THIS NOTES AND WARRANTS PURCHASE AGREEMENT (the "Agreement")
is made and entered into this 18th day of February, 1997, by and between Tinicum
Investors and Xxxxx Xxxxxxx (each a "Purchaser" and collectively, the
"Purchasers") and Glasgal Communications, Inc., a Delaware corporation (the
"Company").
BACKGROUND
The Company desires to sell and each Purchaser desires to
purchase promissory notes having a principal amount of $1,000,000 (the "Notes"),
to be dated the date of issue thereof, to mature February 18, 1999, to bear
interest on the unpaid balance thereof from the date thereof until the principal
thereof shall have become due and payable at the rate of 10% per annum and on
overdue payments at the rate specified therein, to be convertible into the
Company's Common Stock following the expiration of six months following the
Closing Date (as defined hereinafter to the extent the Notes remain
outstanding), and to be substantially in the form of Exhibit A attached hereto.
In consideration for the purchase of the Notes, the Company will issue to each
Purchaser (i) a warrant (the "Original Warrants"), to be substantially in the
form of Exhibit B attached hereto, for the purchase of 250,000 shares of Common
Stock of the Company, par value $.001 per share (the "Common Stock"), at an
exercise price of $5.25 per share, and (ii) an additional warrant (the
"Conditional Warrants"), to be substantially in the form of Exhibit C attached
hereto, for the purchase of 100,000 additional shares of Common Stock at an
exercise price of $5.25 per share, which Conditional Warrants expire pursuant to
their terms if the Note is repaid within 90 days of the date hereof. The term
"Notes" as used herein shall include each such promissory notes delivered
pursuant to any provision of this Agreement and each such promissory note
delivered in substitution or exchange for any other Note pursuant to any such
provision. The term "Warrants" as used herein shall include the Original
Warrants and the Conditional Warrants.
NOW, THEREFORE, in consideration of the premises and of the
mutual representations, warranties and covenants hereinafter set forth, the
parties hereto hereby agree as follows:
ARTICLE I
THE PURCHASE
1.1 THE PURCHASE AND SALE. Subject to the terms and conditions
set forth herein, at the Closing described below, the Company will sell and the
Purchasers will purchase the Notes and Warrants for an aggregate purchase price
of $2,000,000 (the "Purchase Price").
1.2 THE CLOSING. The closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of Xxxxxx Xxxxxxxx Frome
& Xxxxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on February 18, 1997
at 10:00 A.M. or at such other place or time as the parties may agree (the
"Closing Date"). At the Closing, (i) the Purchase Price shall be payable by
delivery of immediately available funds by wire transfer to an account
of the Company that shall be specified in writing by the Company not later than
one Business Day prior to the Closing Date, and (ii) the Company shall deliver
to each Purchaser one or more Notes registered in the name of such Purchaser (or
its nominee) evidencing the aggregate principal amount of Notes to be purchased
by such Purchaser and the Original Warrants registered in the name of such
Purchaser (or its nominee).
1.3 TERMINATION OF THIS AGREEMENT. Anything contained in this
Agreement to the contrary notwithstanding, in the event that the Purchasers fail
to deliver immediately available funds representing the Purchase Price by the
close of business on the Closing Date, this Agreement shall terminate and be of
no force and effect without the requirement of any notice from, or any action
by, the Company.
ARTICLE II
Representations and Warranties
CONCERNING THE COMPANY
The Company hereby represents and warrants to the Purchasers
as follows:
2.1 ORGANIZATION AND STANDING. The Company is a corporation
duly organized and existing under the laws of the State of Delaware and is in
good standing under such laws.
2.2 CORPORATE POWER. The Company has all requisite corporate
power and authority to enter into this Agreement and the Company will have at
the Closing Date all requisite corporate power to sell the Notes and the
Warrants and to carry out and perform its obligations under the terms of this
Agreement.
2.3 CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company consists of (i) 34,000,000 shares of Glasgal Common
Stock and (ii) 4,000,000 shares of preferred stock, par value $.001 per share.
There are 21,772,560 shares of the Company's Common Stock and 100,000 shares of
Preferred Stock currently issued and outstanding.
2.4 SUBSIDIARIES AND INVESTMENTS. Other than Signatel Ltd.,
Computer-Aided Software Integration, Inc., HH Communications, Inc. and Datatec
Industries Inc., the Company does not own, directly or indirectly, any capital
stock, or other equity ownership or proprietary interest, in any other
corporation, association, trust, partnership, joint venture.
2.5 SEC REPORTS AND FINANCIAL STATEMENTS. The Company has
filed with the Securities and Exchange Commission (the "SEC"), and has
heretofore made available to the Purchasers true and complete copies of all
forms, reports, schedules, statements and other documents required to be filed
by it under the Securities Act and the Securities and Exchange Act of 1934, as
amended (the "Exchange Act") (as such documents have been amended or
supplemented since the time of their filing, collectively, the "SEC Reports").
As of their respective dates, the SEC Reports have been prepared in conformity
with Generally Accepted
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Accounting Principles consistently applied and as of the dates indicated, and
for the periods then ended, present fairly the financial position and results of
operations of the Company as of the dates and for the periods indicated.
2.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as described in
the SEC Reports, the Company has no material debts, liabilities or obligations
of any kind, whether accrued, absolute, contingent or other, whether due or to
become due, except as incurred in the ordinary course of business, that would
have a material adverse effect on the Company.
2.7 ABSENCE OF CHANGES. Since October 31, 1996, the Company
has operated in the ordinary course of business consistent with past practice.
Since October 31, 1996, there has not occurred any change in the financial
condition, results of operations, assets, liabilities or business of the Company
which, in the aggregate, would have a material adverse effect on the Company.
2.8 FULLY PAID SHARES. The shares of Common Stock issuable
upon the exercise of the Warrants or upon conversion of the Notes, when acquired
by the Purchasers will be fully paid and non-assessable, free of preemptive
rights and encumbrances, and will have the same rights under the Company's
certificate of incorporation and by-laws as all other shares of Common Stock.
ARTICLE III
Representations and Warranties
OF PURCHASERS
Each Purchaser (as to himself only) hereby represents and
warrants to the Company as follows:
3.1 INVESTMENT INTENT, ETC. Each Purchaser is an "accredited
investor" as such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act. Each Purchaser has received, examined and reviewed copies of
the Company's most recent reports, as amended, filed under the Exchange Act and
other publicly available documents requested by him and recognizes that the
investment in the Company's Notes and Warrants involves a high degree of risk.
Each Purchaser has been advised that it may not be possible to readily liquidate
this investment. Each Purchaser's overall commitment to the Notes and Warrants
which are not readily marketable is not disproportionate to his net worth, his
investment in the Company will not cause such overall commitment to become
excessive, and he can afford to bear the loss of his entire investment in the
Company. Each Purchaser has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of an
investment in the Company. Each Purchaser confirms that the Company has made
available to him the opportunity to ask questions of, and receive answers from,
the Company concerning the Company and the activities of the Company and
otherwise to obtain any additional information, to the extent that the Company
possesses such information or could acquire it without
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unreasonable effort or expense, necessary to verify the accuracy of the
information conveyed to such Purchaser. Each Purchaser hereby acknowledges that
he has been advised that this offering of Notes and Warrants has not been
registered with, or reviewed by, the Securities and Exchange Commission because
this offering is intended to be a non-public offering pursuant to Section 4(2)
of the Securities Act. Each Purchaser represents that the Notes and Warrants are
being purchased for such Purchaser's own account, for investment purposes only
and not with a view towards distribution or resale to others. Each Purchaser
agrees that he will not attempt to sell, transfer, assign, pledge or otherwise
dispose such Notes and Warrants or the shares of Company Stock underlying such
Notes and Warrants unless they are registered under the Securities Act or unless
in the opinion of counsel satisfactory to the Company an exemption from such
registration is available. Each Purchaser understands that no securities
administrator of any state has made any finding or determination relating to the
fairness of this investment and that no securities administrator of any state
has recommended or endorsed, or will recommend or endorse, the offering of the
Notes and Warrants. The execution, delivery and performance by each Purchaser of
this Agreement are within the powers of such Purchaser, have been duly
authorized and will not constitute or result in a breach or default under, or
conflict with, any order, ruling or regulation of any court or other tribunal or
of any governmental commission or agency, or any agreement or other undertaking,
to which each Purchaser is a party or by which each Purchaser is bound. Each
Purchaser has relied solely upon the advice of its own tax and legal advisors
with respect to the tax and other legal aspects of this investment. Each
Purchaser is purchasing the Notes and Warrants for his account, and not in any
agency, fiduciary or similar capacity. The source of the funds evidencing the
Purchase Price are from legally available funds of each Purchaser.
3.2 RISK FACTORS. Each Purchaser has conducted his own due
diligence with respect to all aspects of this transaction and is familiar with
the following risk factors inherent in the purchase of the Notes and the
Warrants:
A. WORKING CAPITAL DEFICIENCIES; HISTORY OF LOSSES. The
Company has a history of limited working capital and has had
working capital deficiencies of $2,679,000, $10,223,000 and
$3,910,000 for the fiscal years ended April 30, 1995 and 1996,
and the six months ended October 31, 1996, respectively. In
addition, although the Company had net income of $1,426,000
for the six months ended October 31, 1996, it incurred net
losses of $2,392,000 and $13,418,000 for the fiscal years
ended April 30, 1995 and 1996. There can be no assurance that
the Company will generate sufficient revenues to meet expenses
or to operate profitably in the future. If the Company is
unable to generate sufficient cash flow from its operations it
would have to seek additional borrowings, effect debt or
equity offerings or otherwise raise capital. There can be no
assurance that any such financing will be available to the
Company, or if available, that the terms will be acceptable to
the Company. In addition, the ability to raise other capital
might be restricted by financial covenants contained in
currently existing borrowing agreements.
-4-
B. REVOLVING CREDIT FACILITY. The Company's primary
revolving credit facility expired on September 30, 1996. The
Company's subsidiary, Datatec Industries Inc. ("Datatec"), is
a party to a revolving credit facility which expires on March
31, 1997. Datatec has in the past been in violation of certain
of the financial covenants contained in its credit facility.
At October 31, 1996, $9,400,000 was outstanding under such
agreement. There can be no assurance that the Company will be
able to enter into a new revolving credit agreement. If the
Company is unable to enter into a new revolving credit
agreement, the Company's business may be materially adversely
affected. On February 12, 1997, the Company received a
commitment from Finova Capital Corporation for a revolving
line of credit and term loan facility in the aggregate amount
of $17 million. There can be no assurance, however, that the
Company will consummate such loan arrangement.
C. DEPENDENCE ON KEY PERSONNEL. The Company's future
success depends in large part on the continued service of its
key personnel. In particular, the loss of the services of
Xxxxx Xxxx, Chief Executive Officer, Xxxxxx Xxxx, Vice
President - Federal and Enterprise Systems, Xxxxx Xxxxx,
President of Computer Aided Software Integration, Inc.
("CASI"), of which the Company owns 80% of the issued and
outstanding shares or Xxxxxxxxxxx Xxxxx, President and Chief
Executive Officer of Datatec, of which the Company owns
approximately 98.5% of the issued and outstanding shares,
could have a material adverse effect on the operations of the
Company. The Company has an employment agreement with Mr. Gaon
which expires on October 31, 1999, which may be terminated by
the Company for cause or by Mr. Gaon for good reason. The
Company has an employment agreement with Xx. Xxxxx which
expires on April 30, 2001, which may be terminated by the
Company for cause or by Xx. Xxxxx for good reason. The Company
has an employment agreement with Xx. Xxxx which expires on
December 31, 1996 and which may be terminated by Xx. Xxxx upon
six months prior written notice to the Company. The Company
has an employment agreement with Xx. Xxxxx which expires on
October 31, 1999, which may be terminated by the Company for
cause or by Xx. Xxxxx for good reason. The Company's future
success and growth also depends on its ability to continue to
attract, motivate and retain highly qualified employees,
including those with the technical expertise necessary to
operate the business of the Company. There can be no assurance
that the Company will be able to attract, motivate and retain
such persons.
D. COMPETITION. The Company competes with other
companies involved in the installation and servicing of local
and wide area networks, the provision of software tools to
systems integrations and the distribution of data
communications equipment. These competitors include local and
national systems integrators, computer manufacturers, software
vendors, telephone companies and distribution companies. These
markets are highly competitive, and some companies with which
the Company competes are substantially larger and have
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significantly greater resources than the Company. There can be
no assurance that the Company will be able to compete
successfully in the future.
E. CONTROL BY PRINCIPAL STOCKHOLDERS. Xxxxx Xxxxxxx,
the Chairman of the Board and President of the Company,
through his beneficial ownership and through a voting
agreement with Direct Connect International Inc. ("DCI") has
the power to vote approximately 24% of the Common Stock. DCI
has pledged 1,175,000 of the shares of Common Stock it owns in
the Company as collateral for a loan. If the pledgee were to
become the owner of such shares, Xx. Xxxxxxx would no longer
have the power to vote such shares. In addition, Xx. Xxxxx,
President and Chief Executive Officer of Datatec has the power
to vote approximately 18% of the Common Stock.
F. EXTENDED LEAD TIMES FOR REALIZATION OF REVENUE.
Due to the nature and size of orders that the Company is now
pursuing there is a longer lead time between the initiation of
prospective business and the consummation of a transaction, if
any. Consequently, significantly more resources are required
to manage this process. As such, there is likely to be
substantial fluctuations in sales volume on a month-to-month
and quarter-to-quarter basis. The pursuit of this type of
business increases the Company's risk of failure, especially
given its present level of working capital. As a result, if
the Company experiences lower than expected sales volume for
an extended period of time, there will be a material adverse
effect on the Company.
G. SHARES ELIGIBLE FOR FUTURE SALE. The sale, or
availability for sale, of substantial amounts of Common Stock
in the public market pursuant to Rule 144 or otherwise could
adversely affect the market price of the Common Stock and
could impair the Company's ability to raise additional capital
through the sale of its equity securities.
H. NO DIVIDENDS. The Company currently intends to
retain earnings, if any, for use in the business and does not
anticipate paying any dividends to its stockholders in the
foreseeable future.
I. RIGHTS OF COMMON STOCK SUBORDINATE TO EXISTING AND
FUTURE PREFERRED STOCK. The Certificate of Incorporation of
the Company authorizes the issuance of a maximum of 4,000,000
shares of preferred stock, par value $.001 per share. The
Company currently has outstanding 1,000,000 shares of
Preferred Stock. The holders of the Preferred Stock are
entitled to receive dividends in an amount of 6% per annum and
are entitled to a preferential distribution on liquidation of
the Company. In addition, the Company may be required to
redeem the Preferred Stock under certain circumstances. The
shares of Preferred Stock are convertible into Common Stock in
accordance with their respective Certificates of Designation.
Holders of the Preferred Stock are not entitled to vote on any
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matter submitted to the stockholders, provided, however, that
the affirmative vote of the holders of a majority of the
outstanding Preferred Stock, is required as to those matters
which (i) alter or change adversely the powers, preferences or
rights given to the Preferred Stock or (ii) authorize or
create any class of stock ranking as to dividends or
distribution of assets upon a liquidation senior to, prior to
or PARI PASSU with the Preferred Stock. If additional shares
of preferred stock are issued in the future, the terms of a
series of preferred stock may be set by the Company's Board of
Directors without approval by the holders of the Common Stock
of the Company. Such terms could include, among others,
preferences as to dividends and distributions on liquidation
as well as separate class voting rights. The rights of the
holders of the Company's Common Stock will be subject to, and
may be adversely affected by, the rights of the holders of any
preferred stock that may be issued in the future.
J. CERTAIN ANTI-TAKEOVER CHARTER PROVISIONS. The
future issuance of preferred stock by the Company could have
the effect of making it more difficult for a third party to
acquire, or of discouraging a third party from acquiring, a
majority of the outstanding voting stock of the Company. Other
than the Preferred Stock described herein, the Company does
not have any present plans to issue any additional shares of
preferred stock.
K. ACQUISITIONS. It is currently anticipated that a
portion of the Company's future growth will result from
acquisitions of other similar or complementary businesses. In
October 1994, the Company consummated the acquisition of
Signatel, Ltd. ("Signatel"). On April 24, 1996, the Company
acquired 80% of the issued and outstanding capital stock of
CASI, a provider of software tools and services to systems
integrators and independent software vendors. On July 31,
1996, the Company acquired 100% of the issued and outstanding
capital stock of HH Communications, Inc. ("HH"), which resells
computer networking equipment and provides value-added
services in connection with such equipment. On October 31,
1996, the Company acquired approximately 98.5% of the issued
and outstanding capital stock of Datatec, a network
integrator. The Company has no other current plan or agreement
to acquire any other business. There can be no assurance that
any other transaction will be consummated or that they will
result in increased levels of profit for the Company. In
addition, there can be no assurance that the Company will be
able to integrate or manage successfully other acquired
businesses.
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ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 REGISTRATION RIGHTS AGREEMENT. The Company hereby agrees
to use its best efforts to cause a registration statement under the Securities
Act (the "Registration Statement") covering the resale of an aggregate of
500,000 shares of Common Stock issuable upon the exercise of the Warrants within
30 days following the Closing Date and to remain current and effective to permit
the sale of the Shares until the earlier of (a) the date that all of the Shares
have been sold pursuant to the Registration Statement, (b) the date the holders
of the Shares receive an opinion of counsel satisfactory to each Purchaser that
the Shares may be sold under the provisions of Rule 144(k) promulgated under the
Securities Act, or (c) the five year anniversary of the effective date of the
Registration Statement. If any of the Notes remain outstanding 180 days
following the Closing Date, the Company further agrees to use its best efforts
to immediately file a registration statement under the Securities Act (the
"Conditional Registration Statement") covering the resale of (i) those shares of
Common Stock issuable upon the exercise of the Conditional Warrants and (ii)
those shares of Common Stock into which the Notes are convertible on the date
prior to the filing of such Conditional Registration Statement. If the Notes are
prepaid prior to 180 days and after 90 days following the Closing Date, the
Company will use its best efforts to file a registration statement under the
Securities Act covering the resale of those shares of Common Stock issuable upon
the exercise of the Conditional Warrants within 30 days following such
prepayment of the Notes.
The rights contained in this Section 4.1 are referred to
collectively as the "Registration Rights". The Company shall bear all expenses
incurred in the preparation and filing of any Registration Statement with
respect to the Registration Rights, except that the Purchasers shall pay any
underwriting discounts or commissions and the expenses of their own legal
counsel.
4.2 SUBORDINATION. Each Purchaser agrees that he will enter
into such agreements as may be reasonably required by any prospective senior
lenders of the Company to subordinate the Notes to obligations which may become
due and owing to such senior lenders.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by written agreement of Purchaser and the Company.
5.2 WAIVER. Any breach of any obligation, covenant, agreement
or condition contained herein shall be deemed waived by the non-breaching party,
only by a writing, setting forth with particularity the breach being waived and
the scope of the waiver, but such waiver shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other breach. No waiver shall be
implied from any conduct or action of the non-breaching party. No failure or
delay by any party in exercising any right, power or privilege hereunder or
under the Documents and no course of dealing by any party shall operate as a
waiver and any right, power or privilege
-8-
hereunder or under any Document nor shall any single or partial exercise thereof
or the exercise of any other right, power or privilege.
5.3 NOTICES. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand:
(a) if to the Company, to:
Glasgal Communications Inc.
00 Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Chief Financial Officer
with a copy to:
Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
(b) if to Purchasers, to:
Xxxxx Xxxxxxx
00 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx Xxxxx, Xxx Xxxx 00000
Tinicum Investors
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
with a copy to:
Tinicum Incorporated
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxx
or to such other address as any party shall have specified by notice in writing
to the other in compliance with this Section 5.3.
5.4 BINDING NATURE AGREEMENT. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, but neither this Agreement
nor any of the rights, interests or obligations
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hereunder shall be assigned by any of the parties hereto without prior written
consent of the other parties.
5.5 GOVERNING LAW. This Agreement and the legal relations
among the parties hereto shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and performed
therein.
5.6 EXPENSES. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense.
5.7 COUNTERPARTS. This Agreement may be signed in counterparts
with the same effect as if both parties had signed one and the same instrument.
5.8 FORM OF SIGNATURE. The parties hereto agree to accept a
facsimile transmission copy of their respective signatures as evidence of their
respective actual signatures to this Agreement; PROVIDED HOWEVER, that each
party who produces a facsimile signature agrees, by the express terms hereof, to
place, immediately after transmission of its signature by fax, a true and
correct original copy of its signature in overnight mail to the address of the
other party.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed the day and year first above written.
GLASGAL COMMUNICATIONS, INC.
By: /S/ XXXXX XXXX
-------------------------------------
Name: Xxxxx Xxxx
Title: Chief Financial Officer
/S/ XXXXX XXXXXXX
----------------------------------------
XXXXX XXXXXXX
TINICUM INVESTORS
By: /S/ XXXX TUTTENBERG
-------------------------------------
Name: Xxxx Xxxxxxxxxx
Title: General Partner
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LIST OF EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF ORIGINAL WARRANT
Exhibit C FORM OF CONDITIONAL WARRANT
-12-
EXHIBIT A
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO U.S. PERSONS (AS SUCH TERMS ARE DEFINED IN REGULATION S UNDER SAID
ACT) EXCEPT IN TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SAID
ACT.
FORM OF CONVERTIBLE PROMISSORY NOTE
$1,000,000 February 18, 1997
WHEREAS, [ ] (the "Lender") desires to loan to Glasgal
Communications, Inc. (the "Borrower"), and the Borrower desires to borrow from
the Lender, the principal amount of $1,000,000 pursuant to the terms and
conditions contained in this Convertible Promissory Note (the "Note"). This Note
is being issued pursuant to the provisions of a Note and Warrant Purchase
Agreement dated February 18, 1997 by and among the Lender, the Borrowers. All
capitalized terms used in this Note that are not defined herein shall have the
meaning assigned to them in the Note and Warrant Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration herein
contained, the Lender hereby agrees to loan to the Borrower, and the Borrower
hereby promises to pay to the order of the Lender or his successors or assigns
the principal amount of one million ($1,000,000) dollars on February 18, 1999
(the "Maturity Date"), unless this Note shall have been converted prior thereto
as provided herein, plus accrued and unpaid interest on such date and as
specified below.
The Borrower also promises to pay interest on the $1,000,000
principal amount of this Note on the Maturity Date at a rate equal to 10% per
annum (on the basis of a 360-day year and actual number of days elapsed) from
and including the date hereof until such principal sum shall be paid in full and
to pay interest on any overdue installment of principal or interest at a rate
equal to 12% per annum.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in immediately
available funds to the Lender, at [ ], or at such other place as shall be
designated in writing by the Lender for such purpose.
The Borrower hereby waives diligence, presentment, dishonor,
demand, notice and protest and, to the full extent permitted by law, the right
to plead any statute of limitations as a defense to any demand hereunder. The
Borrower promises to
pay all costs and expenses, including reasonable attorneys' fees, incurred in
the collection and enforcement of this Note.
This Note may be converted in whole but not in part at any
time after August 18, 1997 and prior to the Maturity Date at the option of the
Lender into the common stock, $.001 par value of the Borrower (the "Common
Stock"). The number of shares of Common Stock into which the Note Shall be
convertible shall mean the Adjusted Face Amount (as defined below) on the date
of conversion divided by the 80% of the average closing bid price per share of
Common Stock for the five (5) trading days immediately preceding the conversion
date on the Nasdaq Small-Cap Market or such other market, quotation system or
exchange on which the Company's Common Stock is then listed. The Adjusted Face
amount shall mean the 1,000,000 principal amount plus any accrued interest
thereon.
On the Maturity Date, if this Note shall not have been
converted prior thereto as provided herein, the Borrower shall pay to the order
of the Lender or his successors or assigns the principal amount of $1,000,000
plus accrued and unpaid interest at the rate set forth above. If any payment on
this Note becomes due and payable on a day which is not a Business Day, the
maturity thereof shall be extended to the next Business Day and interest shall
be payable at the applicable rate during such extension period.
The terms of this Note are not subject to amendment except by
written agreement of the Lender and the Borrower and the Borrower may assign its
obligations hereunder without the prior written consent of the Lender.
Prior to August 18, 1997, this Note may be prepaid at any time
by the Borrower either in whole or in part. After August 18, 1997, this Note may
only be prepaid by the Borrower following 30 days prior written notice to the
Lender.
This Note shall be governed by and construed and enforced in
accordance with the laws of State of New York, without regard to principles of
conflicts of laws.
IN WITNESS WHEREOF, the Borrower has duly executed this Note,
the day and year first above written.
GLASGAL COMMUNICATIONS, INC.
By:
-------------------------------------
Name:
Title:
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EXHIBIT B
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1993 (THE "ACT") OR ANY STATE'S SECURITIES LAWS AND THESE
SECURITIES MAY NOT BE RESOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE
SUBSEQUENTLY REGISTERED PURSUANT TO AN EXEMPTION FROM APPLICABLE REGISTRATION
REQUIREMENTS. THESE SECURITIES ARE SUBJECT TO OTHER RESTRICTIONS ON EXERCISE AND
TRANSFER AS SET FORTH HEREIN.
COMMON STOCK PURCHASE WARRANT
For the Purchase of 250,000 Shares of Common Stock
of
GLASGAL COMMUNICATIONS, INC.
(A Delaware Corporation)
1. WARRANT.
THIS CERTIFIES THAT, for value received, ______________ (the
"Holder"), as registered owner of this Warrant, is entitled at any time from the
date hereof until 5:00 p.m., New York City time, on February 18, 2002, but not
thereafter, to subscribe for, purchase and receive, in whole or in part, up to
two hundred fifty thousand (250,000) shares (the "Shares") of Common Stock, par
value $.001 per share (the "Common Stock"), of Glasgal Communications, Inc., a
Delaware corporation (the "Company") in accordance with the terms hereof.
This Warrant is being issued pursuant to a Note and Warrant
Purchase Agreement dated February 18, 1997.
The exercise price (the "Exercise Price") per share of Common
Stock in respect of any exercise of this Warrant shall be $5.25.
2. EXERCISE.
In order to exercise this Warrant, the exercise form attached
hereto must be duly executed, completed and delivered to the Company, together
with this Warrant and payment of the applicable Exercise Price for the Shares of
the Common Stock being purchased. If the rights represented hereby shall not
have been exercised before 5:00 p.m., Eastern Time, on February 18, 2002 this
Warrant shall become and be void and without further force or effect and all
rights represented hereby shall cease and expire.
3. TRANSFER.
3.1 GENERAL RESTRICTIONS. The registered Holder of this
Warrant, by such Holder's acceptance hereof, agrees that he shall not sell,
transfer or assign or hypothecate this Warrant except in a transaction that does
not require registration under the Securities Act of 1933, as amended (the
"Act"). This Warrant shall not be transferred unless and until (i) the Company
has received the opinion of counsel for the Holder that this Warrant may be sold
pursuant to an exemption from registration under the Act, the availability of
which is established to the reasonable satisfaction of the Company, or (ii) a
registration statement relating to this Warrant has been filed by the Company
and declared effective by the Securities and Exchange Commission (the
"Commission"). The Shares of Common Stock issuable upon exercise of this Warrant
shall be subject to the transfer restrictions set forth below.
3.2 RESTRICTIONS IMPOSED BY THE ACT. The Holder by accepting
this Warrant confirms that the Warrants were acquired by the Holder solely for
investment and with no present intention to distribute any Warrants or
securities issuable upon the exercise thereof and that the Holder will dispose
of securities issuable upon the exercise hereof only in compliance with
applicable Federal and state securities laws. The Shares of Common Stock
purchased upon exercise of this Warrant shall not be transferred unless and
until (i) the Company has received the opinion of counsel for the Holder that
such Shares may be sold pursuant to an exemption from registration under the
Act, the availability of which is established to the reasonable satisfaction of
the Company, or (ii) a registration statement relating to such Shares has been
filed by the Company and declared effective by the Commission.
Each certificate for securities purchased upon exercise of
this Warrant shall bear a legend as follows unless such securities have been
registered under the Act:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act"). The
securities may not be offered for sale, sold or otherwise
transferred except (i) pursuant to an effective registration
statement under the Act or (ii) pursuant to an exemption from
registration under the Act in respect of which the Company has
received an opinion of counsel satisfactory to the Company to
such effect."
4. NEW WARRANTS TO BE ISSUED.
4.1 PARTIAL EXERCISE OR TRANSFER. Subject to the restrictions
in Section 3 hereof, this Warrant may be exercised in whole or in part,
provided, however that the Holder must purchase
-2-
a minimum of 25,000 Shares each time he chooses to purchase Shares, except to
purchase the remaining Shares available to him. In the event of the exercise
hereof in part, upon surrender of this Warrant for cancellation, together with
the duly executed exercise form, the Company shall cause to be delivered to the
Holder without charge a new warrant or new warrants of like tenor with this
Warrant in the name of the Holder evidencing the right to purchase, in the
aggregate, the remaining number of underlying Shares of Common Stock purchasable
hereunder after giving effect to any such partial exercise.
4.2 LOST CERTIFICATE. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and of an indemnification in favor of the Company, reasonably satisfactory to
it, the Company shall execute and deliver a new warrant of like tenor and date.
Any such new warrants executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute an additional contractual obligation
on the part of the Company.
5. RESERVATION. The Company shall at all times reserve and keep available out of
its authorized shares of Common Stock, solely for the purpose of issuance upon
exercise of the Warrant, such number of authorized but unissued shares of Common
Stock, free from preemptive rights, as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Warrant and
payment of the applicable Exercise Price therefor, all shares of Common Stock
shall be duly and validly issued, fully paid and nonassessable and not subject
to preemptive rights of any stockholder. The Company further covenants and
agrees that upon exercise of this Warrant and payment of the applicable Exercise
Price therefor, all shares of Common Stock shall be duly and validly issued,
fully paid and nonassessable and not subject to preemptive rights of any
stockholder. If the Common Stock is then listed on a national securities
exchange, all shares of Common Stock issued upon exercise of this Warrant shall
also be duly listed thereon.
6. ADJUSTMENTS. The Exercise Price and the number of shares purchasable
hereunder are subject to adjustment from to time as follows.
6.1 MERGER, SALE OF ASSETS, ETC. If at any time while this
Warrant, or any portion thereof, is outstanding and unexpired there shall be (i)
a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation in which the
Company is the surviving entity but the shares of the Company's capital stock
outstanding immediately prior to the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash, or
otherwise, or (iii) a sale or transfer of the
-3-
Company's properties and assets as, or substantially as, an entirety to any
other person, then as a part of such reorganization, merger, consolidation, sale
or transfer lawful provision shall be made so that the holder of this Warrant
shall thereafter be entitled to receive upon exercise of this Warrant, during
the period specified herein and payment of the Exercise Price then in effect,
the number of shares of stock or other securities or property of the successor
corporation resulting from such reorganization, merger, consolidation, sale or
transfer that a holder of the shares deliverable upon exercise of this Warrant
would have been entitled to receive in such reorganization, consolidation,
merger, sale or transfer if this Warrant had been exercised immediately before
such reorganization, merger, consolidation, sale or transfer, all subject to
further adjustment as provided in this Section 6. The foregoing provisions of
this Section 6 shall similarly apply to successive reorganization,
consolidations, mergers, sales and transfers and to the stock or securities of
any other corporation that are at the time receivable upon the exercise of this
Warrant. If the per-share consideration payable to the holder hereof for shares
in connection with any such transaction is in a form other than cash or
marketable securities, then the value of such consideration shall be determined
in good faith by the Company's Board of Directors. In all events, appropriate
adjustment (as determined in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Warrant with respect
to the rights and interests of the Holder after the transaction, to the end that
the provisions of this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.
6.2 ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. In the
event that, prior to the issuance by the Company of all the Shares issuable upon
exercise of this Warrant, there shall be any change in the outstanding Common
Stock by reason of the declaration of stock dividends, or through a
recapitalization resulting from stock splits or combinations, without the
payment to the Company of any compensation therefor in money, services or
property, the remaining Shares still subject to this Warrant and the Purchase
Price thereof shall be appropriately adjusted (but without regard to fractions)
by the Board of Directors of the Company to reflect such change.
7. CERTAIN NOTICE REQUIREMENTS.
7.1 HOLDER'S RIGHT TO RECEIVE NOTICE. Nothing herein shall be construed
as conferring upon the Holder the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights
-4-
whatsoever as a stockholder of the Company prior to the exercise hereof
(including the right to receive dividends).
7.2 TRANSMITTAL OF NOTICES. All notices, requests, consents
and other communications under this Warrant shall be in writing and shall be
deemed to have been duly given or made when hand delivered, or when delivered by
responsible overnight courier:
(i) If to the registered Holder of this Warrant,
to:
[Insert address of Holder]
(ii) if to the Company, to:
Glasgal Communications, Inc.
00 Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx Xxxx, Chief Financial Officer
Either of the Holder or the Company may change the foregoing address by
notice given pursuant to this Section 7.2.
8. MISCELLANEOUS.
8.1 PURCHASE FOR INVESTMENT. By his acceptance of this
Warrant, the Holder represents and warrants that the Holder has acquired this
Warrant for the Holder's own account for investment and not with the view to the
distribution thereof, except in accordance with applicable federal and state
securities laws. The Holder represents that he is an "accredited investor" as
such term is defined under Rule 501 of Regulation D promulgated under the Act.
The Holder confirms that he has been advised that the Warrants and the Shares of
Common Stock issuable upon exercise of this Warrant have not been, registered
under the Act and that he has consulted with and been advised by counsel as to
the restrictions on resale to which this Warrant and such Shares will be
subject.
8.2 AMENDMENTS. All modifications or amendments to this
Warrant shall require the written consent of each party.
8.3 HEADINGS. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this Warrant.
8.4 ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersede all prior agreements and
-5-
understandings of the parties, oral and written, with respect to the subject
matter hereof.
8.5 BINDING EFFECT. This Warrant shall inure solely to the
benefit of and shall be binding upon, the Holder and the Company and their
permitted assignees, respective successors, legal representatives and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Warrant or
any provisions herein contained.
8.6 GOVERNING LAW. This Warrant shall be governed by and
construed and enforced in accordance with the laws of the State of New York,
without giving effect to conflict of laws.
8.7 WAIVER, ETC. The failure of the Company or the Holder to
at any time enforce any of the provisions of this Warrant shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Warrant or any provision hereof or the right of the Company or
any Holder to thereafter enforce each and every provision of this Warrant. No
waiver of any breach, noncompliance or nonfulfillment of any of the provisions
of this Warrant shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such
waiver is sought; and no waiver of any such breach, noncompliance or
nonfulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, noncompliance or nonfulfillment.
-6-
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer as of the 18th day of February, 1997.
GLASGAL COMMUNICATIONS, INC.
By:
-------------------------------------
Name:
Title:
AGREED AND ACCEPTED:
[Insert Name of Holder]
By:
----------------------
Name:
Title:
-7-
Form to be used to exercise Warrant:
GLASGAL COMMUNICATIONS, INC.
00 Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Date: ________________, 19__
The Undersigned hereby elects irrevocably to exercise the
within Warrant and to purchase __________ shares of Common Stock of Glasgal
Communications, Inc. and hereby makes payment of $_____________ (at the rate of
$5.25 per share) in payment of the Exercise Price pursuant thereto. Please issue
the shares as to which this Warrant is exercised in accordance with the
instructions given below.
--------------------------------
Signature
--------------------------------
Signature Guaranteed
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name
---------------------------------------------------------------------------
(Print in Block Letters)
Address
---------------------------------------------------------------------------
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.
-8-
EXHIBIT C
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1993 (THE "ACT") OR ANY STATE'S SECURITIES LAWS AND THESE
SECURITIES MAY NOT BE RESOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE
SUBSEQUENTLY REGISTERED PURSUANT TO AN EXEMPTION FROM APPLICABLE REGISTRATION
REQUIREMENTS. THESE SECURITIES ARE SUBJECT TO OTHER RESTRICTIONS ON EXERCISE AND
TRANSFER AS SET FORTH HEREIN.
COMMON STOCK PURCHASE WARRANT
For the Purchase of 100,000 Shares of Common Stock
of
GLASGAL COMMUNICATIONS, INC.
(A Delaware Corporation)
1. WARRANT.
THIS CERTIFIES THAT, for value received, ______________ (the
"Holder"), as registered owner of this Warrant, is entitled at any time during
the period commencing May 18, 1997 and ending at 5:00 p.m., New York City time,
on February 18, 2002, but not thereafter, to subscribe for, purchase and
receive, in whole or in part, up one hundred thousand (100,000) shares (the
"Shares") of Common Stock, par value $.001 per share (the "Common Stock"), of
Glasgal Communications, Inc., a Delaware corporation (the "Company") in
accordance with the terms hereof.
This Warrant is being issued pursuant to a Note and Warrant
Purchase Agreement dated February 18, 1997 and notwithstanding anything to the
contrary herein, if the Notes (as such term is defined in the Note and Warrant
Purchase Agreement) are paid by the Company on or prior to May 18, 1997, this
Warrant
shall not vest and shall immediately terminate.
The exercise price (the "Exercise Price") per share of Common
Stock in respect of any exercise of this Warrant shall be $5.25.
2. EXERCISE.
In order to exercise this Warrant, the exercise form attached
hereto must be duly executed, completed and delivered to the Company, together
with this Warrant and payment of the applicable Exercise Price for the Shares of
the Common Stock being purchased. If the rights represented hereby shall not
have been exercised before 5:00 p.m., Eastern Time, on February 18, 2002 this
Warrant shall become and be void and without further force or effect and all
rights represented hereby shall cease and expire.
3. TRANSFER.
3.1 GENERAL RESTRICTIONS. The registered Holder of this
Warrant, by such Holder's acceptance hereof, agrees that he shall not sell,
transfer or assign or hypothecate this Warrant except in a transaction that does
not require registration under the Securities Act of 1933, as amended (the
"Act"). This Warrant shall not be transferred unless and until (i) the Company
has received the opinion of counsel for the Holder that this Warrant may be sold
pursuant to an exemption from registration under the Act, the availability of
which is established to the reasonable satisfaction of the Company, or (ii) a
registration statement relating to this Warrant has been filed by the Company
and declared effective by the Securities and Exchange Commission (the
"Commission"). The Shares of Common Stock issuable upon exercise of this Warrant
shall be subject to the transfer restrictions set forth below.
3.2 RESTRICTIONS IMPOSED BY THE ACT. The Holder by accepting
this Warrant confirms that the Warrants were acquired by the Holder solely for
investment and with no present intention to distribute any Warrants or
securities issuable upon the exercise thereof and that the Holder will dispose
of securities issuable upon the exercise hereof only in compliance with
applicable Federal and state securities laws. The Shares of Common Stock
purchased upon exercise of this Warrant shall not be transferred unless and
until (i) the Company has received the opinion of counsel for the Holder that
such Shares may be sold pursuant to an exemption from registration under the
Act, the availability of which is established to the reasonable satisfaction of
the Company, or (ii) a registration statement relating to such Shares has been
filed by the Company and declared effective by the Commission.
Each certificate for securities purchased upon exercise of
this Warrant shall bear a legend as follows unless such securities have been
registered under the Act:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act"). The
securities may not be offered for sale, sold or otherwise
transferred except (i) pursuant to an effective registration
statement under the Act or (ii) pursuant to an exemption from
registration under the Act in respect of which the Company has
received an opinion of counsel satisfactory to the Company to
such effect."
-2-
4. NEW WARRANTS TO BE ISSUED.
4.1 PARTIAL EXERCISE OR TRANSFER. Subject to the restrictions
in Section 3 hereof, this Warrant may be exercised in whole or in part,
provided, however that the Holder must purchase a minimum of 25,000 Shares each
time he chooses to purchase Shares, except to purchase the remaining Shares
available to him. In the event of the exercise hereof in part, upon surrender of
this Warrant for cancellation, together with the duly executed exercise form,
the Company shall cause to be delivered to the Holder without charge a new
warrant or new warrants of like tenor with this Warrant in the name of the
Holder evidencing the right to purchase, in the aggregate, the remaining number
of underlying Shares of Common Stock purchasable hereunder after giving effect
to any such partial exercise.
4.2 LOST CERTIFICATE. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and of an indemnification in favor of the Company, reasonably satisfactory to
it, the Company shall execute and deliver a new warrant of like tenor and date.
Any such new warrants executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute an additional contractual obligation
on the part of the Company.
5. RESERVATION. The Company shall at all times reserve and keep available out of
its authorized shares of Common Stock, solely for the purpose of issuance upon
exercise of the Warrant, such number of authorized but unissued shares of Common
Stock, free from preemptive rights, as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Warrant and
payment of the applicable Exercise Price therefor, all shares of Common Stock
shall be duly and validly issued, fully paid and nonassessable and not subject
to preemptive rights of any stockholder. The Company further covenants and
agrees that upon exercise of this Warrant and payment of the applicable Exercise
Price therefor, all shares of Common Stock shall be duly and validly issued,
fully paid and nonassessable and not subject to preemptive rights of any
stockholder. If the Common Stock is then listed on a national securities
exchange, all shares of Common Stock issued upon exercise of this Warrant shall
also be duly listed thereon.
6. ADJUSTMENTS. The Exercise Price and the number of shares purchasable
hereunder are subject to adjustment from to time as follows.
6.1 MERGER, SALE OF ASSETS, ETC. If at any time while this
Warrant, or any portion thereof, is outstanding and unexpired there shall be (i)
a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company
-3-
with or into another corporation in which the Company is the surviving entity
but the shares of the Company's capital stock outstanding immediately prior to
the merger are converted by virtue of the merger into other property, whether in
the form of securities, cash, or otherwise, or (iii) a sale or transfer of the
Company's properties and assets as, or substantially as, an entirety to any
other person, then as a part of such reorganization, merger, consolidation, sale
or transfer lawful provision shall be made so that the holder of this Warrant
shall thereafter be entitled to receive upon exercise of this Warrant, during
the period specified herein and payment of the Exercise Price then in effect,
the number of shares of stock or other securities or property of the successor
corporation resulting from such reorganization, merger, consolidation, sale or
transfer that a holder of the shares deliverable upon exercise of this Warrant
would have been entitled to receive in such reorganization, consolidation,
merger, sale or transfer if this Warrant had been exercised immediately before
such reorganization, merger, consolidation, sale or transfer, all subject to
further adjustment as provided in this Section 6. The foregoing provisions of
this Section 6 shall similarly apply to successive reorganization,
consolidations, mergers, sales and transfers and to the stock or securities of
any other corporation that are at the time receivable upon the exercise of this
Warrant. If the per-share consideration payable to the holder hereof for shares
in connection with any such transaction is in a form other than cash or
marketable securities, then the value of such consideration shall be determined
in good faith by the Company's Board of Directors. In all events, appropriate
adjustment (as determined in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Warrant with respect
to the rights and interests of the Holder after the transaction, to the end that
the provisions of this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.
6.2 ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. In the
event that, prior to the issuance by the Company of all the Shares issuable upon
exercise of this Warrant, there shall be any change in the outstanding Common
Stock by reason of the declaration of stock dividends, or through a
recapitalization resulting from stock splits or combinations, without the
payment to the Company of any compensation therefor in money, services or
property, the remaining Shares still subject to this Warrant and the Purchase
Price thereof shall be appropriately adjusted (but without regard to fractions)
by the Board of Directors of the Company to reflect such change.
-4-
7. CERTAIN NOTICE REQUIREMENTS.
7.1 HOLDER'S RIGHT TO RECEIVE NOTICE. Nothing herein shall be
construed as conferring upon the Holder the right to vote or consent or to
receive notice as a stockholder for the election of directors or any other
matter, or as having any rights whatsoever as a stockholder of the Company prior
to the exercise hereof (including the right to receive dividends).
7.2 TRANSMITTAL OF NOTICES. All notices, requests, consents
and other communications under this Warrant shall be in writing and shall be
deemed to have been duly given or made when hand delivered, or when delivered by
responsible overnight courier:
(i) If to the registered Holder of this Warrant,
to:
[Insert address of Holder]
(ii) if to the Company, to:
Glasgal Communications, Inc.
00 Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx Xxxx, Chief Financial Officer
Either of the Holder or the Company may change the foregoing address by
notice given pursuant to this Section 7.2.
8. MISCELLANEOUS.
8.1 PURCHASE FOR INVESTMENT. By his acceptance of this
Warrant, the Holder represents and warrants that the Holder has acquired this
Warrant for the Holder's own account for investment and not with the view to the
distribution thereof, except in accordance with applicable federal and state
securities laws. The Holder represents that he is an "accredited investor" as
such term is defined under Rule 501 of Regulation D promulgated under the Act.
The Holder confirms that he has been advised that the Warrants and the Shares of
Common Stock issuable upon exercise of this Warrant have not been, registered
under the Act and that he has consulted with and been advised by counsel as to
the restrictions on resale to which this Warrant and such Shares will be
subject.
8.2 AMENDMENTS. All modifications or amendments to this
Warrant shall require the written consent of each party.
8.3 HEADINGS. The headings contained herein are for the
sole purpose of convenience of reference, and shall not in any way
-5-
limit or affect the meaning or interpretation of any of the terms or provisions
of this Warrant.
8.4 ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersede all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter hereof.
8.5 BINDING EFFECT. This Warrant shall inure solely to the
benefit of and shall be binding upon, the Holder and the Company and their
permitted assignees, respective successors, legal representatives and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Warrant or
any provisions herein contained.
8.6 GOVERNING LAW. This Warrant shall be governed by and
construed and enforced in accordance with the laws of the State of New York,
without giving effect to conflict of laws.
8.7 WAIVER, ETC. The failure of the Company or the Holder to
at any time enforce any of the provisions of this Warrant shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Warrant or any provision hereof or the right of the Company or
any Holder to thereafter enforce each and every provision of this Warrant. No
waiver of any breach, noncompliance or nonfulfillment of any of the provisions
of this Warrant shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such
waiver is sought; and no waiver of any such breach, noncompliance or
nonfulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, noncompliance or nonfulfillment.
-6-
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer as of the 18th day of February, 1997.
GLASGAL COMMUNICATIONS, INC.
By:
---------------------------------------
Name:
Title:
AGREED AND ACCEPTED:
[Insert Name of Holder]
By:
----------------------------
Name:
Title:
-7-
Form to be used to exercise Warrant:
GLASGAL COMMUNICATIONS, INC.
00 Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Date: ________________, 19__
The Undersigned hereby elects irrevocably to exercise the
within Warrant and to purchase __________ shares of Common Stock of Glasgal
Communications, Inc. and hereby makes payment of $_____________ (at the rate of
$5.25 per share) in payment of the Exercise Price pursuant thereto. Please issue
the shares as to which this Warrant is exercised in accordance with the
instructions given below.
--------------------------------
Signature
--------------------------------
Signature Guaranteed
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name
---------------------------------------------------------------------------
(Print in Block Letters)
Address
---------------------------------------------------------------------------
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.
-8-
