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
-----
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, XXXX X. XXXXXXX 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
-1-
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.
-2-
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.
-3-
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.
-4-
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.
-5-
(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
-6-
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
-7-
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
-8-
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
-9-
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
-10-
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
-11-
(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/ Xxxxxx X. Xxxxx
-----------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman and CEO
-12-
NOTICE OF EXERCISE
To: DATAMETRICS CORPORATION
00X Xxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx Xxxx, XX 00000
(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-
