Document:

Unassociated Document

EXHIBIT 10.1

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE AND THE SHARES OF CAPITAL STOCK RECEIVABLE UPON CONVERSION OF THIS NOTE HAVE BEEN OR WILL BE ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO ITS OR THEIR DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR THIS NOTE OR SUCH SHARES UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

April 21, 2010

NATIONAL DATACOMPUTER, INC.

SECURED CONVERTIBLE PROMISSORY NOTE

On or before April 21, 2013 (the “Maturity Date”) National Datacomputer, Inc., a Delaware corporation (the “Company”), for value received, promises to pay to the order of the ______________ (the “Holder”), the principal sum of ______________ Dollars ($__________.00), with interest thereon at the rate and on the terms set forth below.

The following is a statement of the rights and obligations of the Holder and the Company under this Note, and the conditions to which this Note is subject, to which the Company, by the execution and delivery hereof, and the Holder, by the acceptance of this Note, agree:

1.             Definitions. As used in this Note, the following terms, unless the context otherwise requires, have the following meanings:

1.1           “Common Stock” shall mean and include: (a) the Company’s Common Stock, $.001 par value per share, and (b) any other securities into which or for which the securities described in (a) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

1.2           “Final Closing Date” shall mean the date on which the Company issues the final Note, which date shall take place no later five business days after the termination of the offering of Notes pursuant to the Memorandum.

 

1.3           “Holder,” or similar terms, when the context refers to a Holder of a Note, shall mean any person who shall at the time be the Holder of this Note. Such terms used in the plural shall mean any persons who shall at the time be the Holders of the Notes.

  

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1.4           “Memorandum” shall mean the Company’s Confidential Private Placement Memorandum dated as of April 21, 2010, pursuant to which the Notes were offered and sold.

1.5           “Notes” shall mean up to $150,000 in original principal amount of this Note and Secured Convertible Promissory Notes of like tenor to this Note issued and sold pursuant to the Memorandum.

1.6           “Security Agreement” shall mean that certain Security Agreement dated as of April __, 2010, among the Company, the Holders, as secured parties, and Bruna Bucacci, as agent for the Holders (the “Agent”).

1.7           Subscription Agreement” shall mean that certain Subscription Agreement between the Company and the original Holder of this Note. Such terms used in the plural shall mean any similar agreements between the Company and the original Holders of the other Notes.

1.8           “Trading Day” means (a) a day on which the Common Stock is traded on the OTC Bulletin Board or a registered national securities exchange, or (b) if the Common Stock is not traded on the OTC Bulletin Board or a registered national securities exchange, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); provided, however, that in the event that the Common Stock is not listed or quoted as set forth in (a) or (b) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the Commonwealth of Massachusetts are authorized or required by law or other government action to close.

	
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Terms of the Note.

2.1           Beginning on the date this Note is issued, this Note shall bear interest at the rate of 0.67% per annum on the outstanding principal balance hereof, and such interest shall accrue, compounding annually on each anniversary of the date of this Note, until the earlier of the repayment of the outstanding principal sum hereunder with all accrued interest in accordance with this Note or the conversion of this Note pursuant to Section 7 hereof. Interest will be computed on the basis of a year of 365 days for the number of days actually elapsed.

2.2           If any payment on this Note becomes due and payable on a Saturday, Sunday or legal holiday, the maturity thereof shall be extended to the next succeeding business day.

2.3           This Note may be prepaid by the Company at its election with the written consent of at least 75% in original principal amount of the Notes. Provided that such written consent in obtained (but not otherwise), this Note may be prepaid in full any time without premium or penalty, but with interest thereon, if any, to the date of prepayment.

  

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3.             Security. The indebtedness of the Company arising under this Note is secured under the terms of the Security Agreement.

 

4.             Events of Default. For purposes of this Note, the Company shall be in default hereunder (and an “Event of Default” shall have occurred hereunder) upon any of the following:

 

(i)           Any breach by the Company of the observance or performance of any material covenant in the Security Agreement or the Subscription Agreements (subject to applicable grace periods);

(ii)           The institution of any bankruptcy, reorganization, arrangement, liquidation, receivership, moratorium or similar proceedings by the Company;

(iii)           The institution of any bankruptcy, reorganization, arrangement, liquidation, receivership, moratorium or similar proceedings against the Company, which is not dismissed within 30 days;

(iv)           The liquidation, termination or dissolution of the Company, a decision by the Company’s Board of Directors to discontinue the Company’s operations in the ordinary course of business, or the appointment of a receiver for the Company’s property;

(v)           Any default under any other indebtedness of the Company, after applicable grace periods, the effect of which would require the Company to file a Current Report on Form 8-K with the Securities and Exchange Commission; or

(vi)           The entry of a final judgment for the payment of money against the Company, which is not discharged or stayed pending appeal within applicable grace periods, the effect of which would require the Company to file a Current Report on Form 8-K with the Securities and Exchange Commission.

5.             Consequences of Default. Upon the occurrence and during the continuation of an Event of Default:

5.1          The holders of a majority of the principal amount of the Notes then outstanding may declare the entire unpaid principal balance of the Notes, together with interest accrued but unpaid thereon and with all other sums due or owed by Company under the Notes, as well as all reasonable out-of-pocket costs and expenses (including but not limited to attorneys’ fees and disbursements) incurred by the Holders in connection with the collection or enforcement of the Notes, the Subscription Agreement and the Security Agreement, to be declared to be due and payable immediately, by delivering written notice to the Company.

5.2          If an Event of Default persists for a period of at least 45 days, the interest rate on this Note shall increase to 18% per annum which shall apply from the date such Event of Default first occurs until the date the Event of Default is cured or this Note is paid in full.

  

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5.3          In addition to all of the sums payable hereunder, the Company agrees to pay the Holder all costs and expenses incurred by the Holder, or by the Agent in its behalf, in connection with any and all actions taken to enforce collection of this Note, the Subscription Agreement and the Security Agreement, including all attorneys’ fees.

5.4          In addition to any rights granted hereunder or any documents delivered in connection herewith, the Holder, or the Agent on its behalf, shall have all of the rights and remedies granted by the Security Agreement.

6.             Remedies not Exclusive. The remedies of the Holder, or the Agent in its behalf, provided herein or otherwise available to the Holder at law or in equity shall be cumulative and concurrent, and may be pursued singly, successively and together at the sole discretion of the Holder, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release of the same.

7.             Optional Conversion.

7.1           At any time and from time to time on or after April 21, 2012, this Note shall be convertible (in whole or in part), at the option of the Holder (the “Conversion Option”), into such number of fully paid and non-assessable shares of Common Stock which equals (x) 0.53333% of the number of shares of Common Stock outstanding immediately after the Final Closing Date, calculated on a fully diluted basis and including conversion of the Notes (notwithstanding the fact that the Company will not have authorized a sufficient number of shares of Common Stock to accomplish such conversion as of such date), for each $1,000 of principal and interest which the Holder elects to convert. Each conversion of this Note, in whole or in part, shall be effective on the date on which the Holder delivers a notice of conversion in the form attached hereto (the “Conversion Notice”), duly executed, to the Company (the “Conversion Date”). In addition, the Holder shall deliver this Note to the Company at such time that this Note is fully converted. With respect to partial conversions of this Note, the Company shall keep written records of the amount of this Note converted as of each Conversion Date.

7.2           Not later than three Trading Days after any Conversion Date, the Company or its designated transfer agent, as applicable, shall issue and deliver to the Holder, at the Holder’s address specified in the Conversion Notice, a certificate or certificates representing the shares of Common Stock issuable upon such conversion. Such certificate or certificates shall bear such legends as may be required by applicable state and federal securities laws. No fractional shares will be issued on conversion of this Note. If a fraction of a share would otherwise be issuable on conversion of this Note, the Company will round down the number of shares to be issued to the next whole share.

8.             Changes; Waivers. Any of the terms and conditions of this Note may be changed or amended, and any right of the Holder of this Note may be waived, with the written consent of the Company and the Holders of a majority in original principal amount of the Notes; provided, however, that (i) no such change, amendment or waiver which would alter or change the principal amount owing upon this Note, the rate of interest payable hereon or the Maturity Date may be approved without the consent of the Holders of 100% in original principal amount of the Notes; and (ii) notwithstanding the foregoing, the prepayment of the Notes in full shall be governed by Section 2.3 hereof and not by this Section.

  

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9.             Miscellaneous.

9.1          The Company, regardless of the time, order or place of signing, waives presentment, demand, protest and notices of any kind in connection with the enforcement of this Note. If the Company fails to comply with any of the provisions of this Note, the Company will pay to the Holder of this Note, on demand, such further amounts as shall be sufficient to cover the costs and expenses, including but not limited to reasonable attorneys’ fees and disbursements, incurred by the Holder of this Note in collecting upon this Note or otherwise enforcing any of the Holder’s rights hereunder.

9.2          The rights and remedies herein reserved to any party shall be cumulative and in addition to any other or further rights and remedies available at law or in equity. No delay or omission on the part of the Holder in exercising any right hereunder shall operate as a waiver of such right or of any other right of such Holder. The waiver by any party hereto of any breach of any provision of this Note shall not be deemed to be a waiver of the breach of any other provision or any subsequent breach of the same provision.

9.3          This Note shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without reference to choice of law principles.

    9.4          The Company and the Holder irrevocably agree that all legal proceedings arising out of or in connection with this Note, including its enforcement, will be tried in a court of competent jurisdiction by a judge without a jury. Each party waives any right to a jury trial in any such proceeding and agrees to take, or not to take, such action as is appropriate to give effect to this provision.

9.5          In case any provision contained herein (or part thereof) shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or other unenforceability shall not affect any other provision (or the remaining part of the affected provision) hereof, but this Note shall be construed as if such invalid, illegal, or unenforceable provision (or part thereof) had never been contained herein, but only to the extent that such provision is invalid, illegal or unenforceable.

IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name and executed as a sealed instrument this ____ day of April, 2010.

NATIONAL DATACOMPUTER, INC.

By:__________________________________

Bruna Bucacci, President

 

 

 

 

  

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FORM OF

NOTICE OF CONVERSION

 

(To be Executed by the Registered Holder in order to Convert the Note)

 

 

The undersigned hereby irrevocably elects to convert $ ________________ of the principal amount of the above Note, together with all accrued but unpaid interest thereon, into shares of Common Stock of National Datacomputer, Inc. (the “Company”) according to the conditions hereof, as of the date written below.

 

Date of Conversion _________________________________________________________

 

Number of shares of Common Stock beneficially owned or deemed beneficially owned by the Holder on the Date of Conversion: _________________________

 

 

 

Signature___________________________________________________________________

[Name]

 

 

The certificate or certificates representing such shares of Common Stock shall be delivered to the Registered Holder at the following address:

 

 

__________________________________________________________________

 

__________________________________________________________________

 

 

 

 

 

  

6Unassociated Document

EXHIBIT 10.2

 

NATIONAL DATACOMPUTER, INC.

Form of Subscription Agreement

National Datacomputer, Inc.

19B Crosby Drive

Suite 310

Bedford, Massachusetts 01730

Ladies and Gentlemen:

1.           Subscription. The undersigned (the “Purchaser”), intending to be legally bound, hereby agrees to purchase from National Datacomputer, Inc., a Delaware corporation (the “Company”), the Company’s Secured Convertible Promissory Note (the “Note”) (in the form of Note attached hereto as Exhibit A) in the original principal amount set forth on the signature page hereof. The minimum subscription for a note shall be $5,000, however, the Company may, in its discretion, accept less than the minimum subscription amount. This subscription is submitted to you in accordance with and subject to the terms and conditions described in this agreement (this “Subscription Agreement”) and in the Confidential Private Placement Memorandum of the Company, dated April 21, 2010, as amended or supplemented from time to time, including all attachments, schedules and exhibits thereto (the “Memorandum”), relating to the offering (the “Offering”) of the Note and other Secured Convertible Promissory Note (the “Notes”).

The Purchaser understands and agrees that the Company’s obligations under the Notes will be secured by a security interest in the Company’s assets pursuant to a security agreement in the form attached hereto as Exhibit B (the “Security Agreement”). The terms of the Offering are more completely described in the Memorandum and such terms are incorporated herein in their entirety. Certain terms used but not otherwise defined herein shall have the respective meanings provided in the Memorandum.

2.           Payment. The Purchaser encloses herewith a check payable to, or will immediately make a wire transfer payment to, “National Datacomputer, Inc.” in the full amount of the purchase price of the Note being subscribed for. Such funds will be held for the Purchaser’s benefit, and will be returned promptly, without interest, penalty, expense or deduction if this Subscription Agreement is not accepted by the Company or if the Offering is terminated pursuant to its terms or by the Company. Together with the check for, or wire transfer of, the full purchase price, the Purchaser is delivering (i) a completed and executed counterpart signature page to this Subscription Agreement and (ii) a completed and executed counterpart signature page to the Security Agreement.

3.           Acceptance of Subscription. The Purchaser understands and agrees that the Company reserves the right to accept or reject this or any other subscription for a Note, in whole or in part. The Company shall have no obligation hereunder until the Company shall execute and deliver to the Purchaser an executed copy of this Subscription Agreement. If this subscription is rejected in whole or the Offering is terminated, all funds received from the Purchaser will be returned without interest, penalty, expense or deduction, and this Subscription Agreement shall thereafter be of no further force or effect. If this subscription is rejected in part, the funds for the rejected portion of this subscription will be returned without interest, penalty, expense or deduction, and this Subscription Agreement will continue in full force and effect to the extent this subscription was accepted.

  

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4.           Representations and Warranties of the Purchaser. The Purchaser hereby represents, warrants, acknowledges and agrees as follows:

(a)           Neither the Note nor the shares of the Company’s common stock, par value $.001 per share (the “Common Stock”), issuable upon conversion of the Note (the “Conversion Shares”) are registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws. The Purchaser understands that the offering and sale of the Notes is intended to be exempt from registration under the Securities Act, by virtue of Section 4(2) thereof and the provisions of Regulation D promulgated thereunder, based, in part, upon the representations, warranties and agreements of the Purchaser contained in this Subscription Agreement.

(b)           The Purchaser has received the Memorandum, this Subscription Agreement (and the forms of Note and Security Agreement attached as Exhibits A and B hereto) and all other documents requested by the Purchaser, has carefully reviewed them and understands the information contained therein, and the Purchaser, prior to the execution of this Subscription Agreement, has had access to the same kind of information which would be available in a registration statement filed by the Company under the Securities Act, including without limitation the Company’s Commission Reports (as defined below).

(c)           Neither the Securities and Exchange Commission (the “Commission”) nor any state securities commission has approved the Notes or passed upon or endorsed the merits of the Offering or confirmed the accuracy or determined the adequacy of the Memorandum. The Memorandum has not been reviewed by any federal, state or other regulatory authority.

(d)           All documents, records and books pertaining to the investment in the Notes (including, without limitation, the Memorandum) have been made available for inspection by the Purchaser.

(e)           The Purchaser has had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the offering of the Notes and the business, financial condition, results of operations and prospects of the Company, and all such questions have been answered to the full satisfaction of the Purchaser.

(f)           In evaluating the suitability of an investment in the Company, the Purchaser has not relied upon any representation or other information (oral or written) other than as stated in the Memorandum and in the Commission Reports (as the representations or other information contained therein may be modified by the Memorandum).

(g)           The Purchaser is unaware of, is in no way relying on, and did not become aware of the Offering through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication 

 

  

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published in any newspaper, magazine or similar media or broadcast over television or radio, in connection with the Offering and sale of the Notes and is not subscribing for a Note and did not become aware of the offering of the Notes through or as a result of any seminar or meeting to which the Purchaser was invited by, or any solicitation of a subscription by, a person not previously known to the Purchaser in connection with investments in securities generally.

(h)           The Purchaser has taken no action which would give rise to any claim by any person, corporation, general partnership, limited partnership, proprietorship, entity, other business organization, trust, union or association (any of the foregoing, a “Person”) for brokerage commissions, finders’ fees or the like relating to this Subscription Agreement or the transactions contemplated hereby.

(i)           The Purchaser has such knowledge and experience in financial, tax and business matters, and, in particular, investments in securities, so as to enable Purchaser to utilize the information made available to Purchaser in connection with the Offering to evaluate the merits and risks of an investment in the Company and to make an informed investment decision with respect thereto.

(j)           The Purchaser is not relying on the Company or any of its employees or agents with respect to the legal, tax, economic and related considerations as to the purchase of the Note, and the Purchaser has relied on the advice of, or has consulted with, only his own advisors.

(k)           The Purchaser is acquiring the Note solely for the Purchaser’s own account for investment and not with a view to resale, assignment or distribution thereof, in whole or in part. The Purchaser has no agreement or arrangement, formal or informal, with any Person to sell or transfer all or any part of the Note or the Conversion Shares and the Purchaser has no plans to enter into any such agreement or arrangement.

(l)           The Purchaser must bear the substantial economic risks of the purchase of the Note indefinitely because neither the Note nor the Conversion Shares may be sold, hypothecated or otherwise disposed of unless subsequently registered under the Securities Act and applicable state securities laws or an exemption from such registration is available. Legends shall be placed on the Note and on any certificates representing Conversion Shares to the effect that they have not been registered under the Securities Act or applicable state securities laws and appropriate notations thereof will be made in the Company’s records.

(m)           The Purchaser has adequate means of providing for such Purchaser’s current financial needs and foreseeable contingencies and has no need for liquidity in the Note for an indefinite period of time.

(n)           The Purchaser is aware that the purchase of a Note involves a number of very significant risks and has carefully read and considered the matters set forth under the caption “Risk Factors” in the Memorandum and in the Commission Filings.

  

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(o)           The Purchaser meets the requirements of at least one of the suitability standards for an “accredited investor” as set forth on the signature page to this Subscription Agreement.

(p)           The Purchaser: (i) if a natural person, represents that the Purchaser has reached the age of 21 and has full power and authority to execute and deliver this Subscription Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof; and (ii) if a corporation, partnership, limited liability company or partnership, association, joint stock company, trust, unincorporated organization or other entity, (1) such entity was not formed for the specific purpose of acquiring the Note, (2) such entity is duly organized, validly existing and in good standing under the laws of the state of its organization, (3) the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other organizational documents, (4) such entity has full power and authority to execute and deliver this Subscription Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the Note, (5) the execution and delivery of this Subscription Agreement has been duly authorized by all necessary corporate action on behalf of such entity, and (6) this Subscription Agreement has been duly executed and delivered on behalf of such entity and is a legal, valid and binding obligation of such entity. The execution and delivery of this Subscription Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Purchaser is a party or by which it is bound.

(q)           The Purchaser had the opportunity to obtain any additional information, to the extent the Company had such information in its possession or could acquire it without unreasonable effort or expense, necessary to verify the accuracy of the information contained in the Memorandum and all documents received or reviewed in connection with the purchase of the Note and the opportunity to have representatives of the Company provide Purchaser with such additional information regarding the terms and conditions of this particular investment and the financial condition, results of operations, business and prospects of the Company deemed relevant by the Purchaser and all such requested information, to the extent the Company had such information in its possession or could acquire it without unreasonable effort or expense, has been provided to Purchaser’s full satisfaction.

(r)           The Purchaser has a sufficient net worth to sustain a loss of its entire investment in the Company in the event such a loss should occur. The Purchaser’s overall commitment to investments which are not readily marketable is not excessive in view of its net worth and financial circumstances and the purchase of the Note will not cause such commitment to become excessive. The investment is a suitable one for the Purchaser.

(s)           The Purchaser acknowledges and agrees that the Company does not make and has not made any representations or warranties with respect to the Company or the Offering other than those specifically set forth in this Subscription Agreement.

5.           Representations and Warranties of the Company. The Company hereby represents, warrants, acknowledges and agrees as follows:

  

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(a)           Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Company is in violation of any material provision of its certificate of incorporation or by-laws.

(b)           Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the Offering. The execution and delivery of this Subscription Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and no further consent or action is required by the Company. This Subscription Agreement, when executed and delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and general principles of equity.

(c)           No Conflicts. The execution, delivery and performance of this Subscription Agreement by the Company and the consummation by the Company of the Offering do not and will not: (i) conflict with or violate any provision of the Company’s certificate of incorporation or by-laws, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority as currently in effect to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such as would not, individually or in the aggregate (x) adversely affect the legality, validity or enforceability of the Offering, (y) have or result in or be reasonably likely to have or result in a material adverse effect on the results of operations, assets, prospects, business or condition (financial or otherwise) of the Company, or (z) adversely impair the Company’s ability to perform fully on a timely basis its obligations under this Subscription Agreement (any of (x), (y) or (z), a “Material Adverse Effect”).

(d)           Filings, Consents and Approvals. Neither the Company nor any Subsidiary is required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or Person in connection with the execution, delivery and performance by the Company of this Subscription Agreement, other than (i) the filing with the Commission of a Form D pursuant to Regulation D under the Securities Act, and (ii) applicable Blue Sky filings.

(e)           Issuance of the Notes. The issuance of the Notes has been duly authorized. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 4, no registration under the Securities Act is required for the offer and sale of the Note by the Company to the Purchaser as contemplated hereby. The issuance and sale of the Notes pursuant to the Memorandum and this Subscription Agreement do not contravene the rules and regulations of the trading market for the Common Stock.

  

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(f)           Commission Reports. Except with respect to its Annual Report on Form 10-K for the fiscal year ended December 31, 2010, which the Company has not yet filed with the Commission, the Company has filed all reports required to be filed by it under the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for the two years preceding the date hereof (the foregoing materials being collectively referred to herein as the “Commission Reports”). As of their respective dates, and except as described in the Memorandum, the Commission Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder, and none of the Commission Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(g)           Material Changes. Except for this Offering, since the date of the latest Commission Report, except as specifically disclosed in the Memorandum, there has been no event, occurrence or development that has had a Material Adverse Effect.

(h)           Disclosure. The disclosure provided to the Purchaser regarding the Company, its business and the transactions contemplated hereby, furnished by or on behalf of the Company, including the Memorandum and all of the Commission Reports, when taken together as a whole, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

6.           Covenants of the Company.  The Company hereby covenants and agrees that:

(a)           Commission Filings.  So long as the Notes are outstanding, the Company will provide to the Purchaser copies of all Commission Filings made by the Company after the date of this Subscription Agreement or, at the Company’s option, a link to the Commission’s Web site from which such Commission Filings may be reviewed and copied.

(b)           Stockholders’ Meeting.  The Company will take all action necessary to convene a meeting of its stockholders, such meeting to be held prior to the second anniversary of the date of the Memorandum, for the purpose of increasing the authorized capital stock of the Company to permit conversion of the Notes in accordance with their terms.

7.           Irrevocability; Binding Effect. The Purchaser hereby acknowledges and agrees that the subscription hereunder is irrevocable by the Purchaser, except as required by applicable law, and that this Subscription Agreement shall survive the death or disability of the Purchaser and shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and permitted assigns.

  

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8.           Modification. This Subscription Agreement shall not be modified or waived except by an instrument in writing signed by the party against whom any such modification or waiver is sought.

9.           Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, sent by nationwide overnight courier or delivered against receipt to the party to whom it is to be given (a) if to Company, at the address set forth above, or (b) if to the Purchaser, at the address set forth on the signature page hereof (or, in either case, to such other address as the party shall have furnished in writing in accordance with the provisions of this Section). Any notice or other communication given by certified mail shall be deemed given at the time that it is signed for by the recipient except for a notice changing a party’s address which shall be deemed given at the time of receipt thereof. Any notice or other communication given by nationwide overnight courier shall be deemed given the next business day following being deposited with such courier.

10.           Assignability. This Subscription Agreement and the rights, interests and obligations hereunder are not transferable or assignable by the Purchaser and the transfer or assignment of the Note or the Conversion Shares shall be made only in accordance with all applicable laws.

11.           Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without reference to choice of law principles.

12.           Waiver of Jury Trial. THE COMPANY AND THE PURCHASER EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE OFFERING, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. THE COMPANY AND THE PURCHASER EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE COMPANY AND THE PURCHASER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

13.           Use of Pronouns. All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons referred to may require.

14.           Miscellaneous.

(a)           This Agreement and its exhibits and schedules constitutes the entire agreement between the Purchaser and the Company with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings, if any, relating to the subject matter hereof.

  

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(b)           The Purchaser’s and Company’s covenants, agreements, representations and warranties made in this Agreement and the Memorandum shall survive the execution and delivery hereof and delivery of the Note.

(c)           Each of the parties hereto shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby whether or not the transactions contemplated hereby are consummated.

(d)           This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.

(e)           Each provision of this Subscription Agreement shall be considered separable and, if for any reason any provision or provisions hereof are determined to be invalid or contrary to applicable law, such invalidity or illegality shall not impair the operation of or affect the remaining portions of this Subscription Agreement.

(f)           Paragraph titles are for descriptive purposes only and shall not control or alter the meaning of this Subscription Agreement as set forth in the text.

[Remainder of Page Intentionally Left Blank]

 

 

 

  

8

  

NATIONAL DATACOMPUTER, INC.

 

Counterpart Signature Page to

Subscription Agreement

I.             Subscription. Purchaser hereby elects to subscribe for a Note under the Subscription Agreement in the aggregate principal amount of $__________.

II.            Accredited Investor Confirmation. Purchaser represents and warrants as indicated below by the undersigned’s initials (please initial the appropriate item(s)):

A.           Individual investors: (Please initial one or more of the following, four statements)

 

	
1.______

	
I certify that I am an accredited investor because I have had individual income (exclusive of any income earned by my spouse) of more than $200,000 in each of the most recent two years and I reasonably expect to have an individual income in excess of $200,000 for the current year.

 

	
2.______

	
I certify that I am an accredited investor because I have had joint income with my spouse in excess of $300,000 in each of the most recent two years and reasonably expect to have joint income with my spouse in excess of $300,000 for the current year.

 

	
3.______

	
I certify that I am an accredited investor because I have an individual net worth, or my spouse and I have a joint net worth, in excess of $1,000,000.

 

	
4.______

	
I am a director or executive officer of National Datacomputer, Inc.

 

 

	
B.

	
Partnerships, corporations, trusts or other entities: (Please initial one of the following seven statements). The undersigned hereby certifies that it is an accredited investor because it is:

 

	
1.______

	
an employee benefit plan whose total assets exceed $5,000,000;

 

	
2.______

	
an employee benefit plan whose investments decisions are made by a plan fiduciary which is either a bank, savings and loan association or an insurance company (as defined in Section 3(a) of the Securities Act) or an investment adviser registered as such under the Investment Advisers Act of 1940;

 

	
3.______

	
a self-directed employee benefit plan, including an Individual Retirement Account, with investment decisions made solely by persons that are accredited investors;

 

	
4.______

	
an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, not formed for the specific purpose of acquiring the Units, with total assets in excess of $5,000,000;

 

	
5.______

	
a corporation, partnership, limited liability company, limited liability partnership, other entity or similar business trust, not formed for the specific purpose of acquiring the Units, with total assets excess of $5,000,000;

 

  

9

  

	
6.______

	
a trust, not formed for the specific purpose of acquiring the Units, with total assets exceed $5,000,000, whose purchase is directed by a person who 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 Units; or

 

	
7.______

	
an entity (including a revocable grantor trust but other than a conventional trust) in which each of the equity owners qualifies as an accredited investor under items A(1), (2) or (3) or item B(1) above.

If the Purchaser is an INDIVIDUAL, or if the Purchasers are INDIVIDUALS who have purchased as JOINT TENANTS, as JOINT TENANTS with RIGHT OF SURVIVORSHIP, as TENANTS IN COMMON, or as COMMUNITY PROPERTY:

	
 

___________________________

Print Names(s)

	
 

___________________________

Social Security Number(s)

	
 

___________________________

Signature(s) of Investor(s)

	
 

___________________________

Joint Signature

	
 

___________________________

Address

	
 

___________________________

Date

If the Purchaser is a PARTNERSHIP, CORPORATION, TRUST, LIMITED LIABILITY COMPANY or LIMITED LIABILITY PARTNERSHIP:

	
 

___________________________

Name of Partnership, Corporation,

Trust, Limited Liability Company

or Limited Liability Partnership

 

Address:

 

	
 

___________________________

Federal Taxpayer

Identification Number

	
 

By:___________________________

 

	
 

___________________________

 

	
Name: ________________________

 

	
State of Organization

 

	
Title:________________________

	  

  

10

  

SUBSCRIPTION FOR A NOTE IN THE PRINCIPAL AMOUNT OF $_________ ACCEPTED AND AGREED TO this _____ day of ______________, 2010.

NATIONAL DATACOMPUTER, INC.

By:__________________________________

      Name:

      Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

11

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