validity, legality, and enforceability of the remaining provisions
contained therein shall not in any way be affected or impaired thereby and
shall otherwise remain in full force and effect.
8.03. APPLICABLE LAW. The Loan Documents shall be construed in accordance
with and governed by the laws of the state of Maryland.
8.04. WAIVER. Neither the failure or any delay on the part of the Bank in
exercising any right, power or privilege granted in the Loan Documents
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise of any other right, power,
or privilege which may be provided by law.
8.05. MODIFICATION. No modification, amendment, or waiver of any provision
of any of the Loan Documents shall be effective unless in writing and
signed by the Borrower and Bank.
8.06. PAYMENT AMOUNT ADJUSTMENT. In the event that any Loan(s) referenced
herein has a variable (floating) interest rate and the interest rate
increases, Bank, at its sole discretion, may at any time adjust the
Borrower's payment amount(s) to prevent the amount of interest accrued in a
given period to exceed the periodic payment amount or to cause the Loan(s)
to be repaid within the same period of time as originally agreed upon.
8.07. STAMPS AND FEES. The Borrower shall pay all federal or state stamps,
taxes, or other fees or charges, if any are payable or are determined to be
payable by reason of the execution, delivery, or issuance of the Loan
Documents or any security granted to the Bank; and the Borrower and
Guarantor agree to indemnify and hold harmless the Bank against any and all
liability in respect thereof.
8.08. ATTORNEYS FEES. In the event the Borrower or Guarantor shall default
in any of its obligations hereunder and the Bank believes it necessary to
employ an attorney to assist in the enforcement or collection of the
indebtedness of the Borrower to the Bank, to enforce the terms and
provisions of the Loan Documents to modify the Loan Documents, or in the
event the Bank voluntarily or otherwise should become a party to any suit
or legal proceeding (including a proceeding conducted under the Bankruptcy
Code), the Borrower and Guarantors agree to pay the reasonable attorney's
fees of the Bank and all related costs of collection or enforcement that
may be incurred by the Bank. The Borrower and Guarantor shall be liable for
such attorney's fees and costs whether or not any suit or proceeding
commences.
8.09. BANK MAKING REQUIRED PAYMENTS. In the event Borrower shall fail to
maintain insurance, pay taxes or assessments, costs and expenses which
Borrower is, under any of the terms hereof or of any Loan Documents,
required to pay, or fail to keep any of the properties and assets
constituting collateral free from new security interests, liens, or
encumbrances, except as permitted herein, Bank may at its election make
expenditures for any or all such purposes and the amounts expended together
with interest thereon at the Default Rate, shall become immediately due and
payable to Bank, and shall have benefit of and be secured by the collateral
The Bank shall be under no duty or obligation whatever with respect to any
of the foregoing expenditures.
8.10. RIGHT OF OFFSET. Any indebtedness owing from Bank to Borrower may be
set off and applied by Bank on any indebtedness or liability of Borrower to
Bank, at any time and from time to time after maturity, whether by
acceleration or otherwise, and without demand or notice to Borrower. Bank
may sell participations in or make assignments of any loans made under this
Agreement, and Borrower agrees that any such participant or assignee shall
have the same right of setoff as is granted to the Bank herein.
8.11. MODIFICATION AND RENEWAL FEES. Bank may, at its option, charge any
fees for modification, renewal, extension, or amendment of any terms of the
Note(s) permitted by applicable law and the Loan Documents.
5
<PAGE>
8.12. CONFLICTING PROVISIONS. If provisions of this Agreement shall
conflict with any terms or provisions of the Note(s), the provisions of the
Note(s) shall take priority over any provisions in the Agreement.
8.13. NOTICES. Any notice permitted or required by the provisions of this
Agreement shall be deemed to have been given when delivered in writing to
the City Executive or any Vice President of the Bank at its offices in
Hyattsville, Maryland, and to the Chief Executive Officer of the Borrower
at its offices in Florham, New Jersey when sent by certified mail and
return receipt requested.
8.14. CONSENT TO JURISDICTION. Borrower hereby irrevocably agrees that any
legal action or proceeding arising out of or relating to this Agreement may
be instituted in any Maryland state court or federal court sitting in the
state of Maryland, or in such other court and venue as Bank may choose as
its sole discretion. Borrower consents to the jurisdiction of such courts
and waives any objection relating to the basis for personal or in rem
jurisdiction or to venue which Borrower may now or hereafter have in any
such legal action or proceedings.
8.15. COUNTERPARTS. This Agreement may be executed by one or more parties
on any number of separate counterparts and all of such counterparts taken
together shall be deemed to constitute one and the same instrument.
8.16. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement
between Borrower and Bank with respect to the Loans, and there are no oral
or parol agreements existing between Bank and Borrower with respect to the
Loans which are not expressly set forth in the Loan Documents.
[Signatures on Following Page]
6
<PAGE>
Signature Page
IN WITNESS WHEREOF, the Borrower and Guarantor have caused this Agreement to be
duly executed all as of the date first above written.
BORROWER IS A CORPORATION:
---------------------------------------
Name of Corporation
Attest: By:
---------------------- ---------------------------------------
Title: Title:
---------------------- ---------------------------------------
By:
---------------------------------------
(Corporate Seal)
Title:
---------------------------------------
ADDITIONAL CO-MAKERS OR GUARANTORS:
WITNESS:
(SEAL)
- --------------------------------- -----------------------------------
(SEAL)
- --------------------------------- -----------------------------------
(SEAL)
- --------------------------------- -----------------------------------
(SEAL)
- --------------------------------- -----------------------------------
Branch Banking and Trust Company
Attest: By:
----------------------------- -----------------------------------------
(Corporate Seal) Title:
-----------------------------------------
7
<PAGE>
BB&T
Addendum to Loan Agreement
THIS ADDENDUM amends and supplements the Loan Agreement dated , between
("Borrower"), BRANCH BANKING AND TRUST COMPANY ("Bank"), and certain Guarantors.
ADDITIONAL REPRESENTATIONS AND WARRANTIES - Year 2000 Ready:
Borrower represents and warrants to Bank that it has begun to evaluate
and to take all necessary and appropriate steps to insure that its computer
operating systems' hardware and software for information processing,
manufacturing, communications, building(s) and plant facilities, support
services, and other applications (collectively "Systems") will be Year 2000
Ready on or prior to December 31, 1999. "Year 2000 Ready" means that all Systems
shall (i) accept input and provide output of data involving dates or portions
thereof correctly and without ambiguity as to the twentieth (20th) or
twenty-first (21st) centuries; (ii) manage, store, manipulate, sort, sequence,
and perform calculations (collectively "process") all data involving dates or
portions thereof before, during and after January 1, 2000, without malfunction,
amends or aborts; and (iii) correctly process leap years (including the year
2000).
ADDITIONAL COVENANTS
1. If requested by Bank, Borrower will assist in accurately completing
the BB&T Year 2000 Client Questionnaire.
2. Borrower shall promptly report to Bank any likelihood or
circumstances which may render Borrower unable to make its Systems Year 2000
Ready by December 31, 1999, and if requested by Bank, Borrower shall furnish
periodic progress reports on its progress in becoming Year 2000 Ready.
3. If Borrower determines at anytime that it may not be Year 2000 Ready
by December 31, 1999, or if the Bank believes that the Borrower will not be Year
2000 Ready by December 31, 1999, Bank may, at its sole discretion (i) conduct an
audit of Borrower to determine its Year 2000 Readiness, or (ii) require Borrower
to have a Year 2000 Ready audit conducted by an independent firm or consultant
satisfactory to Bank at Borrower's expense.
EVENT OF DEFAULT
Borrower shall be in default under this Loan Agreement should (i) it
determine that it cannot be Year 2000 Ready by December 31, 1999, or (ii) an
audit conducted by the Bank or by an independent firm or consultant reveals that
Borrower is not or cannot be Year 2000 Ready by December 31, 1999.
BORROWER IS A CORPORATION:
-----------------------------
Name of Corporation
Attest: By:
---------------------------- -----------------------------
Title: Title:
--------------------------- -----------------------------
By:
-----------------------------
(Corporate Seal)
Title:
-----------------------------
ADDITIONAL CO-MAKERS OR GUARANTORS:
WITNESS:
(SEAL)
- ------------------------------------- -----------------------------
(SEAL)
- ------------------------------------- -----------------------------
(SEAL)
- ------------------------------------- -----------------------------
(SEAL)
- ------------------------------------ -----------------------------
BRANCH BANKING AND TRUST COMPANY
Attest: By:
------------------------------ ----------------------------
(Corporate Seal) Title:
----------------------------
Borrower: DATAMETRICS CORPORATION, a Delaware corporation
Account Number: _______________ Note Number: ________________
Address:_______________________ BB&T ___________________, Maryland
_______________________ Date: August 20, 1999
PROMISSORY NOTE
THE UNDERSIGNED REPRESENTS THAT THE LOAN EVIDENCED HEREBY IS BEING OBTAINED FOR
BUSINESS/COMMERCIAL OR AGRICULTURAL PURPOSES. For value received, the
undersigned, jointly and severally if more than one, promises to pay to BRANCH
BANKING AND TRUST COMPANY, a North Carolina banking corporation (the "Bank"), or
order, at any of Bank's offices in the above referenced city (or such other
place or places that may be hereafter designated by Bank), the principal amount
of ONE MILLION FIVE HUNDRED THOUSAND * * * Dollars ($1,500,000.00) plus
accrued interest theron, in immediately available coin or currency of the
United States of America. INTEREST SHALL ACCRUE FROM THE DATE HEREOF ON THE
UNPAID PRINCIPAL BALANCE OUTSTANDING FROM TIME TO TIME AT THE:
|_| Fixed rate of ___________________ % per annum.
|X| Variable rate of the Bank's Prime Rate plus .5% per annum to be adjusted
DAILY as the Bank's prime Rate changes. If checked here |_| the interest
rate will not exceed a(n)|_| fixed average maximum rate of ____ % or |_| a
floating maximum rate of the greater of ___% or the Bank's Prime Rate; and
the interest rate will not decrease below a fixed minimum rate of ___ %. If
an average maximum rate is specified, a determination of any required
reimbursement of interest by Bank will be made: |_| when Note is repaid in
full by Borrower |_| annually beginning on _____________
|_| Fixed rate of _____% per annum through ________________ which automatically
converts on _____________ to a variable rate equal to the Bank's Prime Rate
plus _____% per annum which shall be adjusted as such Prime Rate changes.
|_| ___________________________________________________________________________
PRINCIPAL AND INTEREST ARE PAYABLE AS FOLLOWS
|_| Principal plus any accrued interest not otherwise scheduled herein _______
___________________________ is due in full at maturity on ______________
|_| Principal plus accrued interest
|_| Payable in consecutive ____________________ installments of |_| Principal
commencing on ____________________ |_| Principal and Interest _____________
and continued on the same day of each calendar period thereafter, _________
in equal payments of $____________, with one final payment of all remaining
principal and accrued interest due on ___________________.
|_| Business ChoiceLine Payment Option: 2% of outstanding balance is payable
monthly commencing on _______ and continuing on the same day of each
calendar period thereafter, with one final payment of all remaining
principal and accrued interest due on ___________________.
|X| Accrued interest is payable MONTHLY commencing on September 25, 1999 and
continuing on the same day of each calendar period thereafter, with one
final payment of all remaining principal and accrued costs, fees and
interest due on AUGUST 25, 2000.
Page 1 or 8
<PAGE>
|_| Bank reserves the right in its sole discretion to adjust the fixed payment
due hereunder ____________ on _____________ and continuing on the same day
of each calendar period thereafter, in order to maintain an amortization
period of no more than ________________ months from the date of this Note.
Borrower understands the payment may increase if interest rates increase.
|X| Prior to an event of default, Borrower may borrow, repay, and reborrow
hereunder pursuant to the terms of the Loan Agreement, hereinafter defined.
|X| SEE ADDENDUM TO PROMISSORY NOTE FOR ADDITIONAL TERMS, WHICH ARE HEREBY
INCORPORATED.
In addition, the undersigned promises to pay to Bank, or order, a late fee
in the amount of five percent (5%) of any installment past due for fifteen (15)
or more days. When any installment payment is past due for fifteen (15) or more
days, subsequent payments shall first be applied to the past due balance. All
interest shall be computed and charged for the actual number of days elapsed on
the basis of a year consisting of three hundred sixty (360) days. In the event
periodic accruals of interest shall exceed any periodic fixed payment amount
described above, the fixed payment amount shall be immediately increased, or
additional supplemental interest payments required on the same periodic basis as
specified above (increased fixed payments or supplemental payments to be
determined in the Bank's sole discretion), in such amounts and at such times as
shall be necessary to pay all accruals of interest for the period and all
accruals of unpaid interest from previous periods. Such adjustments to the fixed
payment amount or supplemental payments shall remain in effect for so long as
the interest accruals shall exceed the original fixed payment amount and shall
be further adjusted upward or downward to reflect changes in the variable
interest rate; provided that unless elected otherwise above, the fixed payment
amount shall not be reduced below the original fixed payment amount. However,
Bank shall have the right, in its sole discretion, to lower the fixed payment
amount below the original payment amount.
This Promissory Note ("NOTE") is given by the undersigned pursuant to and/
or in connection with the following agreements and instruments: (if any)
Deed(s) of Trust/S.C. Mortgage(s) granted in favor of Bank as beneficiary /
mortgagee:
|_| dated ___________________ in the maximum principal amount of $ ____________
granted by ________________________________________________________________
|_| dated ___________________ in the maximum principal amount of $ ____________
granted by ________________________________________________________________
Security Agreement(s) granting a security interest to Bank: _______________
|X| dated AUGUST 20, 1999 granted by DATAMETRICS CORPORATION, A DELAWARE
CORPORATION
|_| dated _________________ granted by ________________________________________
|X| Loan Agreement dated AUGUST 20, 1999 executed by DATAMETRICS CORPORATION, A
DELAWARE CORPORATION
|X| LIMITED RECOURSE GUARANTY EXECUTED BY ROY DOUMANIU AND CARL K. DOUMANI
|X| STANDBY LETTER OF CREDIT IN THE AGGREGATE AMOUNT OF ONE MILLION FIVE
HUNDRED THOUSAND DOLLARS ($1,500,000.00).
All of the terms, conditions an covenants Of the above described
instruments and agreements and instruments (the "Agreements") are expressly made
a part of this Note by reference in the same manner and with the same effect as
if set forth herein at length and any holder of this Note is entitled to the
benefits of and remedies provided in the Agreements and any other agreements by
and between the undersigned and the Bank.
Page 2 of 8
<PAGE>
In addition to collateral pledged pursuant to the terms of the Agreements
(if any) described above, the undersigned, as collateral security for the
indebtedness evidenced by this Note, hereby grants the Bank a security interest
and lien in and to all deposit accounts, certificates of deposit, securities and
stocks now or hereafter in Bank's possession or on deposit with the Bank
including but not limited to the following pledged to Bank: BB&T Savings
Account(s)/Instruments(s), including all renewals, amendments, and proceeds
thereof (if applicable):
|_| # __________________ in the amount of $ ________________ in the name(s) of
|_| # __________________ in the amount of $ ________________ in the name(s) of
|_| ___________________________________________________________________________
If any stock or securities are pledged to Bank herein, the pledge and
security interest includes all cash dividends, stock dividends and splits,
reissued shares, substituted shares, and all proceeds thereof, which the
undersigned promises to deliver to Bank.
No delay or omission on the part of the Note holder in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Note holder, nor shall any delay, omission or waiver on any one occasion be
deemed a bar to or waiver of the same or of any other right on any future
occasion. Each of the undersigned and every endorser or guarantor of this Note
regardless of the time, order or place of signing, waives presentment, demand,
protest and notices of every kind and assents to any one or more extensions or
postponements of the time of payment or any other indulgences, to any
substitutions, exchanges or releases of collateral if at any time there be
available to the Note holder collateral for this Note, and to the additions or
releases of any other parties or persons primarily or secondarily liable
herefor.
The failure to pay any part of the principal or interest when due on this
Note or to fully perform any covenant, obligation or warranty on this or on any
other liability to the Bank by any one or more of the undersigned, by any
affiliate of the undersigned as defined in 11 USC Section (101) (2)), or by any
guarantor or surety of this Note (such affiliate, guarantor, and surety each
herein called Obligor), or if any financial statement or other representation
made to the Bank by any of the undersigned or any Obligor shall be found to be
materially incorrect or incomplete, or in the event of default under any of the
Agreements or any other obligation of any of the undersigned or any Obligor in
favor of the Bank, or in the event the Bank demands that the undersigned secure
or provide additional security for its obligations under this Note and security
deemed adequate and sufficient by the Bank is not given when demanded, or in the
event one or more of the undersigned or any Obligor shall die, terminate its
existence, allow the appointment of a receiver for any part of its property,
make an assignment for the benefit of creditors, or where a proceeding under
bankruptcy or insolvency laws is initiated by or against any of the undersigned
or any Obligor, or in the event the Bank should otherwise in good faith deem
itself, its security interest, or any collateral unsafe or insecure; or should
the Bank in good faith believe that the prospect of payment or other performance
is impaired, or if there is an attachment, execution, or other judicial seizure
of all or any portion of the Borrower's or any Obligor's assets, including an
action or proceeding to seize any funds on deposit with the Bank, and such
seizure is not discharged within 20 days, or if final judgment for the payment
of money shall be rendered against the Borrower or any Obligor which is not
covered by insurance and shall remain undischarged for a period of 30 days
unless such judgment or execution thereon is effectively stayed, or the
termination of any guaranty agreement given in connection with this Note, then
any one of the same shall be a material default hereunder, and this Note and
other debts due the Bank by any one or more of undersigned shall immediately
become due and payable without notice, at the option of the Bank. From and after
any event of default hereunder, interest shall accrue on the sum of the
principal balance and accrued interest then outstanding at the variable rate
equal to the Bank's Prime Rate plus 5% per annum ("Default Rate"), provided that
such rate shall not exceed at any time the highest rate of interest permitted by
the laws
Page 3 of 8
<PAGE>
of the State of Maryland; and further provided that such rate shall apply after
judgement. In the event of any default, the then remaining unpaid principal
amount and accrued but unpaid interest then outstanding shall bear interest at
the Default Rate called for hereunder until such principal and interest have
been paid in full. In addition, upon default, the Bank may pursue its full legal
remedies at law or equity, and the balance due hereunder may be charged against
any obligation of the Bank to any party including any Obligor. BANK SHALL NOT BE
OBLIGATED TO ACCEPT ANY CHECK, MONEY ORDER, OR OTHER PAYMENT INSTRUMENT MARKED
"PAYMENT IN FULL" ON ANY DISPUTED AMOUNT DUE HEREUNDER, AND BANK EXPRESSLY
RESERVES THE RIGHT TO REJECT ALL SUCH PAYMENT INSTRUMENTS. BORROWER AGREES THAT
TENDER OF ITS CHECK OR OTHER PAYMENT INSTRUMENT SO MARKED WILL NOT SATISFY OR
DISCHARGE ITS OBLIGATION UNDER THIS NOTE, DISPUTED OR OTHERWISE, EVEN IF SUCH
CHECK OR PAYMENT INSTRUMENT IS INADVERTENTLY PROCESSED BY BANK UNLESS IN FACT
SUCH PAYMENT IS IN FACT SUFFICIENT TO PAY THE AMOUNT DUE HEREUNDER. IF THIS NOTE
IS PLACED WITH AN ATTORNEY FOR COLLECTION, THE UNDERSIGNED AGREES TO PAY, IN
ADDITION TO PRINCIPAL AND INTEREST, ALL COSTS OF COLLECTION, INCLUDING BUT NOT
LIMITED TO REASONABLE ATTORNEYS' FEES.
The term "Prime Rate," if used herein, means the rate of interest per annum
announced by the Bank from time to time and adopted as its Prime Rate, which is
one of several rate indexes employed by the Bank when extending credit. Any
change in the interest rate resulting from a change in the Bank's Prime Rate
shall become effective as of the opening of business on the effective date of
the change. All obligations of the undersigned and of any Obligor shall bind his
heirs, executors, administrators, successors, and assigns. Use of the masculine
pronoun herein shall include the feminine and the neuter, and also the plural.
If more than one party shall execute this Note, the term "undersigned" as used
herein shall mean all the parties signing this Note and each of them, and all
such parties shall be jointly and severally obligated hereunder. Wherever
possible, each provision of this Note shall be interpreted in such a manner to
be effective and valid under applicable law, but if any provision of this Note
shall be prohibited by or invalid under such law, such provision shall be
ineffective but only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Note. The proceeds of the loan evidenced by this Note may be paid to any one or
more of the undersigned. From time to time the maturity date of this Note may be
extended, or this Note may be renewed in whole or in part, or a new note of
different form any be substituted for this Note, or the rate of interest may be
modified, or changes may be made in consideration of loan extensions, and the
Note holder, from time to time may waive or surrender, either in whole or in
part any rights, guaranties, secured interest, or liens, given for the benefit
of the Note holder in connection with the payment and the securing the payment
of this Note; but no such occurrence shall in any manner affect, limit, modify,
or otherwise impair any rights, guaranties or security of the Note holder not
specifically waived, released, or surrendered in writing, nor shall the
undersigned Borrower makers, or any obligor either primarily or contingently, be
released from such event. The Note holder, from time to time, shall have the
unlimited right to release any person who might be liable hereon, and such
release shall not affect or discharge the liability of any other person who is
or might be liable hereon. No waivers and modifications shall be valid unless in
writing and signed by the Bank. The Bank may, at its option, charge any fees for
the modification, renewal, extension, or amendment of any of the terms of the
Note permitted by applicable laws. In case of a conflict between the terms of
this Note and the Loan Agreement or Commitment Letter issued in connection
herewith, the priority of controlling terms shall be first this Note, then the
Loan Agreement, and then the Commitment Letter if the Commitment Letter survives
closing. This Note shall be governed by and construed in accordance with the
laws of Maryland.
Page 4 of 8
<PAGE>
CREDIT LIFE AND DISABILITY INSURANCE
------------------------------------
Subject to certain underwriting criteria and limitations, INDIVIDUAL BORROWERS
AND ADDITIONAL CO-MAKERS HAVE THE RIGHT TO REQUEST CREDIT LIFE AND DISABILITY
INSURANCE PROTECTION FOR THIS LOAN. One or two Borrowers/Co-makers may be
covered by BB&T Credit Lite lnsurance and one Borrower/Co-maker may be covered
by BB&T Credit Disability Insurance. However, the purchase of credit life and
credit disability insurance from the Bank is not a condition of obtaining this
loan.
1, the undersigned, desire the credit insurance with the cost and terms
described below and promise to pay the premium of such insurance coverage.
I understand that I may cancel this credit insurance at any time.
|_| Product I: Complete the following: |_| Fidelity Security Insurance
Company Flex Plan (Complete separate appplication)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CREDIT LIFE INSURANCE Effective Date Term in Mos. Initial Ins. Amount Credit Life Premium
|_| Single |_| Level
|_| Joint |_| Decreasing ______________ ___________ $__________________ $________________
CREDIT DISABILITY INSURANCE Monthly Benefit Amount Credit Disability Premium
Effective Date and Terms in Mos.
Same as Credit Life Insurance Above
------------------------- $---------------------- $--------------------------
</TABLE>
Credit Disability Insurance is subject to a 14-day elimination period and a
60-month maximum benefit period. Only the Borrower or Co-Maker who signs the
first line under "Signature(s) of Borrower" is covered by Credit Disability
Insurance.
Signature(s) of Borrowers Total Credit Life and Disability
Insurance Premium
- ------------------------------------
Signature of Primary Borrower
- ------------------------------------ $________________________________
Signature of Secondary Borrower
(SIGNATURES ON FOLLOWING PAGE)
Page 5 of 8
<PAGE>
BB&T
PROMISSORY NOTE SIGNATURE PAGE
Borrower: DATAMETRICS CORPORATION, a Delaware corporation
Account Number: ____________________ Note Number : ____________
Note Amount: _______________________ Date: August 20, 1999
-----------------
NOTICE OF RIGHT TO COPY OF APPRAISAL: If a 1-4 family residential dwelling is
pledged as collateral for this Note, you, the undersigned, have a right to a
copy of the real estate appraisal report used in connection with your
application for credit. If you wish to receive a copy, please notify the Bank in
writing at the branch office where you applied for credit. You must mail or
deliver your request to the Bank no later than 90 days after the date of this
Note. In your request letter, please provide your name, mailing address,
appraised property address, the date of this Note, and the Account and Note
Numbers shown on the front of this Note.
SHARING OF INFORMATION WITH AFFILIATES. Applicable law permits Bank to share
information with third parties about its credit and account history with you.
Applicable law also permits Bank to share additional information about you and
your accounts with companies related to BB&T by common ownership or control
("Affiliates"). We provide this additional information to our Affiliates so that
you may receive special offers and promotions from our Affiliates. You may
request that Bank not furnish this additional information (other than credit and
account history) to our Affiliates by writing to Branch Banking and Trust
Company, Client Services Administration, P.O. Box 1847, Wilson, North Carolina
27894-1847. Please include your name, address, telephone number, account number
(if known), and social security (tax identification) number. Due to marketing
programs already in progress, please allow a reasonable period of time for your
request to take effect. In order for us to communicate important loan or deposit
account information, we will continue to notify you through occasional statement
inserts or other customer service mailings. Please be aware that state and
federal laws impose certain mandatory disclosures of customer information by
financial institutions. We must comply with laws that require mandatory
production or disclosure.
Page 6 of 8
<PAGE>
IN WITNESS WHEREOF, the undersigned, on the day and year first written above,
has caused this note to be executed under seal.
IF BORROWER IS A CORPORATION:
ATTEST: DATAMETRICS CORPORATION, a Delaware corporation
NAME OF CORPORATION
Title: By: /s/ Daniel P. Ginns
Daniel P. Ginns, Chairman of the Board
Title: Chief Executive Officer
(Affix seal or
insert name of
corporation in
seal to adopt as
seal of Borrower) By:____________________________________________
Title:_________________________________________
IF BORROWER IS A PARTNERSHIP, LIMITED LIABILITY COMPANY,
OR LIMETED LIABLILTY PARTNERSHIP
WITNESS: _____________________________________________
NAME OF PARTNERSHIP, LLC, OR LLP
___________________________ By:___________________________________ (SEAL)
GENERAL PARTNER OR MANAGER
___________________________ By:____________________________________(SEAL)
GENERAL PARTNER OR MANAGER
___________________________ By:____________________________________(SEAL)
GENERAL PARTNER OR MANAGER
IF BORROWER IS AN INDIVIDAUL
WITNESS: ____________________________________ (SEAL)
__________________________ ____________________________________ (SEAL)
Page 7 of 8
<PAGE>
ADDITONAL CO-MAKERS
WITNESS: ____________________________________ (SEAL)
____________________________ ____________________________________ (SEAL)
____________________________ _____________________________________(SEAL)
____________________________ ____________________________________ (SEAL)
____________________________ _____________________________________(SEAL)
Page 8 of 8
<PAGE>
ADDENDUM TO PROMISSORY NOTE
WITNESSETH:
The following additional terms are incorporated into the Promissory Note
dated August 20, 1999, by and between Branch Banking and Trust Company (the
"Bank"), and Datametrics Corporation, a Delaware corporation (the "Borrower"):
1. Notices. The Bank shall give Borrower written notice of any default, and
the Borrower shall thereafter have ten (10) business days to cure said default.
Notices shall be given to Borrower by hand-delivery to the Borrower's office
located at 25 B Hanover Road, Suite 305, Florham Park, New Jersey 07932, or sent
via facsimile transmission to (973) 377-5736, or sent by overnight mail via a
nationally recognized overnight delivery service to either of Borrower's
addresses listed above, or by United States mail, first-class and postage
prepaid to either of Borrower's addresses listed above. All notices required or
permitted to be given hereunder to the Bank shall be hand-delivered to the
Lender at 3505 Hamilton Street, Hyattsville, Maryland 20782, Attn: Commercial
Lending, or sent by United States Mail, postage prepaid, registered or certified
with return receipt requested to the aforesaid address.
If any written notice is mailed via first-class mail, it shall be deemed
effective on the earlier of actual receipt or on the third (3rd) calendar day
following date of mailing; notices sent by overnight delivery shall be effective
twenty-four (24) hours after being deposited with the overnight delivery
company; and notice delivered in person, by registered or certified mail, or by
facsimile transmission shall be effective upon actual delivery or transmission.
Any party may change its address or facsimile number for notice hereunder to
another location within the continental United States by giving thirty (30) days
written notice to the other party in the manner set forth above.
2. CONFESSED JUDGMENT. UPON THE OCCURRENCE OF A DEFAULT WITHOUT CURE
THEREOF WITHIN ANY APPLICABLE CURE PERIODS, BORROWER HEREBY AUTHORIZES ANY
ATTORNEY DESIGNATED BY THE BANK OR ANY CLERK OF ANY COURT OF RECORD TO APPEAR
FOR BORROWER IN ANY COURT OF RECORD AND CONFESS JUDGMENT WITHOUT PRIOR HEARING
AGAINST BORROWER IN FAVOR OF THE BANK FOR, AND IN THE AMOUNT OF, THE UNPAID
BALANCE OF THE PRINCIPAL AMOUNT OF THIS NOTE, ALL INTEREST ACCRUED AND UNPAID
THEREON, ALL OTHER AMOUNTS PAYABLE BY BORROWER TO THE BANK UNDER THE TERMS OF
THIS NOTE OR ANY OTHER AGREEMENT, DOCUMENTS, INSTRUMENT EVIDENCING, SECURING OR
GUARANTYING THE OBLIGATIONS EVIDENCED BY THIS NOTE, COSTS OF SUIT, AND
REASONABLE ATTORNEY'S FEES.
Page 9 or 8
<PAGE>
Borrower hereby releases, to the extent permitted by applicable law, all
errors and all rights of exemption, appeal, stay of execution, inquisition, and
other rights to which Borrower may otherwise be entitled under the laws of the
United States of America or of any state or possession of the United States of
America now in force and which may hereafter be enacted. The authority and power
to appear for and enter judgment against Borrower shall not be exhausted by one
or more exercises thereof or by any imperfect exercise thereof and shall not be
extinguished by any judgment entered pursuant thereto. Such authority may be
exercised on one or more occasions or from time to time in the same or different
jurisdictions as often as the Bank shall deem necessary or desirable, for all of
which this Note shall be a sufficient warrant.
[Signatures on following page.]
BORROWER:
Attest: DATAMETRICS CORPORATION, a
Delaware corporation
__________________________ By: /s/ Daniel P. Ginns (Seal)
------------------------------------------
Daniel P. Ginns, Chairman of the Board,
Chief Executive Officer
Page 10 of 8
Hyattsville, MD.
----------------
August 20, 1999
----------------
BB&T
SECURITY AGREEMENT
In order to secure (i) the payment of a promissory note or notes
(collectively the "Note") dated as of August 20, 1999 and executed and delivered
by Datametrics Corporation, a Delaware corporation (the "Borrower(s)"), to the
Bank in the aggregate principal sum of $1,500,000.00 payable as provided therein
(the Note and any loan agreement or other agreement executed in connection with
the loan secured hereby are incorporated herein by reference); (ii) all other
obligations and liabilities (whether direct or indirect, absolute or contingent,
primary or secondary, sole or joint and several) now existing or hereafter
arising of the Borrower to the Bank; and (iii) performance by the Borrower or
the Debtor (as hereinafter defined) of the agreements hereinafter set forth or
contained in any loan agreement or other agreement entered into in connection
with the loan (all obligations secured hereby are referred to as the "Secured
Obligations"), the Borrower, or if the Collateral (as hereinafter defined) is
not owned by the Borrower,______________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(such owner of the Collateral being hereinafter referred to as the "Debtor"),
hereby grants to BRANCH BANKING AND TRUST COMPANY (the "Bank") a security
interest in the following property including any and all additions, replacements
and substitutions of all or any part thereof (and other items of property of the
same class) whether now owned or hereafter acquired or arising and all proceeds
thereof (including insurance proceeds) (all collectively called the
"Collateral").
Collateral will be located at addresses listed below until such times
as written consent to a change of location is obtained from the Bank. If the
Collateral is or includes vehicles or goods that are mobile and ordinarily used
in more than one location, such vehicles or goods will be kept at the address
set forth below except for temporary and ordinary use in other locations. If the
Collateral is or includes Accounts. all records concerning such Accounts are
located at the address set forth below.
/_/ All Equipment, including but not limited to the following:
/_/ Equipment, more specifically described as follows: __________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Unless otherwise specified above, the term "Equipment" shall have the
definition given it in the Maryland Uniform Commercial Code (Annotated Code of
Maryland, Commercial Law Article ss.9-109) and shall include all accessions,
parts, attachments, tools, operating manuals, and all replacements therefor.)
/_/ Vehicles described below:
-1-
<PAGE>
Serial If Truck - Ton & Class
New/Used Year/Make Model/Body/Type Number If Mobile Home - #2 S/N
1.
2.
3.
4.
5.
/_/ Farm Products described below (describe all crops, livestock
and supplies that are used or produced in the farming operation and that are to
serve as security): ____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
including products of the described drops or livestock in their unmanufactured
states in the Debtor's possession and any offspring of the described livestock.
(Unless otherwise specified above, "Farm Products" shall have the definition
given it in the Maryland Uniform Commercial Code (Annotated Code of Maryland,
Commercial Law Article ss.9-109).)
|X| All Accounts, including but not limited to the following:
all accounts receivable
of Debtor, wherever
located or generated,
including accounts in
New Jersey and Florida
/_/ Accounts, more specifically described below:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
-2-
<PAGE>
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(The term "Accounts" shall have the definition given it in the Maryland Uniform
Commercial Code (Annotated Code of Maryland, Commercial Law Article 59-106), no
matter how evidenced, including accounts receivable, contract rights, checks,
notes, drafts, acceptances, and other forms of obligations and receivables).
|X| All Inventory, including but not limited to the following: all inventory of
Debtor, wherever
located, including
inventory in New
Jersey and Florida
|_| Inventory, more specifically described below:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Unless otherwise specified above, "Inventory" shall have the definition given
it in the Maryland Uniform Commercial Code (Annotated Code of Maryland,
Commercial Law Article ss.9-109).
|_| All Goods, including all furniture and fixtures, including but not
limited to the following:
|_| Goods, including furniture and fixtures, more specifically described as
follows:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Unless otherwise specified above, "Goods" shall have the definitions given them
in the Maryland Uniform Commercial Code (Annotated Code of Maryland, Commercial
Law Article ss.9-105).
|_| All Documents, Instruments, Chattel Paper, and General Intangibles,
including but not limited to the following:
|_| Documents, Instruments, Chattel Paper, and General intangibles, more
specifically described as follows:
-3-
<PAGE>
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Unless otherwise specified above, "Documents," "'Instruments," "Chattel Paper,"
and "General Intangibles" shall have the definitions given them in the Maryland
Uniform Commercial Code (Titles 1 through 10 of the Commercial Law Article of
the Annotated Code of Maryland).)
Debtor warrants and agrees that:
1. USE OF COLLATERAL.-The Collateral is and will be used for o personal
|X| business |_| farming purposes
If checked here o the Collateral is being acquired with the proceeds of the
advance as evidenced by this agreement and the Note, which proceeds the Bank may
disburse directly to the seller of Collateral as shown on the Bank's records. If
acquired with such advance the Collateral was delivered to the Debtor on or
before ____________________________
2. DEBTOR'S RESIDENCE OR PLACE OF BUSINESS. Debtor's residence (or place of
business if Debtor is an organization) is 25 B Hanover Road, #305, Florham Park,
New Jersey 07932
(if the Debtor is an organization and has more than one place of business, use
the chief executive office.) The Debtor will immediately notify the Bank in
writing of any change in the Debtor's residence (or place of business).
3. Chief Executive Office. If the Collateral is a type normally used in
more than one state or includes Accounts or General Intangibles and the Debtor
has a place of business in more than one state. the Debtor's chief executive
office (if different from the address set out in item 2) is
- ---------------- ---------------- -------------- ------------
(No. and Street) (City or Town) (County) (State)
and the Debtor will immediately notify the Bank in writing of any change in the
Debtor's chief executive office. If certificates of title are issued or
outstanding in respect to any of the Collateral, Debtor will cause the interest
of the Bank to be properly noted thereon and will cause the certificates of
title to be delivered to the Bank.
4. FIXTURES; CROPS; TIMBER; MINERALS. If the Collateral is to be affixed to real
estate or includes crops growing or to be grown, timber to be cut, minerals or
Accounts arising from the sale of minerals, the real estate and record owner of
the real estate is described above (name of record owner not necessary if
Collateral is crops growing or to be grown). If the Collateral is affixed to
such real estate prior to the perfection of the security interest granted
hereby. Debtor, on demand of the Bank, will furnish the Bank with a disclaimer
or disclaimers of any interest in the Collateral signed by all persons having
any interest in the real estate. The Debtor will (i) notify the Bank in writing
of any intended sale, mortgage, granting of a deed of trust or conveyance of the
realty and give written notice of the terms and conditions of this Security
Agreement to any prospective purchaser, mortgagee, beneficiary of a deed of
trust or grantee of a
- 4 -
<PAGE>
conveyance of said realty and a copy of such notice to the Bank and (ii) cause a
Request for Copy of Notice providing tor notice to the Bank and satisfying the
requirements of Annotated Code of Maryland, Real Property Article ss.7-105 or
any successor provision to be filed as to each existing or future mortgage or
deed of trust.
5. ACCOUNTS. If the Collateral is or includes Accounts,
(a) each Account represents a valid and legally
enforceable indebtedness according to its terms and
as represented by its corresponding invoice and is
subject to no offsets, counterclaims, contra accounts
or any other defense of any kind and character and
will be subject to no discounts, deductions,
allowances or offsets, with an unpaid balance legally
owing in the amount set forth in the respective
invoice, which balance is not yet due;
(b) the goods or merchandise sold have been delivered to
such customers or to the carrier, or the services
have been performed for such customers, in accordance
with any contracts or purchase orders between the
Debtor and its customers;
(c) the sales or rendering of services that created the
Accounts were not in violation of any law or
governmental regulation or order;
(d) at the request of the Bank.
(i) the Debtor will keep all collections of the
Accounts separate from all other funds and
property. Such funds will be delivered to
the Bank at the time and in the form
requested by the Bank. The Bank will have
the right at any time to notify account
debtors of the Bank's security interest in
the Accounts and to request that payment of
the Accounts be made directly to the Bank.
The Bank is hereby appointed the true and
lawful attorney-in-fact of the Debtor to
receive, endorse in the name of the Debtor
and collect any and all checks made payable
to the Debtor issued in payment of the
Accounts;
(ii) all collections of the Accounts will be set
forth on itemized schedules, showing the
name of the account debtor, the amount of
each payment, and such other information as
the Bank may request;
(iii) all collections of the Accounts delivered to
the Bank (either by the Debtor or directly
by account debtors) will be deposited into a
deposit account subject to the sole control
of the Bank. The Bank will have the right at
all times and in its sole discretion to
apply all or part of the funds in such
deposit account to the payment of the
Secured Obligations;
(iv) the Debtor will furnish the Bank, at such
intervals as the Bank determines, schedules
of the Accounts in a form and substance
satisfactory to the Bank;
(v) the Debtor will deliver to the Bank copies
of all invoices and other documents relating
to the Accounts; and
(vi) the Debtor will not maintain funds received
from collections of the Accounts with any
bank other than the Bank.
(e) the Bank will have the right, at all times, to cause
verification to be made of the Accounts with the
account debtors, with or without notice being given
to the account debtors of the Bank's interest in the
Accounts, and the Bank may, during normal business
hours of the Debtor, examine the ledgers, books of
account, records and papers of the Debtor and all
evidence in support of any entry thereon, and the
Debtor agrees to produce such ledgers, books, records
and papers upon demand by the Bank.
6. DISCHARGE OF OBLIGATIONS. Debtor will pay, perform and discharge all of the
Secured Obligations as and when they become due and payable or dischargeable;
except that if the Debtor and Borrower are not the same person and Debtor is not
a guarantor, endorser or co-maker of the Note or other obligations, the Debtor
shall be liable for payment of the Note or other obligations only to the extent
of the Collateral.
- 5 -
<PAGE>
7. OWNERSHIP. Except for the security interest granted hereby, Debtor is the
owner of the Collateral free and clear of all liens, security interests and
other encumbrances except as previously disclosed to Bank and will defend the
Collateral against the claims and demands of all persons.
8. WASTE. Debtor will keep the Collateral in good order and repair, reasonable
wear and tear excepted, shall not waste or destroy or permit the waste or
destruction of the Collateral or any part thereof and shall not use the
Collateral in violation of any application statute, ordinance or policy of
insurance thereon.
9. INSPECTIONS. Debtor will permit the Bank or its representatives or agents to
inspect the Collateral at any time.
10. INSURANCE. Debtor will obtain and keep in force such insurance on the
Collateral as is normal and customary in the Debtor's business or as the Bank
may require, all in such amounts, under such forms of policies, upon such terms,
for such periods and written by such companies or underwriters as the Bank may
approve. All policies of insurance will contain long form Lender's Loss Payable
clauses in favor of the Bank, and the Debtor shall deliver the policies to the
Bank as evidence of compliance with the provisions of this paragraph. Such
policies will be noncancellable except upon thirty days prior written notice to
the Bank. It is agreed that the proceeds of all such insurance, if any loss
should occur, may be applied by the Bank to the payment of the Secured
Obligations or to the replacement of any of the Collateral damaged or destroyed,
as the Bank may elect or direct in its sole discretion. The Debtor hereby
appoints (which appointment is irrevocable as long as any of the Secured
Obligations remain outstanding) Bank as its lawful attorney-in-fact in making,
adjusting, and settling claims under and canceling such insurance and endorsing
the Debtor's name on any drafts by insurers of the collateral.
11. TAXES; ASSESSMENTS. Debtor will promptly pay when due all taxes and
assessments upon the Collateral or for its use or operation.
12. OTHER LIENS; SALE OF COLLATERAL. Debtor will not (a) permit or suffer to
remain, and will promptly discharge, any senior liens or security interests
(other than the Bank's security interest) on any of the Collateral; (b) permit
any of the Collateral to be levied upon under any legal process; (c) dispose of
any of the Collateral without the prior written consent of the Bank (provided,
however, that if the Collateral is or includes inventory, such inventory may be
sold in the ordinary course of the Debtor's business); (d) permit anything to be
done that might impair the value of any of the Collateral or the security
afforded by this agreement; or (e) permit the Collateral to become an accession
to other goods which are not Collateral.
13. FURTHER DOCUMENTS. Upon demand of the Bank, Debtor will furnish to the Bank
such further information and shall execute and deliver to the Bank such
financing statements and other papers and shall do ail such acts and things as
the Bank may at any time or from time to time request or as may be necessary or
appropriate to establish and maintain a perfected first security interest in the
Collateral as security for the Secured Obligations or to protect the Collateral,
and Debtor hereby appoints the Bank as its lawful attorney-in-fact to execute
any such documents and do such acts and things at the Bank's option upon the
Debtor's refusal to act.
14. PROTECTION OF COLLATERAL. The Bank may, in its discretion, but will not be
required to, discharge taxes, liens, security interests or other encumbrances at
any time levied or placed on the Collateral, place and pay for insurance
thereon, order and pay for the repair, maintenance and preservation thereof, and
pay any necessary filing or recording fees. Any amount so expended by the Bank
(including reasonable attorneys' fees) pursuant to the foregoing shall become
part of the Secured Obligations, shall be payable upon demand and shall bear
interest until paid at the rate applicable to the indebtedness evidenced by the
Note. Until default the Debtor may have possession of the Collateral and use the
same in any lawful manner not inconsistent with this agreement or with the terms
and conditions of any insurance policy thereon.
15. DOCUMENTS; INSTRUMENTS. If the Collateral includes documents or instruments
the Debtor has or will, at the request of the Bank, deliver the Collateral to
the Bank to be held by the Bank. The Debtor will execute any endorsement or
writing upon the documents or instruments as may be requested by the Bank in
order to evidence the pledge, assignment and transfer of such Collateral to the
Bank, and Debtor hereby appoints the Bank as its lawful attorney-in-fact to
execute any such endorsements or writings and do such acts and things at the
Bank's option upon the Debtor's
- 6 -
<PAGE>
refusal to act. If the Secured Obligations are paid in full and satisfied, the
Bank will redeliver possession of such Collateral to Debtor and will execute any
endorsements or writings reasonably necessary to transfer such Collateral back
to Debtor (without recourse).
16. DEFAULT. The occurrence of any of the following is a default under this
Agreement:
(a) Failure to pay or perform any of the Secured Obligations when
due;
(b) The falsity in any material respect when made or furnished of
any warranty, representation or statement made or furnished to
the Bank (i) by or on behalf of Debtor in connection with this
agreement (including warranties and representations contained
herein) or (ii) by and on behalf of Borrower in connection
with the Note or other agreement establishing or evidencing
the Secured Obligations;
(c) Loss, theft, substantial damage, destruction, disposition
(without prior written consent), encumbrance to or of any of
the Collateral, or the levy, seizure or attachment of any of
the Collateral;
(d) The Bank in good faith deems itself or the Collateral to be
insecure or unsafe;
(e) Death, dissolution, termination of existence, insolvency,
appointment of a receiver of any of the property of,
assignment for the benefit of creditors by, or the
commencement of any bankruptcy or insolvency proceeding by or
against the Debtor or Borrower or any guarantor or surety of
the Debtor or Borrower.
17. REMEDIES. Upon default the Bank, at its option, may declare all of the
Secured Obligations to be immediately due and payable and will have all the
rights arid remedies of a secured party under the Maryland Uniform Commercial
Code, including without limitation, the right to take possession of the
collateral under ss.9-503 of the Commercial Law Article of the Annotated Code of
Maryland, or other applicable law and all rights provided herein, in the Note,
or in any other applicable security or loan agreement, all of which rights and
remedies will, to the full extent permitted by law, be cumulative. The Bank may
require Debtor to assemble the Collateral and make it available to the Bank at a
place to be designated by the Bank that is reasonably convenient to the Bank and
the Debtor. The Debtor will supply additional collateral as security for the
Secured Obligations if so requested by the Bank. Any notice of sale, disposition
or other intended action by the Bank sent to the Debtor at the address of Debtor
as may from time to time be shown on the Bank's records at least 5 days prior to
such action will constitute reasonable notice to the Debtor. The Bank may
enforce any or all of its remedies against any portion of the Collateral or
against other security or borrowers without affecting its right to enforce any
or all its remedies against any or all of the Collateral or other borrowers.
18. MISCELLANEOUS. This agreement and the security interest in the Collateral
created hereby will terminate when the Secured Obligations have been paid in
full. Debtor and Borrower jointly and severally agree to pay to the Bank upon
demand all costs and expenses (including reasonable attorneys' fees) incurred in
connection with the enforcement of this agreement, and agree that all such fees
shall become part of the Secured Obligations. No waiver by the Bank of any
default will be effective unless in writing nor operate as a waiver of any other
default or of the same default on a future occasion. No failure or delay of the
Bank to exercise its remedies hereunder or take any action upon the occurrence
of a default will operate as a waiver of that default or any other default. All
rights of the Bank hereunder will inure to the benefit of its successors and
assigns, and all obligations of the Debtor will bind the heirs, legal
representatives, successors and assigns of the Debtor. If there be more than one
Debtor, their obligations hereunder will be joint and several. Invalidation of
any one or more of the provisions of this agreement will not affect any of the
other provisions hereof, which shall remain in full force and effect. This
agreement will be governed by and construed in accordance with the laws of the
State of Maryland. Captions are inserted for convenience only and in no way
limit or affect the provisions of this agreement. The terms "account debtor" and
"proceeds", as used herein, will have the same meanings as they have in the
Uniform Commercial Code as adopted in Maryland.
- 7 -
<PAGE>
WITNESS the hand and seal of the undersigned.
IF DEBTOR IS A CORPORATION:
ATTEST: ____________________ DATAMETRICS CORPORATION, a Delaware corporation
-----------------------------------------------
Name of Corporation
Title: By: /s/ Daniel P. Ginns
--------------------------------------------
Daniel P. Ginns, Chairman of the Board,
Title: Chief Executive Officer
-----------------------------------------
CORPORATE SEAL
By: ___________________________________________
Title: ________________________________________
IF DEBTOR IS A PARTNERSHIP, LIMITED LIABILITY COMPANY,
OF LIMITED LIABILITY PARTNERSHIP:
WITNESS:
_____________________________ __________________________
NAME OF PARTNERSHIP, LLC, OR LLP
_____________________________ By: ______________________ (SEAL)
GENERAL PARTNER OR MANAGER
_____________________________ By: ______________________ (SEAL)
GENERAL PARTNER OR MANAGER
_____________________________ By: ______________________ (SEAL)
GENERAL PARTNER OR MANAGER
By: ______________________ (SEAL)
_____________________________ GENERAL PARTNER OR MANAGER
If DEBTOR IS AN INDIVIDUAL:
WITNESS:
_____________________________ ____________________________
TYPE NAME OF DEBTOR
______________________ (SEAL)
__________________________
TYPE NAME OF DEBTOR
_____________________________ ______________________ (SEAL)
- 8 -
BB&T
GUARANTY AGREEMENT
BRANCH BANKING AND TRUST COMPANY _____________________________
Dear Sirs:
As an inducement to Branch Banking and Trust Company ("Bank') to extend
credit to and to otherwise deal with Datametrics Corporation, a Delaware
corporation. ("Borrower"), and in consideration thereof, the undersigned (and
each of the undersigned jointly and severally if more than one) hereby
absolutely and unconditionally guarantees to Bank and its successors and assigns
the due and punctual payment of any and all notes, drafts, debts, obligations
and liabilities, primary or secondary (whether by way of endorsement or
otherwise), of Borrower, at any time, now or hereafter, incurred with or held by
Bank, together with interest, as and when the same become due and payable,
whether by acceleration or otherwise, in accordance with the terms of any such
notes, drafts, debts, obligations or liabilities or agreements evidencing any
such indebtedness, obligation or liability including all renewals, extensions
and modifications thereof. The obligation of the undersigned is a guarantee of
payment and not of collection.
The undersigned is Bank's debtor for all indebtedness, obligations and
liabilities for which this Guaranty is made, and Bank shall also at all times
have a lien on and security interest in all stocks, bonds and other securities
of the undersigned at any time in Bank's possession and the same shall at Bank's
option be held, administered and disposed of as collateral to any such
indebtedness, obligation or liability of the Borrower, and Bank shall also at
all times have the right of set-off against any deposit account of the
undersigned with Bank in the same manner and to the same extent that the right
of set-off may exist against the Borrower.
It is understood that any such notes, drafts, debts, obligations and
liabilities may be accepted or created by or with Bank at any time and from time
to time without notice to the undersigned, and the undersigned hereby expressly
waives presentment, demand, protest, and notice of dishonor of any such notes,
drafts, debts, obligations and liabilities or other evidences of any such
indebtedness, obligation or liability.
Bank may receive and accept from time to time any securities or other
property as a collateral to any such notes, drafts, debts, obligations and
liabilities, and may surrender, compromise, exchange and release absolutely the
same or any part thereof at any time without notice to the undersigned and
without in any manner affecting the obligation and liability of the undersigned
hereby created. The undersigned agrees that Bank shall have no obligation to
protect, perfect, secure or insure any security interests, liens or encumbrances
now or hereafter held for the indebtedness, obligations and liabilities for
which this Guaranty is made.
This obligation and liability on the part of the undersigned shall be a
primary, and not a secondary, obligation and liability, payable immediately upon
demand without recourse first having been had by Bank against the Borrower or
any other guarantor, person, firm or corporation, and without first resorting to
any property held by Bank as collateral security; and the undersigned hereby
waives the benefits of all provisions of law for stay or delay of execution or
sale of property or other satisfaction of judgment against the undersigned on
account of obligation and liability hereunder until judgment be obtained
therefor against the Borrower and execution thereon returned unsatisfied, or
until it is shown that the Borrower has no property available for the
satisfaction of the indebtedness, obligation or liability guaranteed hereby, or
until any other proceedings can be had; and the undersigned hereby agrees to
indemnify the Bank for all costs of collection, including but not limited to the
costs of repossession, foreclosure, reasonable attorneys' fees, and court costs
incurred by the Bank in the event that the Bank should first be required by the
undersigned to resort to any property held by the Bank or in which the Bank has
a security interest or to obtain execution or other satisfaction of a judgment
against the Borrower on account of Borrower's obligation and liability for its
indebtedness guaranteed hereby; and the
-1-
<PAGE>
undersigned further agrees that the undersigned is responsible for any
obligation or debt, or portion thereof, of the Borrower to the Bank which has
been paid by the Borrower to the Bank and which the Bank is subsequently
required to return to the Borrower or a trustee for the Borrower in any
bankruptcy or insolvency proceeding; and the undersigned further agrees that
none of the undersigned shall have any right of subrogation, reimbursement or
indemnity whatsoever, nor any right of recourse to security for the debts and
obligations of the Borrower to Bank unless and until all of the debts and
obligations of the Borrower to Bank have been paid in full. The undersigned
hereby waives, to the extent avoidable under any provision of the Bankruptcy
Code, any right arising upon payment by the undersigned of any obligation under
this Guaranty to assert a claim against the bankruptcy estate of the Borrower.
Check applicable box:
|_| This Guaranty is unlimited and applies to all indebtedness of Borrower,
whether now existing or hereafter arising.
|_| This Guaranty applies to all indebtedness of Borrower evidenced by
its promissory note numbers ____ ated _______(including all extensions,
renewals,and modifications thereof) in the aggregate principal amount
of $ ___________.
|X| This Guaranty is limited to an amount of $_____________ plus accrued
interest, late fees, costs of collection (including attorneys' fees)
and all other obligations and indebtedness which may accrue or be
incurred with respect to the Borrower's indebtedness and obligations to
Bank.
To secure the payment of all obligations of the undersigned hereunder,
the undersigned hereby grants a security interest and lien in the following
goods and property owned by the undersigned:____________________________________
________________________________________________________________________________
**SEE ADDENDUM TO GUARANTY (INCORPORATED HEREIN BY
REFERENCE) FOR GUARANTY SECURITY TERMS** ("Collateral").
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________("Collateral").
The undersigned hereby agrees to execute and deliver to Bank any security
agreement, deed of trust, mortgage, UCC financing statement, or other document
required by the Bank in order to protect its security interest or lien in the
Collateral. This document shall constitute a security agreement under the
Uniform Commercial Code of Maryland ("Code"), and in addition to having all
other legal rights and remedies, the Bank shall have all rights and remedies of
a secured party under the Code.
This agreement shall inure to the benefit of Bank, its successors and
assigns, and the owners and holders of any of the indebtedness, obligations and
liabilities hereby guaranteed, and shall remain in force until a written notice
revoking it has been received by Bank; but such revocation shall not release the
undersigned from liability to Bank, its successors and assigns, or the owners
and holders of any of the indebtedness, obligations and liabilities hereby
guaranteed, for any indebtedness, obligation or liability of the Borrower which
is hereby guaranteed and then in existence or from any renewals, extensions or
modifications thereof in whole or in part, whether such renewals, extensions or
modifications are made before or after such revocation, with or without notice
to the undersigned. The undersigned waives presentment, demand, protest and
notices of every kind and assents to any one or more extensions, modifications,
renewals or postponements of the time or amount of payment or any other
indulgences given to Borrower. The undersigned shall be responsible for and
shall reimburse the Bank for all costs and expenses (including reasonable
attorneys' fees) incurred by the Bank in connection with the enforcement of this
Guaranty or the protection or preservation of any right or claim of
-2-
<PAGE>
the Bank in connection herewith, including without limitation costs and expenses
incurred by the Bank in connection with its attempts to collect the
indebtedness, obligations, and liabilities guaranteed hereby.
If the Borrower is a corporation, this instrument covers all
indebtedness, obligations and liabilities to Bank purporting to be made or
undertaken on behalf of such corporation by any such officer or agent of said
corporation without regard to the actual authority of such officer or agent. The
term 'corporation" shall include associations of all kinds and all purported
corporations, whether correctly and legally chartered and organized.
The undersigned covenants, warrants, and represents to the Bank that:
(i) this guaranty is enforceable against the undersigned in accordance with its
terms; (ii) the execution and delivery of this Guaranty does not violate or
constitute a breach of any agreement to which the undersigned is a party; (iii)
that there is no litigation, claim, action or proceeding pending or, to the best
knowledge of the undersigned, threatened against the undersigned which would
materially adversely affect the financial condition of the undersigned or his
ability to fulfill his obligations hereunder; and (iv) that the undersigned has
knowledge of the Borrower's financial condition and affairs.
This Guaranty is made in and shall be construed in accordance with the
laws and judicial decisions of the State of Maryland. The undersigned agrees
that any dispute arising out of this Guaranty shall be adjudicated in either the
state or federal courts of Maryland and in no other forum, For that purpose, the
undersigned hereby submits to the jurisdiction of the state and/or federal
courts of Maryland. The undersigned waives any defense that venue is not proper
for any action brought in any federal or state court in the State of Maryland.
Witness the signature and seal of each of the undersigned.
WITNESS
_________________________ __________________________(SEAL)
_________________________ __________________________(SEAL)
Address of Guarantor(s): ________________________
________________________
California, Los Angeles County
I, ____________, Notary Public of Los Angeles County, do hereby certify
that__________ personally appeared before me this day and acknowledged the due
execution of the foregoing instrument in writing.
Witness my hand and seal, this____ day of__________, 1999.
My Commission Expires: ---------------------------
Notary Public
- 3 -
<PAGE>
ADDENDUM TO GUARANTY AGREEMENT
WITNESSETH:
The following additional terms are incorporated into the Guaranty
Agreement dated August ___, 1999, by and between Branch Banking and Trust
Company (the "Bank"), and Roy Doumani (the "Guarantor"):
1. Notices. Pursuant to the terms set forth in that certain Promissory
Note from Datametrics Corporation, a Delaware corporation ("Borrower") to Branch
Banking and Trust Company (the "Bank"), the Borrower is entitled to written
notice of any default from Bank with a cure period of ten (10) business days to
cure said default. Prior to exercising its rights in the collateral as described
more fully hereinbelow, the Bank shall give the undersigned Guarantor written
notice of any default which has not been cured by Borrower, and the undersigned
Guarantor shall have an additional ten (10) business days to cure said default
of Borrower.
Notices shall be given to Guarantor by hand-delivery to the Guarantor
at the following address: _______________________, or sent via facsimile
transmission to __________, or sent by overnight mail via a nationally
recognized overnight delivery service to Guarantor's address listed above, or by
United States mail, first-class and postage prepaid to Guarantor's address
listed above. All notices required or permitted to be given hereunder to the
Bank shall be hand-delivered to the Lender at 3505 Hamilton Street, Hyattsville,
Maryland 20782, Attn: Commercial Lending, or sent by United States Mail, postage
prepaid, registered or certified with return receipt requested to the aforesaid
address.
If any written notice is mailed via first-class mail, it shall be
deemed effective on the earlier of actual receipt or on the third (3rd) calendar
day following date of mailing; notices sent by overnight delivery shall be
effective twenty-four (24) hours after being deposited with the overnight
delivery company; and notice delivered in person, by registered or certified
mail, or by facsimile transmission shall be effective upon actual delivery or
transmission. Any party may change its address or facsimile number for notice
hereunder to another location within the continental United States by giving
thirty (30) days written notice to the other party in the manner set forth
above.
-4-
<PAGE>
2. COLLATERAL/RECOURSE. To induce the Bank to extend credit to and to
otherwise deal with Borrower, Guarantor caused the issuance of an irrevocable
Standby Letter of Credit [Credit Number ______] from US Trust in favor of the
Bank in the sum of __________Dollars ($_________.00) as collateral for this
Guaranty. Notwithstanding anything to the contrary contained in the Guaranty, in
the event of default without cure thereof within any applicable cure periods by
Borrower and/or Guarantor, the Bank's recourse against Guarantor shall limited
to the presentation of a sight draft to US Trust against said Letter of Credit.
IN THE EVENT OF A CONFLICT BETWEEN THE GUARANTY AGREEMENT AND
THIS ADDENDUM TO GUARANTY AGREEMENT, THIS ADDENDUM TO GUARANTY
AGREEMENT SHALL CONTROL.
GUARANTOR:
Witness:
__________________________ _______________________________ (Seal)
