SECURITIES PURCHASE AGREEMENT
Between
GENERAL DATACOMM INDUSTRIES, INC.
and
THE INVESTORS SIGNATORY HERETO
Dated as of July 31, 2000
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SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of July 31,
2000 among General DataComm Industries, Inc., a Delaware corporation (the
"Company"), and the investors signatory hereto (each such investor is a
"Purchaser" and all such investors are, collectively, the "Purchasers").
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchasers and the
Purchasers, severally and not jointly, desire to purchase from the Company, the
Company's 5% Cumulative Convertible Preferred Stock (the "Preferred Stock")
which Preferred Stock is convertible into shares of the Company's common stock,
$.10 par value per share (the "Common Stock"), and certain other securities of
the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers agree
as follows:
ARTICLE I
PURCHASE AND SALE
1.1 The Closing
(a) The Closing. Subject to the terms and conditions set forth
in this Agreement, the Company shall issue and sell to the Purchasers and the
Purchasers shall, severally and not jointly, purchase 200,000 shares of
Preferred Stock (the "Shares") for an aggregate purchase price of $5,000,000.
The closing of the purchase and sale of the Preferred Stock (the "Closing")
shall take place at the offices of Robinson Silverman Pearce Aronsohn & Berman
LLP ("Robinson Silverman"), 1290 Avenue of the Americas, New York, New York
10104, or other agreed location on the date hereof. The date of the Closing is
hereinafter referred to as the "Closing Date."
(b) At the Closing, the parties shall deliver or shall cause
to be delivered the following: (A) the Company shall deliver to each Purchaser
(1) stock certificates for the Shares representing the number of shares
indicated below such Purchaser's name on the signature page of this Agreement,
registered in the name of such Purchaser, (2) a Common Stock purchase warrant,
in the form of Exhibit A, registered in the name of such Purchaser, pursuant to
which such Purchaser shall have the right to acquire the number of shares of
Common Stock indicated below such Purchaser's name on the signature page of this
Agreement (each, a " Warrant" and collectively the "Warrants"), (3) the legal
opinion of Weisman Celler Spett &
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Modlin, P.C., counsel to the Company, substantially in the form of Exhibit B,
and (4) all other documents, instruments and writings required to be delivered
at or prior to the Closing by the Company pursuant to this Agreement, including,
without limitation, an executed Registration Rights Agreement, dated the date
hereof, among the Company and the Purchasers, in the form of Exhibit C (the
"Registration Rights Agreement"), and the Transfer Agent Instructions, in the
form of Exhibit D, delivered to the Company's transfer agent (the "Transfer
Agent Instructions") and (B) each Purchaser shall deliver to the Company (1) the
purchase price indicated below such Purchaser's name on the signature page to
this Agreement in United States dollars in immediately available funds by wire
transfer to an account designated for such purpose in writing by the Company,
and (2) all documents, instruments and writings required to have been delivered
at or prior to the Closing by such Purchaser pursuant to this Agreement,
including, without limitation, an executed Registration Rights Agreement.
1.2 Terms of Preferred Stock. The Preferred Stock shall have
the rights, preferences and privileges set forth in Exhibit E, and shall be
incorporated into a Certificate of The Powers, Designation, Preferences, Rights
And Limitations (the "Certificate of Designation") which shall be filed on or
prior to the Closing Date with the Secretary of State of Delaware, in form and
substance mutually agreed to by the parties.
1.3 Certain Defined Terms. For purposes of this Agreement,
"Trading Day" shall have the meaning set forth in Exhibit E and "Business Day"
shall mean any day except Saturday, Sunday and any day which shall be a federal
legal holiday or a day on which banking institutions in the State of New York or
the State of Connecticut generally are authorized or required by law or other
governmental action to close. A "Person" means an individual or corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company
The Company hereby makes the following representations and warranties to the
Purchasers:
(a) Organization and Qualification. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, with the requisite corporate power and authority
to own and use its properties and assets and to carry on its business as
currently conducted. The Company has no subsidiaries other than as set forth in
Schedule 2.1(a) (collectively, the "Subsidiaries"). Each of the Subsidiaries is
an entity, duly incorporated or otherwise organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted. Each of the Company and the Subsidiaries is duly qualified
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to do business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, would not reasonably be
expected to, individually or in the aggregate, (x) adversely affect the
legality, validity or enforceability of the Securities (as defined below) or any
of this Agreement, the Registration Rights Agreement, the Certificate of
Designation, the Transfer Agent Instructions or the Warrants (collectively, the
"Transaction Documents"), (y) have or result in a material adverse effect on the
results of operations, assets, or financial condition of the Company and the
Subsidiaries, taken as a whole, or (z) adversely impair the Company's ability to
perform fully on a timely basis its obligations under any of the Transaction
Documents (any of (x), (y) or (z), a "Material Adverse Effect"). Wherever the
term Material Adverse Effect is used it shall mean a Material Adverse Effect
affecting the Company and its Subsidiaries, taken as a whole.
(b) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company. Each of
the Transaction Documents has been duly executed by the Company and, when
delivered or filed, as the case may be, in accordance with the terms hereof,
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms. Neither the Company nor any
Subsidiary is in violation of any of the provisions of its respective
certificate of incorporation, by-laws or other charter or organizational
documents.
(c) Capitalization The number of authorized, issued and
outstanding capital stock of the Company as of July 20, 2000 is set forth in
Schedule 2.1(c). Except as disclosed in Schedule 2.1(c), the Company owns
directly or indirectly all of the capital stock and membership units of each
Subsidiary. No securities of the Company are entitled to preemptive or similar
rights, nor is any holder of securities of the Company entitled to preemptive or
similar rights arising out of any agreement or understanding with the Company by
virtue of any of the Transaction Documents. Except as a result of the purchase
and sale of the Securities, and except as disclosed in Schedule 2.1(c) and the
SEC Reports, there are no outstanding options, warrants, script rights to
subscribe to, calls or commitments of any character whatsoever relating to the
Common Stock, or rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings, or arrangements by which the
Company is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock. To
the knowledge of the Company, except as specifically disclosed in the SEC
Reports (as defined below) or Schedule 2.1(c) or as contemplated by the
Transaction Documents, no Person or group of related Persons beneficially owns
(as determined pursuant to Rule 13d-3 promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), or has the right to
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acquire, by agreement with or by obligation binding upon the Company, beneficial
ownership of in excess of 5% of the Common Stock.
(d) Issuance of the Securities The Securities are duly
authorized and, when issued and paid for in accordance with the terms hereof and
thereof, will be duly and validly issued, fully paid and nonassessable, free and
clear of all liens, encumbrances (other than as set forth in Article III) and
rights of first refusal of any kind (collectively, "Liens"). The Company has
reserved a number of duly authorized shares of Common Stock for issuance
hereunder upon conversion of the Preferred Stock and exercise of the Warrants
that equals the sum of the Maximum Issuable Shares as defined in Section 3.5, to
be issued (i) on conversion of the Preferred Stock; (ii) the 200,000 shares of
Common Stock issuable upon exercise in full of the Warrants and (iii) payment of
Common Stock and not cash dividends on all quarterly dividends on the Shares.
The shares of Common Stock issuable upon conversion of and upon payment of
dividends on the Shares and exercise of the Warrants are collectively referred
to herein as the "Underlying Shares." The Shares, the Warrants and the
Underlying Shares are collectively referred to herein as, the "Securities."
(e) No Conflicts The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby do not and subject to
applicable Delaware Law will not (i) conflict with or violate any provision of
the Company's or any Subsidiary's articles or certificate of incorporation,
bylaws or other charter documents (each as amended through the date hereof), or
(ii) subject to obtaining the Required Approvals (as defined below), conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt) or other understanding to which the
Company or any Subsidiary is a party or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (iii) result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or any
Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company is bound or
affected; except in the case of each of clauses (ii) and (iii), as would not
reasonably be expected to, individually or in the aggregate, have or result in a
Material Adverse Effect. The business of the Company is not being conducted in
violation of any law, ordinance or regulation of any governmental authority,
except for violations which, individually or in the aggregate, would not
reasonably be expected to have or result in a Material Adverse Effect.
(f) Filings, Consents and Approvals. Neither the Company nor
any Subsidiary is required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) the filings required pursuant to Sections
1.2 and 3.7, (ii) the filing with the Securities and Exchange Commission
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(the "Commission") of a registration statement meeting the requirements set
forth in the Registration Rights Agreement and covering the resale of the Shares
and the Underlying Shares by the Purchasers (the "Underlying Shares Registration
Statement"), (iii) the application(s) to the New York Stock Exchange ("NYSE")
for the maximum permitted listing of the Underlying Shares for trading on the
NYSE in the time and manner required thereby, (iv) applicable Blue Sky filings,
(v) the consent of Foothill Capital Corporation lending group or successor
thereto if shares of Preferred Stock are redeemed or dividends are paid thereon
in cash, and (vi) in all other cases where the failure to obtain such consent,
waiver, authorization or order, or to give such notice or make such filing or
registration would not, reasonably be expected to, have or result in,
individually or in the aggregate, a Material Adverse Effect (the items described
in clauses (i)-(v) are collectively, the "Required Approvals").
(g) Litigation; Proceedings. Except as specified in the SEC
Reports, there is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries or any of their respective
properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an "Action") which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or the
Securities or (ii) would, reasonably be expected to, individually or in the
aggregate, have or result in a Material Adverse Effect.
(h) No Default or Violation. Neither the Company nor any
Subsidiary (i) is in default under or in violation of (and no event has occurred
which has not been waived except as set forth in Schedule 2.1(h) which, with
notice or lapse of time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument for borrowed money to which it is
a party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (ii) is in violation of any order of any
court, arbitrator or governmental body, or (iii) is in violation of any statute,
rule or regulation of any governmental authority, except as would not reasonably
be expected to, individually or in the aggregate, have or result in a Material
Adverse Effect.
(i) Private Offering Assuming the accuracy of the
representations and warranties of the Purchasers set forth in Sections
2.2(b)-(g), the offer, issuance and sale of the Securities to the Purchasers as
contemplated hereby, are exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"). Neither the Company
nor any Person acting on its behalf has taken or is, to the knowledge of the
Company, contemplating taking any action which could subject the offering,
issuance or sale of the Securities to the registration requirements of the
Securities Act including soliciting any offer to buy or sell the Securities by
means of any form of general solicitation or advertising.
(j) SEC Reports; Financial Statements The Company has filed
all reports required to be filed by it under the Securities Act and the Exchange
Act for the two years
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preceding the date hereof (or such shorter period as the Company was required by
law to file such material) (the foregoing materials being collectively referred
to herein as the "SEC Reports" and, together with the Schedules to this
Agreement the "Disclosure Materials") on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. All material
agreements to which the Company is a party or to which the property or assets of
the Company are subject which were required under the Securities Act, the
Exchange Act or the rules or regulations promulgated thereunder to have been
filed with the Commission have been filed as exhibits to the SEC Reports. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis ("GAAP"),
during the periods involved except as may be otherwise specified in such
financial statements or the notes thereto, and fairly present in all material
respects the financial position of the Company and its consolidated subsidiaries
as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal,
year-end audit adjustments. Since March 31, 2000, except as specifically
disclosed in the SEC Reports (a) there has been no event, occurrence or
development that has or that would reasonably be expected to, result in a
Material Adverse Effect, (b) the Company has not incurred any liabilities
(contingent or otherwise) other than (w) ongoing discussions from time to time
with its secured lenders for additional financing, (x) liabilities incurred in
the ordinary course of business consistent with past practice and (y)
liabilities not required to be reflected in the Company's financial statements
pursuant to GAAP or required to be disclosed in filings made with the
Commission, (c) the Company has not altered its method of accounting or the
identity of its auditors, and (d) the Company has not declared or made any
payment or distribution of cash or other property to its stockholders or
officers or directors (other than grant of stock purchase options and stock
options or dividends payable pursuant to currently outstanding shares of the
Company's preferred stock) with respect to its capital stock, or purchased,
redeemed (or made any agreements to purchase or redeem) any shares of its
capital stock.
(k) Investment Company. The Company is not and is not
an Affiliate (as defined in Rule 405 under the Securities Act) of, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
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(l) Certain Fees No fees or commissions will be payable by the
Company to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person, with respect to the transactions
contemplated by this Agreement except reimbursement of expenses to RAM Capital
Resources L.L.C. . The Purchasers shall have no obligation with respect to any
fees or with respect to any claims made by or on behalf of any other Persons
claiming to act on the Company's behalf, for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by this
Agreement except RAM Capital Resources L.L.C. The Company shall indemnify and
hold harmless the Purchasers, their employees, officers, directors, agents, and
partners, and their respective Affiliates, from and against all claims, losses,
damages, costs (including the costs of preparation and attorney's fees) and
expenses suffered in respect of any claimed or existing fees of such Persons
claiming to act on the Company's behalf, as such fees and expenses are incurred.
(m) Solicitation Materials. Neither the Company nor
any Person acting on the Company's behalf has solicited any offer to buy or sell
the Securities by means of any form of general solicitation or advertising.
(n) Form S-3 Eligibility. The Company is eligible to register
its Common Stock for resale under Form S-3 registration statement promulgated
under the Securities Act.
(o) Listing and Maintenance Requirements. The Company has not,
in the two years preceding the date hereof, received notice (written or oral)
from the NYSE or any other stock exchange, market or trading facility on which
the Common Stock is or has been listed (or on which it has been quoted) to the
effect that the Company is not in compliance with the listing or maintenance
requirements of such exchange, market or trading facility. The Company is, and
has no reason to believe that it will not in the foreseeable future continue to
be, in compliance with all such listing and maintenance requirements.
(p) Registration Rights; Rights of Participation. Except as
set forth on Schedule 6(b) to the Registration Rights Agreement, the Company has
not granted or agreed to grant to any Person any rights (including "piggy-back"
registration rights) to have any securities of the Company registered with the
Commission or any other governmental authority which has not been satisfied. No
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the
Transaction Documents.
(q) Regulatory Permits. The Company and its Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
Federal, state or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where failure to
possess such permits would not reasonably be expected to, individually or in the
aggregate, have or result in a Material Adverse Effect (the "Material Permits")
and neither the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit.
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(r) Absence of Certain Proceedings.
Except as described in the SEC Reports, (i) neither the Company nor any
Subsidiary, nor any director or officer thereof, is or has been the subject of
any Action involving (A) a claim of violation of or liability under federal or
state securities laws or (B) a claim of breach of fiduciary duty; (ii) the
Company does not have pending before the Commission any request for confidential
treatment of information and the Company has no knowledge of any expected such
request that would be made prior to the Effectiveness Date (as defined in the
Registration Rights Agreement); and (iii) there has not been, and to the best of
the Company's knowledge there is not pending or contemplated, any investigation
by the Commission involving the Company or any current or former director or
officer of the Company.
(s) Disclosure. The Company confirms that neither it nor any
Person acting on its behalf has provided any of the Purchasers or their agents
or counsel with any information that constitutes or might constitute material
non-public information except for the offering of the Securities hereunder. The
Company understands and confirms that the Purchasers shall be relying on the
foregoing representations in effecting transactions in securities of the
Company. All disclosure provided to the Purchasers regarding the Company, its
business and the transactions contemplated hereby, including the Schedules to
this Agreement, furnished by or on behalf of the Company are true and correct in
all material respects and do not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
The Purchasers acknowledge and agree that the Company has not made any
other representations and warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 2.1.
2.2 Representations and Warranties of the Purchasers.
Each Purchaser hereby, for itself and for no other Purchaser, represents and
warrants to the Company as follows:
(a) Organization; Authority. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership or
other power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder. The purchase by such Purchaser of the Securities
hereunder has been duly authorized by all necessary action on the part of such
Purchaser. Each of this Agreement and the Registration Rights Agreement has been
duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms.
(b) Investment Intent. Such Purchaser is acquiring the
Securities as principal for its own account for investment purposes only and not
with a view to or for distributing or reselling such Securities or any part
thereof, without prejudice, however, to
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such Purchaser's right, subject to the provisions of this Agreement and the
Registration Rights Agreement, at all times to sell or otherwise dispose of all
or any part of such Securities pursuant to an effective registration statement
under the Securities Act and in compliance with applicable federal, foreign and
state securities laws or under an exemption from such registration. Nothing
contained herein shall be deemed a representation or warranty by such Purchaser
to hold Securities for any set amount of time except as above provided if
registered or sold pursuant to applicable exemption from registration.
(c) Purchaser Status. At the time such Purchaser was offered
the Securities, it was, and at the date hereof it is, and at each exercise date
under the Warrants and/or conversion of the Shares, it will be, an "accredited
investor" as defined in Rule 501(a) under the Securities Act.
(d) Experience of Such Purchaser. Such Purchaser, either alone
or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment.
(e) Ability of Purchaser to Bear Risk of Investment.
Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such
investment.
(f) Access to Information. Such Purchaser acknowledges that it
has reviewed the Disclosure Materials and has been afforded (i) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers
from, representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Company's
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information which the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment. Neither such
inquiries nor any other investigation conducted by or on behalf of such
Purchaser or its representatives or counsel shall modify, amend or affect such
Purchaser's right to rely on the truth, accuracy and completeness of the
Disclosure Materials and the Company's representations and warranties contained
in the Transaction Documents.
(g) General Solicitation. Such Purchaser is not purchasing the
Securities as a result of or subsequent to any advertisement, article, notice or
other communication regarding the Securities published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.
(h) Reliance. Such Purchaser understands and acknowledges that
(i) the Securities are being offered and sold to it without registration under
the Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act and (ii)
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the availability of such exemption, depends in part on, and the Company will
rely upon the accuracy and truthfulness of, the foregoing representations and
such Purchaser hereby consents to such reliance.
(i) Certain Fees. Except for certain fees payable by
Purchasers to RAM Capital Resources L.L.C., no fees or commissions will be
payable by such Purchaser to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person, with respect
to the transactions contemplated by this Agreement. The Company shall have no
obligation with respect to any fees or with respect to any claims made by or on
behalf of other Persons claiming to act on the Purchasers' behalf, for fees of a
type contemplated in this Section that may be due in connection with the
transactions contemplated by this Agreement. Such Purchaser shall indemnify and
hold harmless the Company, its employees, officers, directors, agents, and
partners, and their respective Affiliates, from and against all claims, losses,
damages, costs (including the costs of preparation and attorney's fees) and
expenses suffered in respect of any such claimed or existing fees of such
Persons claiming to act on such Purchaser's behalf, as such fees and expenses
are incurred.
The Company acknowledges and agrees that no Purchaser makes or has made any
other representations and warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 2.2.
ARTICLE III
OTHER AGREEMENTS OF THE PARTIES
3.1 Transfer Restrictions. (a) Purchasers acknowledge and agree that
the Securities may only be disposed of pursuant to an effective registration
statement under the Securities Act, to the Company or pursuant to an available
exemption from or in a transaction not subject to the registration requirements
of the Securities Act, and in compliance with any applicable federal and state
securities laws. In connection with any transfer of Securities other than
pursuant to an effective registration statement or to the Company, except as
otherwise set forth herein, the Company may require the transferor thereof to
provide to the Company an opinion of counsel selected by the transferor, the
form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration under
the Securities Act or applicable foreign and state laws. Notwithstanding the
foregoing, the Company, hereby consents to and agrees to register on the books
of the Company and with any transfer agent for the securities of the Company,
any transfer of Securities by a Purchaser to an Affiliate of such Purchaser or
to one or more funds or managed accounts under common management with such
Purchaser, and any transfer among any such Affiliates or one or more funds or
managed accounts, provided that the transferee certifies to the Company that it
is an "accredited investor" as defined in Rule 501(a) under the Securities Act
and that it is acquiring the Securities solely for investment purposes (subject
to the qualifications hereof). As a condition of transfer, the Purchasers shall
deliver a certificate of compliance and, if requested, legal opinion
satisfactory to Company to such transfer and any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall
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have the rights of a Purchaser under this Agreement and the Registration Rights
Agreement.
(b) The Purchasers agree to the imprinting, so long as
is required by this Section 3.1(b), of the following legend on the Securities:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES (ARE EXERCISABLE) (OR CONVERTIBLE) HAVE BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.
The Underlying Shares shall not contain the legend set forth
above nor any other legend, if the conversion of Shares and exercise of Warrants
or other issuance of Underlying Shares as contemplated hereby, by the
Certificate of Designation or the Warrants occurs at any time while an
Underlying Shares Registration Statement with respect to such Securities is
effective under the Securities Act, (and the Company has not notified the
Purchasers that the Underlying Shares Registration Statement is not accurate in
all material respects, which notification has not been subsequently rescinded),
or, in the event there is not such an effective Underlying Shares Registration
Statement, at such time, if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission). The Company shall cause
its counsel to issue the legal opinion included in the Transfer Agent
Instructions to the Company's transfer agent on the day that the Underlying
Shares Registration Statement is declared effective by the Commission (the
"Effective Date"). The Company agrees that if any Underlying Shares are issued
with a legend in accordance with this Section 3.1(b), it will, within five (5)
Business Days after request therefor by a Purchaser and the surrender by such
Purchaser of the certificate representing the applicable Underlying Shares,
cause its transfer agent to provide such Purchaser with a certificate or
certificates representing such Underlying Shares or issuance thereof in book
entry form, free from such legend at such time as such legend is no longer
required under this Section 3.1(b). The Company may not make any notation on its
records or give instructions to any transfer agent of the Company which enlarge
the restrictions of transfer set forth in this Section.
3.2 Acknowledgment of Dilution. The Company acknowledges that the
issuance of Underlying Shares upon conversion of the Preferred Stock and upon
exercise of the Warrants will result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligation to issue Underlying Shares
upon conversion of the Preferred Stock and upon
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exercise of the Warrants pursuant to the terms thereof is unconditional and
absolute regardless of the effect of any such dilution except as otherwise
limited by law or the NYSE.
3.3 Furnishing of Information. As long as the Purchasers own
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. So long as the Purchasers own Securities, if the Company is not
required to file reports pursuant to such laws, it will prepare and furnish to
the Purchasers and make publicly available in accordance with Rule 144(c)
promulgated under the Securities Act, such information as is required for the
Purchasers to sell the Securities under Rule 144 promulgated under the
Securities Act. The Company further covenants that it will take such further
action as any holder of Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell Underlying Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act, including
the legal opinion referenced above in Section 3.1. Upon the request of any such
Person, the Company shall deliver to such Person a written copy of its recent
SEC filing disclosing such compliance or certification of a duly authorized
officer as to whether it has complied with such requirements.
3.4 Integration. The Company shall not, and shall use its best efforts
to ensure that, no Affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers or that
would be integrated with the offer or sale of the Securities for purposes of the
rules and regulations of the NYSE.
3.5 Reservation and Listing of Underlying Shares. (a) The Company shall
(i) within three (3) Business Days following the Closing Date in the manner
required by the NYSE, prepare and file with the NYSE an additional shares
listing application covering 19.9999% of its outstanding Common Stock as of July
20, 2000 for Underlying Shares of Common Stock (the "Maximum Issuable Shares"),
(ii) take all steps necessary to cause such shares of Common Stock to be
approved for listing on the NYSE as soon as possible thereafter, and (iii)
provide to the Purchasers evidence of such listing, and the Company shall
maintain the listing of its Common Stock thereon. If the Company shall have
obtained stockholder approval referred to in Section (D)(10)(c) of the
Certificate of Designation, it will, within two (2) Business Days after
obtaining such stockholder approval, file with the NYSE a listing application
covering such additional approved Underlying Shares.
(b) The Company shall maintain a reserve of shares of Common
Stock for issuance upon conversion of and payment of dividends upon the Shares
and upon exercise in full of the Warrants in accordance with the Preferred Stock
and Warrants, in such amount as may be required to fulfill its obligations in
full under the Certificate of Designation and Warrants, subject to Section
(D)(10)(c) of the Certificate of Designation which reserve shall equal no less
than the Maximum Issuable Shares.
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3.6 Conversion and Exercise Procedures. The Transfer Agent Instructions
and Form of Election to Purchase under the Warrants and conversion procedures
set forth in the Certificate of Designation set forth the totality of the
procedures with respect to the exercise of the Warrants and conversion of the
Shares, including the form of legal opinion, if necessary, that shall be
rendered to the Company's transfer agent and such other information and
instructions as may be reasonably necessary to enable the Purchasers to exercise
the Warrants and convert the Shares.
3.7 Certain Securities Laws Disclosures; Publicity. The Company shall:
(i) as soon as practicable on or after the Closing Date, but no later than one
(1) week unless the Company chooses to combine such press release with its
earnings release on August 3, 2000, issue a press release reasonably acceptable
to the Purchasers disclosing the transactions contemplated hereby, (ii) file
with the Commission a Report on Form 8-K or Form 10-Q (as applicable) disclosing
the transactions contemplated hereby within ten (10) Business Days after the
Closing Date, and (iii) timely file with the Commission a Form D promulgated
under the Securities Act as required under Regulation D promulgated under the
Securities Act and provide a copy thereof to the Purchasers promptly after the
filing thereof and use good faith efforts to provide the Purchasers with a copy
thereof no less than one (1) Business Day prior to filing any such Form D. The
Company and the Purchasers shall consult with each other in issuing any press
releases with respect to the transactions contemplated hereby and neither party
shall issue any such press release pertaining to the transactions contemplated
hereby without the prior written consent of the other, which consent shall not
be unreasonably withheld or delayed, except that no prior consent shall be
required if such disclosure is required by law and such consent can not
reasonably be expected to be received prior to the time required to complete
such filing or make such statement in accordance with such applicable law, in
which such case the disclosing party shall provide the other party with prior
notice of such public statement, filing or other communication. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of a Purchaser,
or include the name of a Purchaser in any filing with the Commission, or any
regulatory agency, trading facility or stock market without the prior written
consent of such Purchaser, except to the extent such disclosure is required by
law, in which case the Company shall provide such Purchaser with prior notice of
such disclosure.
3.8 Use of Proceeds The Company shall use the net proceeds from the
sale of the Securities hereunder for working capital and general corporate
purposes.
3. 9 Indemnification
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Purchaser and its officers, directors, partners, controlling persons (if
any), employees and agents from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
reasonable attorneys' fees) and expenses (collectively, "Losses"), as
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incurred, arising out of or relating to any breach by the Company of any of the
representations and warranties made by the Company in this Agreement or any
other Transaction Document, or the failure of the Company to fully and timely
perform all covenants to be performed by it under this Agreement or any other
Transaction Document, other than by reason of the Purchaser's gross negligence
or willful misconduct.
(b) Indemnification by the Purchasers. Each Purchaser shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
the Company and its officers, directors, partners, controlling persons (if any),
employees and agents from and against any and all Losses, as incurred, arising
out of or relating to any breach by such Purchaser of any of the representations
and warranties made by such Purchaser in this Agreement or any other Transaction
Document, or the failure of such Purchaser to fully and timely perform all
covenants to be performed by it under this Agreement or any other Transaction
Document, other than by reason of the Company's gross negligence or willful
misconduct.
3.10 Certain Trading Limitations. Each Purchaser agrees that until the
expiration of the Closing Warrants by redemption, exercise in full or otherwise,
it will not enter into Short Sales (as hereinafter defined) in excess of the
amount permitted by this Section. For purposes of this Section 3.10, a "Short
Sale" by a Purchaser shall mean a sale of shares of Common Stock marked as a
"short sale" at a time when there is no equivalent offsetting long position in
the Common Stock then held by such Purchaser. For purposes hereof, shares of
Common Stock acquired by a Purchaser after the Closing Date in the open market
and Shares of Common Stock issuable to such Purchaser pursuant to delivered
Elections to Convert, as defined in the Certificate of Designation, and
delivered Elections to Purchase under the Warrants, shall be deemed to be held
long by such Purchaser. The aggregate number of shares of Common Stock that may
be sold by Purchasers in all outstanding such Short Sales may not exceed in the
aggregate the lesser of (i) such number of shares of Common Stock having a value
equal to 50% of the liquidation value of the outstanding Shares, or (ii) such
number of shares of Common Stock having a value of $2,000,000, provided however
that such number of shares of Common Stock may have a value of at least
$500,000. For purposes of this Section 3.10, the value of a share of Common
Stock shall be based on the then Conversion Price of the Shares unless there are
no Shares outstanding in which event the value of a share of Common Stock shall
be based on the then Exercise Price of the Warrants.
3.11 9% Cumulative Convertible Exchangeable Preferred Stock. So long as
any of the Shares are outstanding, without the prior written consent of the
holders of at least a majority of the Shares outstanding, which consent may be
withheld or conditioned in their sole discretion, the Company may not exercise
any right that it may have under its Certificate of Designation for its 9%
Cumulative Convertible Exchangeable Preferred Stock to exchange the Company's 9%
Convertible Subordinated Debentures due 2006 for such 9% Cumulative Convertible
Exchangeable Preferred Stock of the Company.
3.12 Option on Merger. In the event of a merger of the Company in which
the
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Company is not the surviving corporation, then the Purchasers shall have the
option by written notice to the Company within 15 days after notice from the
Company of a stockholder meeting called to approve such merger: (i) to either
convert its outstanding Shares, if any, into shares of Common Stock at the then
Conversion Price therefor (as defined in the Certificate of Designation), or
require the surviving corporation to redeem the Shares at 125% of the then
liquidation value thereof as provided in Section (F)(1)of the Certificate of
Designation, on the completion of such merger, and (ii)to either exercise the
outstanding Warrants at the then Exercise Price thereof, or the Warrants will
expire at the end of such 15 day period. Failure to exercise the above option
with respect to the Shares within such 15 day period shall result in the
automatic conversion of the outstanding Shares at the then (as of the day after
the last day of such 15 day period) Conversion Price, and the Shares shall
thereafter be null and void and of no further force and effect. Except as
otherwise provided in this Section 3.12, the terms of the Certificate of
Designation or Warrants, as the case may be, shall apply to any such conversion,
redemption or exercise.
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ARTICLE IV
MISCELLANEOUS
4.1. Except as otherwise set forth in the Registration Rights
Agreement and except for the payment by the Company of $25,000 at the Closing to
Robinson Silverman for reimbursement of their legal fees and expenses in
representing the Purchasers in connection with preparation and/or negotiation of
the Transaction Documents, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The amount contemplated by the
immediately preceding sentence shall be retained by the Purchasers and wired to
Robinson Silverman at the Closing and shall not be delivered to the Company at
the Closing. The Company shall pay all stamp and other taxes and duties levied
in connection with the issuance of the Securities.
4.2 Entire Agreement; Amendments. The Transaction Documents,
together with the Exhibits and Schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.
4.3 Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section prior to 5:30 p.m. (New
York City time) on a Business Day, (ii) the Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Agreement at or later than 5:30
p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City
time) on such date, (iii) the Business Day of receipt of delivery if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as follows:
If to the Company: General DataComm Industries, Inc.
Park Road Extension
Middlebury, Connecticut 06762-1299
Facsimile No.: 203-577-6244
Attn: Chief Financial Officer
With copies to: Weisman Celler Spett & Modlin P.C.
445 Park Avenue
New York, NY 10022
Facsimile No.: (212) 371-5407
Attn: Howard S. Modlin, Esq.
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If to a Purchaser: To the address set forth under such
Purchaser's name on the
signature pages hereto.
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
4.7 Amendments; Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by both the Company and the Purchasers or, in the case of a waiver,
by the party against whom enforcement of any such waiver is sought. No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right accruing to it thereafter.
4.8 Headings. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
4.9 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Purchasers. Except as set
forth in Section 3.1(a), the Purchasers may not assign this Agreement or any of
the rights or obligations hereunder without the consent of the Company. This
provision shall not limit any Purchaser's right to transfer securities or
transfer or assign rights under the Registration Rights Agreement.
4.10 No Third-Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective successors and
permitted assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.
4.11 Governing Law. The corporate laws of the State of
Delaware shall govern all issues concerning the relative rights of the Company
and its stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal
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service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address in effect
for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.
4.12 Survival. The representations, warranties, agreements and
covenants contained herein shall survive the Closing and the delivery and
conversion or exercise of the Shares and the Warrants, as the case may be.
4.13 Execution in Counterparts. This Agreement may be executed
in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart. In the
event that any signature is delivered by facsimile transmission, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and effect as if
such facsimile signature page were an original thereof.
4.14 Severability. In case any one or more of the provisions
of this Agreement shall be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Agreement shall
not in any way be affected or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.
4.15 Remedies. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, the
parties will be entitled to specific performance of the obligations of each
other under the Transaction Documents. Each of the Company and the Purchasers
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of its obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be adequate. In the
event that the Registration Statement, as defined in the Registration Rights
Agreement, is not declared effective by the Commission within 180 days following
the Closing Date, and the Company has not been notified in writing by the
Commission that such failure to declare the Registration Statement effective is
due to comments specifically addressing violations of the Federal securities
laws by any Purchaser or selling stockholder included in such Registration
Statement (including the identity thereof but not of the structure of this
transaction generally), or in the event the Company's Common Stock is delisted
from trading on the NYSE and is not listed or traded on any other exchange or
market (including a market made by one or more brokers), then so long as such
failure continues the Purchasers shall have the right to rescind this Agreement
and the transactions hereunder ab initio by written notice under Section 4.3,
and on the fifth Business Day thereafter, at a Closing held at Robinson
Silverman, the Company shall pay to Purchasers $5,000,000 and the Purchasers
shall deliver to the Company
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the (i) Shares, (ii) any shares of Common Stock issued on conversion thereof and
dividends thereon and (iii) the Warrants and any shares of Common Stock issued
upon the exercise of the Warrants, and the Registration Rights Agreement and
other Transaction Documents shall be null and void and shall be automatically
terminated and the Company shall withdraw such Registration Statement. If the
Purchasers have disposed of any Shares or shares of Common Stock received on
conversion or payment of dividends on the Shares or exercise of the Warrants,
then the $5,000,000 repayment shall be adjusted pro rata for any such
disposition based on a $25.00 purchase price per Share of Preferred Stock.
If the Company fails to deliver to the Purchaser such
certificate or certificates for shares of Common Stock pursuant to Section
D(4)(a) of the Certificate of Designation, by the fifth Trading Day after the
date of the conversion of the Shares as provided in the Certificate of
Designation, and if after such fifth Trading Day the Purchaser purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by such Purchaser of shares of Common Stock which the
Purchaser was entitled to receive upon such conversion (a "Buy-In"), then the
Company shall, within seven (7) days after notice (which notice shall be no
later than ten (10) days from such Buy-In) from Purchaser (A) pay in cash to the
Purchaser the amount by which (x) the Purchaser's total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the product of (1) the aggregate number of shares of
Common Stock that such Purchaser was entitled to receive from the conversion at
issue multiplied by (2) the market price of the Common Stock at the time of the
sale giving rise to such purchase obligation and (B) at the option of the
Purchaser to be exercised prior to delivery of the shares of Common Stock
issuable upon such conversion, either return the Shares for which such
conversion was not honored or deliver to such Purchaser the number of shares of
Common Stock that would have been issued had the Company timely complied with
its conversion and delivery obligations under such Section D(4). For example, if
the Purchaser purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted conversion of Shares with respect to
which the market price of the shares of Common Stock on the date of conversion
totaled $10,000, under clause (A) of the immediately preceding sentence the
Company shall be required to pay the Purchaser $1,000. The Purchaser shall
provide the Company written notice indicating the amounts payable to the
Purchaser in respect of the Buy-In and all documentation evidencing such Buy-In
transaction. Nothing herein shall limit a Purchaser's right to pursue any other
remedies available to it hereunder at law (provided the Purchaser did not
exercise his above Buy-In remedy for such transaction) or in equity, including,
without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company's failure to thereafter timely deliver certificates
representing shares of Common Stock upon conversion of the Shares as required
pursuant to the terms hereof.
4.16 Independent Nature of Purchasers' Obligations and Rights.
The obligations of each Purchaser under any Transaction Document is several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for
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the performance of the obligations of any other Purchaser under any Transaction
Document. Nothing contained herein or in any Transaction Document, and no action
taken by any Purchaser pursuant thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in
concert with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation the rights arising out of
this Agreement or out of the Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.
4.17 Force Majeure. Neither party shall be liable for any
failure to perform or delay in performance of its obligations hereunder (other
than payment) caused by fire, storm, flood, earthquake, explosion, major
accident, acts of a public enemy, war, rebellion, insurrection, riot, civil
commotion, strikes or other labor disputes, sabotage, epidemic, quarantine
restrictions, transportation embargoes and other acts of God.
In the event of such a delay, time periods shall be
appropriately adjusted.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this
Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
GENERAL DATACOMM INDUSTRIES, INC.
By: /S/ WILLIAM G. HENRY
Name: William G. Henry
Title: Vice President, Finance
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
<PAGE>
STRONG RIVER INVESTMENTS, INC.
By: KENNETH L. HENDERSON
Name: Kenneth L. Henderson
Title: Attorney-in-Fact
Purchase Price for Preferred Stock
to be acquired at Closing: $2,500,000
Number of shares of Preferred Stock to be
acquired at Closing: 100,000
Warrant Shares to be acquired
at Closing: 100,000
Address for Notice:
Strong River Investments, Inc.
c/o Gonzalez-Ruiz & Aleman (BVI) Limited
Wickhams Cay I, Vanterpool Plaza
P.O. Box 873
Road Town, Tortolla, BVI
Facsimile No.: (212) 541-4630
With copies to:
Robinson Silverman Pearce Aronsohn &
Berman LLP
1290 Avenue of the Americas
New York, NY 10104
Facsimile No.: (212) 541-4630
Attn: Kenneth L. Henderson, Esq. and
Eric L. Cohen. Esq.
<PAGE>
BAY HARBOR INVESTMENTS, INC.
By: KENNETH L. HENDERSON
Name: Kenneth L. Henderson
Title: Attorney-in-Fact
Purchase Price for Preferred Stock
to be acquired at Closing: $2,500,000
Number of shares of Preferred Stock to be
acquired at Closing: 100,000
Warrant Shares to be acquired
at Closing: 100,000
Address for Notice:
With copies to:
Robinson Silverman Pearce Aronsohn &
Berman LLP
1290 Avenue of the Americas
New York, NY 10104
Facsimile No.: (212) 541-4630
Attn: Kenneth L. Henderson, Esq. and
Eric L. Cohen. Esq.
<PAGE>
SCHEDULE 2.1(h)
NONE
