EXHIBIT 4.6
-----------
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of the ____ day of
December, 1998, among the entities listed on Schedule A (collectively referred
to as the "Holders"), and DATAMETRICS CORPORATION, a corporation incorporated
under the laws of the state of Delaware, and having its principal place of
business at 00X Xxxxxxx Xxxx, Xx. 0000, Xxxxxxx Xxxx XX 00000 (the "Company").
WHEREAS, the Holders are purchasing from the Company, pursuant to a 10%
Note Subscription Agreement dated the date hereof (the "Subscription
Agreement"), an aggregate of $3,324,000 Dollars principal amount of the
Company's 10% Subordinated Notes ("Notes") and warrants to purchase 797,760
shares of common stock of the Company ("Common Stock"); and
WHEREAS, as a condition to such purchase, the Holders have required
that the Company grant to the Holders the registration rights set forth herein
with respect to the shares of Common Stock (collectively hereinafter referred to
as the "Stock" or "Securities" of the Company) purchasable upon exercise of the
Warrants.
NOW, THEREFORE, the parties hereto mutually agree as follows:
Section 1. REGISTRABLE SECURITIES. As used herein the term "Registrable
Security" means the Securities and any other shares of Common Stock issued upon
exercise of any other warrants held by Holders on the date hereof issued by the
Company; provided, however, that with respect to any particular Registrable
Security, such security shall cease to be a Registrable Security when, as of the
date of determination, (i) it has been registered under the Securities Act of
1933, as amended (the "1933 Act"), (ii) registration under the 1933 Act is no
longer required for the immediate public distribution of such security as a
result of the provisions of Rule 144 promulgated under the 1933 Act, or (iii) it
has ceased to be outstanding. The term "Registrable Securities" means any and/or
all of the Securities falling within the foregoing definition of a "Registrable
Security." In the event of any merger, reorganization, consolidation,
recapitalization or other change in corporate structure affecting the Common
Stock, such adjustment shall be made in the definition of "Registrable Security"
as is appropriate in order to prevent any dilution or enlargement of the rights
granted pursuant to this Section 1.
Section 2. RESTRICTIONS ON TRANSFER. The Holders acknowledge and
understand that prior to the registration of the Securities as provided herein,
the Securities are "restricted securities" as defined in Rule 144 promulgated
under the Act. The Holders understand that no disposition or transfer of the
Securities may be made by the Holders in the absence of (i) an opinion of
counsel to the Company that such transfer may be made without registration under
the 1933 Act or (ii) such registration.
Section 3. REGISTRATION RIGHTS.
(a) The Company agrees that it will use its best efforts to
prepare and file with the Securities and Exchange Commission
("Commission"), within ninety (90) days after the date hereof
(the "Subscription Date"), a registration statement under the
1933 Act (the "Registration Statement"), at the sole expense
of the Company (except as provided in Section 3(c) hereof), in
respect of all holders of Registrable Securities, so as to
permit a registered issuance of the Registrable Securities
under the Act. The Company shall cause the Registration
Statement to become effective within one hundred eighty (180)
days from Subscription Date. The number of shares designated
in the Registration Statement to be registered shall be one
hundred (100%) percent (or such higher number as the Company
determines) of the number of Securities that would be required
if all the Registrable Securities were issued on the day
before the filing of the Registration Statement.
(b) The Company will maintain the effectiveness of the
Registration Statement or post-effective amendment filed under
this Section 3 hereof current under the 1933 Act until the
earlier of (i) the date that all of the Registrable Securities
have been sold pursuant to the Registration Statement, (ii)
the date the holders thereof receive an opinion of counsel
that all of the Registrable Securities may be sold under the
provisions of Rule 144 (without volume limitation) or (iii)
five years after the Subscription Date.
(c) All fees, disbursements and out-of-pocket expenses and costs
incurred by the Company in connection with the preparation and
filing of the Registration Statement under subparagraph 3(a)
and in complying with applicable securities and Blue Sky laws
(including, without limitation, all attorneys' fees) shall be
borne by the Company. The Holders shall bear the cost of
underwriting discounts and commissions, if any, applicable to
the Registrable Securities being registered and the fees and
expenses of its counsel. The Company shall qualify any of the
Registrable Securities for sale in such states as each Holder
reasonably designates and shall furnish indemnification in the
manner provided in Section 6 hereof. However, the Company
shall not be required to qualify any of the Registrable
Securities for sale in any state which will require an escrow
or other restriction relating to the Company and/or the
sellers. The Company at its expense will supply the Holder
with copies of the Registration Statement and the prospectus
or offering circular included therein and other related
documents in such quantities as may be reasonably requested by
the Holders.
(d) The Company shall not be required by this Section 3 to include
a Holder's Registrable Securities in any Registration
Statement which is to be filed if, in the opinion of counsel
for both the Holders and the Company (or, should they not
agree,
2
in the opinion of another counsel experienced in securities
law matters acceptable to counsel for the Holders and the
Company) the proposed offering or other transfer as to which
such registration is requested is exempt from applicable
federal and state securities laws and would result in all
transferees obtaining securities which are not "restricted
securities," as defined in Rule 144 under the 1933 Act.
(e) In the event the Registration Statement to be filed by the
Company pursuant to Section 3(a) above is not filed with the
Commission within ninety (90) days from the Subscription Date
and/or the Registration Statement is not declared effective by
the Commission within one hundred eighty (180) days from the
Subscription Date, then the Company will pay Holder (pro rated
on a daily basis), as liquidated damages for such failure and
not as a penalty, three (3%) percent of the Purchase Price of
the then outstanding Notes held by such Holder each month
until such time as the Registration Statement has been filed
and/or declared effective. Such payment of the liquidated
damages shall be made to the Holders in cash, immediately upon
demand, provided, however, that the payment of such liquidated
damages shall not relieve the Company from its obligations to
register the Securities pursuant to this Section and shall not
relieve the Company from any obligation to pay liquidated
damages.
If the Company does not remit the damages to the Holders as set forth
above, the Company will pay the Holders' reasonable costs of collection,
including reasonable attorneys fees, in addition to the liquidated damages. The
registration of the Securities pursuant to this provision shall not affect or
limit Holders' other rights or remedies as set forth in this Agreement.
(f) No provision contained herein shall preclude the Company from
selling securities pursuant to any Registration Statement in
which it is required to include Registrable Securities
pursuant to this Section 3.
(g) If at any time or from time to time after the effective date
of the Registration Statement, the Company notifies the
Holders in writing of the existence of a Potential Material
Event (as defined in Section 3(h) below), the Holders shall
not offer or sell any Registrable Securities or engage in any
other transaction involving or relating to Registrable
Securities, from the time of the giving of notice with respect
to a Potential Material Event until such Holder receives
written notice from the Company that such Potential Material
Event either has been disclosed to the public or no longer
constitutes a Potential Material Event; provided, however,
that the Company may not so suspend the right to such holders
of Securities for more than one (1) twenty (20) day period
during any twelve month period, during the periods the
Registration Statement is required to be in effect. If a
Potential Material Event shall occur prior to the date the
Registration Statement is filed, then the Company's obligation
to file the Registration Statement shall be delayed without
penalty for not more than twenty (20) days. The Company must
give each Holder notice in writing at least two (2)
3
business days prior to the first day of the blackout period
relating to any potential material event.
(h) "Potential Material Event" means any of the following: (a) the
possession by the Company of material information not ripe for
disclosure in a registration statement; (b) any material
engagement or activity by the Company which would be adversely
affected by disclosure in a registration statement at such
time; or (c) the Registration Statement would be materially
misleading absent the inclusion of such information.
Section 4. COOPERATION WITH COMPANY. Holders will cooperate with the
Company in all respects in connection with this Agreement, including timely
supplying all information reasonably requested by the Company and executing and
returning all documents reasonably requested in connection with the registration
and sale of the Registrable Securities.
Section 5. REGISTRATION PROCEDURES. If and whenever the Company is
required by any of the provisions of this Agreement to effect the registration
of any of the Registrable Securities under the Act, the Company shall (except as
otherwise provided in this Agreement), as expeditiously as possible:
(a) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the
provisions of the Act with respect to the sale or other
disposition of all securities covered by such registration
statement whenever the Holder of such securities shall desire
to sell or otherwise dispose of the same (including prospectus
supplements with respect to the sales of securities from time
to time in connection with a registration statement pursuant
to Rule 415 promulgated under the Act);
(b) furnish to each Holder such numbers of copies of a summary
prospectus or other prospectus, including a preliminary
prospectus or any amendment or supplement to any prospectus,
in conformity with the requirements of the Act, and such other
documents, as such Holder may reasonably request in order to
facilitate the public sale or other disposition of the
securities owned by such Holder;
(c) register and qualify the securities covered by the
Registration Statement under such other securities or blue sky
laws of such jurisdictions as the Holders shall reasonably
request (subject to the limitations set forth in Section 3(d)
above), and do any and all other acts and things which may be
necessary or advisable to enable each Holder to consummate the
public sale or other disposition in such jurisdiction of the
securities owned by such Holder, except that the Company shall
not for any such purpose be required to qualify to do business
as a foreign corporation in any jurisdiction wherein it is not
so qualified or to file therein any general consent to service
of process;
4
(d) list such securities on the American Stock Exchange or other
national securities exchange on which any securities of the
Company are then listed, if the listing of such securities is
then permitted under the rules of such exchange;
(e) notify each Holder of Registrable Securities covered by the
Registration Statement, at any time when a prospectus relating
thereto covered by the Registration Statement is required to
be delivered under the Act, of the happening of any event of
which it has knowledge as a result of which the prospectus
included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing.
Section 6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Holders,
and each officer, director or person, if any, who controls
each Holder within the meaning of the 1933 Act ("Distributing
Holder") against any losses, claims, damages or liabilities,
joint or several (which shall, for all purposes of this
Agreement, include, but not be limited to, all costs of
defense and investigation and all attorneys' fees), to which
the Distributing Holder may become subject, under the 1933 Act
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, or any related preliminary prospectus, final
prospectus, offering circular, notification or amendment or
supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the
Company (i) will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the
Registration Statement, preliminary prospectus, final
prospectus, offering circular, notification or amendment or
supplement thereto in reliance upon, and in conformity with,
written information furnished to the Company by the
Distributing Holder, specifically for use in the preparation
thereof, or (ii) will not pay any amounts paid in settlement
of any loss, claim, damage or liability if such settlement is
effected without the consent of the Company, which consent
shall not be unreasonably withheld. This Section 6(a) shall
not inure to the benefit of any Distributing Holder with
respect to any person asserting such loss, claim, damage or
liability who purchased the Registrable Securities which are
the subject thereof if the Distributing older failed to send
or give (in violation of the 1933 Act or the rules and
regulations promulgated thereunder) a copy of the prospectus
contained in such Registration Statement to such person at or
prior to the written confirmation of such person of the sale
of such Registrable Securities, where the Distributing Holder
was
5
obligated to do so under the 1933 Act or the rules and
regulations promulgated thereunder. This indemnity provision
will be in addition to any liability which the Company may
otherwise have.
(b) Each Distributing Holder agrees that it will indemnify and
hold harmless the Company, and each officer, director, or
person, if any, who controls the Company within the meaning of
the 1933 Act, against any losses, claims, damages or
liabilities (which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and
investigation and all attorneys' fees) to which the Company or
any such officer, director or controlling person may become
subject under the 1933 Act or otherwise, insofar as such
losses claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in
the Registration Statement, or any related preliminary
prospectus, final prospectus, offering circular, notification
or amendment or supplement thereto, or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but
in each case only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was
made in the Registration Statement, preliminary prospectus,
final prospectus, offering circular, notification or amendment
or supplement thereto in reliance upon, and in conformity
with, written information furnished to the Company by such
Distributing Holder, specifically for use in the preparation
thereof. This indemnity provision will be in addition to any
liability which the Distributing Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 6,
notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not
relieve the indemnifying party from any liability which it may
have to any indemnified party otherwise than as to the
particular item as to which indemnification is then being
sought solely pursuant to this Section 6. In case any such
action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, assume the defense
thereof, subject to the provisions herein stated and after
notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified
party under this Section 6 for any legal or other expenses
subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue
the action to its final conclusion. The
6
indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall not
be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with
counsel reasonably satisfactory to the indemnified party;
provided that if the indemnified party is the Distributing
Holder, the fees and expenses of such counsel shall be at the
expense of the indemnifying party if (i) the employment of
such counsel has been specifically authorized in writing by
the indemnifying party, or (ii) the named parties to any such
action (including any impleaded parties) include both the
Distributing Holder and the indemnifying party and the
Distributing Holder shall have been advised by such counsel
that there may be one or more legal defenses available to the
indemnifying party different from or in conflict with any
legal defenses which may be available to the Distributing
Holder (in which case the indemnifying party shall not have
the right to assume the defense of such action on behalf of
the Distributing Holder, it being understood, however, that
the indemnifying party shall, in connection with any one such
action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable only for the
reasonable fees and expenses of one separate firm of attorneys
for the Distributing Holder, which firm shall be designated in
writing by the Distributing Holder). No settlement of any
action against an indemnified party shall be made without the
prior written consent of the indemnified party, which consent
shall not be unreasonably withheld.
Section 7. CONTRIBUTION. In order to provide for just and equitable
contribution under the 1933 Act in any case in which (i) the indemnified party
makes a claim for indemnification pursuant to Section 6 hereof but is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 6 hereof provide
for indemnification in such case, or (ii) contribution under the 1933 Act may be
required on the part of any indemnified party, then the Company and the
applicable Distributing Holder shall contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (which shall, for all
purposes of this Agreement, include, but not be limited to, all costs of defense
and investigation and all attorneys' fees), in either such case (after
contribution from others) on the basis of relative fault as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the applicable
Distributing Holder on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Distributing Holder agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in this
Section 7. The amount paid or
7
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
Section 8. NOTICES. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received), (b) on the second business day following the date of mailing by
reputable courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur, or (c) on the fifth
business day following the date of mailing by certified or registered mail,
return receipt requested, postage prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:
8
If to Datametrics Corporation:
Datametrics Corporation
00X Xxxxxxx Xxxx
#0000
Xxxxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, CEO
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
With a copy to:
Xxxx Xxxxxx & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
If to the Holders at the addresses set forth on SCHEDULE A attached
hereto.
Any party hereto may from time to time change its address or facsimile
number for notices under this Section by giving at least ten (10) days' prior
written notice of such changed address or facsimile number to the other party
hereto.
Section 9. ASSIGNMENT. This Agreement is binding upon and inures to the
benefit of the parties hereto and their respective heirs, successors and
permitted assigns. The rights granted the Holders under this Agreement shall not
be assigned without the written consent of the Company, which consent shall not
be unnecessarily withheld. In the event of a transfer of the rights granted
under this Agreement, the Holder agrees that the Company may require that the
transferee comply with reasonable conditions as determined in the discretion of
the Company.
Section 10. COUNTERPARTS; FACSIMILE; AMENDMENTS. This Agreement may be
executed in multiple counterparts, each of which may be executed by less than
all of the parties and shall be deemed to be an original instrument which shall
be enforceable against the parties actually executing such counterparts and all
of which together shall constitute one and the same instrument. Except as
otherwise stated herein, in lieu of the original documents, a facsimile
transmission or copy of the original documents shall be as effective and
enforceable as the original. This Agreement may be amended only by a writing
executed by all parties.
Section 11. TERMINATION OF REGISTRATION RIGHTS. The rights granted
pursuant to this Agreement shall terminate as to each Holder (and permitted
transferees or assignees) upon the
9
occurrence of any of the following:
(a) all Holder's Securities subject to this Agreement have been
registered;
(b) all of such Holder's Securities subject to this Agreement may
be sold without such registration pursuant to Rule 144
promulgated by the SEC pursuant to the Securities Act;
(c) all of such Holder's Securities subject to this Agreement can
be sold pursuant to Rule 144(k).
Section 12. HEADINGS. The headings in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
Section 13. GOVERNING LAW: VENUE; JURISDICTION. This Agreement will be
construed and enforced in accordance with and governed by the laws of the State
of New York, except for matters arising under the Act, without reference to
principles of conflicts of law. Each of the parties consents to the jurisdiction
of the U.S. District Court sitting in the Southern District of the State of New
York in connection with any dispute arising under this Agreement and hereby
waives, to the maximum extent permitted by law, any objection, including any
objection based on forum non conveniens, to the bringing of any such proceeding
in such jurisdiction. Each party hereby agrees that if another party to this
Agreement obtains a judgment against it in such a proceeding, the party which
obtained such judgment may enforce same by summary judgment in the courts of any
country having jurisdiction over the party against whom such judgment was
obtained, and each party hereby waives any defenses available to it under local
law and agrees to the enforcement of such a judgment. Each party to this
Agreement irrevocably consents to the service of process in any such proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to such party at its address set forth herein. Nothing herein shall
affect the right of any party to serve process in any other manner permitted by
law.
Section 14. SEVERABILITY. If any provision of this Agreement shall for
any reason be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision hereof and this Agreement shall be
construed as if such invalid or unenforceable provision had never been contained
herein.
Section 15. CAPITALIZED TERMS. All capitalized terms not otherwise
defined herein shall have the meaning assigned to them in the Subscription
Agreement.
Section 16. ENTIRE AGREEMENT. This Agreement, together with all
documents referenced herein, embody the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all prior oral or written agreements and understandings relating to
the subject matter hereof. No statement, representation, warranty, covenant or
agreement
10
of any kind not expressly set forth in this Agreement shall affect, or be used
to interpret, change or restrict, the express terms and provisions of this
Agreement.
[The Rest of this Page Intentionally Left Blank]
11
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed, on the day and year first above written.
DATAMETRICS CORPORATION
By:
--------------------------------------
Xxxxxx X. Xxxxx, Chief Executive Officer
LITTLE WING, L.P.
By:
--------------------------------------
Name: Bic Xxxxxx
Title: Authorized Signatory
TRADEWINDS FUND LTD.
By:
--------------------------------------
Name: Bic Xxxxxx
Title: Authorized Signatory
LITTLE WING TOO, L.P.
By:
--------------------------------------
Name: Bic Xxxxxx
Title: Authorized Signatory
THE CUTTYHUNK FUND LIMITED
By:
--------------------------------------
Name:
Title:
TONGA PARTNERS, L.P.
By:
--------------------------------------
Name:
Title:
12
SCHEDULE A
LITTLE WING, L.P.
Little Wing, L.P.
x/x Xxxxxxx Xxxx.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
TRADEWINDS FUND LTD.
Tradewinds Fund Ltd.
x/x Xxxxxxx Xxxx.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
LITTLE WING TOO, L.P.
Little Wing Too, L.P.
x/x Xxxxxxx Xxxx.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
THE CUTTYHUNK FUND LIMITED
The Cuttyhunk Fund Limited
00 Xxxxx Xxxxxx
Xxxxxxxx, XX 00 Xxxxxxx
XXXXX PARTNERS, L.P.
Tonga Partners, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 00
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
13
