AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November, 2001 (this
"Agreement"), among Peripheral Equipment Corporation, a California corporation
("PEC"), DATAMETRICS Corporation, a Delaware corporation ("DATAMETRICS") and
Peripheral Equipment Acquisition Corp., a California corporation and a direct
wholly owned subsidiary of DATAMETRICS ("Merger Sub").
W I T N E S S E T H
WHEREAS, the Boards of Directors of PEC, DATAMETRICS and Merger Sub have
each determined that it is advisable and in the best interests of their
respective stockholders for PEC, DATAMETRICS and Merger Sub to enter into a
business combination; WHEREAS, the Boards of Directors of PEC, DATAMETRICS and
Merger Sub have each approved the merger (the "Merger") of PEC with and into
Merger Sub in accordance with the applicable provisions of the Delaware
Corporation Law (the "Delaware Law") and the applicable provisions of the
California Corporations Code (the "California Code"), and upon the terms and
subject to the conditions set forth herein; and WHEREAS, pursuant to the Merger,
each outstanding share of PEC's common stock, $.01 par value (the "PEC Common
Stock"), shall be converted into the right to receive a warrant (the
"DATAMETRICS Warrants") to purchase Common Stock, $.01, of DATAMETRICS
("DATAMETRICS Common Stock"), upon the terms and subject to the conditions set
forth herein. NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, DATAMETRICS, PEC and Merger Sub hereby agree as follows:
1. The Merger.
(a) Effective Time. At the Effective Time, and subject to
and upon the terms and conditions of this Agreement, PEC shall merge with and
into Merger Sub, the separate corporate existence of PEC shall cease, and Merger
Sub shall continue as the surviving corporation. Merger Sub is hereinafter
sometimes referred to as the "Surviving Corporation." As promptly as
practicable, the parties hereto shall file a certificate of merger as
contemplated by the California Code (the "California Certificate of Merger").
(b) Closing. The consummation of the Merger will take place within two days
after satisfaction or waiver of the conditions set forth in Articles 6 and 7, at
the offices of XxXxxxxxxx & Xxxxx, LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 unless another date, time or place is agreed to in writing by the parties
hereto (the "Closing").
(c) Effect of the Merger. At the Effective Time, all the property, rights,
privileges, powers and franchises of PEC shall vest in the Surviving
Corporation, and all debts, liabilities and duties of PEC shall become the
debts, liabilities and duties of the Surviving Corporation.
(d) Certificate of Incorporation and By-Laws. The Certificate of
Incorporation and By-Laws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation and By-laws of the
Surviving Corporation until thereafter amended in accordance with the California
Code and such Certificate of Incorporation such that the name of the corporation
shall be Peripheral Equipment Corporation.
(e) Conversion of Securities. At the Effective Time, by virtue of the
Merger:
(i) Each share of PEC Common Stock issued and outstanding immediately
prior to the Effective Time and each share subject to an outstanding option or
warrant of PEC (the "PEC Options") be converted into the right to receive
DATAMETRICS Warrants to purchase, at a price of $.07 per share, DATMETRICS
Common Stock for a period of 10 years. Following such conversion, the
stockholders and option holders of PEC immediately preceding the Effective Time
(as set forth on Schedule 1 annexed hereto) shall own in the aggregate, Warrants
to purchase up to 30,000,000 shares of DATAMETRICS Common Stock immediately
following the Effective Time, without giving effect to the proposed
one-for-twenty reverse stock split of DATAMETRICS common stock. The Warrants
shall be distributed pro-rata to the stockholders and option holders of PEC in
accordance with their respective holdings as set forth on Schedule 1. A form of
the Warrant is attached as hereto as Exhibit A.
(ii) As soon as reasonably practicable after the Effective Time,
DATAMETRICS will mail to each holder of record of PEC Common Stock and PEC
Options (collectively the "PEC Certificates") instructions to effect the
surrender of the PEC Certificates in exchange for the DATAMETRICS Warrants. Upon
surrender of PEC Certificates for cancellation to DATAMETRICS, properly endorsed
for transfer, the holder of such PEC Certificate shall be entitled to
DATAMETRICS Warrants which such holder has the right to receive in accordance
with Section 1(e), and the PEC Certificate so surrendered shall be cancelled.
Until so surrendered, each outstanding PEC Certificate that, prior to the
Effective Time, represented shares of PEC Common Stock and PEC Options will be
deemed from and after the Effective Time, for all corporate purposes, other than
the payment of dividends, to evidence only the ownership of the number of
DATAMETRICS Warrants into which such shares of PEC Common Stock and PEC Options
shall have been so converted.
(f) Stock Transfer Books. At the Effective Time, the stock transfer books
of PEC shall be closed, and there shall be no further registration of transfers
of shares of PEC Common Stock thereafter on the records of PEC.
(g) No Further Rights in PEC Common Stock. The DATAMETRICS Warrants
delivered upon the surrender of shares of PEC Common Stock and PEC Options shall
be deemed to have been paid in full satisfaction of all rights pertaining to
such shares of PEC Common Stock and PEC Options. Holders of the shares of PEC
Common Stock and PEC Options shall have no further ownership rights in PEC
Common Stock after the Effective Time.
(h) Dissenting Shares. Notwithstanding anything in this Agreement to the
contrary, shares of PEC Common Stock which immediately prior to the Effective
Time are held by stockholders who have properly exercised dissenters' rights
under the California Code (the "Dissenting Shares") shall not be converted into
DATAMETRICS Warrants as provided in Section 1.5(a) hereof, but the holders of
Dissenting Shares shall be entitled to receive such consideration as shall be
determined pursuant to the California Code; provided, however, that, if any such
holder shall withdraw or lose such holder's right to dissent and payment under
the California Code, such holder's outstanding shares of PEC Common Stock shall
thereupon be deemed to have been converted as of the Effective Time into the
right to receive the DATAMETRICS Warrants. PEC shall give DATAMETRICS prompt
notice of any demands for payment under the California Code received by PEC.
Except as required by applicable law, prior to the Effective Time, PEC shall
not, except with the prior written consent of DATAMETRICS, make any payment with
respect to or settle or offer to settle, any such demands.
(i) Irrevocable Proxy. Each of Messrs. Xxxxxxxxxx, Xxxxx and Xxxxx (the
"Principals") agree to vote all of the shares of DATAMETRICS Common Stock
beneficially owned by such holder in favor of the Merger.
(j) Stockholders Meetings. PEC shall call and hold its Stockholders Meeting
as promptly as practicable and in accordance with applicable laws for the
purpose of voting upon the approval of the Merger and the adoption of the Merger
Agreement and PEC shall use its best efforts to hold their respective
Stockholders Meeting as soon as practicable after the date on which this
Agreement becomes effective. PEC shall:
(i) recommend, and shall take all other action necessary or advisable to
secure, approval of the transactions contemplated by this Agreement by its
stockholders.
2. Further Agreements
(a) Confidentiality. Pending the Effective Time, each party shall keep any
confidential information obtained from the other party confidential in
accordance with the terms of the confidentiality agreement between DATANETRICS
and PEC.
(b) Public Announcements. DATAMETRICS and PEC shall consult with each other
before issuing any press release and shall not issue any press release or make
any public statement with respect to the Merger or this Agreement without the
prior consent of the other party, which shall not be unreasonably withheld;
provided, however, that a party may, without the prior consent of the other
party, issue such press release or make such public statement as may upon the
advise of outside counsel be required by law.
(c) DATAMETRICS Subsidiary. DATAMETRICS agrees to maintain the separate
corporate existence of Merger Sub, which shall be known as Peripheral Equipment
Corporation for one year following the Effective Time.
(d) Material Adverse Effect When used in connection with DATAMETRICS or
PEC, as the case may be, the term "Material Adverse Effect" means any change,
effect or circumstance that, individually or when taken together with all other
such changes, effect or circumstance, that have occurred prior to the date of
termination of the occurrence of such change, effect or circumstance, is
materially adverse to the business, assets (including intangible assets),
financial condition, results of operations or prospects of DATAMETRICS, PEC, and
Merger Sub as the case may be, in each case taken as a whole.
3. Representations and Warrants of PEC. PEC and, to the best of their
knowledge, each of the Principals, jointly and severally, represent, warrant and
agree that from the date of this Agreement through the Closing Date:
(a) Corporate.
(1) PEC is a corporation duly organized, validly existing and in good
standing under and by virtue of the laws of the State of California. PEC is
qualified to do business as a foreign corporation in such other states in which
the ownership of its assets or the nature and conduct of its businesses requires
such qualification. PEC has no subsidiaries or equity ownership in any other
entities. PEC has the power to own its properties and carry on its business. The
execution and delivery of, and performance by PEC of its obligations under this
Agreement and the other documents contemplated or referenced under this
Agreement, have been duly authorized by all necessary action of PEC. This
Agreement has been, or will be at the Closing Date, duly executed and delivered
by PEC will be at the Closing Date, the valid and binding obligation of it,
enforceable in accordance with its terms, except as may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or laws affecting the rights
and remedies of creditors generally, and (ii) the availability of the remedy of
specific performance, injunctive relief or other equitable relief, whether
applicable applied by a court of law or equity, including the exercise of
judicial discretion in accordance with general principles of equity.
(2) The authorized capital stock of PEC consists of _________ shares of
_________ stock, par value $___ per share, of which ___________shares are
presently outstanding. The issued and outstanding shares of the PEC capital
stock are as stated in Schedule1 (the "PEC Outstanding Capital Stock"). No
shares of the PEC Outstanding Capital Stock are held in its treasury. The PEC
Outstanding Capital Stock has been duly authorized and validly issued and is
fully paid and nonassessable; with no liability on the part of the holders
thereof. There are no preemptive rights on the part of any holder of any class
of securities of PEC and, except as set forth on Schedule 1, no options,
warrants, conversion or other rights or commitments of any kind obligating PEC
to issue or sell any shares of its capital stock.
(b) Financial.
(1) The unaudited balance sheets of PEC as of August 31, 2001, the related
unaudited statement of earnings for the twelve months ended August 31, 2001, and
the unaudited balance sheets as of August 31, 2001 and the related statement of
earnings for the 12 months then ended prepared by PEC, as set forth on Schedule
3(b) of this Agreement, are complete and correct and present fairly the
financial condition of PEC as August 31, 2001, and the results of its operations
for the periods then ended, in conformity with generally accepted accounting
principles applied on a basis consistent with that of preceding periods.
(2) Since August 31, 2001, except as specified in Schedule 3(b)(2), the
business of PEC has been carried on in the ordinary course in substantially the
same manner as prior to that date, and there has not been any Material Adverse
Effect on PEC's financial condition or in the operation of its businesses from
that shown on the unaudited financial statements as of August 31, 2001 referred
to in subsection 3(b)(1).
(c) Undisclosed Liabilities.
(1) PEC has no material liabilities, individually or in the aggregate, of
any nature, whether accrued, absolute, contingent or otherwise (including
without limitation any affirmative obligations under its leases and liabilities
as guarantor or otherwise) not disclosed to DATAMETRICS pursuant to this
Agreement, except to the extent specifically set forth in any of the Schedules
annexed to this Agreement.
(2) There is no basis for any claim against PEC or any liability of any
nature or in any amount not fully set forth in the financial statements referred
to in subsection 3 (b)(1) or disclosed by this Agreement and the Schedules
annexed to this Agreement.
(d) Tax Returns.
(1) PEC has filed with the appropriate governmental agencies all the tax
returns required to be filed by it or with respect to its business and has paid,
or made provision for the payment of, all taxes as well as penalties and
interest related thereto, if any, which have or may become due pursuant to said
returns, except taxes which have not yet accrued or otherwise become due or for
which adequate provision has been made on the books of such Companies.
(2) No deficiency or assessment with respect to or proposed adjustment of
any of PEC' Federal, state, county or local taxes are pending or, to the best of
PEC's knowledge, threatened. There are no tax liens, whether imposed by any
Federal, state, county or local taxing authority, outstanding against the
assets, properties or businesses of any of PEC.
(e) Title to Property. PEC owns all right, title and interest in and to all
of its properties and assets, including intangibles, free and clear of all
mortgages, liens, pledges, charges or encumbrances of any nature whatsoever,
except as set forth in Schedule 3(e)(1); and has taken all steps necessary or
otherwise required to perfect and protect its rights in and to its properties
and assets, including intangibles.
(f) Inventories. The inventories of PEC existing on the Closing Date,
consist of items of a quality and quantity usable or saleable in the normal
course of its business.
(g) Contracts and Commitments.
(1) Except as set forth on Schedule 3(g)(1), no director, officer, employee
or stockholder of PEC, or member of the family of any such person, or any
corporation, partnership, trust or other entity in which any such person, or any
member of the family of any such person, has a substantial interest or is an
officer, director, trustee, partner or holder of more than 5% of the outstanding
capital stock thereof, in an entity who is a competitor, customer, supplier or
other, entity, who, during the past 12 months has been a party to any
transaction with PEC. For the purposes hereof, a spouse, lineal descendant,
parent, brother or sister of any such person shall be deemed to be a member of
the family of such person.
(2) PEC leases no real or personal property as lessee, except as set forth
in Schedule 3(g)(2). Each of these leases are in good standing, valid, binding,
and in full force and effect and have not been modified. PEC is not in default,
nor is there any known basis for any claim of default, under any leases,
contracts or commitments made or obligations owed by it. PEC has no knowledge of
any breach or anticipated breach by the other party to any lease, contract or
commitment to which PEC is a party. PEC has not received any notice of its
default under any of its leases or contracts. To the best of PEC's knowledge, no
consent or approval of any third party is required with respect to such leased
or contract in order to avoid a default thereunder by reason of the transactions
contemplated by this Agreement. (h) Absence of Certain Changes or Events. Since
August 31, 2001, PEC has conducted its business in the ordinary course.
(i) Employee Relations. PEC is not a party to any collective bargaining
agreement covering or relating to any of its employees. PEC is not a party to
any contract with any of its employees, agents, consultants, officers, salesmen,
sales representatives, distributors or dealers that is not cancelable by PEC
without penalty or premium on not more than thirty days' notice, except as set
forth in Schedule 3(i) attached hereto. PEC has complied in all material
respects with all applicable laws, rules or regulations relating to employment,
including those relating to wages, hours, collective bargaining and the
withholding and payment of taxes and contributions, discrimination or
harassment.PEC has no employee benefit plans in effect.
(j) No Breach of Statute or Contract. Neither the execution and delivery of
this Agreement, nor compliance with the terms and provisions of this will (i)
violate any statute, license, or regulation of any governmental authority or
(ii) will result in the default by PEC of any rule or regulation of any court or
administrative agency, or (iii) will breach, conflict with, or result in a
breach of any of the terms, conditions or provisions of its certificate of
incorporation, by-laws or any material agreement or instrument to which PEC is a
party, or by which it is or may be bound, or (iv) result in the creation or
imposition of any claim, lien, charge or encumbrance of any nature whatsoever
upon, or (v) give to others any claim, interest or rights, including rights of
termination or cancellation in, or with respect to, any of their property,
assets, contracts, licenses or businesses. The conduct of PEC's businesses does
not violate any law or regulation applicable to such business. PEC has complied
with all laws, rules, regulations and orders applicable to its business,
operations, properties, assets, products and services, and PEC has all necessary
permits, licenses and other authorizations required to conduct its business as
conducted and as proposed to be conducted.
(k) No Litigation. PEC has not received any written notice of any suit,
action or legal, administrative, arbitration or other proceeding or governmental
investigation, or any change in the zoning or building ordinances affecting the
real property or leasehold interests of PEC, pending or threatened against PEC.
There is no action or suit by PEC pending or threatened against others.
(l) Patents and Trademarks. Schedule 3(l) sets forth descriptions of all
patents, trademarks, trade names, service marks, copyrights, and any
applications therefore, technology, know-how and tangible or intangible
proprietary information or material that are material to the business of PEC
(the "PEC Intellectual Property Rights"). PEC, directly or indirectly, owns, or
is licensed or otherwise possesses legally enforceable rights to use, all PEC
Intellectual Property Rights. Except as set forth on Schedule 3(l), PEC either
own the entire right, title and interest in, to and under, or has an express or
implied license to use, any and all Intellectual Property that is necessary for
the conduct of its business in the manner that its business has heretofore been
conducted, except where the failure to own or posses valid rights to use such
Intellectual property would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect. Except as set forth on Schedule
3(l), none of the Intellectual Property is subject to any order, judgment,
decree, stipulation or agreement materially restricting the use thereof by PEC,
and to the knowledge of PEC, the use of the Intellectual Property does not
conflict with, infringe upon or violate, in any respect that would reasonably be
likely to have a material adverse effect, any Intellectual property of any
persons.
(m) Insurance. PEC holds valid policies covering all of the insurance
required to be maintained by it and which is customary for businesses similar to
that of PEC. There are currently no claims pending against PEC under any
insurance policies currently in effect and covering the property, business or
employees of PEC, and all premiums with respect to the policies maintained by
PEC have been maintained to date.
(n) Significant Customers and Suppliers. Schedule 3(n) sets forth PEC's 10
largest customers and suppliers by amounts paid to or by PEC, as the case may
be, in PEC's fiscal year ended August 31, 2001. No supplier or customer which
was significant to the any of PEC during the period covered by the Financial
Statements or which has been significant to PEC thereafter, has terminated,
materially reduced or threatened to terminate or materially reduce its provision
or purchase of products or services to any of PEC.
(o) Environmental Protection. PEC has obtained or applied for all permits,
licenses and other governmental approvals (collectively, "Governmental
Approvals") which are required to be obtained by it as of the Closing Date under
applicable environmental laws for the operation of PEC's business and the
ownership and use of all properties owned or leased by PEC, the absence of which
would have a Material Adverse Effect on such business. To the best knowledge of
PEC and the Principals, the sale of the PEC stock will not cause the termination
or lapse of any such Governmental Approvals, and such Governmental Approvals are
either transferable to PEC or, upon appropriate application, may be reissued in
PEC's name. To the best knowledge of PEC, PEC is in compliance in all material
respects with all applicable Environmental Laws, the terms and conditions of all
Governmental Approvals issued to PEC, and the terms of any orders, decrees, or
judgments issued to PEC under such Environmental Laws.
(p) Disclosure. No representation or warranty by any PEC in this Agreement,
nor any statement, certificate or Schedule furnished, or to be furnished, by or
on behalf of PEC pursuant to this Agreement, or in connection with actions
contemplated hereby, contains or shall contain any untrue statement of a
material fact, or omits, or shall omit to state a material fact necessary to
make the statements contained therein not misleading.
4. Representations and Warranties of DATAMETRICS. DATAMETRICS represents
and warrants as follows:
(a) Corporate
(1) DATAMETRICS is a corporation duly organized, validly existing and in
good standing under and by virtue of the laws of the State of Delaware.
(2) DATAMETRICS has the power to own its properties and carry on its
business. The execution and delivery of, and performance by DATAMETRICS of its
obligations under this Agreement and the other documents contemplated or
referenced under this Agreement, have been duly authorized by all necessary
action of DATAMETRICS. This Agreement has been, or will be at the Closing Date,
duly executed and delivered by DATAMETRICS will be at the Closing Date, the
valid and binding obligation of it, enforceable in accordance with their terms,
except as may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or laws affecting the rights and remedies of creditors generally, and
(ii) the availability of the remedy of specific performance, injunctive relief
or other equitable relief, whether applicable applied by a court of law or
equity, including the exercise of judicial discretion in accordance with general
principles of equity.
(b) Ability to Carry Out the Agreement, Etc. DATAMETRICS is not subject to
any provision of any certificate or articles of incorporation or by-laws, or to
the best of DATAMETRICS' knowledge any mortgage, deed of trust, lease, note,
bond, indenture, other instrument or agreement, license, permit or other
restriction, or any applicable provision of any law, statute, rule, regulation,
judgment, order, writ, injunction or decree of any court, governmental body,
administrative agency or arbitrator which could prevent or be violated by or
under which there would be a default as a result of, nor, is the consent of any
person which has not been obtained required for the execution, delivery and
performance by the DATAMETRICS under this Agreement, or any agreements,
contemplated hereunder.
(c SEC Reporting. The DATAMETRICS Common Stock is currently listed on the
Over the Counter Bulletin Board. DATAMETRICS is current in its requirements to
file periodic reports with the SEC. DATAMETRICS will use its best efforts to
remain current in its periodic reports required to be filed with the SEC.
5. Conduct of the Business of PEC Pending the Closing Date. From and after
the date of this Agreement and until the Closing Date:
(a) Full Access. DATAMETRICS and its authorized representatives shall have
full access, during normal business hours, to all properties, books, records,
contracts and documents of PEC, and PEC shall furnish or cause to be furnished
to DATAMETRICS and its authorized representatives all information with respect
to the affairs and business of PEC as DATAMETRICS may request.
(b) Carry On In Regular Course. PEC shall carry on its businesses
diligently and substantially in the same manner as heretofore.
(c) Compliance with Laws. PEC will comply with all applicable laws as may
be required for the valid and effective transfer of the PEC stock as
contemplated by this Agreement.
(d) No Solicitation. PEC shall not, directly or indirectly, through any
officer, director, employee representative or agent of PEC or any of its
subsidiaries, (i) solicit, initiate or encourage any inquiries or proposals
regarding any mergers, sale of substantial assets, sale of any of the
outstanding shares of capital stock (including without limitation by way of a
tender offer) or similar transactions involving PEC other than the Merger (any
of the foregoing inquiries or proposals being referred to herein as an
"Acquisition Proposal"), or (ii) engage in negotiations or discussions
concerning, or provide any nonpublic information to any person relating to, any
Acquisition Proposal. PEC shall promptly notify DATAMETRICS after receipt of any
Acquisition Proposal, or any material modification of or amendment to any
Acquisition Proposal. Such notice to DATAMETRICS shall indicate the name of the
person making such Acquisition Proposal and the terms and conditions of such
Acquisition Proposal.
6. Conditions Precedent to DATAMETRICS' Obligations. Each and every
obligation of DATAMETRICS to be performed on the Closing Date or thereafter, as
the case may be, shall be subject to the satisfaction prior thereto of the
following conditions:
(a) Representations and Warranties True at the Closing Date. The
representations and warranties made by PEC and, the Principals, in this
Agreement or given on their behalf hereunder shall be true on and as of the
Closing Date with the same effect as through such representations and warranties
had been made or given on and as of the Closing Date.
(b) No Adverse Change. The business, assets and properties of PEC shall not
have been materially and adversely affected in any way as a result of fire,
explosion, earthquake, disaster, accident, labor trouble or dispute, any action
by the United States or any other governmental authority, flood, drought,
embargo, riot, civil disturbance, uprising, activity of armed forces or act of
God or public enemy or for any other reason.
(c Compliance with Agreement. PEC shall have performed and complied with
all of its obligations under this Agreement which are to be performed or
complied with by it prior to or on the Closing Date.
(d) Employees. The Principals shall have agreed to continue their
employment with PEC after the Closing Date and shall have entered into
employment agreements on mutually acceptable terms set forth hereto as Exhibit
B. All of PEC's outstanding employment agreements shall have been terminated
without any further liability to PEC and PEC shall have delivered to DATAMETRICS
the consent of the employees to such employment agreements, including a release
of PEC, with respect to such termination.
(e) Stockholder Approval. The Merger shall have been approved and this
Agreement shall have been adopted by the requisite vote of the stockholders of
PEC and the stockholders of Merger Sub.
(f) All Documents. All documents required to be delivered under this
Agreement shall have been delivered to DATAMETRICS.
7. Conditions Precedent to PEC's Obligations. Each and every obligation of
PEC to be performed on the Closing Date shall be subject to the satisfaction
prior thereto of the following conditions:
(a) Representations and Warranties True at the Closing Date. DATAMETRICS'
representations and warranties contained in this Agreement shall be true at and
as of the Closing Date as though such representations and warranties were made
at and as of the Closing Date.
(b) Compliance with Agreement. DATAMETRICS shall have performed and
complied with its obligations under this Agreement which are to be performed or
complied with prior to or on the Closing Date.
(d) All Documents. All documents required to be delivered under this
Agreement shall have been delivered to the Seller.
(e) Directors. At the Closing, the Board of Directors of DATAMETRICS shall
include Xxxx Xxxxxxxxxx or his designee. Such right of Xxxxxxxxxx to serve as a
Director or to designate a Director shall continue until the end of the 2003
fiscal year of DATAMETRICS.
(f) Xxxxxxxxxx Loan. PEC shall have agreed to repay Xxxxxxxxxx'x loan to
PEC in the principal amount of $_________ in 12 monthly installments, the first
such installment shall be due 30 days after the Effective Time.
8. Indemnification and Resolution of Disputes.
(a) Indemnification. Each PEC and the Principals shall, jointly and
severally, indemnify and hold harmless DATAMETRICS, and shall reimburse
DATAMETRICS for, any loss, liability, claim, damage, expense (including, but not
limited to, reasonable cost of investigation and defense and reasonable
attorneys' fees) or diminution of value (collectively, "Damages") arising from
or in connection with (a) any inaccuracy in any of the representations and
warranties of PEC pursuant to this Agreement or in any certificate delivered PEC
pursuant to this Agreement, or any actions, omissions or states of facts
inconsistent with any such representation or warranty, or (b) any failure by PEC
to perform or comply with any provision of this Agreement. DATAMETRICS shall
indemnify and hold harmless the Principals and PEC , and shall reimburse the
Principals and PEC for any Damages arising from (a) any inaccuracy in any of the
representations and warranties of DATAMETRICS in this Agreement or in any
certificate delivered by DATAMETRICS pursuant to this Agreement, or any actions,
omissions or states of facts inconsistent with any such representation or
warranty, (b) any failure by the DATAMETRICS to perform or comply with any
provision of this Agreement, or (c) the lease for the premises at Newbury Park,
California.
(b) Procedure for Indemnification. Promptly after receipt by an indemnified
party under Section 8(a) above, of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party under such section, give notice to the
indemnifying party of the commencement thereof, but the failure so to notify the
indemnifying party shall not receive it of any liability that it may have to any
indemnified party except to the extent the defense of such action by the
indemnifying party is prejudiced thereby. In case any such action shall be
brought against an indemnified party and it shall give notice to the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, to assume
the defense thereof with counsel reasonable satisfactory to such indemnified
party and, after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party shall not
be liable to such indemnified party under such section for any fees of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party in connection with the defense thereof, other than reasonable
costs of investigation, If an indemnifying party assume the defense of such an
action, (a) no compromise or settlement thereof may be effected by the
indemnifying party without the indemnified party's consent (which shall not be
unreasonable withheld) unless (i) there is no finding or admission of any
violation of law or any violation of the rights of any person which is not fully
remedied by the payment referred to in clause (ii) and no adverse effect on any
other claims that may be made against the indemnified party; and (ii) the sole
relief provided is monetary damages that are paid in full by the indemnifying
party, (b) the indemnifying party shall have no liability with respect to any
compromise or settlement thereof effected without its consent (which shall not
be unreasonably withheld) and (c) the indemnified party will reasonable
cooperate with the indemnifying party in the defense of such action. If notice
is given to an indemnifying party of the commencement of any action and it does
not, within 15 days after the indemnified party's notice is given, give notice
to the indemnified party of its election to assume the defense thereof, the
indemnifying party shall be bound by any determination made in such action or
any compromise or settlement thereof effected by the indemnified party.
Notwithstanding the foregoing, if an indemnified party determined in good faith
that there is a reasonable probability that an action may materially and
adversely affect it or its affiliated party other than as a result of monetary
damages, such indemnified party may, by notice to the indemnifying party, assume
the exclusive right to defend, compromise or settle such action, but the
indemnifying party shall not be bound by any determination of an action so
defended or any compromise or settlement thereof effected without its consent
(which shall not be unreasonably withheld).
9. Termination and Abandonment. This Agreement may be terminated, and the
sale provided for by this Agreement may be abandoned without liability on the
part of any party to the other, on or before the Closing Date:
(a) by mutual consent of DATAMETRICS and PEC;
(b) by DATAMETRICS
(1) if any of the events or conditions specified in subsection (b)(2) of
Section 3 have occurred; or
(2) if any of the conditions provided for in Section 6 of this Agreement
have not been met and have not been waived by DATAMETRICS in writing;
(c) by PEC if any of the conditions of Section 7 of this Agreement have not
been met and have not been waived in writing by PEC. In the event of termination
and abandonment by any party, as above provided in this Section 9, prompt
written notice shall be given to the other party.
10. Closing Date. At the Closing,
(a) PEC shall deliver to DATAMETRICS the following:
(1) a certificate of fulfillment of conditions set forth in Section 6
hereof, signed by the President of PEC.
(2) resignations of the officers and directors of the PEC;
(3) such other and further documents, instruments and certificates not
inconsistent with the provisions of this Agreement, executed by PEC as
DATAMETRICS shall reasonably require to carry out and effectuate the purposes
and terms of this Agreement.
(b) DATAMETRICS shall deliver to PEC the following:
(1) a certificate of fulfillment of conditions set forth in Section 7
hereof signed by the President and Treasurer of the DATAMETRICS;
(2) the employments agreements with the Principals
(3) such other and further documents, instruments and certificates not
inconsistent with the provisions of this Agreement, executed by DATAMETRICS, as
PEC shall reasonably require to carry out and effectuate the purposes and terms
of this Agreement.
11. Brokerage. PEC , the Principals and DATAMETRICS represent and that they
have not engaged the services of any broker or finder in connection with the
transactions herein provided for
12. Miscellaneous Provisions.
(a) Nature and Survival of Representations. All statements contained in any
certificate, schedule or document delivered by or on behalf of any of the
parties pursuant to this Agreement and the transactions contemplated hereby
shall be deemed representations and warranties by the respective parties
hereunder. All representations and warranties made by the parties each to each
other in this Agreement shall survive the consummation of the transactions
contemplated by this Agreement, notwithstanding any investigation heretofore or
hereafter made by any of them or on behalf of any of them. Each Schedule
delivered in accordance with this Agreement shall be deemed to include and refer
to every other Schedule hereto.
(b) Entire Agreement. This Agreement, together with the Exhibits and
Schedules delivered pursuant to this Agreement, and the Confidentiality
Agreement previously executed by the parties, sets forth the entire agreement
and understanding between the parties as to the subject matter hereof, and
merges and supersedes all prior discussions, agreements and understandings of
every and any nature between them, and no party shall be bound by any condition,
definition, warranty, or representation, other than expressly set forth or
provided for in this Agreement and the Confidentiality Agreement previously
executed by the parties, or as may be, on or subsequent to the date hereof, set
forth in writing and signed by the party to be bound thereby. This Agreement may
not be changed or modified, except by agreement in writing, signed by all of the
parties hereto.
(c) Parties in Interest. All the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
successors in interest of the respective parties hereto.
(d) Laws Governing. This Agreement shall be construed and interpreted
according to the law of the State of Florida as applied to contracts executed
and performed in the State of Florida. The parties hereby irrevocably consent
that any legal action or proceeding against any of them by any other of them
under, arising out of or in any manner relating to this Agreement shall be
brought exclusively in a court located in Florida. By its execution and delivery
of this Agreement, the parties expressly and irrevocably consent and submit to
the personal jurisdiction and jurisdiction over their property of all of such
courts in any such action or proceeding.
(e) Assignment. This Agreement may not be assigned by either PEC or
DATAMETRICS.
(f) Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand, or overnight courier, telecopied or mailed, certified or
registered mail, with first-class postage page, (a) if to PEC, 00000-X, Xxxxxxx
Xxxx, Xxxxxxxxxx 00000-0000 or to such other person and place as PEC shall
furnish to DATAMETRICS in writing; and, (b) if to DATAMETRICS, 0000 Xxxxxxxxx
Xxx Xxxxxxx, XX 00000, Attn: Xxxxxx Xxxxxxx, CEO or to such other person and
place as DATAMETRICS shall furnish to PEC in writing with a copy to Xxxxxx X.
Xxxxxxxx, Esq., XxXxxxxxxx & Xxxxx, LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. All notices shall be deemed given upon receipt.
(g) Further Instruments. The parties will, on the Closing Date or such
other date as the other party may request, at their own cost and expense,
execute and deliver or cause to be executed and delivered to the other party or
take such other action as may reasonably be requested to more effectively
consummate the transactions contemplated by this Agreement
(h) Counterparts. This Agreement may be executed simultaneously in two (2)
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(i) Counsel The parties to this Agreement have had the opportunity to have
this Agreement reviewed by counsel.
(j) Expenses. DATAMETRICS, and PEC shall each bear their own respective
expenses, including professional fees, incurred in connection with this
Agreement.
(k) Severability. If any provision of this Agreement is held by any court
of competent jurisdiction to be illegal, invalid or unenforceable, such
provision shall be of no force and effect, but the illegality, invalidity or
unenforceability shall have no effect upon and shall not impair the
enforceability of any other provision of this Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
DATAMETRICS CORPORATION
By: /s/Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Chief Executive Officer
PERIPHERAL EQUIPMENT ACQUISITION CORP
By:_/s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Chief Executive Officer
PERIPHERAL EQUIPMENT CORPORATION
By:__/s/ Xxxxx Xxxxxxxxxx
Name: Xxxxx Xxxxxxxxxx
Title: President
__/s/ Xxxxx Xxxxxxxxxx
Xxxxx Xxxxxxxxxx
__/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
__/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
