THE SECURITIES DESCRIBED IN THIS AGREEMENT HAVE NOT BEEN REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR THE
SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND APPLICABLE STATE
SECURITIES LAWS. THIS SUBSCRIPTION AGREEMENT SHALL NOT CONSTITUTE AN OFFER TO
SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE SECURITIES MAY NOT BE
SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS, OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE
PROVISIONS OF THE SECURITIES ACT AND UNDER PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS.
12% SUBORDINATED CONVERTIBLE SECURED NOTE
SUBSCRIPTION AGREEMENT
DATAMETRICS CORPORATION
THIS 12% SUBORDINATED CONVERTIBLE SECURED NOTE SUBSCRIPTION AGREEMENT (this
"Agreement") is executed in reliance upon an exemption under the Securities and
Exchange Commission ("SEC"), under the Securities Act of 1933, as amended (the
"Act"). The undersigned hereby subcribes for the Notes hereinafter described in
the amount set forth on its/his/her signature page.
This Agreement has been executed by the undersigned subscribers
("Subscribers", and each a "Subscriber") in connection with the private
placement of up to $2,500,000 of 12% Subordinated Convertible Secured Notes (the
"Notes") and warrants to purchase up to One Million Two Hundred Fifty Thousand
(1,250,000) shares of Common Stock ("Warrants") of DATAMETRICS CORPORATION ,
with an address at 00X Xxxxxxx Xxxx, Xx. 0000, Xxxxxxx Xxxx, XX 00000, a
corporation organized under the laws of the State of Delaware, USA (the
"Company"). The terms of the Notes are set forth in the form of the 12%
Subordinated Convertible Secured Note Due 2000 annexed hereto as Exhibit A,
which terms include, without limitation, the Subscribers' right to exchange the
Notes for shares of the Company's Common Stock ("Conversion Shares"). The Notes
shall be secured by a security interest in the assets of the Company, pursuant
to a security agreement between the Company, the Subscribers and the Subscribers
Agent named therein ("Security Agreement"), in the form annexed hereto as
Exhibit B. The terms of the Warrants are set forth in the form annexed hereto as
Exhibit C. The shares of Common Stock issuable upon the exercise of the Warrants
("Warrant Shares") and the Conversion Shares are subject to a registration
rights agreement ("Registration Rights Agreement") between the Company and the
Subscribers, in the form annexed hereto as Exhibit D. The Notes, Warrants,
Security Agreement and Registration Rights Agreement are referred to herein as
the "Purchase Documents." The offer and sale of the Notes and the Warrants
(collectively the "Securities"), are being made in reliance upon an exemption
under the Act. The Closing Date shall be determined in accordance with Section 1
hereof.
SECTION 1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE.
1.1 CLOSING. The closing ("Closing") of the purchase and sale shall
occur on July 15, 1999 (the "Closing Date"). At the Closing, the Company will
sell and the Subscribers will buy, in reliance upon the representations and
warranties of the Company and each Subscriber contained in this Agreement and in
the Purchase Documents, upon the terms and conditions set forth herein and
therein, for an aggregate purchase
- 1 -
price of up to Two Million Five Hundred Thousand U.S. Dollars ($2,500,000, the
"Purchase Price") in such amounts as are subscribed for pursuant hereto. All or
a portion of the Purchase Price in the case of certain Subscribers ("Existing
Securityholders") consists of the surrender and cancellation of the 1996 Senior
Subordinated Secured Debentures of the Company (the "Existing Debentures") held
by such Existing Securityholders, the instruments for which shall be delivered
to the Company at the Closing together with bond powers duly endorsed in blank.
Except as otherwise agreed, the cash portion of the Purchase Price shall be paid
on the Closing Date by federal funds wire transfer, as follows:
Xxxx Xxxxxx & Xxxxx LLP
State Street Bank and Trust Company
Address: 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000
Account Title: Xxxx Xxxxxx & Xxxxx Clients' Fund Account
Routing: ABA # 000000000
Account No.: 3901-4162
Attention: Xxxxx X. Xxxxxxxxx, Vice President Tel (000) 000-0000
Fax (000) 000-0000
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBERS. Each of
the Subscribers individually acknowledges, represents, warrants and agrees as
follows, to the extent applicable to such Subscriber:
2.1 ORGANIZATION AND AUTHORIZATION. The Subscriber is duly incorporated
or organized and validly existing in the state or country of its incorporation
or organization and has all requisite power and authority to subscribe for and
purchase and hold the Securities and to enter into this Agreement and the
Purchase Documents. The decision to subscribe for the Securities and the
execution and delivery of this Agreement and the Purchase Documents by the
Subscriber, the performance by the Subscriber of its obligations hereunder and
thereunder, and the consummation by the Subscriber of the transactions
contemplated hereby and thereby have been duly authorized and require no other
proceedings on the part of the Subscriber. The undersigned signatory has all
right, power and authority to execute and deliver this Agreement and the
Purchase Documents on behalf of the Subscriber. This Agreement and the Purchase
Documents have been duly executed and delivered by the Subscriber and, assuming
the execution and delivery hereof and acceptance hereof by the Company,
constitutes the legal, valid and binding obligations of the Subscriber,
enforceable against the Subscriber in accordance with their terms.
2.2 EVALUATION OF RISKS. The Subscriber has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of, and bearing the economic risks entailed by, an investment
in the Company and of protecting its interests in connection with this
transaction. The Subscriber recognizes that its investment in the Company
involves a high degree of risk and could result in the complete loss of its
investment. The Subscriber's overall commitment to the Company and other
investments which are not readily marketable is not disproportionate to the
Subscriber's net worth and the Subscriber has no need for immediate liquidity in
the Subscriber's investment in the Company.
2.3 INDEPENDENT COUNSEL. The Subscriber acknowledges that it have been
advised to consult with its own attorney regarding legal matters concerning the
Company and its investment in the Securities and to consult with its tax advisor
regarding the tax consequences of acquiring the Securities.
2.4 DISCLOSURE DOCUMENTATION. To the full satisfaction of the
Subscriber, the Subscriber has received and reviewed copies of the Company's
reports and registration statements filed since October 25, 1998 under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the Act,
including the
- 2 -
Company's 10-K for the fiscal year ended October 25, 1998, 10-QSBs for the
fiscal quarters ended January 24, 1999 and April 25, 1999, 8-Ks filed on January
7, 1999 and May 17, 1999, and a Registration Statement on Form SB-2 filed on May
28, 1999 (collectively, the "Reports"). No representations or warranties have
been made to the Subscriber by the Company or any agent, employee or affiliate
of the Company which were or are in any way inconsistent with the Reports, and
in entering into this transaction the Subscriber is not relying upon any
information, other than that contained in the Reports and the results of the
Subscriber's independent investigation.
2.5 OPPORTUNITY TO ASK QUESTIONS. The Subscriber has had a reasonable
opportunity to ask questions of and receive answers from the Company concerning
the Company and the offering of the Securities, and all such questions, if any,
have been answered to the full satisfaction of such Subscriber.
2.6 INVESTMENT INTENT. Without limiting its ability to resell the
Securities pursuant to an effective registration statement under the Act, the
Subscriber acknowledges and agrees with the Company that it is acquiring the
Securities solely for its own account and not with a view to the distribution,
assignment or resale to others. The Subscriber understands and agrees that it
may have to bear the economic risk of its investment in the Securities for an
indefinite period of time.
2.7 NO ADVERTISEMENTS. The Subscriber is not subscribing for the
Securities as a result of or pursuant to any advertisement, article, notice or
other communication published in any newspaper, magazine, or similar media or
broadcast over television or radio, or presented at any seminar or meeting.
2.8 EXISTING DEBENTURES. The Subscriber, if also an Existing
Securityholder, is the legal and beneficial owner of the Existing Debentures
free of all liens and encumbrances both on the date hereof and at the Closing.
The Subscriber agrees to execute all documents and instruments required to
terminate all liens and encumbrances on assets of the Company in its favor.
2.9 DILUTION. The Subscriber is aware and acknowledges that conversion
of the Notes and exercise of the Warrants could significantly increase the
outstanding number of shares of Common Stock and cause dilution to existing
stockholders.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. THE COMPANY
ACKNOWLEDGES, REPRESENTS, WARRANTS AND AGREES AS FOLLOWS:
3.1 ORGANIZATION/QUALIFICATION. The Company is a corporation duly
organized and validly existing under the laws of the State of Delaware and is in
good standing under such laws. The Company has all requisite corporate power and
authority to own, lease and operate its properties and assets, and to carry on
its business as presently conducted. The Company is qualified to do business as
a foreign corporation in each jurisdiction in which the ownership of its
property or the nature of its business requires such qualification, except where
its failure to be so qualified would not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise) or on the
earnings, business affairs, properties, or assets of the Company (a "Material
Adverse Effect").
3.2 AUTHORIZATION. The Company has all requisite corporate right, power
and authority to execute and deliver this Agreement and the Purchase Documents
and to consummate the transactions contemplated hereby and thereby. All
corporate action on the part of the Company, its directors and stockholders
necessary for the authorization, execution, delivery and performance of this
Agreement and the Purchase Documents by the Company, the authorization, sale,
issuance and delivery of the Securities and
- 3 -
the performance of the Company's obligations hereunder and thereunder has been
taken. Upon their issuance and delivery in accordance with this Agreement and
the Purchase Documents, the Securities will be validly issued, fully paid and
nonassessable and will be free of any liens or encumbrances; provided, however,
that the Securities are subject to restrictions on transfer under state and/or
federal securities laws. The issuance and sale of the Securities will not give
rise to any preemptive right or right of first refusal or right of participation
on behalf of any person.
3.3 FILING OF REPORTS. The Company has registered its Common Stock
pursuant to Section 12 of the 1934 Act. The Company is in compliance, to the
extent applicable and material, with all reporting obligations under the 1934
Act. The Company has made all filings required to be filed pursuant to all
reporting obligations under either Section 13(a) or 15(d) of the 1934 Act during
the twelve (12) months immediately preceding the offer and sale of the
Securities (or for such shorter period that the Company has been required to
file such material).
3.4 FULL DISCLOSURE None of the Reports contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances under
which they were made, not misleading. There is no fact known to the Company
(other than general economic conditions known to the public generally) that has
not been publicly disclosed by the Company or disclosed in writing to each of
the Subscribers which (i) could reasonably be expected to have a Material
Adverse Effect, or (ii) could reasonably be expected materially and adversely to
affect the ability of the Company to perform its obligations pursuant to this
Agreement.
3.5 ENFORCEABILITY; NO CONFLICT. This Agreement and the Purchase
Documents have been duly executed and delivered by the Company and constitute
legal, valid and binding obligations of the Company enforceable in accordance
with their terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies, and to limitations
of public policy as they may apply to the indemnification provisions set forth
in this Agreement and the Purchase Documents. The execution and delivery of this
Agreement and the Purchase Documents do not, and the consummation of the
transactions contemplated hereby and thereby will not result in any violation
of, constitute a default under, or give rise to a right of termination,
cancellation or acceleration of any material obligation or to a loss of a
material benefit under, any provision of the Company's Certificate of
Incorporation, or Bylaws each (as amended), or any material mortgage, indenture,
lease or other agreement or instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Company, its properties or assets and which (i) would reasonably be
expected to have a Material Adverse Effect, or (ii) could reasonably be expected
materially and adversely to affect the ability of the Company to perform its
obligations pursuant to this Agreement.
3.6 GOVERNMENTAL CONSENT, ETC. To the Company's knowledge, no consent,
approval or authorization of or designation, declaration or filing with any
governmental authority on the part of the Company is required in connection with
the valid execution and delivery of this Agreement (including all Exhibits
annexed hereto), the consummation of any other transaction contemplated hereby,
or the offer, sale or issuance of the Securities, except as may be required by
applicable securities laws.
3.7 MATERIAL CONTRACTS. Except as set forth in the Reports, the
agreements to which the Company is a party described in the Reports are valid
agreements, in full force and effect, and the Company is not in breach or
default under any of such agreements which could (i) reasonably be expected to
have a Material
- 4 -
Adverse Effect, or (ii) could reasonably be expected materially and adversely to
affect the ability of the Company to perform its obligations pursuant to this
Agreement.
3.8 LITIGATION. Except as disclosed in the Reports, there is no action,
proceeding or investigation pending, or to the Company's knowledge threatened,
against the Company which might result, either individually or in the aggregate,
in any Material Adverse Effect, nor is the Company a party to or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality which could (i) reasonably be expected to
have a Material Adverse Effect, or (ii) could reasonably be expected to
materially and adversely affect the ability of the Company to perform its
obligations pursuant to this Agreement.
3.9 CAPITALIZATION. The authorized capital stock of the Company
consists of 40,000,000 shares of Common Stock, $0.01 par value per share, of
which 19,007,227 are outstanding. There are 5,000,000 shares of Preferred Stock
authorized and none outstanding. The Company has issued and outstanding Warrants
to purchase approximately 5,634,901 shares of Common Stock. All issued and
outstanding shares of Common Stock have been duly authorized, validly issued and
fully paid and nonassessable.
SECTION 4. SECURITIES ISSUES.
4.1 NO REGISTRATION, REVIEW OR APPROVAL. Each Subscriber acknowledges
and understands that the sale of Securities pursuant to this Agreement: (i) has
not been reviewed or approved by the SEC or by any state securities commission,
authority or agency, (ii) is not registered under the Act or under the
securities or "blue sky" laws, rules or regulations of any state, and (iii) are
being offered and sold hereunder pursuant to a private placement exemption to
the registration provisions of the Act pursuant to Section 3(b) or Section 4(2)
of such Act, and a similar exemption to the registration provisions of
applicable state securities laws. Each Subscriber acknowledges and understands
that the Securities, Conversion Shares and Warrant Shares may not be resold or
otherwise transferred unless so registered or subject to an exemption from such
registration.
4.2 RELIANCE BY COMPANY. The Subscriber understands that the
information provided herein, including specifically, but not limited to, the
responses provided in Section 9.2 or 9.3 (as applicable) of this Agreement, will
be relied upon by the Company for the purpose of determining the eligibility of
the Subscriber to purchase the Securities of the Company. The Subscriber
represents to the Company that his/her/its representations and warranties
contained herein are complete and accurate and may be relied upon by the Company
in determining the availability of an exemption from registration under federal
and state securities laws in connection with a private offering of securities.
The Subscriber agrees to provide, if requested, any additional information that
may reasonably be required to determine the eligibility of the Subscriber to
purchase the Securities of the Company.
4.3 INDEMNIFICATION. Each of the Subscribers agrees to indemnify, and
to hold harmless the Company and its affiliates, officers, directors,
controlling persons, attorneys, agents and employees, from and against any and
all losses, damages, liabilities, costs and expenses (including reasonable
attorneys' fees) which the Company and/or any of them may sustain or incur due
to, arising out of or in connection with the breach or threatened breach by such
Subscriber of any representation, warranty or covenant made by such Subscriber
in this Agreement, any of the Purchase Documents, or in any other document
provided by the Subscriber to the Company in connection with the Subscriber's
investment in the Securities, including, without limitation, transfer of the
Subscriber's Securities in violation of the Act.
- 5 -
SECTION 5. Legend. Until such time as the Securities are registered
under the Act, the certificates representing the Securities shall be subject to
a legend restricting transfer under the Act, such legend to be substantially as
follows:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT") OR UNDER APPLICABLE STATE SECURITIES LAWS AND
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION, PROVIDED THAT
THE SELLER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY CONFIRMING THE AVAILABILITY OF SUCH EXEMPTION. INVESTORS
SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME."
The certificates representing these Securities, and each certificate issued in
transfer thereof, will also bear any legend required under any applicable state
securities law.
SECTION 6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. Each
Subscriber understands that the Company's obligation to sell the Securities to
such Subscriber is conditioned upon:
(i) The receipt and acceptance by the Company of this Subscription
Agreement and all Purchase Documents duly executed by the
Subscriber;
(ii) Delivery by the Subscriber of the Purchase Price set forth in
Schedule A as payment in full for the purchase of the
Securities subscribed for by the Purchaser;
(iii) All representations and warranties of the Subscriber contained
herein shall remain true and correct as of the Closing Date;
and
(iv) The Company shall have obtained all permits and qualifications
required by any state for the offer and sale of the
Securities, or shall have the availability of exemptions
therefrom. At the Closing Date, the sale and issuance of the
Securities shall be legally permitted by all laws and
regulations to which the Subscriber and the Company are
subject.
SECTION 7. CONDITIONS TO SUBSCRIBER'S OBLIGATION TO PURCHASE. The
Company understands that each Subscriber's obligation to purchase the Securities
is conditioned upon:
(i) Acceptance by the Company of the Subscriber's Subscription
Agreement in the form hereof and the due execution by the
Company of the Exhibits hereto in favor of such Subscriber;
(ii) Delivery by the Company of the original Securities as
described herein;
(iii) All representations and warranties of the Company contained
herein shall remain true and correct in all material respects
as of the Closing Date; and
(iv) The Company shall have obtained all permits and qualifications
required by any state for the offer and sale of the Securities
or shall have the availability of exemptions therefrom.
- 6 -
At the Closing Date, the sale and issuance of the Securities
shall be legally permitted by all laws and regulations to
which the Company and each Subscriber are subject.
SECTION 8. MISCELLANEOUS.
8.1 GOVERNING LAW/JURISDICTION. This Agreement will be construed and
enforced in accordance with and governed by the laws of the State of New Jersey,
except for matters arising under the Act, without reference to principles of
conflicts of law. Each of the parties consents to the jurisdiction of the US
District Court for the State of New Jersey in connection with any dispute
arising under this Agreement and hereby waives, to the maximum extent permitted
by law, any objection, including any objection based on forum non conveniens, to
the bringing of any such proceeding in such jurisdiction. Each party hereby
agrees that if another party to this Agreement obtains a judgment against it in
such a proceeding, the party which obtained such judgment may enforce same by
summary judgment in the courts of any state or country having jurisdiction over
the party against whom such judgment was obtained, and each party hereby waives,
to the extent permitted by law, 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.
8.2 CONFIDENTIALITY. The Company and each of the Subscribers agrees to
keep confidential and not to disclose to or use for the benefit of any third
party the terms of this Agreement (including the names of the Subscribers) or
any other information which at any time is communicated by the other party as
being confidential without the prior written approval of the other party;
provided, however, that this provision shall not apply to information which, at
the time of disclosure, is already part of the public domain (except by breach
of this Agreement) and information which is required to be disclosed by law. If
for any reason the transactions contemplated by this Agreement are not
consummated, each of the parties hereto shall keep confidential any such
information obtained from any other party, including the names of each
Subscriber (except information publicly available or in such party's domain
prior to the date hereof, and except as required by court order) and shall
promptly return to the other parties all schedules, documents, instruments, work
papers or other written information, without retaining copies thereof,
previously furnished by it as a result of this Agreement or in connection
herewith.
8.3 FACSIMILE/COUNTERPARTS/ENTIRE AGREEMENT. Except as otherwise stated
herein, in lieu of the original, a facsimile transmission or copy of the
original shall be as effective and enforceable as the original. This Agreement,
and in particular the Signatures and Sections 9.2 and 9.3, may be executed in
counterparts which shall be considered an original document and which together
shall be considered a complete document. This Agreement, the Purchase Documents
and the Exhibits hereto and thereto, constitute the entire agreement between
each Subscriber and the Company with respect to the subject matter hereof.
8.4 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
8.5 LEGAL FEES AND EXPENSES. Each of the parties shall pay its own fees
and expenses (including the fees of any accountants, appraisers or others
engaged by such party) in connection with this Agreement and the transactions
contemplated hereby.
- 7 -
8.6 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 or facsimile number as such party
shall have specified most recently in writing. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective (a) upon
hand delivery or delivery by facsimile, with accurate confirmation generated by
the transmitting facsimile machine, at the address or number designated below
(if delivered on a business day during normal business hours where such notice
is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received), (b) on the second business day following the date of
mailing by reputable courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first occur, or (c) on
the fifth business day following date of mailing by registered or certified
mail, return receipt requested, postage prepaid, addressed to such address, or
upon actual receipt of such mailing, whichever shall first occur. The addresses
for such communications shall be:
(i) If to the Company: to With a copy to:
Datametrics Corporation Xxxx Xxxxxx & Xxxxx LLP
00X Xxxxxxx Xxxx Xx. 0000 000 Xxxxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000 Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, CEO Attn: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
and
(ii) If to the Subscribers, at the addresses and numbers set forth
in Sections 9.2 and 9.3 with respect to each Subscriber
8.7 AMENDMENTS AND WAIVERS. Any term of this Agreement or of the Notes
may be amended and the observance of any term of this Agreement or of the Notes
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Company and
the holders of a majority principal amount of the Notes at the time outstanding,
provided that (a) without the prior written consent of the holders of all the
Notes at the time outstanding, no such amendment or waiver shall (i) extend the
fixed maturity or reduce the principal amount of, or reduce the rate or extend
the time of payment of interest on, or reduce the amount or extend the time of
payment of any principal or premium payable on any redemption or prepayment of,
any Note, or (ii) reduce the aforesaid percentage of the principal amount of the
Notes the holders of which are required to consent to any such amendment or
waiver.
THE REST OFTHIS PAGE IS INTENTIONALLY BLANK
- 8 -
SECTION 9. ACCREDITED INVESTOR REPRESENTATION - MUST BE COMPLETED:
9.1 EXISTING INVESTOR: Please check one box only: |_| New investor; or
|_| Current investor holding Common Stock, Warrants or other securities of the
Company.
9.2 ACCREDITED INVESTOR REPRESENTATIONS FOR INDIVIDUALS:(Entities go to
Section 9.3 on next Page). The Subscriber is (check all that apply):
|_| (a) a natural person who has an individual net worth, or, together
with his or her spouse, has a combined net worth in excess of $1,000,000. If
this category applies, complete the following (or provide a personal financial
statement): Net worth (including home, home furnishings and automobiles), over
total liabilities equals $________.
|_| (b) a natural person who has an individual income (exclusive of any
income attributable to a spouse) in excess of $200,000 in the last two (2)
calendar years, or joint income with such person's spouse in excess of $300,000
for each of those years, and reasonably expects reaching the same income level
in the current calendar year.
|_| (c) a director, executive officer, or general partner of the issuer
of the securities being offered or sold, or any director, executive officers, or
general partner of a general partner of that issuer.
Executed under seal as of the date set forth beside the signature of
the Company on Page 12 hereof.
Amount Subscribed For: $________________
SIGNATURE PAGE FOR INDIVIDUALS
Form of Ownership INDIVIDUAL SIGNATURES
(Print Name(s) under Signature(s))
( ) INDIVIDUAL OWNERSHIP
(One signature required) _________________________________
( ) TENANTS IN COMMON
(All tenants must sign) _________________________________
( ) JOINT TENANTS WITH RIGHTS
OF SURVIVORSHIP _________________________________
(All tenants must sign)
--------------------------------- ---------------------------------
(Social Security Number of Individual)
--------------------------------- ---------------------------------
(Street Address) (Telephone)
--------------------------------- ---------------------------------
(City/State/Zip Code) (Facsimile Number)
Date:__________________
- 9 -
9.3 ACCREDITED INVESTOR REPRESENTATIONS FOR ENTITIES. The Subscriber is
(check all that apply):
|_| (d) a bank as defined in Section 3(a)(2) of the Securities Act, or any
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity.
|_| (e) any broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934 (the "1934 Act").
|_| (f) an insurance company as defined in Section 2(13) of the Securities
Act.
|_| (g) an investment company registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), or a business development company as
defined in Section 2(a)(48) of the 0000 Xxx.
|_| (h) a small business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
|_| (i) a plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, which plan has total assets in
excess of $5,000,000.
|_| (j) an employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and (i) the
decision to invest in the Company was made by a plan fiduciary (as defined in
Section 3(21) of ERISA) that is either a bank, savings and loan association,
insurance company or registered investment advisor, or (ii) the employee benefit
plan has total assets in excess of $5,000,000, or (iii) if a self-directed plan,
with investment decisions made solely by persons that are accredited investors.
The Undersigned is aware of (i) the risk/return factors, (ii) the effect of the
plan's investment in the Securities on the diversification, liquidity and cash
flow needs of the plan, and (iii) the projected effect of the investment in
meeting the plan's funding objectives. The Undersigned has concluded that an
investment in the Securities is a prudent one.
|_| (k) a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940, as amended (the "Advisers
Act").
|_| (l) an organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, (the "Code"), a corporation, Massachusetts or
similar business trust, or partnership not formed for specific purpose of
acquiring the Securities, with total assets in excess of $5,000,000.
|_| (m) a trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the Securities, whose purchase of the
Securities is directed by a person who, either alone or with a purchaser
representative has such knowledge and experience in business and financial
matters that he is capable of revaluating the merits and risks of the
prospective investment.
|_| (n) an entity in which each of the equity owners (i.e., partners in
partnership or Shareholders in a corporation) meets all of the requirements of
one of the above categories.
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SIGNATURE PAGE FOR ENTITIES
ENTITY OWNERSHIP: CHECK FORM OF ORGANIZATION OF ENTITY SUBSCRIBER
( ) TRUST (Please attach a copy of trust instrument or
in lieu thereof an opinion of counsel that
such trust has the authority to purchase the
Securities).
( ) CORPORATION (Please include certified corporate
resolution authorizing signature).
( ) PARTNERSHIP (Please attach a copy of the partnership
agreement or in lieu thereof, an opinion of
counsel that such partnership has the
authority to purchase the Securities).
( ) EMPLOYEE BENEFIT PLAN (Please attach a copy of the Plan
Agreement or in lieu thereof, an opinion
of counsel that such employee benefit plan
has the authority to purchase the
Securities).
NUMBER OF OWNERS - If the subscriber is a grantor trust, partnership or S
corporation, provide the number of direct or indirect owners (or beneficiaries)
of such entity: ___________________. (The subscriber is required to inform the
Partnership if this number increases at any time during which the Subscriber
holds an interest in the Partnership).
Executed under seal as of the date set forth beside the signature of
the Company on Page 12 hereof.
Amount Subscribed For: $________________
ENTITY SIGNATURE:
--------------------------------- -------------------------------
(Print Name of Entity) (Xxxxxx Xxxxxxx)
By:______________________________ -------------------------------
(Signature of Officer or Agent) (City/State/Zip Code)
--------------------------------- -------------------------------
(Print Name and Title of Person Signing) (Taxpayer ID Number)
--------------------------------- -------------------------------
(Telephone) (Facsimile Number)
Date:__________________
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ACCEPTANCE OF SUBSCRIPTION
DATAMETRICS CORPORATION
The foregoing subscription of for 12% Subordinated Convertible Secured
Notes in the amount of $______________ and Warrants to purchase up to ________
shares of the Common Stock of the Company, is hereby accepted by DATAMETRICS
CORPORATION, and the foregoing Subscription Agreement is hereby executed under
seal by DATAMETRICS CORPORATION, this _____ day of ___________________, 199 .
DATAMETRICS CORPORATION
By:_________________________________
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
- 12 -
