REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made
and entered into as of July ___, 1999, among Datametrics Corporation, a Delaware
corporation (the "Company"), and the entities or individuals listed on Schedule
A attached hereto "Subscribers"). This Agreement is being entered into in
connection with that certain 12% Subordinated Convertible Secured Note
Subscription Agreement, dated of even date herewith, by and among the Company
and the Subscribers (the "Subscription Agreement") pursuant to which the Company
issued 12% Subordinated Convertible Secured Notes ("Notes") to the Subscribers.
The Company and the Subscribers hereby agree as follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined
herein shall have the meanings given such terms in the Subscription Agreement.
As used in this Agreement, the following terms shall have the following
meanings:
"AFFILIATE" means, with respect to any Person, any other
Person that directly or indirectly controls or is controlled by or
under common control with such Person. For the purposes of this
definition, "control," when used with respect to any Person, means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise;
and the terms of "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
"BANK FINANCING" means an institutional line of credit or
working capital loans of at least $1,500,000.
"BOARD" shall have the meaning set forth in Section 3(l).
"BUSINESS DAY" means any day except Saturday, Sunday and any
day which shall be a legal holiday in the state of New Jersey or a day
on which banking institutions in the state of New Jersey generally are
authorized or required by law or other government actions to close.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Company's Common Stock, par value
$.01 per share.
"CONVERSION SHARES" means the shares of the Common Stock
issuable upon the conversion of the Notes.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in
Section 2.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FILING DATE" means the earlier of (i) the 30th day following
the Closing of any Bank Financing in excess of One Million Dollars
($1,000,000), or (ii) August 31, 1999.
"HOLDER" or "HOLDERS" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
"INDEMNIFIED PARTY" shall have the meaning set forth in
Section 5(c).
"INDEMNIFYING PARTY" shall have the meaning set forth in
Section 5(c).
"LOSSES" shall have the meaning set forth in Section 5(a).
"PERSON" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an
agency or political subdivision thereof) or other entity of any kind.
"PROCEEDING" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"PROSPECTUS" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes
any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by the Registration
Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by
reference in such Prospectus.
"REGISTRABLE SECURITIES" means (i) the Warrant Shares and (ii)
the Conversion Shares. Notwithstanding anything herein contained to the
contrary, such registered shares of Common Stock shall be allocated
among the Holders pro rata based on the total number of Registrable
Securities issued or issuable as of each date that a Registration
Statement, as amended, relating to the resale of the Registrable
Securities is declared effective by the Commission. Notwithstanding
anything contained herein to the contrary, if the actual number of
shares of Common Stock issuable upon conversion of the Notes or the
exercise of the Warrants exceeds 100% of the number of shares of Common
Stock issuable upon conversion of the Notes or the exercise of the
Warrants based upon a computation as at the Closing Date or the Filing
Date, the term "Registrable Securities" shall be deemed to include such
additional shares of Common Stock.
"REGISTRATION STATEMENT" means the registration statements and
any additional registration statements contemplated by Section 3,
including (in each case) the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material
incorporated by reference in such registration statement.
"RULE 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"RULE 158" means Rule 158 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"RULE 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"WARRANTS" means the Warrants to purchase shares of the
Company's Common Stock issued in connection with the Subscription
Agreement.
"WARRANT SHARES" means the shares of Common Stock issuable
upon the exercise of any of the Warrants.
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2. REGISTRATION. No later than the Filing Date, the Company shall
prepare and file with the Commission a Registration Statement covering all
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415. The Company shall use its best efforts to cause the Registration
Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof, but in any event prior to December 31, 1999,
and to keep such Registration Statement continuously effective under the
Securities Act until such date as is the earlier of (x) the date when all
Registrable Securities covered by such Registration Statement have been sold, or
(y) the date on which the Registrable Securities may be sold without any
restriction pursuant to Rule 144(k) as determined by the counsel to the Company
pursuant to a written opinion letter, addressed to the Company's transfer agent
to such effect (the "Effectiveness Period"). In the event that a Registration
Statement under the Securities Act covering all Registrable Securities is not
effective by December 31, 1999, the Company shall pay to the Holder, in
immediately available funds, upon demand, as liquidated damages for such failure
and not as a penalty, 2% of the outstanding principal amount of Note, for each
month after such date that such a Registration Statement is not fully effective,
until the earlier of the dates described in clauses (x) or (y) above, at which
time such liquidated damages shall cease. Any and all payments required pursuant
to this paragraph shall be payable only in cash.
3. REGISTRATION PROCEDURES. In connection with the Company's
registration obligations hereunder, the Company shall:
(a) Prepare and file with the Commission on or prior to the
Filing Date, a Registration Statement on a form appropriate for the
purposes hereof, and cause the Registration Statement to become
effective and remain effective as provided herein; provided, however,
that not less than five (5) Business Days prior to the filing of the
Registration Statement or any related Prospectus or any amendment or
supplement thereto (including any document that would be incorporated
therein by reference), the Company shall, at the request of any Holder
(i) furnish to the Holders copies of all such documents proposed to be
filed, which documents (other than those incorporated by reference)
will be subject to the review of such Holders, and (ii) cause its
officers and directors, counsel and independent certified public
accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of counsel to such Holders, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company
shall not file the Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a majority of
the Registrable Securities shall reasonably object in writing within
three (3) Business Days of their receipt thereof.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement as
may be necessary to keep the Registration Statement continuously
effective as to the applicable Registrable Securities for the
Effectiveness Period, and prepare and file with the Commission such
additional Registration Statements in order to register for resale
under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed
pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; (iii) respond promptly to any
comments received from the Commission with respect to the Registration
Statement or any amendment thereto; and (iv) comply in all material
respects with the provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities covered
by the Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Holders
thereof set forth in the Registration Statement as so amended or in
such Prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities to be sold,
and with respect to (i)(C) below, the Company's transfer agent, as
promptly as possible (and, in the case of (i)(A) below, not
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less than five (5) Business Days prior to such filing) and (if
requested by any such Person) confirm such notice in writing no later
than one (1) Business Day following the day: (i)(A) when a Prospectus
or any Prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed; and (B) with respect to
the Registration Statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the Commission or any
other Federal or state governmental authority for amendments or
supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) if at any time any of the
representations and warranties of the Company contained in any
agreement contemplated hereby ceases to be true and correct in all
material respects; (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for
sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; and (vi) of the occurrence of any event
that makes any statement made in the Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires
any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the
Prospectus, as the case may be, it will not 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 the light of the circumstances under which they were made,
not misleading;.
(d) Use its best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of, (i) any order suspending the
effectiveness of the Registration Statement, or (ii) any suspension of
the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.
(e) If requested by the Holders of a majority in interest of
the Registrable Securities, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment to the Registration Statement
such information as the Company reasonably agrees should be included
therein, and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as practicable
after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.
(f) Furnish to each Holder and upon request and without
charge, at least one conformed copy of each Registration Statement and
each amendment thereto, including financial statements and schedules,
and also, to the extent requested by such person, all documents
incorporated or deemed to be incorporated therein by reference, and all
exhibits to the extent requested by such Person (including those
previously furnished or incorporated by reference) promptly after the
filing of such documents with the Commission.
(g) Promptly deliver to each Holder, without charge, as many
copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons
may reasonably request; and the Company hereby consents to the use of
such Prospectus and each amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable Securities,
use its best efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification
(or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue
Sky laws of such jurisdictions within the United States as any Holder
requests in writing, to keep each such registration or qualification
(or exemption therefrom) effective
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during the Effectiveness Period and to do any and all other acts or
things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by a Registration
Statement; PROVIDED, HOWEVER, that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is not
then so qualified or to take any action that would subject it to
general service of process in any such jurisdiction where it is not
then so subject, or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.
(i) Cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to a Registration Statement, which
certificates shall be free of all restrictive legends, and to enable
such Registrable Securities to be in such denominations and registered
in such names as any Holder may request at least two (2) Business Days
prior to any sale of Registrable Securities, provided the Company is
given five (5) Business Days' notice of such sale.
(j) Upon the occurrence of any event described in Section
3(c)(vi), as promptly as possible, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement or
a supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, and file any other
required document so that, as thereafter delivered, neither the
Registration Statement nor such Prospectus will contain 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, in
the light of the circumstances under which they were made, not
misleading.
(k) Comply in all material respects with all applicable rules
and regulations of the Commission.
Notwithstanding anything to the contrary herein contained, the
Company shall be entitled to postpone, for a reasonable period of time
not in excess of 120 days, the filing, or suspend filing or
effectiveness, of a Registration Statement, or any amendment thereto,
otherwise required pursuant to this Agreement if the Company
determines, in the good faith exercise of its reasonable business
judgment, that (i) such registration and offering would materially
interfere with bona fide financing plans of the Company; or (ii) such
registration and offering would require disclosure of material
non-public information regarding the Company which the Company's Board
of Directors (the "Board") reasonably determines not to be in the
Company's best interest to disclose and which the Company is not
otherwise required to disclose.
4. OBLIGATIONS OF HOLDERS.
(a) Each Holder covenants and agrees that (i) it will not sell
any Registrable Securities under the Registration Statement until it
has received copies of the Prospectus as then amended or supplemented
as contemplated in Section 3(g) and notice from the Company that such
Registration Statement and any post-effective amendments thereto have
become effective as contemplated by Section 3(c) and (ii) it and its
officers, directors or Affiliates, if any, will comply with the
prospectus delivery requirements of the Securities Act as applicable to
them in connection with sales of Registrable Securities pursuant to the
Registration Statement.
(b) Each Holder agrees by its acquisition of Registrable
Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(c)(ii),
3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi), such Holder will forthwith
discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder's receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing by the
Company that the use of the applicable Prospectus may be
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resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated
by reference in such Prospectus or Registration Statement.
(c) The Company may require each selling Holder to furnish to
the Company information regarding such Holder and the distribution of
such Registrable Securities as is required by law to be known by the
Company and/or disclosed in the Registration Statement, and the Company
may exclude from such registration the Registrable Securities of any
such Holder who unreasonably fails to furnish such information within a
reasonable time after receiving such request.
5. INDEMNIFICATION
(a) INDEMNIFICATION BY THE COMPANY. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, each Person who controls any such Holder (within
the meaning of Section 15 of the Securities Act and/or Section 20 of
the Exchange Act) and the officers, directors, agents, brokers,
investment advisors and employees of each of them, to the fullest
extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without
limitation, costs of preparation and attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of or relating to
any untrue or alleged untrue statement of a material fact contained in
the Registration Statement, any Prospectus or any form of prospectus or
in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary
to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in the light of the circumstances
under which they were made) not misleading, except to the extent, but
only to the extent, that such untrue statements or omissions are based
solely upon information regarding such Holder furnished in writing to
the Company by such Holder expressly for use therein, which information
was reasonably relied on by the Company for use therein or to the
extent that such information relates to such Holder or such Holder's
proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for
use in the Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto. The Company shall
notify the Holders promptly of the institution, threat or assertion of
any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement. Such indemnity shall
remain in full force and effect regardless of any investigation made by
or on behalf of an Indemnified Party and shall survive the transfer of
the Registrable Securities by the Holders.
(b) INDEMNIFICATION BY HOLDERS. Each Holder shall, severally
and not jointly, indemnify and hold harmless the Company, each Person
who controls the Company (within the meaning of Section 15 of the
Securities Act and/or Section 20 of the Exchange Act), and the
directors, officers, agents or employees of each of the Company and
such controlling Persons, to the fullest extent permitted by applicable
law, from and against all Losses, as incurred, arising solely out of or
based solely upon any untrue statement of a material fact contained in
the Registration Statement, any Prospectus, or any form of prospectus,
or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus
or supplement thereto, in the light of the circumstances under which
they were made) not misleading, to the extent, but only to the extent,
that such untrue statement or omission is contained in any information
so furnished in writing by such Holder to the Company specifically for
inclusion in the Registration Statement or such Prospectus and that
such information was reasonably relied upon by the Company for use in
the Registration Statement, such Prospectus or such form of prospectus
or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and
was reviewed and expressly approved in writing by such Holder expressly
for use in the Registration Statement, such Prospectus or such form of
Prospectus. Notwithstanding anything to the contrary contained herein,
the Holder
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shall be liable under this Section 5(b) for only that amount as does
not exceed the net proceeds to such Holder as a result of the sale of
Registrable Securities pursuant to such Registration Statement.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. (i) If any
Proceeding shall be brought or asserted against any Person entitled to
indemnity hereunder (an "INDEMNIFIED PARTY"), such Indemnified Party
promptly shall notify the Person from whom indemnity is sought (the
"INDEMNIFYING PARTY) in writing, and the Indemnifying Party shall
assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent
that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further
review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.
(ii) An Indemnified Party shall have the right to employ
separate counsel in any such Proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless: (A) the
Indemnifying Party has agreed in writing to pay such fees and expenses;
or (B) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (C)
the named parties to any such Proceeding (including any impleaded
parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel
that a conflict of interest is likely to exist if the same counsel were
to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of
the Indemnifying Party, the Indemnifying Party shall not have the right
to assume the defense thereof and such counsel shall be at the expense
of the Indemnifying Party). The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written
consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in
respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party
from all liability on claims that are the subject matter of such
Proceeding.
(iii) All fees and expenses of the Indemnified Party
(including reasonable fees and expenses to the extent incurred in
connection with investigating or preparing to defend such Proceeding in
a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten (10) Business Days of
written notice thereof to the Indemnifying Party (regardless of whether
it is ultimately determined that an Indemnified Party is not entitled
to indemnification hereunder; provided, that the Indemnifying Party may
require such Indemnified Party to undertake to reimburse all such fees
and expenses to the extent it is finally judicially determined that
such Indemnified Party is not entitled to indemnification hereunder).
(d) CONTRIBUTION. If a claim for indemnification under Section
5(a) or 5(b) is unavailable to an Indemnified Party because of a
failure or refusal of a governmental authority to enforce such
indemnification in accordance with its terms (by reason of public
policy or otherwise), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses,
in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of
such Indemnifying Party and Indemnified Party shall be determined by
reference to, among other things, whether any action in question,
including any
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untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or
relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such action,
statement or omission. The amount paid or payable by a party as a
result of any Losses shall be deemed to include, subject to the
limitations set forth in Section 5(c), any reasonable attorneys' or
other reasonable fees or expenses incurred by such party in connection
with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided
for in this Section was available to such party in accordance with its
terms. The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to in the
immediately preceding paragraph. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties
may have to the Indemnified Parties
6. RULE 144. As long as any Holder owns any Note, Warrants or
Registrable Securities, the Company shall timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to Section
13(a) or 15(d) of the Exchange Act, and furnish the Holders upon request with
true and complete copies of all such filings. As long as any Holder owns any
Note, Warrants or Registrable Securities, if the Company is not required to file
reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare
and furnish to the applicable Holders and make publicly available the
information required by Rule 144(c)(2) promulgated under the Securities Act. The
Company further will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Person to
sell Conversion Shares and Warrant Shares without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144
promulgated under the Securities Act, including providing any legal opinions
referred to in the Purchase Agreement.
7. REGISTRATION EXPENSES. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not the Registration Statement is filed or becomes
effective and whether or not any Registrable Securities are sold pursuant to the
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the American Stock Exchange and any other securities
exchange or market on which Registrable Securities are required hereunder to be
listed, (B) with respect to filings required to be made with the Commission, and
(C) in compliance with state securities or Blue Sky laws (including, without
limitation, fees and disbursements of counsel for the Holders in connection with
Blue Sky qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the Holders of a majority of Registrable Securities may
designate)), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) Securities Act liability insurance, if the
Company so desires such insurance, and (v) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, including, without limitation, the
Company's independent public accountants (including the expenses of any comfort
letters or costs associated with the delivery by independent public accountants
of a comfort letter or comfort letters). In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder.
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8. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company or by a
Holder, of any of their obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law and under this Agreement, including
recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company and each Holder agree that
monetary damages would not provide adequate compensation for any losses
incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action
for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. Neither the Company nor any of
its subsidiaries has, as of the date hereof entered into and currently
in effect, nor shall the Company or any of its subsidiaries, on or
after the date of this Agreement, enter into any agreement with respect
to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions
hereof. Without limiting the generality of the foregoing, without the
written consent of the Holders of a majority of the then outstanding
Registrable Securities, the Company shall not grant to any Person the
right to request the Company to register any securities of the Company
under the Securities Act unless the rights so granted are subject in
all respects to the prior rights in full of the Holders set forth
herein, and are not otherwise in conflict with the provisions of this
Agreement, or the Registration Rights Agreement has been declared
effective by the SEC.
(c) 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.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified
or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in writing
and signed by the Company and each of the Holders. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof
with respect to a matter that relates exclusively to the rights of
Holders and that does not directly or indirectly affect the rights of
other Holders may be given by Holders of at least a majority of the
Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(e) NOTICES. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified
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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 Subscriber(s), at the addresses and numbers
set forth beside its name below, unless otherwise
listed on Schedule A annexed hereto.
(f) SuCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and
permitted assigns and shall inure to the benefit of each Holder and its
successors and assigns. The Company may not assign this Agreement or
any of its rights or obligations hereunder without the prior written
consent of each Holder.
(g) ASSIGNMENT OF REGISTRATION RIGHTS. The rights of each
Holder hereunder, including the right to have the Company register for
resale Registrable Securities in accordance with the terms of this
Agreement, shall be automatically assignable by each Holder to any
transferee of such Holder of all or a portion of the shares of Common
Stock or the Registrable Securities if: (i) the Holder agrees in
writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within a reasonable
time after such assignment, (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice
of (a) the name and address of such transferee or assignee, and (b) the
securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment
the further disposition of such securities by the transferee or
assignees is restricted under the Securities Act and applicable state
securities laws, (iv) at or before the time the Company receives the
written notice contemplated by clause (ii) of this Section, the
transferee or assignee agrees in writing with the Company to be bound
by all of the provisions of this Agreement, and (v) such transfer shall
have been made in accordance with the applicable requirements of the
Purchase Agreement. In addition, each Holder shall have the right to
assign its rights hereunder to any other Person with the prior written
consent of the Company, which consent shall not be unreasonably
withheld. The rights to assignment shall apply to the Holders (and to
subsequent) successors and assigns.
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(h) 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 may be executed in
counterparts which shall be considered an original document and which
together shall be considered a complete document. This Agreement and
the Schedules and Exhibits hereto, constitute the entire agreement
between each Subscriber and the Company with respect to the subject
matter hereof.
(i) 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.
(j) HEADINGS. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.
DATAMETRICS CORPORATION
By:_________________________________
Name: Xxxxxx X. Xxxxx
Title: CEO
SUBSCRIBER:_________________________
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
Address:____________________________
No. and Street
____________________________
City (Town), State and Zip
____________________________
Telephone
____________________________
Facsimile Telephone Number
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