PURCHASE AGREEMENT
DATED JULY 10, 2000
BETWEEN
LOGIMETRICS, INC.
AND
L-3 COMMUNICATIONS CORPORATION
TABLE OF CONTENTS
PAGE
ARTICLE I PURCHASE AND SALE OF COMMON STOCK........................................................... 1
Section 1.1........................................................Purchase and Sale of Purchaser Shares. 1
Section 1.2......................................................................................Closing. 3
Section 1.3...................................................................Purchaser Share Adjustment. 3
Section 1.4............................................................................Additional Shares. 3
Section 1.5.........................................................................Certain Indebtedness. 5
Section 1.6...................................................................Technology Transfer Option. 5
Section 1.7......................................................................Administration Services. 6
Section 1.8............................................................................L-3 Stock Options. 6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................... 7
Section 2.1.................................................Organization and Qualification; Subsidiaries. 7
Section 2.2................................................................................Authorization. 8
Section 2.3............................................................................Non-contravention. 8
Section 2.4..................................................................................No Consents. 9
Section 2.5................................................................Capitalization of the Company. 9
Section 2.6.............................................................................SEC Reports, etc. 10
Section 2.7..............................................................Absence of Certain Developments. 11
Section 2.8...................................................Governmental Authorizations; Licenses; Etc. 12
Section 2.9...................................................................................Litigation. 13
Section 2.10.....................................................................Undisclosed Liabilities. 13
Section 2.11.......................................................................................Taxes. 13
Section 2.12.......................................................................Environmental Matters. 14
Section 2.13..........................................................................Proprietary Rights. 15
Section 2.14...........................................................................Books and Records. 17
Section 2.15.....................................................................................Brokers. 17
Section 2.16.............................................................................Use of Proceeds. 17
Section 2.17............................................................Absence of Questionable Payments. 17
Section 2.18.................................................................Accuracy of Representations. 17
Section 2.19......................................................................................Assets. 18
Section 2.20...................................................................................Contracts. 18
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Section 2.21..........................................................................Product Warranties. 20
Section 2.22...................................................................................Insurance. 20
Section 2.23...............................................................Employees, Labor Matters, etc. 21
Section 2.24..................................................Employee Benefit Plans and Related Matters. 21
Section 2.25...........................................................Transactions with Related Parties. 23
Section 2.26.....................................................................Interest in Competitors. 23
Section 2.27....................................................................Territorial Restrictions. 24
Section 2.28.......................................................................Effect of Transaction. 24
Section 2.29...............................................................................Order Backlog. 24
Section 2.30.....................................................................Suppliers and Customers. 24
Section 2.31.....................................................................Antitakeover Provisions. 24
Section 2.32..........................................................................Extent of Offering. 24
Section 2.33.........................................................................Registration Rights. 24
Section 2.34...............................................................Real Property Holding Company. 25
Section 2.35................................................................No Retention Agreements, etc. 25
Section 2.36..............................................................Newbridge Networks Corporation. 25
Section 2.37.......................................................................Financial Projections. 25
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............................................. 25
Section 3.1.................................................................................Organization. 25
Section 3.2................................................................................Authorization. 25
Section 3.3........................................................................Access to Information. 25
Section 3.4..........................................................................Accredited Investor. 26
Section 3.5............................................................................Investment Intent. 26
Section 3.6..........................................................................Financial Resources. 26
Section 3.7......................................................................................Brokers. 26
Section 3.8............................................................................Non-contravention. 27
ARTICLE IV MANAGEMENT COVENANTS........................................................................ 27
Section 4.1..........................................Indemnification; Officers' and Directors' Insurance. 27
Section 4.2.........................................................................Employee Option Plan. 28
Section 4.3..........................................................................Other Option Grants. 28
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Section 4.4.........................................................Actions Requiring a Special Majority. 28
Section 4.5...................................................Indemnification Claims against the Company. 30
Section 4.6................................................................Enforcement against Purchaser. 30
Section 4.7...................................................................................Expiration. 30
ARTICLE V ADDITIONAL COVENANTS........................................................................ 30
Section 5.1........................................................................Investment Commitment. 30
Section 5.2...................................................................Public Offering Commitment. 30
Section 5.3................................................................................Reverse Split. 30
Section 5.4..............................................................................ISRA Compliance. 31
Section 5.5....................................................................Xxxx-Xxxxx-Xxxxxx Filings. 31
Section 5.6.........................................................................Public Announcements. 31
Section 5.7................................................................Rule 144 Reporting; Rule 144A. 31
Section 5.8...........................................................................Further Assurances. 32
Section 5.9.........................................................................................Debt. 32
Section 5.10..........................................................................Rule 14f-1 Mailing. 32
ARTICLE VI CLOSING DELIVERIES.......................................................................... 33
Section 6.1......................................................................Deliveries to Purchaser. 33
Section 6.2....................................................................Deliveries to the Company. 36
ARTICLE VII SURVIVAL; INDEMNIFICATION................................................................... 37
Section 7.1...................................................Survival of Representations and Warranties. 37
Section 7.2..............................................................................Indemnification. 37
Section 7.3......................................................................................Set-Off. 40
ARTICLE VIII MISCELLANEOUS............................................................................... 40
Section 8.1......................................................................................Notices. 41
Section 8.2.....................................................................................Expenses. 42
Section 8.3.......................................................Governing Law; Consent to Jurisdiction. 42
Section 8.4......................................................................Arbitration of Disputes. 42
Section 8.5....................................Assignment; Successors and Assigns; No Third Party Rights. 43
Section 8.6.................................................................................Counterparts. 43
Section 8.7..........................................................................Titles and Headings. 43
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TABLE OF CONTENTS
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Section 8.8.............................................................................Entire Agreement. 44
Section 8.9.................................................................................Severability. 44
Section 8.10......................................................................No Strict Construction. 44
Section 8.11......................................................................Company Acknowledgment. 44
Section 8.12..........................................................Stock Splits and Recapitalizations. 44
Section 8.13.................................................................Shares Subject to Agreement. 44
Section 8.14..................................................................................Amendments. 44
Section 8.15...........................................................................Extension; Waiver. 44
Section 8.16..............................................................................Future Legends. 45
ARTICLE IX DEFINITIONS................................................................................. 45
Section 9.1..........................................................................Certain Definitions. 45
Section 9.2.................................................................................Construction. 52
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LIST OF EXHIBITS
EXHIBIT A -- FORM OF SECURED PROMISSORY NOTE
EXHIBIT B -- FORM OF STOCK PLEDGE AGREEMENT
EXHIBIT C -- FORM OF COMPANY COUNSEL LEGAL OPINION
EXHIBIT D -- FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT E -- AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
EXHIBIT F -- FORM OF THE STOCKHOLDERS AGREEMENT
EXHIBIT G -- FORM OF PURCHASER SPECIAL COUNSEL LEGAL OPINION
EXHIBIT H -- FORM OF PURCHASER GENERAL COUNSEL LEGAL OPINION
LIST OF SCHEDULES
Schedule 1.5. Certain Indebtedness.
Schedule 1.6(a). Technology Transfer Option.
Schedule 2.1(d). Company's Major Stockholders.
Schedule 2.1(e). The Company's Subsidiaries.
Schedule 2.3. Non-contravention.
Schedule 2.5(a). Capitalization of the Company Immediately After the Closing.
Schedule 2.5(b). Capitalization of the Company Immediately Prior to the Closing.
Schedule 2.5(c). Agreements Containing Anti-dilution Provisions.
Schedule 2.5(d). Convertible Securities.
Schedule 2.6(a). SEC Reports.
Schedule 2.6(b). Interim Unaudited Consolidated Financial Statements.
Schedule 2.7. Absence of Certain Developments.
Schedule 2.8. Governmental Authorizations; Licenses; Etc.
Schedule 2.9(a). Litigation.
Schedule 2.10. Undisclosed Liabilities.
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Schedule 2.11(a). Tax Returns Not Timely Filed.
Schedule 2.11(b). Audited Tax Returns; Elections Pursuant to the Code.
Schedule 2.11(d). List of Tax Returns
Schedule 2.12. Environmental Matters.
Schedule 2.13(a). Material Intellectual Property
Schedule 2.13(b). Intellectual Property Subject to Encumbrance.
Schedule 2.13(c). Intellectual Property Judgments and Infringement.
Schedule 2.13(d). Payments Due to Any Governmental Authority
Schedule 2.15. Brokers.
Schedule 2.16. Use of Proceeds.
Schedule 2.19(a). Leases.
Schedule 2.19(c). Tangible Property.
Schedule 2.19(d). Encumbrances on Assets.
Schedule 2.20(a). Contracts.
Schedule 2.20(c). Default Under Contracts.
Schedule 2.20(d). Signal Agreements.
Schedule 2.21. Product Warranties and Claims.
Schedule 2.22. Insurance.
Schedule 2.23. Employees, Labor Matters, etc.
Schedule 2.24(a). Employee Benefit Plans.
Schedule 2.24(e). Compensation; Officers and Directors.
Schedule 2.24(i). Change in Employee Benefits.
Schedule 2.25. Transactions with Related Parties.
Schedule 2.26. Interest in Competitors.
Schedule 2.29. Order Backlog.
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Schedule 2.30. Suppliers and Customers.
Schedule 2.33. Registration Rights.
Schedule 2.35. No Retention Agreements, etc.
Schedule 2.36. Newbridge Networks Corporation.
Schedule 3.8. Non-contravention.
Schedule 4.2. Employee Options Plan.
Schedule 4.3. Founder Options.
Schedule 6.1(a). Good Standing Certificates of the Company.
Schedule 6.1(s). Waivers.
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PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated July 10, 2000, by and between LogiMetrics,
Inc., a Delaware corporation (the "Company"), and L-3 Communications
Corporation, a Delaware corporation (the "Purchaser"). Capitalized and other
defined terms used herein and not otherwise defined shall have the respective
meanings specified in Section 9.1.
W I T N E S S E T H:
WHEREAS, on the terms and subject to the conditions set forth herein,
the Purchaser has agreed to invest an aggregate of $15,000,000 (the "Purchase
Price") in the form of cash and a secured promissory note in the Company in
exchange for an aggregate of 93,236,794 shares of Common Stock (the "Purchaser
Shares"), par value $.01 per share, of the Company (the "Common Stock");
WHEREAS, the Purchaser Shares will constitute at the Closing at least
53.5% of the Company's outstanding Common Stock on a Fully Diluted Basis; and
WHEREAS, the proceeds of the Purchase Price will be used as set forth
on Schedule 2.16;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF COMMON STOCK
Section 1.1. Purchase and Sale of Purchaser Shares.
(a) Upon the terms and subject to the conditions of this Agreement, the
Purchaser shall acquire the Purchaser Shares on the Closing Date in exchange for
the Purchase Price to be paid in the form of (i) cash in the amount of
$8,500,000 (the "Cash Funding"), and (ii) a secured promissory note of the
Purchaser in the principal amount of $6,500,000 in substantially the form of
Exhibit A attached hereto (the "Secured Promissory Note").
(b) The Purchaser shall have the right to cancel (in whole or in part),
at the Purchaser's option, its obligation to make any payment in respect of the
Secured Promissory Note if, in the Purchaser's reasonable discretion: (i) a
breach by the Company of any representation, warranty, covenant or agreement
contained in this Agreement or any other Transaction Document results from or
has resulted in a Material Adverse Effect with respect to either (A) the Company
and its Subsidiaries, or (B) the Purchaser; or (ii) a Material Adverse Effect
has occurred or shall occur with respect to the Company and its Subsidiaries as
a result of any claim or litigation by XxxxxXXXX.xxx L.P. ("SpeedUSNY") against
the Company or any of its Subsidiaries, whether now existing or hereafter
arising.
(c) From time to time after the Closing, the Purchaser shall prepay all
or a portion of the Secured Promissory Note, such prepayment to be made within
five (5) business days after
receipt by the Purchaser of the Required Prepayment Notice, subject to the next
succeeding sentence and Section 1.1(b). Each such prepayment shall be
conditioned upon (i) the Company's requiring funds at the time of the prepayment
for the reasonable ongoing working capital requirements of the Company, and (ii)
the delivery of a notice (the "Required Prepayment Notice") from the Company to
the Purchaser to the effect of clause (i) above and setting forth the amount of
the requested prepayment. In any event, subject to the terms of the Secured
Promissory Note and Section 1.1(b), the Purchaser shall pay to the Company all
principal in respect of the Secured Promissory Note no later than the date (the
"Full Funding Date") that is the earlier to occur of (A) the consummation of the
Public Offering and (B) January 2, 2001.
(d) The Secured Promissory Note initially will be secured by a pledge
of 43.33% of the Purchaser Shares (the "Pledged Shares") pursuant to a Stock
Pledge Agreement in substantially the form of Exhibit B hereto (the "Stock
Pledge Agreement"). For every prepayment or payment by the Purchaser of a
portion of the principal amount of the Secured Promissory Note, a number of the
Pledged Shares equal to the Released Pledged Shares shall be released from the
Encumbrance of the Stock Pledge Agreement and delivered to the Purchaser. The
"Released Pledged Shares" shall mean, as of any time, the product of (A) a
fraction, the numerator of which is the amount of the prepayment of the Secured
Promissory Note being made at such time, and the denominator of which is the
original principal amount of the Secured Promissory Note, and (B) the number of
the Pledged Shares (as adjusted pursuant to Section 1.3) initially subject to
the Encumbrance of the Stock Purchase Agreement as of the Closing Date. The
Company agrees that, upon payment of the Secured Promissory Note in full, all
Purchaser Shares then subject to the Encumbrance of the Stock Pledge Agreement
shall be automatically released from the Encumbrance of the Stock Pledge
Agreement and delivered to the Purchaser.
(e) If (i) the Purchaser exercises its right under Section 1.1(b), and
(ii) it is determined by a court of competent jurisdiction in a final,
non-appealable judgment or order or by a final, non-appealable arbitration award
that the Purchaser did not in fact have the right so to cancel its obligation to
make any payment in respect of the Secured Promissory Note, then the Purchaser
shall pay to the Company the Liability Amount. The Liability Amount shall
constitute liquidated damages for loss of a bargain and not a penalty, and
(notwithstanding Article VII) shall constitute the sole and exclusive remedy of
the Company in connection with such a breach by the Purchaser and the Purchaser
shall have no other liability to the Company in respect thereof. The parties
hereto hereby acknowledge that (A) the amount of damages that would be incurred
by the Company as a result of such a breach by the Purchaser are difficult to
ascertain, and (B) the amount of liquidated damages provided for in this Section
1.1(e) are reasonable.
The "Liability Amount" shall mean, as of any time, the portion of the
Purchase Price not paid in cash by the Purchaser to the Company at such time.
Notwithstanding anything in this Agreement or any of the other
Transaction Documents to the contrary, if the Purchaser pays the Liability
Amount, then all Purchaser Shares then subject to the Encumbrance of the Stock
Pledge Agreement shall be automatically released from the Encumbrance of the
Stock Pledge Agreement and delivered to the Purchaser.
(f) If, subsequent to the Purchaser's exercise of its right under
Section 1.1(b), the Purchaser makes any payment to the Company with respect to
the Secured Promissory Note, the
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provisions of Section 1.1(e) shall not have any force and effect with respect to
the amount so paid.
Section 1.2. Closing. The closing of the transactions contemplated by
Section 1.1(a) (the "Closing") shall take place at the offices of Xxxxxxx Breed
Xxxxxx & Xxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m. on the
date of this Agreement. The time and date of the Closing is hereinafter referred
to as the "Closing Date". At the Closing, the Purchaser shall pay the Cash
Funding in immediately available funds by wire transfer to one or more U.S. bank
accounts previously designated by the Company pursuant to the Disbursement
Letter and shall deliver the Secured Promissory Note to the Company.
Section 1.3. Purchaser Share Adjustment.
(a) If, on the date that is the first business day after the 30th day
after the Closing, the number of Purchaser Shares exceeds 53.5% of the then
outstanding Common Stock on a Fully Diluted Basis, then the Purchaser and the
Company shall instruct the pledgee under the Stock Pledge Agreement to surrender
to the Company for cancellation a number of Purchaser Shares equal to the amount
of such excess.
(b) If, on the date that is the first business day after the 30th day
after the Closing, the number of Purchaser Shares is less than 53.5% of the then
outstanding Common Stock on a Fully Diluted Basis, then the Company shall issue
and deliver to the Purchaser, for no additional consideration, such number of
shares of Common Stock equal to the amount of such deficiency. If additional
shares of Common Stock are issued and delivered to the Purchaser pursuant to
this Section 1.3(b), then the Purchaser shall pledge pursuant to the Stock
Pledge Agreement a number of such additional shares so that, when aggregated
with the Pledged Shares initially pledged at the Closing, the Secured Promissory
Note will be secured by a pledge of 43.33% of the Purchaser Shares (such
percentage to be appropriately reduced to reflect any Released Pledge Shares
between the Closing Date and the date that is the first business day after the
30th day after the Closing).
(c) For purposes of this Section 1.3, the Additional Shares and the
Investment Bank Shares shall be excluded from the calculation of outstanding
Common Stock on a Fully Diluted Basis.
Section 1.4. Additional Shares.
(a) From time to time, the Purchaser shall acquire on or after January
2, 2001 (unless the Purchaser elects to acquire any Additional Shares in its
sole discretion prior to January 2, 2001) (but subject to Section 1.4(b) and to
the next succeeding sentence) an aggregate of 3,333,333 shares of Common Stock
(collectively, "Additional Shares") at a purchase price of $1.50 per share (such
number of shares and price to be appropriately adjusted to give effect to the
Reverse Stock Split or any stock split, stock combination, reorganization,
recapitalization, etc. affecting the Company's capital stock). The Purchaser's
obligation to acquire any portion of the Additional Shares shall be conditioned
upon (i) the Company's requiring funds for the reasonable ongoing working
capital requirements of the Company, and (ii) the delivery of a notice from the
Company to the Purchaser to the effect of clause (i) above and setting forth the
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amount of funds so required. The total purchase price of $5,000,000 payable for
the Additional Shares is herein called the "Additional Share Purchase Price". At
the time any Additional Shares are so purchased, the Company will issue one or
more certificates to the Purchaser representing such Additional Shares. In any
event, subject to Sections 1.4(b) and 1.4(c), the Purchaser shall purchase all
the Additional Shares no later than the date of the consummation of the Public
Offering.
(b) The Purchaser shall have the right to cancel (in whole or in part),
at the Purchaser's option, any obligation of the Purchaser to purchase
Additional Shares pursuant to Section 1.4(a), if, in the Purchaser's reasonable
discretion: (i) a breach by the Company of any representation, warranty,
covenant or agreement contained in this Agreement or any other Transaction
Document results from or results in a Material Adverse Effect with respect to
either (A) the Company and its Subsidiaries, or (B) the Purchaser; or (ii) after
the Closing Date, a Material Adverse Effect has occurred or shall occur with
respect to the Company and its Subsidiaries.
(c) Any purchase of Additional Shares pursuant to Section 1.4(a) shall
be subject to the following conditions precedent: (i) the Purchaser and the
Company shall have complied with the HSR Act to the extent applicable; (ii) the
issuance of the Additional Shares shall not have been restrained, enjoined or
otherwise prohibited by any Applicable Law, including any order, injunction,
decree or judgment of any court or other Governmental Authority; (iii) no court
or other Governmental Authority shall have determined that any Applicable Law
makes illegal the issuance or purchase of the Additional Shares, and no
proceeding with respect to the application of any such Applicable Law to such
effect shall be pending or threatened; and (iv) the Company shall have obtained
and shall have delivered to the Purchaser copies of (A) all Governmental
Approvals required to be obtained by the Company in connection with the issuance
or purchase of the Additional Shares, and (B) all Consents (including all
Consents required under any Contract) necessary to be obtained in order to
consummate the issuance and sale of the Additional Shares. Each of the Purchaser
and the Company shall use commercially reasonable efforts to satisfy the
conditions precedent set forth in this Section 1.4(c).
(d) If (i) the Purchaser exercises its right under Section 1.4(b), and
(ii) it is determined by a court of competent jurisdiction in a final,
non-appealable judgment or order or by a final, non-appealable arbitration award
that the Purchaser did not in fact have the right so to cancel its obligation to
purchase the Additional Shares, then the Purchaser shall pay to the Company the
Damage Amount. The Damage Amount shall constitute liquidated damages for loss of
a bargain and not a penalty, and (notwithstanding Article VII) shall constitute
the sole and exclusive remedy of the Company in connection with such a breach by
the Purchaser and the Purchaser shall have no other liability to the Company in
respect thereof. The parties hereto hereby acknowledge that (A) the amount of
damages that would be incurred by the Company as a result of such a breach by
the Purchaser are difficult to ascertain, and (B) the amount of liquidated
damages provided for in this Section 1.4(d) are reasonable.
The "Damage Amount" shall mean, as of any time, the portion of the
Additional Share Purchase Price not paid in cash by the Purchaser to the Company
at such time.
Notwithstanding anything in this Agreement or any of the other
Transaction Documents to the contrary, if the Purchaser pays the Damage Amount,
then the Company, simultaneously
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with such payment, will issue to the Purchaser all Additional Shares not
theretofore issued by the Company to the Purchaser.
Section 1.5. Certain Indebtedness.
(a) If at anytime, or from time to time, the Purchaser or any of its
Affiliates issues a guaranty, causes a letter of credit to be issued, enters
into a keep-well or other similar agreement, makes any payment, or otherwise
incurs a financial obligation (the "Purchaser Credit Support"), in respect of
all or any portion of certain indebtedness of the Company specified on Schedule
1.5 (including any refinancing, extension or refunding thereof) (the "Company's
Debt"), then the amount of the Purchaser Credit Support shall constitute, to the
extent of the amount of the Purchaser Credit Support, a payment to the Company
to be applied (i) first, to the principal in respect of the Secured Promissory
Note (to the extent such principal then remains unpaid), and (ii) second (to the
extent of any excess), to the Additional Share Purchase Price to purchase
Additional Shares (a "Credit Support Payment").
(b) If the Company's Debt has been paid in full and none of the
Purchaser Credit Support has been utilized or called upon, then the Credit
Support Payment pursuant to Section 1.5(a) shall be deemed not to have been
made. If, at any time, the amount of the Purchaser Credit Support shall have
been permanently reduced by reason other than the payment by or on behalf of the
Purchaser of any amount in respect of such Purchaser Credit Support, then the
Credit Support Payment pursuant to Section 1.5(a) shall be deemed not to have
been made, but only to the extent of such reduction.
(c) For the six-month period following the Closing Date, each of the
Company and the Purchaser shall use commercially reasonable efforts to
restructure the Company's Debt on terms mutually acceptable to the parties.
Section 1.6. Technology Transfer Option.
(a) The Purchaser hereby grants the Company an option (the "Technology
Option") exercisable by a vote of a majority of the Company's entire Board of
Directors (the "Board") for the transfer, without further consideration, by the
Purchaser, in connection with an imminent Public Offering, of the technology
described in Schedule 1.6(a) in existence and owned by the Purchaser at the time
of such exercise of the Technology Option (the "Technology") to the Company or
its Subsidiaries. Any such exercise of the Technology Option and transfer of the
Technology shall be subject to the following conditions precedent: (i) the
Purchaser and the Company shall have complied with the HSR Act to the extent
applicable; (ii) the transfer of any of the Technology shall not have been
restrained, enjoined or otherwise prohibited by any Applicable Law, including
any order, injunction, decree or judgment of any court or other Governmental
Authority; (iii) no court or other Governmental Authority shall have determined
that any Applicable Law makes illegal the transfer of any of the Technology, and
no proceeding with respect to the application of any such Applicable Law to such
effect shall be pending or threatened; (iv) the Purchaser shall have obtained
and shall have delivered to the Company copies of (A) all Governmental Approvals
required to be obtained by the Purchaser in connection with the transfer of any
of the Technology, and (B) all Consents necessary to be obtained in order to
consummate the transfer of the Technology; and (v) the managing underwriter of
the
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Public Offering shall have determined in writing that the transfer of the
Technology to the Company or its Subsidiaries is beneficial in connection with
the consummation of the Public Offering. Each of the Purchaser and the Company
shall use commercially reasonable efforts to satisfy the conditions precedent
set forth in this Section 1.6(a). If the Technology Option is exercised pursuant
to this Section 1.6(a), the transfer of the Technology shall be effective upon
the consummation of the Public Offering.
(b) Notwithstanding the foregoing, until the exercise of the Technology
Option pursuant to Section 1.6(a), the Company and the Existing Holders
acknowledge and agree that the Purchaser may conduct its business and utilize
the Technology in any manner as the Purchaser sees fit and at any time and from
time to time may sell, transfer, license, lease, create Encumbrances on or
otherwise dispose of (each a "Disposition") any of the Technology as it sees fit
in the ordinary course of its business (it being understood and agreed that upon
the occurrence of any Disposition, the Technology subject to such Disposition
thereafter will no longer be subject to the Technology Option).
(c) The Technology Option shall expire and this Section 1.6 shall be
nugatory and of no force and effect upon the earlier to occur of (i) the
consummation of the Public Offering and (ii) December 31, 2001.
(d) From and after the effective date of the transfer of the
Technology, the Company will (and shall cause its wholly owned Subsidiary
mm-Tech, Inc. to) pay promptly all bills referred to in Schedule 1.6(a).
(e) Notwithstanding the foregoing provisions of this Section 1.6 (but
subject to the conditions precedent set forth in Section 1.6(a)(i) through
Section 1.6(a)(ii), inclusive), at any time after the Closing and until the
exercise of the Technology Option pursuant to Section 1.6(a), the Purchaser may,
in its sole discretion, transfer all or part of the Technology to the Company.
Section 1.7. Administration Services. After the Closing, the Purchaser
may, in its sole discretion, provide administration and other services and
equipment (including team services, support services, facilities, tools and
equipment) to the Company or any of its Subsidiaries. Such services and
equipment will be billed, from time to time, at cost to the Company or its
Subsidiary. Cost will include direct labor, direct material, other direct
charges and expenses and overhead (including a corporate expense allocation
charge equal to 1.5% of the Company's consolidated sales). Cost will not include
any profit.
Section 1.8. L-3 Stock Options.
(a) At or immediately prior to the Closing, the Company shall grant
options to acquire 5,555,555 shares of Common Stock to the Purchaser (the "L-3
Stock Options"). Each L-3 Stock Option shall have an exercise price of $0.54 per
share of Common Stock (such price to be appropriately adjusted to give effect to
the Reverse Stock Split or any stock split, stock combination, reorganization,
recapitalization, etc. affecting the Company's capital stock) for an aggregate
exercise price of $3,000,000.
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(b) The L-3 Stock Options shall become exercisable by the Purchaser
upon the date that the aggregate Additional Share Purchase Price is paid (or
deemed paid) in full pursuant to Section 1.4 and/or Section 7.3.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser as of the Closing
Date as follows:
Section 2.1. Organization and Qualification; Subsidiaries.
(a) Each of the Company and its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to own
or lease its property and assets and to carry on its business as presently
conducted, and is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where the failure to be so qualified and
in good standing would have a Material Adverse Effect with respect to the
Company and its Subsidiaries.
As used herein, "Material Adverse Effect" means, as to any Person, any
event, change, occurrence or circumstance that, with or without the passage of
time, the giving of notice or both, (i) would result or could reasonably be
expected to result in a material adverse change in the business, financial
condition, operations, results of operations or prospects (financial and other)
of such Person and its Subsidiaries taken as a whole, or (ii) has materially and
adversely impaired or could reasonably be expected to materially and adversely
impair such Person's ability to perform any of its obligations hereunder or
under any other Transaction Document.
(b) The Company has made available to the Purchaser true and complete
copies of (i) the certificate of incorporation of and all amendments thereto
(whether or not filed with any Governmental Authority), and (ii) the by-laws as
currently in effect, for each of the Company and its Subsidiaries.
(c) True, complete and correct copies of minutes of all meetings of its
directors (including committees thereof) and stockholders (or written actions or
consents in lieu of meetings) (including minutes and written actions or consents
of predecessor companies) since January 1, 1994 through the Closing Date of each
of the Company and its Subsidiaries have been made available to the Purchaser.
(d) Schedule 2.1(d) sets forth, as of May 31, 2000, a true and complete
list of each of the Company's stockholders that, to the Company's best
knowledge, beneficially owns 5% or more of any class of the Company's equity
securities, listing the number and class of securities beneficially owned, to
the knowledge of the Company, by such stockholder and such stockholder's
percentage interest in the Company (determined pursuant to Section 13 of the
Exchange Act and the rules and regulations promulgated thereunder).
(e) Except as set forth on Schedule 2.1(e), the Company does not have
any Subsidiaries. The Company does not own any amount of any shares of stock of
any corporation or any equity interest in a partnership, joint venture or other
Person, and the Company does not
-7-
control or have the right (whether or not presently exercisable) to control any
other Person by means of ownership, management contract or otherwise, other than
the Subsidiaries listed on Schedule 2.1(e). Except as set forth on Schedule
2.1(e), all the issued and outstanding capital stock of each Subsidiary of the
Company listed on Schedule 2.1(e) is owned, beneficially and of record, by the
Company, and no other Person has any voting or other rights in respect of any
such Subsidiary.
Section 2.2. Authorization.
(a) The Company has the power and authority (corporate and other) to
execute and deliver this Agreement and the other Transaction Documents and to
perform its obligations hereunder and thereunder, all of which have been duly
authorized by all requisite corporate action. This Agreement and the other
Transaction Documents have been duly authorized, executed and delivered by the
Company. This Agreement and the other Transaction Documents constitute valid and
binding agreements of the Company, enforceable against the Company in accordance
with their terms.
(b) The Purchaser Shares (including the Pledged Shares) and the
Additional Shares have been duly authorized and, when issued to the Purchaser in
accordance with the terms hereof at the Closing, will be duly authorized,
validly issued, fully paid and non-assessable, free of pre-emptive, subscription
or other similar rights in favor of third persons and free and clear of all
Encumbrances (other than the Encumbrance on the Pledged Shares pursuant to the
Stock Pledge Agreement and the obligation of the Purchaser to return certain
Purchaser Shares as provided in Section 1.3).
Section 2.3. Non-contravention. Except as set forth in Schedule 2.3,
neither the negotiation, execution or delivery of this Agreement or the other
Transaction Documents by the Company nor the performance by the Company of its
obligations hereunder or thereunder has or will: (a) contravene any provision
contained in the Company's certificate of incorporation or by-laws; (b) violate
or result in a breach (with or without the lapse of time, the giving of notice
or both) of or constitute a default under (i) any contract, agreement,
commitment, indenture, mortgage, lease, pledge, note, license, permit or other
instrument or obligation, or (ii) any judgment, order, decree, law, rule or
regulation or other restriction of any Governmental Authority, in each case to
which the Company or any of its Subsidiaries is a party or by which any of them
is bound or to which any of their respective assets or properties is subject,
other than, in the case of either clause (i) or clause (ii), such violations,
breaches and defaults that would not, individually or in the aggregate, have a
Material Adverse Effect with respect to the Company and its Subsidiaries; (c)
result in the creation or imposition of any Encumbrance on any of the assets or
properties of the Company or any of its Subsidiaries, other than Encumbrances
that would not, individually or in the aggregate, have a Material Adverse Effect
with respect to the Company and its Subsidiaries; or (d) result in the
acceleration of, or permit any Person to accelerate or declare due and payable
prior to its stated maturity, any material obligation of the Company or any of
its Subsidiaries. No Person other than the Company's officers and counsel have
been authorized to act for or on behalf of the Company or any of its
Subsidiaries, as its agent, representative or otherwise, in respect of any of
the negotiations that have resulted in this Agreement or in respect of the
execution or delivery of this Agreement or the other Transaction Documents.
-8-
Section 2.4. No Consents. No notice to, filing with, or authorization,
registration, consent or approval of any Governmental Authority or other Person
is necessary for the execution, delivery or performance of this Agreement or the
other Transaction Documents by the Company or the consummation of the
transactions contemplated hereby or thereby by the Company, except for such
consents and approvals (a) as have previously been obtained and are in full
force and effect, and (b) as are required under the HSR Act and the ISRA.
Assuming that the representations and warranties contained in Sections 3.4 and
3.5 are true and correct in all respects, the offer and sale of the Purchaser
Shares, the Additional Shares, the L-3 Stock Options and the shares of Common
Stock issued or issuable upon the exercise of the L-3 Stock Options as
contemplated hereby does not require registration under the provisions of the
Securities Act of 1933, as amended (the "Securities Act"), or any applicable
state securities or "blue sky" laws.
Section 2.5. Capitalization of the Company.
(a) On the date hereof, the Company's authorized capital stock consists
solely of: (i) 350,000,000 authorized shares of Common Stock, of which
30,361,265 shares are issued and outstanding; and (ii) 5,000,000 shares of
Preferred Stock, par value $.01 per share (the "Preferred Stock"), of which 25
shares, designated as Series A 12% Cumulative Convertible Redeemable Preferred
Stock, stated value $50,000 per share, are issued and outstanding. In addition,
(A) no shares of the Company's capital stock are held as treasury shares, and
(B) 54,309,052 shares of Common Stock are reserved for issuance upon the
exercise, exchange or conversion of outstanding Convertible Securities.
Immediately after the Closing, the capitalization of the Company will be as set
forth on Schedule 2.5(a).
(b) Schedule 2.5(b) sets forth the outstanding Common Stock on a Fully
Diluted Basis immediately prior to the Closing. Except as set forth on Schedule
2.5(b), the Company does not have (i) any shares of Common Stock or Preferred
Stock reserved for issuance, or (ii) any outstanding Convertible Securities, or
other agreements or commitments obligating the Company to issue, grant, award,
purchase, acquire, sell or transfer any shares of the Company's Common Stock, or
other securities of the Company (including any agreement or commitment
obligating the Company to enter into any employee compensation arrangement based
on any valuation or transaction price of, or change of ownership in, shares of
its capital stock). Other than as set forth on Schedule 2.5(b), there are no
voting trusts, proxies or other agreements or understandings to which the
Company is a party with respect to the voting of Common Stock of the Company.
Upon issuance, the Purchaser Shares will constitute at least 53.5% of the
Company's total issued and outstanding Common Stock, on a Fully Diluted Basis.
There are no outstanding obligations of the Company to repurchase, redeem or
otherwise acquire any of its securities. There are no pre-emptive or other
subscription rights (legal, contractual or otherwise) with respect to any shares
of the Company's capital stock or any Convertible Securities. All of the issued
and outstanding shares of capital stock of the Company have been duly authorized
and are validly issued, fully paid and nonassessable. All of the Company's
outstanding securities were offered, issued, sold and delivered by the Company
in compliance in all material respects with all applicable state and federal
securities laws. None of such securities were issued or sold, and the Purchaser
Shares, the Additional Shares, the L-3 Stock Options and the shares of Common
Stock issued or issuable upon the exercise of the L-3 Stock Options will not be
issued or sold, in violation of any pre-emptive or subscription rights (legal,
contractual or otherwise) of any Person.
-9-
(c) Except as set forth in Schedule 2.5(c), there are no agreements or
instruments between the Company and any Person containing anti-dilution or other
similar provisions in respect of the issuance or sale of any shares of Common
Stock or other securities of the Company.
(d) Schedule 2.5(d) sets forth a list of the holders of Convertible
Securities, together with the number of Convertible Securities held by such
holder (including the class or type of Convertible Security and the number of
shares of Common Stock into or for which such Convertible Security is
exerciseable, convertible or exchangeable), immediately prior to the Closing.
Section 2.6. SEC Reports, etc.
(a) The Company has made available to the Purchaser true and complete
copies of each report, schedule and registration statement, including the
exhibits thereto, filed by the Company with the Securities and Exchange
Commission (the "Commission") since June 30, 1998, which, except as set forth in
Schedule 2.6(a), are all the documents that the Company was required to file
with the Commission since that date and through the date hereof (all of such
documents as amended as of the date hereof collectively, the "SEC Documents").
As of their respective dates, the SEC Documents (as amended as of the date
hereof) complied as to form in all material respects with the requirements of
the Securities Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as the case may be, and the rules and regulations of the
Commission thereunder. As of their respective dates, except to the extent that
information contained therein has been revised or superseded by a later filed
SEC Document, none of the SEC Documents 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. The consolidated
financial statements of the Company included in the SEC Documents comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the Commission with respect thereto, are in
accordance with and accurately reflect, in all material respects, all entries
contained in the books and records of the Company and its Subsidiaries, have
been prepared in accordance with GAAP (except as may be indicated in the notes
thereto or, in the case of the unaudited statements, as permitted by Form
10-QSB) and fairly present, in all material respects, the financial position of
the Company as of the dates thereof and the results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited financial
statements, to normal recurring audit adjustments).
(b) The unaudited consolidated financial statements of the Company for
the fiscal year ended June 30, 1999 and for the 11 months ended May 31, 2000
(copies of which are attached as Schedule 2.6(b) hereto) comply as to form in
all material respects with applicable accounting requirements, are in accordance
with and accurately reflect, in all material respects, all entries contained in
the books and records of the Company and its Subsidiaries, have been prepared in
accordance with GAAP (except that there are no notes thereto) and fairly
present, in all material respects, the financial position of the Company as of
the dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited financial statements, to
normal recurring audit adjustments); provided, however, that such financial
statements do not include (i) the operations of the New York Business (as
defined in the
-10-
Signal Agreements), (ii) any charges or adjustments required as a result of the
Signal Agreements or the transactions contemplated thereby, or (iii) any charges
or adjustments resulting from the transfer by Xxxxxxx X. Brand of 3,000,000
shares to certain lenders in connection with the Legacy Group I Loans.
Section 2.7. Absence of Certain Developments. Except as disclosed in
the SEC Documents or in Schedule 2.7, since June 30, 1998, there has not been
any Material Adverse Effect with respect to the Company and its Subsidiaries,
other than any Material Adverse Effect arising out of or resulting from economic
conditions affecting the economy as a whole and conditions from capital markets
generally. Except as disclosed in the SEC Documents or in Schedule 2.7, since
June 30, 1998, the Company has conducted its business in the ordinary and usual
course consistent with past practices. Except as set forth in the SEC Documents
or in Schedule 2.7 or as expressly contemplated by this Agreement, since June
30, 1998, the Company (including its Subsidiaries) has not:
(a) incurred, assumed, guaranteed or discharged any debt, claim,
commitment, obligation or liability, absolute, accrued, contingent or otherwise,
whether due or to become due, or any indebtedness (including any Debt), except
in the ordinary course of business consistent (in amount and kind) with past
practice;
(b) mortgaged, pledged or subjected to any other Encumbrance, any
property, business or assets, tangible or intangible (other than Permitted
Encumbrances);
(c) sold, transferred, leased to others or otherwise disposed of any
assets, except for Inventories of the Company sold in the ordinary course of
business consistent (in amount and kind) with past practice, or canceled or
compromised any debt, claim, commitment, liability or obligation, or waived or
released any right of substantial value;
(d) received any notice of termination of any material Contract;
(e) suffered any damage, destruction or loss (whether or not covered by
insurance), in any case or in the aggregate, in excess of $50,000;
(f) transferred or granted any rights under, or entered into any
settlement regarding the breach, misappropriation, infringement or violation of,
any Intellectual Property, or modified any existing rights with respect thereto;
(g) made any change in the rate of compensation, commission, bonus or
other direct or indirect remuneration payable, or paid or agreed or orally
promised to pay, conditionally or otherwise, any bonus, incentive, retention or
other compensation, retirement, welfare, fringe or severance benefit or vacation
pay, to or in respect of (i) any employee of the Company whose annual
compensation exceeds $40,000, or (ii) any distributor or agent of the Company;
(h) made any change in the accounting or auditing methods, practices or
principles of the Company;
-11-
(i) encountered any labor union organizing activity, had any actual or
threatened employee strikes, work stoppages, slowdowns or lockouts, or had any
material change in its relations with its employees, distributors, agents,
customers or suppliers;
(j) entered into any transaction, contract, arrangement, order,
license, lease, permit, instrument, agreement or commitment other than in the
ordinary course of business consistent (in amount and kind) with past practice,
or paid or agreed to pay any legal, accounting, brokerage, finder's fee, Taxes
or other expenses in connection with, or incurred any severance pay obligations
by reason of, this Agreement, the other Transaction Documents or the
transactions contemplated hereby or thereby;
(k) made any grant of credit to any customer or distributor other than
in the ordinary course of business consistent with past practice;
(l) amended its certificate of incorporation (other than the
Certificate of Amendment) or by-laws, or merged with or into or consolidated
with any other Person, or subdivided, combined or in any way reclassified any
shares of its capital stock, or changed or agreed to change in any manner the
rights of its outstanding capital stock or the character of its business;
(m) made any declaration of, or set aside or paid, any dividend or
other distribution (whether in cash, stock or other property) with respect to
the capital stock of the Company, or issued, pledged or sold any shares of
capital stock of the Company, or any other Convertible Securities (or entered
into any agreement, arrangement or other understanding to do the same) or
directly or indirectly purchased, redeemed, retired or otherwise acquired any
shares of capital stock of the Company or other Convertible Securities (or
entered into any agreement, arrangement or other understanding to do the same);
(n) made, given or granted any bid or proposal, or any customer option
relating to any Contract, (i) involving an amount in excess of $50,000 (or
amended, supplemented or terminated any existing bid or proposal, or any
existing customer option relating to any Contract, involving an amount in excess
of $50,000), (ii) involving a loss to the Company, or (iii) not in the ordinary
course of business, consistent with past practice; or
(o) taken any action or omitted to take any action that has resulted or
could reasonably be expected to result in the occurrence of any of the
foregoing.
Section 2.8. Governmental Authorizations; Licenses; Etc. Except as
disclosed in Schedule 2.8, the business of each of the Company and its
Subsidiaries has been operated in compliance with Applicable Laws (excluding
Environmental Laws which are specifically covered in Section 2.12), except for
violations which would not, individually or in the aggregate, have a Material
Adverse Effect with respect to the Company and its Subsidiaries. Except as
disclosed in Schedule 2.8, each of the Company and its Subsidiaries has all
permits, licenses, approvals, certificates and other authorizations, and has
made all notifications, registrations, certifications and filings with all
Governmental Authorities, necessary or advisable for the operation of their
respective businesses as currently conducted, except for where the failure to
possess such permits, licenses, approvals, certificates or authorizations or to
make such notifications, registrations, certifications and filings would not,
individually or in the aggregate,
-12-
have a Material Adverse Effect with respect to the Company and its Subsidiaries.
Except as disclosed in Schedule 2.8, there is no action, lawsuit, claim,
investigation, case or proceeding pending or, to the Company's best knowledge,
threatened by any Governmental Authority with respect to: (a) any violation or
alleged violation by the Company, any of its Subsidiaries or any of their
respective Affiliates of any Applicable Law; or (b) any failure or alleged
failure by the Company, any of its Subsidiaries or any of their respective
Affiliates to have any permit, license, approval, certification or other
authorization required in connection with the operation of its business.
Section 2.9. Litigation.
(a) Except as set forth in Schedule 2.9(a) or disclosed in the SEC
Documents, there are no lawsuits, actions, proceedings, claims, orders or
investigations pending or, to the Company's best knowledge, threatened against
the Company or any of its Subsidiaries (i) relating to the Company, any of its
Subsidiaries, the business, financial condition, assets, liabilities,
operations, results of operations or prospects (financial and other) of the
Company or any of its Subsidiaries, or any product alleged to have been
manufactured or sold by any of them, (ii) seeking to enjoin the transactions
contemplated hereby, or (iii) which, individually or in the aggregate, have
resulted or could reasonably be expected to have a Material Adverse Effect with
respect to the Company and its Subsidiaries. Except as set forth in Schedule
2.9(a), there are no judgments unsatisfied against the Company or any of its
Subsidiaries or consent decrees or injunctions to which any of them is subject.
(b) The Company has meritorious defenses to claims made by SpeedUSNY
against the Company. In any event, the Company believes that the outcome of the
litigation between SpeedUSNY and the Company and any related claims will not
have a Material Adverse Effect with respect to the Company and its Subsidiaries.
Section 2.10. Undisclosed Liabilities. Except as set forth in Schedule
2.10 and Schedule 2.20(d), other than those reflected as liabilities in the
financial statements included in (i) the Company's Annual Report on Form 10-KSB
for the fiscal year ended June 30, 1998 (the "1998 Form 10-KSB"), and (ii) the
Company's Quarterly Reports on Form 10-QSB for the fiscal quarters ended
September 30, 1998, December 31, 1998 and March 31, 1999 (collectively, the
"Financial Statements"), there are no material liabilities of the Company or any
of its Subsidiaries of any kind or nature whatsoever, whether known or unknown,
absolute, accrued, contingent or otherwise, or whether due or to become due,
other than liabilities incurred in the ordinary course of business consistent
with past practices since March 31, 1999.
Section 2.11. Taxes.
(a) Except as disclosed in Schedule 2.11(a), all federal, state,
county, local and foreign Tax Returns and reports of the Company and any of its
Subsidiaries required to be filed are complete in all material respects and have
been duly filed. Except as disclosed in Schedule 2.11(a), all federal, state,
county, local, foreign and any other Taxes (including all income, withholding
and employment Taxes), assessments (including interest and penalties), fees and
other governmental charges owed by the Company or any of its Subsidiaries have
been paid or duly provided for in accordance with GAAP in the Company's
financial statements, or are being
-13-
contested in good faith by appropriate proceedings as previously disclosed to
the Purchaser in writing and adequate reserves therefor have been established
pursuant to GAAP, or have arisen after the date hereof in the ordinary course of
business and are not yet due and payable.
(b) The provisions for Taxes listed on the balance sheets included in
the Financial Statements are adequate under GAAP to reflect the accrued
liability in respect of all accrued and unpaid federal, state, local and foreign
Taxes of the Company, whether or not assessed or disputed as of the respective
dates of such balance sheets. There are in effect no waivers of applicable
statutes of limitations with respect to Taxes for any year. Other than as set
forth on Schedule 2.11(b), since January 1, 1994, no Tax Returns of the Company
are currently under audit or have been audited by taxing authorities. Other than
as set forth on Schedule 2.11(b), the Company has not elected pursuant to the
Code to be treated as a collapsible corporation pursuant to Section 341(f) of
the Code, nor has it made any other elections pursuant to the Code (other than
elections that relate solely to methods of accounting, depreciation or
amortization or elections made in the ordinary course of business and consistent
with past practice) that would have a Material Adverse Effect with respect to
the Company and its Subsidiaries.
(c) The Company has withheld all required amounts in respect of Taxes
from its employees, agents, contractors and nonresidents and, to the extent
required, has remitted such amounts to the proper agencies, except where failure
to withhold and remit such amounts would not be material.
(d) Neither the Company nor any director or officer (or employee
responsible for Tax matters) of the Company has received written notice from any
taxing authority of assessments of additional Taxes for any period for which Tax
Returns have been filed other than those additional Taxes that have been paid or
duly provided for in accordance with GAAP in the Company's financial statements.
There is no outstanding dispute or claim concerning any Tax liability of the
Company claimed or raised by any Governmental Authority. Schedule 2.11(d) hereto
lists all federal, state, local and foreign income Tax Returns filed with
respect to the Company for taxable periods since June 30, 1998, indicates those
Tax Returns that have been audited, and indicates those Tax Returns that
currently are the subject of audit. The Company has delivered to the Purchaser
correct and complete copies of all federal, state, local and foreign income Tax
Returns, examination reports, and statements of deficiencies assessed against or
agreed to by the Company since June 30, 1998.
(e) The Company is not a "foreign person" within the meaning of Section
1445(b)(2) of the Code.
Section 2.12. Environmental Matters. Except as disclosed in Schedule
2.12, (a) the business of each of the Company and its Subsidiaries is being
conducted in compliance with all applicable Environmental Laws, except where the
failure to be in such compliance would not have a Material Adverse Effect with
respect to the Company and its Subsidiaries, (b) the real property currently or
formerly owned or operated by the Company or its Subsidiaries (including soil,
groundwater or surface water on or under the properties and buildings thereon)
(the "Affected Property") does not contain any Regulated Substance other than as
permitted under applicable Environmental Laws, (c) neither the Company nor any
of its Subsidiaries has received any notice from any Person (including any
Governmental Authority) that the Company or any of
-14-
its Subsidiaries may be a "potentially responsible party" (as such term is
defined under the Comprehensive Environmental Response, Compensation and Control
Act, 42 U.S.C. 'SS'9601, et seq.) in connection with any waste disposal site
or facility used by the Company or its Subsidiaries, (d) the Company or any of
its Subsidiaries and the Affected Property are not presently subject to a suit
or judgment arising under any Environmental Law, and (e) none of the Affected
Property contains asbestos, lead paint or formaldehyde; provided, however, that
the representations and warranties of the Company set forth in clauses (b) and
(e) are limited to the best knowledge of the Company in the case of actions and
omissions of Persons other than the Company and its Subsidiaries.
As used herein, "Environmental Laws" means any federal, state and local
law, statute, ordinance, rule, regulation, license, permit, authorization,
approval, consent, court order, judgment, decree, injunction, code, requirement
or agreement with any governmental authority, (A) relating to pollution (or the
cleanup thereof or the filing of information with respect thereto), human health
or the protection of air, surface water, ground water, drinking water supply,
land (including land surface or subsurface), plant and animal life or any other
natural resource, or (B) concerning exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production or disposal of Regulated Substances, in each case as amended and as
now or hereafter in effect. The term "Environmental Law" includes, without
limitation, (1) the Comprehensive Environmental Response Compensation and
Liability Act of 1980, the Water Pollution Control Act, the Clean Air Act, the
Clean Water Act, the Solid Waste Disposal Act (including the Resource
Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste
Amendments of 1984), the Toxic Substances Control Act, the Insecticide,
Fungicide and Rodenticide Act, the Occupational Safety and Health Act of 1970,
each as amended and as now or hereafter in effect, and (2) any common law or
equitable doctrine (including injunctive relief and tort doctrines such as
negligence, nuisance, trespass and strict liability) that may impose liability
or obligations for injuries or damages due to or threatened as a result of the
presence of, exposure to, or ingestion of, any Regulated Substance.
As used herein, "Regulated Substances" means pollutants, contaminants,
hazardous or toxic substances, compounds or related materials or chemicals,
hazardous materials, hazardous waste, flammable explosives, radon, radioactive
materials, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum and petroleum products (including waste petroleum and
petroleum products) as defined in applicable Environmental Laws.
Section 2.13. Proprietary Rights.
(a) The Company and its Subsidiaries own all right, title and interest
in, to and under, or the Company and its Subsidiaries have valid licenses to
use, the material Intellectual Property used in their businesses or covering any
aspect of their businesses. Schedule 2.13(a) sets forth a list of all material
Intellectual Property identified in any prior audit of such Intellectual
Property and all trademarks, service marks, trade names, patents, patent
applications, copyright registrations, copyright applications, trademark
applications, and trademark registrations owned by the Company or its
Subsidiaries or which are used in or cover any aspect of their businesses. All
such Intellectual Property that is used pursuant to valid licenses are not
presently terminable due to any breach or noncompliance by the Company or any of
its Subsidiaries, as the case may be, and have not been, and could not
reasonably be expected to be, materially affected by the
-15-
transactions contemplated hereunder or under any other Transaction Document. No
Intellectual Property used in or covering any aspect of the businesses of the
Company or its Subsidiaries is owned or controlled (in whole or in part) by any
of their respective Affiliates. Except as set forth in Schedule 2.13(b), no
other Person has any right, title or interest in, to or under any of the
Intellectual Property owned by the Company or any of its Subsidiaries. Schedule
2.13(a) indicates which of the Company's and its Subsidiaries' material
Intellectual Property is owned by the Company or any of its Subsidiaries and
which of the Company's and its Subsidiaries' material Intellectual Property is
covered by a license. All granted and issued patents, copyright registrations,
and registered trademarks and service marks listed on Schedule 2.13(a) and all
copyrights held by the Company and its Subsidiaries are valid, enforceable and
subsisting. The Company and its Subsidiaries have the exclusive right to file,
prosecute and maintain all applications and registrations with respect to their
respective Intellectual Property.
(b) Except as set forth in Schedule 2.13(b), none of the material
Intellectual Property owned by the Company and its Subsidiaries is subject to
any Encumbrance in favor of any third party. No claims with respect to any
Intellectual Property have been asserted or, to the Company's knowledge,
threatened by any Person (i) against the Company or any of its Subsidiaries, or
(ii) to the Company's knowledge, against any other Person based on use of any of
the Company's or any of its Subsidiaries' products, technology or Intellectual
Property. No use of any of the Company's or any of its Subsidiaries' products,
technology or Intellectual Property by any Person (including the Company or any
of its Subsidiaries) in accordance with the specifications and other materials
furnished by the Company or any of its Subsidiaries constitutes or has
constituted an unauthorized use, infringement, misappropriation or other
violation of the Intellectual Property of any other Person. Without limiting the
generality of the foregoing and except as set forth in Schedule 2.13(b), since
January 1, 1994, no Person ever employed or otherwise engaged by the Company or
any of its Subsidiaries has asserted or, to the Company's best knowledge, has
threatened any claim against the Company or any of its Subsidiaries, as the case
may be, relating to any Intellectual Property. To the best knowledge of the
Company, there has not been, nor is there presently, any unauthorized use,
infringement, misappropriation or violation of any of the Company's or its
Subsidiaries' Intellectual Property by any Person. Except as set forth in
Schedule 2.13(b), each of the Company and its Subsidiaries has the full right to
possess, use, copy, distribute, display, transfer and license all Intellectual
Property used in its business.
(c) Except as set forth in Schedule 2.20(c), no Intellectual Property
of the Company or any of its Subsidiaries is subject to any outstanding order,
award, decision, injunction, judgment, decree, stipulation or agreement in any
manner restricting the transfer, use, enforcement or licensing thereof by the
Company or any of its Subsidiaries, as the case may be. Except as set forth in
Schedule 2.13(c), none of the Company and any of its Subsidiaries has entered
into any agreement to indemnify any other Person against any charge of
infringement of any Intellectual Property. None of the Company and any of its
Subsidiaries has entered into any agreement granting any third party the right
to bring infringement actions with respect to, or otherwise to enforce rights
with respect to, any of the Company's or any of its Subsidiaries' Intellectual
Property.
(d) Except as set forth in Schedule 2.13(d), the Company and its
Subsidiaries have paid all fees, annuities and all other payments which have
heretofore become due to any
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Governmental Authority with respect to their respective Intellectual Property
that is registered and has taken all steps reasonable and necessary to prosecute
and maintain the same.
(e) No computer programs or software (including source code, object
code, data and databases) have been supplied by the Company or any of its
Subsidiaries to any Person except pursuant to a binding license prohibiting
further distribution and disclosure.
(f) No current or former employee, independent contractor or consultant
has any interest in any Intellectual Property of the Company or any of its
Subsidiaries.
(g) The Intellectual Property owned by or validly licensed to mmTech,
Inc. includes all Intellectual Property required for the continued conduct of
its business after the Closing as such business is currently conducted.
Section 2.14. Books and Records. The stock records of each of the
Company and its Subsidiaries fairly and accurately reflects the record ownership
of all of the outstanding shares of the capital stock of the Company or such
Subsidiary, as the case may be. The other books and records of the Company and
its Subsidiaries, including financial records and books of account, are complete
and accurate in all material respects and have been maintained in accordance
with GAAP (to the extent GAAP is applicable) and with sound business practices.
Section 2.15. Brokers. Except as set forth on Schedule 2.15, no Person
is or will be entitled to a broker's, finder's, investment banker's, financial
adviser's or similar fee from the Company in connection with this Agreement or
any of the transactions contemplated hereby. The Company is responsible for, and
will pay, any fee referred to on Schedule 2.15.
Section 2.16. Use of Proceeds.
(a) The Company will use the net proceeds of the sale of the Purchaser
Shares (the "Proceeds") as set forth on Schedule 2.16.
(b) The Company will deposit the Proceeds immediately upon receipt
thereof in a bank account (the "Bank Account") which will require the signature
of the President of the Company or another officer authorized by the President
of the Company for any withdrawals, wiring or transfer of funds in excess of
$5,000.
Section 2.17. Absence of Questionable Payments. Neither the Company,
nor any of its Subsidiaries nor any of their respective directors, officers,
employees and Affiliates, nor, to the best knowledge of the Company, any of the
agents, representatives or other Persons acting on behalf of any of the
foregoing Persons, has: (a) used any corporate or other funds for unlawful
contributions, payments, gifts or entertainment, or made any unlawful
expenditures relating to political activities to government officials or others;
or (b) accepted or received any unlawful contributions, payments, gifts or
expenditures.
Section 2.18. Accuracy of Representations. No representation or
warranty made by the Company in this Agreement or any document delivered, or to
be delivered, by or on behalf of the Company pursuant hereto contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading.
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Section 2.19. Assets.
(a) Except as stated in Schedule 2.19(a), (i) the Leases are in full
force and effect and constitute legal and binding obligations of the Company
and, to the best knowledge of the Company, the other parties thereto,
enforceable according to their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and by equitable principles, including those
limiting the availability of specific performance, injunctive relief and other
equitable remedies and those providing for equitable defenses, (ii) neither the
Company nor any of its Subsidiaries is in material default under any of the
Leases, and (iii) to the best knowledge of the Company or any of its
Subsidiaries, no other party to any of the Leases is in material default
thereunder, and there exist no conditions which, with notice or lapse of time,
or both, would constitute a material default under any of the Leases.
(b) There is no real property owned by the Company and used in the
business of the Company.
(c) Except as set forth on Schedule 2.19(c), the buildings, facilities,
furniture, leasehold improvements, any related capitalized items and other
tangible property material to the business or operations of the Company (the
"Tangible Property") are in good operating condition and repair (ordinary wear
and tear excepted), are suitable for their current use and are currently in use
by the Company in the operation of its business in the ordinary course.
(d) Except as set forth on Schedule 2.19(d), the Company has good and
valid title to or valid leasehold interest in all of its assets and interests in
assets, whether real, personal, mixed, tangible, and intangible, which
constitute all the assets and interests in assets that are used in the business
of the Company. All the assets and interests in assets of the Company are free
and clear of all Encumbrances, easements, rights of way, covenants, conditions
or restrictions, except (i) those Encumbrances disclosed in Schedule 2.19(d),
(ii) Encumbrances for current Taxes not yet due and payable, (iii) matters that,
individually or in the aggregate, are not substantial in amount and do not
materially detract from or interfere with the present or intended use of any of
these assets, and (iv) purchase money security interests securing only the
equipment financed by the seller thereof (the items described in clauses (i),
(ii), (iii) and (iv) above are herein sometimes called "Permitted
Encumbrances").
Section 2.20. Contracts.
(a) Schedule 2.20(a), together with the Exhibits filed as part of the
1998 Form 10-KSB, contains a true, complete and correct list of all agreements,
contracts, commitments, orders, licenses, leases, and other instruments and
arrangements (whether written or oral) (the "Contracts") of the types described
below to which the Company (including its Subsidiaries) is a party or by which
it or any of its assets is bound:
(i) leases (including the Leases covering real property leased
by the Company), and material licenses, permits, franchises, insurance
policies, Governmental Approvals and other contracts concerning or
relating to the real property leased by the Company;
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(ii) employment, consulting, agency, collective bargaining or
other similar contracts, agreements, and other instruments and
arrangements relating to or for the benefit of employees, sales
representatives, distributors, dealers, agents, or (if material)
independent contractors;
(iii) loan agreements, indentures, letters of credit,
mortgages, security agreements, pledge agreements, deeds of trust,
bonds, notes, guarantees, and other agreements and instruments relating
to the borrowing of money or obtaining of or extension of credit;
(iv) licenses, licensing arrangements and other contracts
providing in whole or in part for the use of, or limiting the use of,
any Intellectual Property (other than licenses relating to
off-the-shelf commercially available software (e.g., Microsoft
Windows));
(v) brokerage or finder's agreements;
(vi) joint venture, partnership and similar contracts
involving a sharing of profits or expenses (including but not limited
to joint research and development and joint marketing contracts);
(vii) asset purchase agreements, stock purchase agreements and
other acquisition or divestiture agreements, including any agreements
relating to the sale, lease or disposal of any assets, capital stock,
Convertible Securities or other securities of the Company or any of its
Subsidiaries for consideration in excess of $50,000 (other than sales
of inventory in the ordinary course of business consistent with past
practice) or involving continuing indemnity or other obligations;
(viii) any contract with respect to which the aggregate amount
that could reasonably be expected to be paid or received thereunder in
the future exceeds $50,000 per annum;
(ix) any material sales agency, representative, marketing or
distributorship agreements;
(x) purchase commitments for inventory items or supplies that,
together with amounts on hand, constitute in excess of six months
normal usage;
(xi) any agreement, understanding, contract or commitment
(written or oral) with (A) any employee, agent, consultant,
distributor, dealer or franchisee other than those involving in the
aggregate consideration or other expenditure of less than $50,000, or
(B) any Affiliate;
(xii) any guarantee of the payment or performance of any
Person or any agreement to indemnify any Person, or act as a surety, or
other agreement to be contingently or secondarily liable for the
obligations of any Person other than (A) the endorsement of checks in
the ordinary course of business, and (B) guarantees or agreements which
in the aggregate do not exceed $50,000;
-19-
(xiii) any outstanding bid or proposal or any outstanding
customer option relating to any contract or agreement in excess of
$50,000;
(xiv) any agreement, contract, commitment or understanding
(written or oral) with Signal Technology Corporation, a Delaware
corporation, or any of its Affiliates (individually and collectively,
"Signal"); and
(xv) any other contracts, agreements or commitments that are
material to the Company or any of its Subsidiaries or any of their
businesses.
(b) The Company has made available to the Purchaser true, complete and
correct copies of all written Contracts, together with all amendments thereto,
set forth in Schedule 2.20(a). The Company has furnished the Purchaser with a
true, complete and correct summary of all oral Contracts listed on Schedule
2.20(a).
(c) Except as set forth in Schedule 2.20(c), there does not exist under
any Contract, any event of default or event or condition that, after notice or
lapse of time or both, would constitute a violation, breach or event of default
thereunder by any party to any of the Contracts except for such events or
conditions that would not, individually and in the aggregate, have a Material
Adverse Effect with respect to the Company and Subsidiaries. Except as set forth
in Schedule 2.20(c), each Contract (A) is in full force and effect, and (B) is a
legal, valid, binding and enforceable obligation of the Company and, to the best
knowledge of the Company, the other parties thereto, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally and by equitable principles,
including those limiting the availability of specific performance, injunctive
relief and other equitable remedies and those providing for equitable defenses.
Except as set forth in Schedule 2.20(c), no Consent of any third party is
required under any Contract as a result of or in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby. Except as set forth in Schedule 2.20(c), no
outstanding bid or proposal (or series of related bids or proposals) was bid, or
when accepted would be made, at a loss.
(d) True, correct and complete copies of all agreements between the
Company or any of its Subsidiaries (on the one hand), and Signal or any of its
Affiliates (on the other hand) are included as Schedule 2.20(d) (the "Signal
Agreements").
(e) The consulting agreement, dated December 20, 1995, among the
Company, Xxxxxx, Xxxxx & Co. L.L.C. and SFM Group, Ltd. has been terminated and
is of no force and effect.
Section 2.21. Product Warranties. Schedule 2.21 sets forth a list of
all pending or, to the best knowledge of the Company, threatened warranty claims
in excess of $50,000.
Section 2.22. Insurance. Schedule 2.22 contains a true, complete and
correct list of all insurance policies, (including directors' and officers'
liability insurance) presently maintained by the Company or any of its
Subsidiaries or in which the Company or any of its Subsidiaries has any
interest; and no notice of cancellation, termination or reduction of coverage,
and no notice of intention to cancel, terminate or reduce coverage has been
received. The Company has given to the Purchaser access to true, complete and
correct copies of all such policies, together with all
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riders and amendments thereto. Such policies are in full force and effect, and
all premiums due thereon have been paid. The Company does not own or have any
interest in any split-dollar insurance policies.
Section 2.23. Employees, Labor Matters, etc.
(a) Except as set forth in the Exhibits filed as part of the 1998 Form
10-KSB or on Schedule 2.23, the Company does not have employment contracts with
any of its employees or any collective bargaining agreements covering any of its
employees, nor, to the best knowledge of the Company, has the Company been
subject to any material labor organization activity. There are no material
controversies or labor troubles pending or, to the best knowledge of the
Company, threatened, between the Company and any of its employees. The Company
has complied with all applicable federal and state laws and regulations
respecting employment and employment practices, terms and conditions of
employment, wages and hours and other laws related to employment except where
the failure to so comply would not, individually or in the aggregate, have a
Material Adverse Effect with respect to the Company and its Subsidiaries. There
are no overdue arrears in the payments of wages, withholding or social security
taxes, unemployment insurance premiums or other similar obligations. No employee
or consultant of the Company, the loss of whose services would have a Material
Adverse Effect with respect to the Company and its Subsidiaries, has within the
prior six months given notice to the Company that he or she intends to leave the
employ of the Company or is considering doing so, or is being terminated.
(b) Since January 1, 1998, there has been no reduction in work force,
plant closing or layoff, which alone or in combination would give rise to any
liability or obligation to the Company or any of its Subsidiaries under or
relating to the WARN Act.
Section 2.24. Employee Benefit Plans and Related Matters.
(a) Schedule 2.24(a) lists each pension, retirement, profit-sharing,
deferred compensation, bonus, phantom stock, restricted stock plan, stock option
plan, stock purchase plan, deferred compensation arrangement, other incentive
plan, severance pay plan or policy, supplemental executive retirement plan or
policy, or other employee benefit program, arrangement, agreement or
understanding, or medical, vision, dental or other health plan, or life
insurance or disability plan, or any other employee benefit plan, including any
"employee benefit plan" as defined in Section 3(3) of ERISA, to which the
Company contributes or is a party or is bound and under which it may have
liability and under which employees or former employees of the Company (or their
beneficiaries) are eligible to participate or derive a benefit ("Employee
Benefit Plans"). For purposes of this Section 2.24, any reference to the term
"Company" shall be deemed to refer also to any entity which is under common
control or affiliated with the Company within the meaning of Section 4001 of
ERISA, and the rules and regulations promulgated thereunder and/or Sections
414(b), (c) (m) or (o) of the Code and the rules and regulations promulgated
thereunder. The Company has made available to the Purchaser true, correct and
complete copies of all documents, summary plan descriptions, insurance
contracts, third party administration contracts and all other documentation
created to embody all Employee Benefit Plans, plus descriptions of any Employee
Benefit Plans that have not been reduced to writing.
-21-
(b) Except for required contributions or benefit accruals for the
current plan year, no liability has been or is expected to be incurred by the
Company under or pursuant to the Code or Title I or IV of ERISA or the penalty,
excise tax or joint and several liability provisions of the Code or ERISA
relating to Employee Benefit Plans and, to the best knowledge of the Company, no
event, transaction or condition has occurred or exists that, with or without the
passage of time, the giving of notice or both, would result in any such
liability to the Company or, following the Closing, the Company, the Purchaser
or any such Employee Benefit Plan.
(c) None of the assets of the Company is subject to any Encumbrance in
favor of, or enforceable by, the Pension Benefit Guaranty Corporation (the
"PBGC").
(d) No Employee Benefit Plan is a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA, a "multiple employer plan" within the
meaning of Section 413(c) of the Code, or a defined benefit plan within the
meaning of Section 3(35) of ERISA.
(e) Schedule 2.24(e) lists (i) the name and total of annual rate of
compensation (including bonuses, commissions and incentive compensation) of each
employee of and consultant to the Company whose annual compensation exceeds
$50,000, and (ii) the name of each officer and director of the Company.
(f) Each of the Employee Benefit Plans listed in Schedule 2.24(a) is
and has at all times been in compliance in all material respects with all
applicable provisions of ERISA, the Code and other Applicable Law.
(g) Each "employee pension benefit plan" as defined in Section 3(2) of
ERISA (each a "Pension Plan") which is intended to meet the requirements of
Section 401(a) of the Code now meet, and since their inception have met, the
requirements for qualification under Section 401(a) of the Code and no event has
occurred that has or could reasonably be expected to materially and adversely
affect the qualified status of any such Pension Plan. The IRS has issued a
favorable determination letter with respect to the qualification under the Code
of each Pension Plan and the IRS has not taken any action to revoke any such
letter.
(h) Each fiduciary and every plan official of each Employee Benefit
Plan is bonded to the extent required by Section 412 of ERISA. Those sections of
all annual reports heretofore filed with the IRS, the Department of Labor and
the PBGC by or on behalf of every Employee Benefit Plan which were required to
be certified were only certified without qualification by the accountants or
actuaries of such Employee Benefit Plan.
(i) Except as specifically set forth in Schedule 2.24(i), (i) the
execution and performance of the transactions contemplated by this Agreement
will not (either alone or upon the occurrence of any additional or subsequent
event) constitute an event under any Employee Benefit Plan or individual
agreement that will or may result in any payment (whether of severance pay or
otherwise), acceleration, vesting or increase in benefits with respect to any
employee, former employee, consultant, agent or director of the Company or any
of its Affiliates, and (ii) no payment which will be or may be made by the
Company to any employee, former employee, director, consultant or agent thereof
will or could be characterized as an "excess parachute payment" within the
meaning of Section 280G(b)(1) of the Code.
-22-
(j) Neither the Company nor any of its Affiliates has contributed to,
has been required to contribute to, or has incurred any withdrawal liability
(within the meaning of Section 4201 of ERISA) with respect to any Employee
Benefit Plan which is a multiemployer plan as defined in Section 3(37) of ERISA.
(k) The Company does not maintain any Employee Benefit Plan which is
funded by an association described in Section 501(c) (9) of the Code.
(l) Each "group health plan" (within the meaning of Section 4980B of
the Code) maintained by the Company or any of its Affiliates has been
administered in material compliance with the coverage continuation requirements
contained in the Consolidated Omnibus Budget Reconciliation Act of 1985 and as
provided under Section 4980B of the Code and any regulations promulgated or
proposed under the Code.
(m) With respect to all Employee Benefit Plans which are funded, or are
required by Applicable Law to be funded, the present value of all accrued
benefits (vested and non vested) of each such Employee Benefit Plan as of the
Closing Date, will not exceed the fair market value of the assets of each such
Employee Benefit Plan as of the Closing Date.
(n) The Company and its Affiliates have made all contributions required
to be made to each Employee Benefit Plan under the terms of the plan and
Applicable Law. No prohibited transaction (as defined in Section 4975 of the
Code or Section 406 of ERISA) has occurred with respect to any Employee Benefit
Plan listed, which could subject any Employee Benefit Plan or any related trust,
the Company, any Affiliate, the Purchaser or any director or employee of any of
them to any Tax or penalty imposed under Section 4975 of the Code or Section
502(i) or 502(l) of ERISA, either directly or indirectly, and whether by way of
indemnity or otherwise.
(o) The Company does not maintain, sponsor or contribute to any plan or
program providing retiree medical or life insurance benefits.
(p) The Company has never contributed to a Pension Plan subject to
Title IV of ERISA or Section 412 of the Code.
Section 2.25. Transactions with Related Parties. Except as set forth in
the SEC Documents or as disclosed in Schedule 2.25, the Company is not a party
to any arrangement, understanding or agreement (whether written or oral) with
any of the Company's employees, officers, stockholders or directors or any
Affiliate or immediate family member of any of the foregoing under which it: (a)
leases any real or personal property (either to or from such Person); (b) has
incurred any debt for borrowed money or under which it has lent money or made
any guarantees (other than routine travel advances); (c) licenses technology
(either to or from such Person); (d) is obligated to purchase any tangible or
intangible asset from or sell such asset to such Person; (e) purchases or sells
(or has purchased or sold during the last 18 months) products or services from
or to, as the case may be, such Person (other than pursuant to employment
agreements described in Schedule 2.24(e)); or (f) receives or expends $50,000 or
more.
Section 2.26. Interest in Competitors. Except as disclosed on Schedule
2.26, neither the Company nor to its best knowledge any of its officers or
directors or Affiliates of any of the foregoing, has any interest, either by way
of contract or by way of investment (other than as
-23-
holder of not more than 5% of the outstanding capital stock of a publicly traded
Person), directly or indirectly, in any Person other than the Company that
provides any services or designs, produces or sells any product or product line
or engages in any activity competitive with any activity currently conducted by
the Company.
Section 2.27. Territorial Restrictions. The Company is not restricted
by any agreement or understanding with any other Person from carrying on its
business anywhere in the world.
Section 2.28. Effect of Transaction. No creditor, employee, consultant
or other Person (other than customers or suppliers) having a material business
relationship with the Company has informed the Company that such Person intends
to terminate, or effect any material adverse change in, its relationship with
the Company because of the transactions contemplated by this Agreement and the
other Transaction Documents, nor does the Company have knowledge of any such
intent.
Section 2.29. Order Backlog. A true and complete list of (a) all firm
product and service purchase orders and contracts for the sale of goods or the
delivery of services by the Company to Persons other than Governmental
Authorities, and (b) all firm funded product and service purchase orders and
contracts for the sale of goods or the delivery of services by the Company to
Governmental Authorities (collectively, the "Backlog") pending as of the latest
practical date prior to the date of this Agreement is set forth in Schedule 2.29
attached hereto.
Section 2.30. Suppliers and Customers. Schedule 2.30 attached hereto
sets forth the 20 largest suppliers of the Company, all sole source suppliers of
the Company and the 20 largest customers of the Company as of the date hereof.
The Company does not have any knowledge that any of the Company's suppliers or
customers intends to cancel or otherwise materially and adversely modify its
relationship with the Company or limit its services, supplies or materials to
the Company, or its usage, purchase or pricing of the services and products of
the Company either as a result of the transactions contemplated hereby or
otherwise.
Section 2.31. Antitakeover Provisions. Other than ISRA, no "fair
price", "moratorium", "control share acquisition" or other form of antitakeover
statute, regulation, charter provision or contract is applicable to the purchase
of the Purchaser Shares by the Purchaser or any of the other transactions
contemplated by this Agreement.
Section 2.32. Extent of Offering. Neither the Company nor any agent on
its behalf has sold or offered Common Stock, Convertible Securities or any
similar securities or instruments for sale to, or has solicited any offers to
buy any thereof from, or otherwise approached or negotiated in respect hereof
with, any Person(s) whomsoever so as to bring the issuance and sale or delivery
of any of the Purchaser Shares and/or the Additional Shares within the
provisions of Section 5 of the Securities Act or so as to require registration
or qualification thereof under any state securities law.
Section 2.33. Registration Rights. Except as set forth in the Exhibits
filed as part of the 1998 Form 10-KSB or in Schedule 2.33, the Company is not
under any obligation to register any shares of its capital stock under the
Securities Act, and as of the Closing Date and after giving effect to the
transactions contemplated hereby, will not be under any such obligation.
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Section 2.34. Real Property Holding Company. The Company is not a real
property holding company within the meaning of Section 897 of the Code.
Section 2.35. No Retention Agreements, etc. Except as set forth in the
Exhibits filed as part of the 1998 Form 10-KSB or in Schedule 2.35, are no
retention agreements, severance agreements, change of control agreements and
similar arrangements to which the Company or any of its Subsidiaries, on the one
hand, and any employee, consultant or other Person, on the other hand, are a
party.
Section 2.36. Newbridge Networks Corporation. The Company has provided
to the Purchaser true, complete and correct copies of all Contracts and material
correspondence with, relating to or involving Newbridge Networks Corporation, a
Canadian corporation, or any of its Affiliates (collectively, "Newbridge").
Except as set forth in Schedule 2.36, there does not exist under any Contract
between the Company and Newbridge any event of default or event or condition
that, after notice or lapse of time or both, would constitute a violation,
breach or event of default thereunder by either party to such Contract, except
for such violations, breaches or events of default that would not, individually
or in the aggregate, have a Material Adverse Effect.
Section 2.37. Financial Projections. The financial projections, dated
June 16, 2000 (the "Projections"), were prepared on the basis of assumptions
that the Company reasonably believed in good faith at the time of the
preparation to be reasonable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as of the
Closing Date as follows:
Section 3.1. Organization. The Purchaser is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
Section 3.2. Authorization. The Purchaser has the power and authority
(corporate and other) to execute and deliver this Agreement and any other
Transaction Documents to which the Purchaser is a party and to perform its
obligations hereunder and thereunder, all of which have been duly authorized by
all requisite corporate action. This Agreement has been duly authorized,
executed and delivered by the Purchaser and constitutes a valid and binding
agreement of the Purchaser, enforceable against the Purchaser in accordance with
its terms.
Section 3.3. Access to Information. Without limiting the effect of the
Company's representations and warranties contained herein, the Purchaser has
received copies of the SEC Documents and has reviewed therein the discussion of
risk factors relating to the Company. In addition (but without limiting the
effect of the Company's representations and warranties contained herein), the
Purchaser has had an opportunity to ask questions of and receive answers from
representatives of the Company concerning the business of the Company, its
condition and
-25-
prospects (financial and other) and the terms and conditions of the offering of
the Purchaser Shares.
Section 3.4. Accredited Investor. The Purchaser is an "Accredited
Investor" as such term is defined in Rule 501 of the rules and regulations of
the Commission promulgated under the Securities Act.
Section 3.5. Investment Intent.
(a) The Purchaser is acquiring the Purchaser Shares and the Additional
Shares for its own account for investment only and not for or with a present
view to resale or distribution (other than the possible sale by the Purchaser of
up to 35% of the Purchaser Shares to the Investment Bank in connection with the
equity investment in the Company referred to in Section 5.1). The Purchaser has
not entered into any contract, undertaking, agreement or arrangement with any
Person to sell, transfer or pledge to such Person or anyone else the Purchaser
Shares or the Additional Shares, and the Purchaser has no present plans or
intentions to enter into any such contract, undertaking, agreement or
arrangement.
(b) The Purchaser has the financial ability to bear the economic risk
of losing its entire investment in the Purchaser Shares and the Additional
Shares, is prepared to bear the economic risk of its investment therein for an
indefinite time and can afford to sustain a complete loss of its investment
therein.
(c) The Purchaser understands that the Purchaser Shares and the
Additional Shares constitute restricted securities within the meaning of Rule
144 promulgated under the Securities Act, and that none of the Purchaser Shares,
the Additional Shares or any interest therein may be sold or otherwise
transferred except pursuant to an effective registration statement under the
Securities Act or in a transaction exempt from registration under the Securities
Act, and understands the meaning and effect of such restriction.
(d) The Purchaser acknowledges that the Purchaser Shares and the
Additional Shares may not be transferred, and the Company shall not be required
to register any transfer thereof on the books of the Company, unless such
transfer is made pursuant to an effective registration statement, in compliance
with Rule 144, or pursuant to another exemption under the Securities Act;
provided, however, that the Company shall not be required to register any
transfer if any securities are offered or sold otherwise than pursuant to an
effective registration statement or pursuant to Rule 144 unless the Company
shall have received an opinion of counsel to the Purchaser, reasonably
satisfactory to the Company, that such transfer does not require registration
under the Securities Act or applicable state securities laws.
Section 3.6. Financial Resources. The Purchaser has cash or credit
facilities presently available to meet all of its payment obligations hereunder.
Section 3.7. Brokers. No Person is or will be entitled to a broker's,
finder's, investment banker's, financial adviser's or similar fee from the
Purchaser in connection with this Agreement or any of the transactions
contemplated hereby.
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Section 3.8. Non-contravention. Except as set forth in Schedule 3.8,
neither the negotiation, execution or delivery of this Agreement or the other
Transaction Documents by the Purchaser nor the performance by the Purchaser of
its obligations hereunder or thereunder has or will: (a) contravene any
provision contained in the Purchaser's certificate of incorporation or by-laws;
(b) violate or result in a breach (with or without the lapse of time, the giving
of notice or both) of or constitute a default under (i) any contract, agreement,
commitment, indenture, mortgage, lease, pledge, note, license, permit or other
instrument or obligation, or (ii) any judgment, order, decree, law, rule or
regulation or other restriction of any Governmental Authority, in each case to
which the Purchaser or any of its Subsidiaries is a party or by which any of
them is bound or to which any of their respective assets or properties is
subject, other than, in the case of either clause (i) or clause (ii), such
violations, breaches and defaults that would not, individually or in the
aggregate, have a Material Adverse Effect with respect to the Purchaser and its
Subsidiaries; (c) result in the creation or imposition of any Encumbrance on any
of the assets or properties of the Purchaser or any of its Subsidiaries, other
than Encumbrances that would not, individually or in the aggregate, have a
Material Adverse Effect with respect to the Purchaser and its Subsidiaries; or
(d) result in the acceleration of, or permit any to accelerate or declare due
and payable prior to its stated maturity, any obligation of the Purchaser or any
of its Subsidiaries.
ARTICLE IV
MANAGEMENT COVENANTS
Section 4.1. Indemnification; Officers' and Directors' Insurance.
(a) All rights to indemnification or exculpation now existing in favor
of the past and present directors, officers, employees and agents of the Company
and its Subsidiaries as provided in their respective charters or by-laws or
otherwise in effect as of the Closing Date with respect to matters occurring
prior to the Closing Date shall survive the transactions contemplated hereby and
shall continue in full force and effect. To the maximum extent permitted by the
DGCL, such indemnification shall be mandatory rather than permissive and the
Company shall advance expenses in connection with such indemnification. The
Certificate of Incorporation of the Company shall contain provisions which are
substantially similar to the provisions with respect to indemnification and
exculpation set forth in Article SEVENTH of the Company's Restated Certificate
of Incorporation as in effect on the date hereof, and the Company's by-laws
shall contain provisions which are substantially similar to the provisions with
respect to indemnification and insurance set forth in Article XI of the
Company's by-laws as in effect on the date hereof, which provisions shall not,
until the sixth anniversary of the date hereof in either case be amended in any
manner that would materially and adversely affect the rights of the Company's
past and present employees, agents, directors or officers thereunder for acts or
omissions on or prior to the Closing Date, except if any such amendment is
required by Applicable Law. Any determination required to be made with respect
to whether a party's conduct complies with the standards set forth in the
Certificate of Incorporation or by-laws of the Company or under the DGCL shall
be made by independent counsel selected by the Company and reasonably acceptable
to the indemnified party (whose fees and expenses shall be paid by the Company).
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(b) The Company shall maintain in effect for not less than six years
from the Closing Date the policies of officers' and directors' liability
insurance most recently maintained by the Company (provided that the Purchaser
may substitute therefor policies of at least the same coverage containing terms
and conditions which are not materially less advantageous so long as such
substitution does not result in gaps or lapses in coverage) with respect to
matters occurring prior to the Closing Date, in each case, however, to the
extent available at a reasonable cost (such cost not to exceed 300% of the
premiums currently paid by the Company); provided, however; that if the Company
is not able to obtain the insurance specified herein, the Company will obtain as
much comparable insurance as is then-available at a reasonable cost (such cost
not to exceed 300% of the premiums currently paid by the Company). The Company
will pay all reasonable, direct, out-of-pocket expenses (including reasonable
attorney's fees and expense) that may be incurred by any indemnified party in
enforcing the indemnity and other obligations provided for in this Section 4.1.
(c) If the Company or any of its successors or assigns (i) consolidates
with or merges into any other Person and shall not be the continuing or
surviving corporation thereof, or (ii) sells, leases, transfers or otherwise
disposes of all or substantially all of its properties and assets to any Person,
whether in a single transaction or a series of related transactions, then and in
each such case, proper provision shall be made so that the applicable successor
or assign of the Company will assume the Company's obligations set forth in this
Section 4.1.
Section 4.2. Employee Option Plan. Prior to the Closing, the Company
shall have amended the Company's Amended and Restated 1997 Stock Compensation
Program (the "Plan"), which Plan would cover an aggregate of 7.5% (but, together
with the Founder Options, not more than 15%) of the Company's outstanding shares
of Common Stock (after issuance of the Purchaser Shares). Schedule 4.2 sets
forth a list of persons to be granted options to purchase Common Stock under the
Plan at or immediately prior to the Closing by the Company, together with the
number of options to be granted to each such holder, at an exercise price of
$0.54 per share of Common Stock (such price to be appropriately adjusted to give
effect to the Reverse Stock Split or any stock split, stock combination,
reorganization, recapitalization, etc. affecting the Company's capital stock).
The Plan shall provide for the granting of stock-based incentive compensation to
employees, directors and consultants of the Company and its Subsidiaries. The
Company shall reserve sufficient shares of its Common Stock for issuance upon
the exercise of grants under the Plan.
Section 4.3. Other Option Grants. At or immediately prior to the
Closing, the Company shall grant options to acquire Common Stock to the persons
set forth in Schedule 4.3 (the "Founder Options"). Each Founder Option will have
an exercise price of $0.54 per share of Common Stock (such price to be
appropriately adjusted to give effect to the Reverse Stock Split or any stock
split, stock combination, reorganization, recapitalization, etc. affecting the
Company's capital stock). The Company shall reserve, together with the shares
issuable under the Plan, 15% of the Company's outstanding shares of Common Stock
(after issuance of the Purchaser Shares) for issuance upon the exercise of the
Founder Options or grants under the Plan. The issuance at any time after the
Closing Date of Common Stock upon the exercise of Future Options will dilute all
holders of Common Stock on a pro rata basis.
Section 4.4. Actions Requiring a Special Majority.
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(a) The Company shall not, without the approval of either (i) those
holders of Common Stock (excluding the Purchaser, entities controlled, directly
or indirectly, by the Purchaser and executive officers (within the meaning of
the Exchange Act) of the Purchaser) (the "Minority Stockholders") that represent
not less than a majority of the outstanding Common Stock held by all such
holders (a "Special Stockholder Majority"), given in writing or at a meeting of
the Company's stockholders duly called and held, or (ii) a majority of the
Non-Purchaser Directors (a "Special Director Majority"), given in writing or at
a meeting of the Board duly called and held:
(A) merge or consolidate with or into any Person, permit any Person to
merge or consolidate with or into it, effect a share exchange with any other
Person (or adopt a plan to do any of the foregoing); provided, however, that the
restrictions of this clause (a) shall not apply to any merger or consolidation
with or into a wholly owned Subsidiary of the Company, if immediately after such
merger or consolidation the stockholders of the Company immediately prior to
such merger or consolidation are the stockholders of the Company or of the
surviving or resulting entity, and such merger or consolidation effects no
change in the percentage ownership of such stockholders in the Company or the
surviving or resulting entity from the percentage ownership of such stockholders
in the Company immediately prior to such merger or consolidation;
(B) sell all or substantially all of its assets in one transaction or a
series of related transactions;
(C) commence any voluntary proceeding seeking liquidation,
reorganization, readjustment or other relief under any bankruptcy, insolvency or
similar law or consent to a decree or order for relief or the filing of a
petition thereunder or to the appointment of a trustee, receiver or liquidator,
or otherwise take any voluntary action in furtherance of the bankruptcy,
reorganization, liquidation, dissolution or termination of its corporate status;
(D) except (1) as provided in this Agreement, and (2) pursuant to the
terms of securities outstanding on the date hereof, (3) for options granted and
to be granted under the Plan and Common Stock issued or issuable upon the
exercise thereof, and (4) the Founder Options and Common Stock issued or
issuable upon the exercise thereof, issue, offer or sell any shares of capital
stock or any Convertible Securities;
(E) amend its certificate of incorporation or by-laws, if the terms of
such amendment would conflict with the terms of this Agreement or any other
Transaction Document or would materially and adversely affect the rights of the
Minority Stockholders;
(F) amend or modify any of the Transaction Documents or waive any
provision thereof;
(G) enter into a Rule 13e-3 transaction (as defined in Rule 13-3
promulgated under the Exchange Act); or
(H) enter into, assume or become bound by any agreement, instrument or
understanding to do any of the foregoing or otherwise attempt to do any of the
foregoing.
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(b) Without the prior consent or approval of either the Special
Stockholder Majority or the Special Director Majority, the Purchaser shall not
sell any of the Purchaser Shares prior to December 31, 2001; provided, however,
the restrictions of this clause (b) shall not apply with respect to (i) the sale
of up to 53.27% of the Purchaser Shares, or (ii) any sale to any Affiliate of
the Purchaser.
Section 4.5. Indemnification Claims against the Company. If any
Purchaser Indemnified Party asserts a claim against the Company under Section
7.2, then the Non-Purchaser Directors shall have the right to act on behalf of
the Company in connection therewith.
Section 4.6. Enforcement against Purchaser. The Non-Purchaser Directors
shall have the right to enforce on behalf of the Company the covenants of the
Purchaser contained in this Agreement and in the other Transaction Documents.
Section 4.7. Expiration. The provisions of Sections 4.4, 4.5 and 4.6
shall cease to have any force and effect automatically upon the earlier to occur
of (a) the consummation of the and (b) the date upon which the Existing Holders
collectively first cease to the owners of at least 10% of the outstanding Common
Stock on a Fully Diluted Basis.
ARTICLE V
ADDITIONAL COVENANTS
Section 5.1. Investment Commitment. Until the 60th day after the
Closing Date, each of the Purchaser and the Company shall use its reasonable
best efforts to obtain a binding commitment from a first-tier investment bank or
banks (collectively, the "Investment Bank") to make an equity investment in the
Company in an amount no less than $5,000,000 at a purchase price of $1.50 per
share of Common Stock (the "Investment Bank Shares") (such number of shares and
price to be appropriately adjusted to give effect to the Reverse Stock Split or
any stock split, stock combination, reorganization, recapitalization, etc.
affecting the Company's capital stock). All actions taken by the Purchaser prior
to the Closing Date shall be considered in determining whether the Purchaser has
used its reasonable best efforts to obtain such a commitment from an Investment
Bank.
Section 5.2. Public Offering Commitment. The Company shall use its
reasonable best efforts to prepare and file and have declared effective by the
Commission a registration statement relating to the Public Offering (the
"Registration Statement") as promptly as practicable, but in no event later than
December 31, 2000, subject to market and economic conditions. The Company shall
use reasonable best efforts to consummate the Public Offering as soon as
practicable and, in connection therewith will do all things reasonably necessary
or appropriate to cause the consummation of the Public Offering, including
causing members of its senior management to participate actively in any
marketing and selling efforts for the Public Offering.
Section 5.3. Reverse Split. As promptly as practicable following the
Closing, the Company shall use its reasonable best efforts to take all actions
necessary to effect an at least one-for-ten reverse stock split (the "Reverse
Stock Split").
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Section 5.4. ISRA Compliance. The Company shall, at its own expense,
file any affidavits and applications and pay any fees necessary to secure
compliance with or exemption from The New Jersey Industrial Site Review Act
("ISRA").
Section 5.5. Xxxx-Xxxxx-Xxxxxx Filings. If required by the HSR Act,
each of the Purchaser and the Company will use their respective commercially
reasonable efforts to file with the Antitrust Division of the Department of
Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC")
promptly following the date hereof the notification and report form (the
"Report") required under the HSR Act, with respect to the transactions
contemplated hereby. Each of the Purchaser and the Company shall cooperate with
each other to the extent reasonably necessary to assist each other in the
preparation of its Report, shall request early termination of the waiting period
required by the HSR Act and, if requested, will promptly amend or furnish
additional information thereunder if requested by the Antitrust Division and/or
the FTC. The Purchaser shall bear all filing fees incurred in connection with
the filing of the Report.
Section 5.6. Public Announcements.
(a) The Purchaser and the Company shall reasonably cooperate in the
making and issuing of any press release or public announcement in respect of
this Agreement or the transactions contemplated hereby.
(b) Neither the Purchaser nor the Company shall make any press release
or public announcement in respect of this Agreement or the transactions
contemplated hereby without the prior written consent of the other party (such
consent not to be unreasonably withheld or delayed); provided, however, that if
any press release or public announcement is required by Applicable Law or by the
rules of any applicable securities exchange or market, then the nature of the
announcement shall be described to the party not making a press release or
public announcement and (if time permits) such party shall be allowed reasonable
time to comment prior to dissemination to the public.
Section 5.7. Rule 144 Reporting; Rule 144A. With a view to making
available to each holder of Restricted Securities the benefits of certain rules
and regulations of the Commission which may permit the sale of the Purchaser
Shares to the public without registration, the Company agrees that:
(a) the Company shall, so long as it is subject to the periodic
reporting requirements of the Exchange Act: (i) make and keep available public
information, as those terms are contemplated by Rule 144 under the Securities
Act (or any successor or similar rule then in force); (ii) timely file with the
Commission all reports and other documents required to be filed under the
Securities Act and the Exchange Act; and (iii) furnish to each holder forthwith
upon request a written statement by the Company as to its compliance with the
reporting requirements of the Securities Act and the Exchange Act, a copy of the
most recent annual or quarterly report of the Company, and such other
information as such holder may reasonably request in order to avail itself of
any rule or regulation of the Commission allowing such holder to sell any
Purchaser Shares without registration (it being understood and agreed that the
Company's covenants and agreements contained in this clause (i) shall not be
operative until such time as the
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Company shall have filed with the Commission its Annual Report on Form 10-KSB
for the fiscal year ended June 30, 1999, and its Quarterly Reports on Form
10-QSB for the fiscal quarters ended September 30, 1999, December 31, 1999 and
March 31, 2000; the Company agrees to make such filings as soon as practicable);
and
(b) each holder of Purchaser Shares and each prospective holder of
Purchaser Shares who may consider acquiring Purchaser Shares in reliance upon
Rule 144A under the Securities Act (or any successor or similar rule then in
force) ("Rule 144A") shall have the right to request from the Company, and the
Company will provide upon such request, such information regarding the Company
and its business, assets and properties, if any, as is at the time required to
be made available by the Company under Rule 144A so as to enable such holder to
transfer Purchaser Shares to such prospective holder in reliance upon Rule 144A.
Section 5.8. Further Assurances. Following the Closing, each party
shall from time to time execute and deliver such additional instruments,
documents, conveyances or assurances and take such other actions as shall be
necessary, or otherwise reasonably requested by the other, to confirm and assure
the rights and obligations provided for in this Agreement and render effective
the consummation of the transactions contemplated hereby.
Section 5.9. Debt. In the sole discretion of the Purchaser, after the
Purchaser has purchased all the Additional Shares, then the Purchaser may (but
shall not be required to) lend money to the Company (which loan(s) will not be
convertible into equity of the Company) to finance the reasonable working
capital requirements of the Company. Nothing in this Section 5.9 shall be deemed
to obligate the Purchaser, subject to the terms and conditions hereof, to pay
any amounts to the Company other than the Purchase Price and the Additional
Purchase Price.
Section 5.10. Rule 14f-1 Mailing.
(a) Promptly after the Closing (and in any event by July 17, 2000), the
Company shall deliver to the Purchaser evidence of the filing and mailing of the
informational materials required to be filed with the Commission and sent to the
Company's shareholders pursuant to Section 14(f) and Rule 14f-1 of the Exchange
Act in connection with the Transaction Documents (the "Rule 14f-1 Materials").
The Purchaser will use its reasonable best efforts to take any actions within
its control to assist the Company to effect the foregoing.
(b) No later than the date of the filing of the Rule 14f-1 Materials,
the Company will provide the Purchaser with an opinion from Xxxxxxxxxx Xxxxxxx
PC, special counsel for the Company, relating to the form and content of the
Rule 14f-1 Materials and such other matters as the Purchaser may reasonably
request, which opinion shall be in form and substance reasonably satisfactory to
the Purchaser.
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ARTICLE VI
CLOSING DELIVERIES
Section 6.1. Deliveries to Purchaser. At or prior to the Closing, the
Company shall deliver to the Purchaser the following in form and substance
reasonably satisfactory to the Purchaser and its counsel:
(a) Good Standing Certificates. The Company shall have delivered to the
Purchaser certificates of good standing from the secretaries of state of the
states of the Company's and its Subsidiaries' organization and the states
identified in Schedule 6.1(a);
(b) FIRPTA Certificate. The Purchaser shall have received a certificate
of Seller, dated the Closing Date and sworn under penalty of perjury, setting
forth the name, address and federal Tax identification of the Company and
stating that the Company is not a "foreign person" within the meaning of Section
1445 of the Code, such certificate to be in the form set forth in the Treasury
Regulations hereunder;
(c) Consents. The Company shall have obtained and shall have delivered
to the Purchaser copies of all Consents (including all Consents required under
any Contract) necessary to be obtained in connection with the execution,
delivery and performance of the Transaction Documents and the consummation of
the transactions contemplated thereby;
(d) Stockholders Agreements. Evidence that all existing stockholder and
voting agreements relating to the Company or any of its securities (other than
the Stockholders Agreement executed and delivered pursuant to Section 6.1(v))
have been terminated, including those with the Existing Holders and with
Cerberus Partners, L.P.;
(e) Legal Opinion. The Purchaser shall have received the written
opinion of Xxxxxxxxxx Xxxxxxx PC, special counsel for the Company, dated and
delivered as of the Closing Date, substantially in the form of Exhibit C;
(f) Base Period R&E Information. The Company shall have delivered to
the Purchaser, on the Company's letterhead, all information reasonably requested
by the Purchaser relating to the base period research and experimental expenses
and any other information reasonably requested by the Purchaser to allow the
Purchaser or the Company to claim research and experimental Tax credits in
accordance with the relevant sections of the Code and the regulations
promulgated thereunder;
(g) Registration Rights Agreement. The Company, the Purchaser and the
Existing Holders shall have entered into a Registration Rights Agreement in
substantially the form of Exhibit D hereto (the "Registration Rights
Agreement");
(h) Stock Certificates. A certificate or certificates representing the
Purchaser Shares, duly registered in the name of the Purchaser;
(i) Officer's Certificate. A certificate of the President, dated the
Closing Date, to the effect that (i) each of the representations and warranties
made by the Company in this
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Agreement and the other Transaction Documents that is qualified as to
materiality is true, correct and complete as of the Closing Date, and each such
representation and warranty that is not so qualified is true, correct and
complete in all material respects as of the Closing Date, and (ii) the Company
has duly performed or complied with, in all material respects, all of the
covenants, obligations, agreements and conditions to be performed or complied
with by it under the terms of this Agreement on or prior to or at the Closing;
(j) Secretary's Certificate. A certificate of the Secretary of the
Company, dated the Closing Date, as to the incumbency of any officer of the
Company executing this Agreement or any document related thereto and covering
such other matters as the Purchaser may reasonably request;
(k) Board Resolutions. A certified copy of the resolutions of the
Company's Board of Directors authorizing the execution, delivery and
consummation of this Agreement and the other Transaction Documents and the
transactions contemplated hereby and thereby;
(l) Employment Agreements. Executed counterparts of the Employment
Agreements;
(m) Charter Amendment. The amendment to the Company's certificate of
incorporation set forth as Exhibit E hereto (the "Certificate of Amendment")
shall have been duly filed under the DGCL;
(n) mmTech, Inc. Evidence of the lost stock affidavit for Stock
Certificate No. 1 issued by mmTech, Inc. to Xxxxxxx Brand, as well as evidence
of Stock Certificate No. 3 issued by mmTech, Inc. to the Company, shall have
been delivered to the Purchaser;
(o) Shares Held by Xxxxxx X. Xxxxxx. Evidence of the surrender and
cancellation for no consideration to Xxxxxx X. Xxxxxx of 1,250,000 shares of
Common Stock registered in the name of Xxxxxx X. Xxxxxx as the result of the
supplemental resolutions adopted by the Board on July 7, 2000.
(p) Loan Extensions. The Company shall have delivered to the Purchaser
copies of an agreement by all the relevant lenders under the Legacy Group I
Loans to extend the maturity date of the principal amounts outstanding
thereunder to the date that is the earlier to occur of (i) the fifth day
following the consummation of the Public Offering and (ii) June 30, 2001;
(q) Minute Books. True, correct and complete (through the Closing Date)
copies of the minute books of the Company and each of its Subsidiaries;
(r) ISRA Certificate. A letter from the New Jersey Department of
Environmental Protection certifying the Company's compliance with or exemption
from the requirements of ISRA;
(s) Waivers. Executed waivers and consents from each of the Existing
Holders and the other parties set forth on Schedule 6.1(s) (some of which
waivers and consents may be included in the Stockholders Agreement), wherein
such Existing Holder or other party irrevocably and forever (i) waives the
application of any anti-dilution or other similar provisions contained in any of
the agreements or instruments referred to in Schedule 2.5(c) in connection with
any
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Transaction Document or any of the transactions contemplated thereby or in
connection with any prior transaction, event, occurrence or circumstances, (ii)
waives application of any provision of any agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which any of their
respective assets is bound, that conflicts with any provision of any Transaction
Document, and (iii) consents to the execution, delivery and performance of the
Transaction Documents and the consummation of the transactions contemplated
thereby;
(t) Director Agreement; etc. Executed agreement among Xxxxx X. Brand,
Xxxx-Xxxxxxxx Xxxxxxxx, Xxxx X. Xxxxxx (collectively, the "Former Outside
Directors") and the Company, wherein the parties agree that the Company will
grant each such Former Outside Director non-qualified stock options for 150,000
shares of Common Stock at a per share purchase price of $0.54 in lieu of a bonus
payment of $75,000 in the form of Common Stock or cash or any combination
thereof, and executed agreement between Xxxxxxxxxx Xxxxxxx PC or its designees
and the Company, wherein the parties agree that the Company will grant
Xxxxxxxxxx Xxxxxxx PC or its designees non-qualified stock options for 100,000
shares of Common Stock at a per share purchase price of $0.54;
(u) Conversion of Debentures. Evidence of the conversion simultaneously
with the Closing of an aggregate of 90% of the Company's convertible debentures
and preferred stock (including executed waivers and consents from the holders of
such convertible debentures and preferred stock to the effect of clauses (i),
(ii) and (iii) of Section 6.1(s));
(v) Stockholders Agreement. The Company, the Purchaser and the Existing
Holders shall have entered into a stockholders agreement in substantially the
form of Exhibit F attached hereto (the "Stockholders Agreement");
(w) Exercise of Warrants. Evidence of the exercise or exchange of 80%
of all of the Company's outstanding warrants on a cashless basis;
(x) Amendment of the Company's By-laws. Evidence of an amendment of the
by-laws of the Company providing for the ability of the holders of a majority of
the outstanding Common Stock to call special meetings of the stockholders of the
Company;
(y) L-3 Option Agreement. Executed agreement between the Purchaser and
the Company relating to the L-3 Stock Options;
(z) DLJ Engagement Letter. The Company shall have delivered to the
Purchaser copies of (i) evidence of the termination of the Engagement Letter,
dated August 7, 1998 (the "DLJ Engagement Letter"), between Xxxxxxxxx Lufkin &
Xxxxxxxx Securities Corporation ("DLJ") and the Company, and (ii) an executed
waiver from DLJ wherein DLJ waives any post-termination rights it may have to
any fee pursuant to the terms of the DLJ Engagement Letter, subject to the
reimbursement of out-of-pocket fees and expenses in the approximate amount of
$30,000;
(aa) Projections. Copies of the Projections;
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(bb) Letter Agreement between Company and Xxxxxxx. Evidence of the
termination of the Letter Agreement, dated December 16, 1999, between the
Company and Xxxxxx Xxxxxxx obligating the Company to issue warrants to Xxxxxx
Xxxxxxx;
(cc) Signal Agreements. The Company shall have delivered to the
Purchaser copies of a letter from the Company to Signal terminating the Letter
of Intent, dated February 17, 2000, between the Company and Signal;
(dd) Bank Account. The Company shall have delivered evidence of the
establishment of the Bank Account;
(ee) Class A Debenture Letter. The Company shall have delivered to the
Purchaser a letter regarding the modified conversion price of $0.3451 per share
of Common Stock for the holders of the Company's Class A 13% Senior Subordinated
Convertible Pay-in-Kind Debentures due July 29, 1999; and
(ff) Replacement of Company Officers. The Company shall have delivered
to the Purchaser evidence of (i) the resignation of (A) Xxxxxx X. Xxxxxx as
President, Chief Operating Officer and Interim Chief Financial Officer of the
Company, (B) Xxxxxxx X. Brand as Chairman of the Board and Chief Technical
Officer of the Company, and (C) Xxxx Xxxxxx as Secretary of the Company, and
(ii) the appointment of (A) Xxxx X. Mega as acting President of the Company, (B)
Xxxxxx X. Xxxxxx as Senior Vice President of Administration of the Company, (C)
Xxxxxxx X. Brand as Senior Vice President of Technology of the Company, and (D)
Xxxxxxxxxxx X. Xxxxxxx as Secretary of the Company.
Section 6.2. Deliveries to the Company. At or prior to the Closing, the
Purchaser shall deliver to the Company the following in form and substance
reasonably satisfactory to the Company and its counsel:
(a) Good Standing Certificate. The Purchaser shall have delivered to
the Company a certificate of good standing from the Secretary of State of the
State of Delaware;
(b) Payment. Evidence that the Cash Funding has been paid in full;
(c) Secured Promissory Note. The Purchaser shall have delivered to the
Company the Secured Promissory Note;
(d) Stock Pledge Agreement. The Company and the Purchaser shall have
entered into the Stock Pledge Agreement;
(e) Officer's Certificate. A certificate of the President or a Vice
President of the Purchaser, dated the Closing Date, to the effect that (i) each
of the representations and warranties made by the Purchaser in this Agreement
and the other Transaction Documents that is qualified as to materiality is true,
correct and complete as of the Closing Date, and each such representation and
warranty that is not so qualified is true, correct and complete in all material
respects as of the Closing Date, and (ii) the Purchaser has duly performed or
complied with, in all material respects, all of the covenants, obligations,
agreements and conditions to be
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performed or complied with by it under the terms of this Agreement on or prior
to or at the Closing;
(f) Secretary's Certificate. A certificate of the Secretary or
Assistant Secretary of the Purchaser, dated the Closing Date, as to the
incumbency of any officer of the Purchaser executing this Agreement or any
document related thereto and covering such other matters as the Company may
reasonably request;
(g) Board Resolutions. A certified copy of the resolutions of the
Purchaser's Board of Directors authorizing the execution, delivery and
consummation of this Agreement and the transactions contemplated hereby;
(h) Legal Opinion. The Company shall have received the written opinions
of Xxxxxxx Breed Xxxxxx & Xxxxxx LLP, special counsel for the Purchaser, and
Xxxxxxxxxxx X. Xxxxxxx, General Counsel of the Purchaser, dated and delivered as
of the Closing Date, substantially in the forms of Exhibits G and H,
respectively;
(i) Stockholders Agreement. The Company, the Purchaser and the Existing
Holders shall have entered into the Stockholders Agreement;
(j) Registration Rights Agreement. The Company, the Purchaser, the
Existing Holders and certain other parties shall have entered into the
Registration Rights Agreement; and
(k) L-3 Option Agreement. Executed agreement between the Purchaser and
the Company relating to the L-3 Stock Options.
ARTICLE VII
SURVIVAL; INDEMNIFICATION
Section 7.1. Survival of Representations and Warranties. The
representations and warranties contained in this Agreement shall survive the
Closing and shall apply with respect to claims asserted in writing prior to the
earlier of (a) the consummation of the Public Offering and (b) the first
anniversary of this Agreement; provided, however, that the representations and
warranties contained in Sections 2.5, 2.11 and 2.12 shall survive until the date
that is the earlier to occur of (i) the consummation of the Public Offering and
(ii) the expiration of the applicable statute of limitations in respect of
claims relating thereto. The provisions of this Section 7.1 shall not limit any
covenant or agreement of the parties hereto which, by its terms, contemplates
performance after the applicable Closing. If an indemnified party delivers a
notice of claim for indemnification under this Article VII prior to the end of
the applicable survival period, and such claim is finally settled or adjudicated
in favor of the indemnified party during or after the end of the applicable
survival period, the indemnifying party shall indemnify the indemnified party
from and against Losses incurred by such indemnified party as a result of such
claim for indemnification.
Section 7.2. Indemnification.
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(a) The Company shall indemnify the Purchaser and its Affiliates and
each of their respective officers, directors, employees, stockholders, agents
and representatives (each, a "Purchaser Indemnified Party") against, and hold
them harmless from, any loss, liability (including any Tax liability),
obligation, claim, damage or expense fines, expenses, costs, proceedings,
deficiencies, judgments, penalties or damages (whether absolute, accrued,
conditional or otherwise and whether or not resulting from third party claims),
including reasonable out-of-pocket expenses, consulting fees, court costs,
expert witness fees and reasonable attorneys' fees and expenses incurred in the
investigation or defense of any of the same or in asserting any of their
respective rights hereunder (collectively, "Losses"), as incurred, arising from,
in connection with or otherwise with respect to:
(i) any breach of any representation or warranty of the Company
contained in this Agreement; and
(ii) any failure of the Company to perform any covenant or
agreement made or contained in this Agreement or fulfill any
obligation in respect thereof.
(b) The Purchaser shall indemnify the Company and its Affiliates and
each of their respective officers, directors, employees, stockholders, agents
and representatives against, and hold them harmless from any Loss, as incurred,
arising from, in connection with or otherwise with respect to:
(i) any breach of any representation or warranty of the Purchaser
(and not of the Company) contained in this Agreement; and
(ii) any failure of the Purchaser (and not of the Company) to
perform any
covenant or agreement made or contained in this Agreement or fulfill
any obligation in respect thereof.
Notwithstanding anything herein to the contrary, the aggregate amount
of Losses for which indemnification is provided by the Purchaser pursuant to
this Section 7.2(b) shall not exceed in the aggregate $20 million, such $20
million amount to be reduced from time to time beginning on the Closing Date by
any and all amounts paid in cash to the Company or on its behalf pursuant to
this Agreement (including the Cash Funding, payments or other credits with
respect of the Secured Promissory Note and the Additional Share Purchase Price).
(c) The amount of any Loss for which indemnification is provided under
this Section 7.2 shall be net of any amounts actually recovered by the
indemnified party under insurance policies with respect to such Loss.
(d) In order for an indemnified party to be entitled to any
indemnification provided for under this Agreement in respect of, arising out of
or involving a claim made by any Person against the indemnified party (a "Third
Party Claim"), such indemnified party must notify the indemnifying party in
writing of the Third Party Claim promptly following receipt by such indemnified
party of written notice of the Third Party Claim, such notice to contain the
amount of the Loss claimed or, in the event that such Loss is not then
liquidated, a good faith estimate thereof (if then available); provided,
however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the indemnifying party
shall have been actually and materially prejudiced as a result of such failure.
Thereafter, the indemnified party shall
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deliver to the indemnifying party, promptly following the indemnified party's
receipt thereof, copies of all notices and documents (including court papers)
received by the indemnified party relating to the Third Party Claim.
(e) If a Third Party Claim is made against an indemnified party, the
indemnifying party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
indemnifying party; provided, however, that such counsel is not reasonably
objected to by the indemnified party. Should the indemnifying party so elect to
assume the defense of a Third Party Claim, the indemnifying party shall not be
liable to the indemnified party for any legal expenses subsequently incurred by
the indemnified party in connection with the defense thereof (except as provided
below). If the indemnifying party assumes such defense, the indemnified party
shall have the right to participate in the defense thereof and to employ counsel
at its own expense, separate from the counsel employed by the indemnifying
party, it being understood that the indemnifying party shall control such
defense (except as provided below). The indemnifying party shall be liable for
the fees and expenses of counsel employed by the indemnified party for any
period during which the indemnifying party has not assumed the defense thereof
(other than during any period in which the indemnified party shall have failed
to give notice of the Third Party Claim as provided above). If the indemnifying
party chooses to defend or prosecute a Third Party Claim, all the indemnified
parties shall reasonably cooperate in the defense or prosecution thereof. Such
cooperation shall include the retention and (upon the indemnifying party's
request) the provision to the indemnifying party of records and information that
are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Whether or not the indemnifying
party assumes the defense of a Third Party Claim, the indemnified party shall
not admit any liability with respect to, or settle, compromise or discharge,
such Third Party Claim without the indemnifying party's prior written consent
(which consent shall not be unreasonably withheld or delayed); provided,
however, that if the indemnifying party does not consent to such settlement,
compromise or discharge, the indemnifying party shall be obligated to assume the
defense of such Third Party Claim from and after the date on which the
indemnified party first seeks such consent. If the indemnifying party assumes
the defense of a Third Party Claim, the indemnified party shall agree to any
settlement, compromise or discharge of a Third Party Claim proposed by the
indemnifying party, provided that such settlement, compromise or discharge (i)
either provides for the dismissal of the Third Party Claim against of the
indemnified party with prejudice or involves the payment of money only, (ii)
provides for the indemnifying party to pay the full amount of the liability in
connection with such Third Party Claim, (iii) provides for a complete release of
the indemnified party, and (iv) does not require an admission of wrongdoing or
liability or any other admission against interest by the indemnified party. If
the indemnified party shall in good faith, on the advice of counsel, determine
that the indemnified party may have available to it one or more defenses or
counterclaims (other than that the indemnified party is entitled to be
indemnified by the indemnifying party therefor) that are in conflict with one or
more of those that may be available to the indemnifying party in respect of such
claim or any litigation relating thereto, the indemnified party shall have the
right at all times to take over and assume control over the defense, settlement,
negotiations or litigation relating to any such claim at the sole cost of the
indemnifying party; provided, however, that if the indemnified party does so
take over and assume control, (A) the indemnifying party may participate in, but
not control,
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such defense or litigation, and (B) the indemnified party shall not settle such
claim or litigation without the prior written consent of the indemnifying party,
such consent not to be unreasonably withheld or delayed.
(f) If any indemnified party should have a claim against the
indemnifying party under this Section 7.2 that does not involve a Third Party
Claim being asserted against or sought to be collected from such indemnified
party, the indemnified party shall deliver written notice of such claim with
reasonable promptness to the indemnifying party, such notice to contain the
amount of the Loss claimed or, in the event that such Loss is not then
liquidated, a good faith estimate thereof (if then available). The failure by
any indemnified party so to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have to such indemnified party
under this Section 7.2, except to the extent that the indemnifying party
demonstrates that it has been actually and materially prejudiced by such
failure.
(g) If the indemnifying party disputes its liability with respect to
any claim for indemnification hereunder, the indemnifying party and the
indemnified party shall proceed in good faith to negotiate a resolution of such
dispute and, if not resolved through negotiations, such dispute shall be
resolved pursuant to the arbitration procedures specified in Section 8.4 below.
(h) Any Loss for which the indemnifying party has admitted its
responsibility or any Loss which is determined pursuant to the provisions of
this Section 7.2 to be the indemnifying party's responsibility may be paid on
its behalf by the Purchaser at the Purchaser's option and, if so paid, the
indemnifying party shall issue to the Purchaser a note in the principal amount
of such Loss. Any such note shall mature on the date of the consummation of the
Public Offering, and bear interest (payable only at maturity) at the "applicable
federal rate" for obligations of similar duration (or expected duration).
(i) In the absence of fraud, intentional misconduct, intentional
misrepresentation or criminal activity, the right of the Purchaser and the other
indemnified parties to assert indemnification claims pursuant to this Section
7.2 shall be the sole and exclusive right and remedy exercisable against the
indemnifying party for breaches of this Agreement; provided, however, that
nothing in this Section 7.2 shall limit or restrict the Purchaser's right to
equitable relief (including temporary, preliminary or permanent injunctive
relief) for any breach or alleged breach of the provisions of this Agreement.
Section 7.3. Set-Off. If the Company is required to indemnify the
Purchaser pursuant to this Article VII (as determined by a court of competent
jurisdiction or by an arbitration award), then the Purchaser shall be entitled,
in addition to any other right or remedy it may have, to exercise rights of
set-off against any amounts then due and payable to the Company hereunder or
that may thereafter become due and payable to the Company hereunder (including
under the Secured Promissory Note and the Additional Share Purchase Price).
ARTICLE VIII
MISCELLANEOUS
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Section 8.1. Notices. All notices, requests, claims, demands,
approvals, consents, waivers and other communications hereunder (each a
"Notice") shall be in writing and shall be delivered by hand, delivered by
courier, deposited in the mail (registered or certified mail, postage prepaid,
return receipt requested), or sent by facsimile transmission upon receipt of a
confirmed transmission report, as follows:
If to the Company: LogiMetrics, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxx Xxxxxx
with a copy to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
If to the Purchaser: L-3 Communications Corporation
NARDA Microwave
000 Xxxxxxxx Xxxx
Hauppauge, N Y 11788
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Mr. John Mega
with copies to:
L-3 Communications Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx, Esq.; and
Xxxxxxx Breed Xxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Gerkis, Esq.
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Any party hereto, by Notice given to the other party hereto in accordance with
this Section 8.1, may change the address or facsimile transmission number to
which such Notices are to be sent to such party. All Notices shall be deemed
effective and given upon receipt or refusal of receipt.
Section 8.2. Expenses.
(a) Except as expressly set forth herein, each party shall be
responsible for the costs and expenses incurred by such party in connection with
the negotiation, execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby.
(b) If any party hereto initiates any legal action arising out of or in
connection with this Agreement, the prevailing party in such legal action shall
be entitled to recover from the other party all reasonable costs and expenses
(including attorneys' fees and expert witness fees and expenses) incurred by the
prevailing party in connection therewith.
(c) The Company shall be responsible for and pay in a timely manner of
all sales, use, value added, documentary, stamp, gross receipts, registration,
transfer, conveyance, excise, recording, license and other similar Taxes and
fees ("Transfer Taxes"), arising out of or in connection with or attributable to
the transactions effected pursuant to this Agreement, including the sale and
purchase of the Purchaser Shares. Each party hereto shall prepare and timely
file all Tax Returns required to be filed in respect of Transfer Taxes that are
the primary responsibility of such party under applicable law; provided,
however, that such party's preparation of any such Tax Returns shall be subject
to the other party's approval, which approval shall not be unreasonably withheld
or delayed.
Section 8.3. Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of New York, without reference to the choice of law principles thereof.
Each of the parties hereto irrevocably submits to the exclusive jurisdiction of
the courts of the State of New York and the United States District Court for the
Southern District of New York for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action
or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this Agreement.
Each of the parties hereto irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such
court. Each party hereto irrevocably waives any objection to the laying of venue
of any such suit, action or proceeding brought in such court and irrevocably
waives any claim that any such suit, and action or proceeding brought in any
such court has been brought in an inconvenient forum.
Section 8.4. Arbitration of Disputes.
(a) Except as provided in Section 8.4(d), all disputes, controversies
or questions arising under, out of or relating to this Agreement or the breach
hereof shall be referred for decision by arbitration in the State of New York to
a panel of three arbitrators, one selected by the Purchaser, the second selected
by the Company and the third selected jointly by the Purchaser and the Company.
Any arbitration proceeding shall be governed by the Commercial Rules of the
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American Arbitration Association then in effect or such rules last in effect (in
the event such Association is not then in existence). If the parties are unable
to agree upon the third arbitrator within 21 days after either party has given
the other written notice of the desire to submit the dispute, controversy or
question for decision as aforesaid, then either party may apply to the American
Arbitration Association for a final and binding appointment of the third
arbitrator. If, however, such Association is not then in existence or does not
act in the matter within 45 days of any such application, any party may apply to
the Presiding Justice of the Supreme Court of any county in New York for an
appointment of an arbitration panel to hear the parties and such Justice is
hereby authorized to make such appointment.
(b) Except as provided in Section 8.4(d), if any party submits a
dispute, controversy or question arising hereunder to arbitration, the decision
of the arbitrators shall be final, conclusive and binding on all interested
Persons (absent fraud or evident impartiality), and no action at law or in
equity shall be instituted or, if instituted, further prosecuted by either party
other than to enforce the arbitration award.
(c) The arbitration award may be entered in any court that has
jurisdiction. The award shall include interest from and including the date of
any breach or violation of this Agreement to but excluding the date that the
award is paid in full, at the legal rate of interest in New York applicable to
judgments obtained in the courts of New York. The arbitrators may not limit,
expand or otherwise modify the terms of this Agreement. The arbitrators shall
apply the substance and not the conflicts laws of the State of New York as
specified in Section 8.3.
(d) The foregoing provisions of this Section 8.4 shall not limit or
otherwise affect the right of any party to seek equitable relief (including
temporary, preliminary or permanent injunctive relief) for any breach or alleged
breach of the provisions of this Agreement.
Section 8.5. Assignment; Successors and Assigns; No Third Party Rights.
This Agreement may not be assigned by the Company. This Agreement may not be
assigned by the Purchaser except to any of its controlled Affiliates or to any
successor-in-interest to substantially all of the Purchaser's business. In the
event of any permitted assignment of this Agreement, the assigning party shall
not be released from its obligations hereunder. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, permitted assigns and legal representatives. This Agreement shall be
for the sole benefit of the parties to this Agreement and their respective
successors, permitted assigns and legal representatives and is not intended, nor
shall be construed, to give any Person, other than the parties hereto and their
respective successors, assigns and legal representatives, any legal or equitable
right, remedy or claim hereunder.
Section 8.6. Counterparts. This Agreement may be executed (including by
facsimile transmission) with counterpart signature pages or in multiple
counterparts, each of which shall be deemed an original agreement, but all of
which together shall constitute one and the same instrument.
Section 8.7. Titles and Headings. The titles and headings in this
Agreement are for reference purposes only, and shall not in any way affect the
meaning or interpretation of this Agreement.
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Section 8.8. Entire Agreement. This Agreement constitutes the entire
agreement and understanding between the parties with respect to the matters
covered hereby and thereby and supersedes all previous written, oral or implied
agreements or understandings between them with respect to such matters.
Section 8.9. Severability. The invalidity of any portion hereof shall
not affect the validity, force or effect of the remaining portions hereof. If it
is ever held that any restriction hereunder is too broad to permit enforcement
of such restriction to its fullest extent, such restriction shall be enforced to
the maximum extent permitted by law.
Section 8.10. No Strict Construction. Each of the parties hereto
acknowledges that this Agreement has been prepared jointly by the parties
hereto, and shall not be strictly construed against either party.
Section 8.11. Company Acknowledgment. The Company acknowledges that the
representations and warranties contained in this Agreement and in any document
or instrument delivered to the Purchaser pursuant hereto or in connection
herewith shall not be deemed waived or otherwise affected by any investigation
by the Purchaser, its officers, directors, employees, counsel, accountants,
advisors, representatives and agents.
Section 8.12. Stock Splits and Recapitalizations. Whenever a reference
is made herein to (a) a price per share of Common Stock or per Additional Share,
(b) a number of Purchaser Shares or Additional Shares, or (c) a number of shares
of Common Stock, such price or number shall be appropriately adjusted to give
effect to the Reverse Stock Split or any stock dividend, stock split, reverse
split, stock combination, reclassification, reorganization, recapitalization,
merger, consolidation, share exchange or any other transaction affecting the
Company's capital stock.
Section 8.13. Shares Subject to Agreement. This Agreement shall apply
to (a) the Common Stock and Convertible Securities held by the parties hereto,
as well as any Common Stock and Convertible Securities hereafter acquired by any
such party (including any Common Stock issued upon the exercise, conversion or
exchange of any Convertible Securities), and (b) any and all shares of capital
stock of the Company that may be issued in respect of, in exchange for or in
substitution of any Common Stock or Convertible Securities, by reason of the
Reverse Stock Split or any stock dividend, stock split, reverse split, stock
combination, reclassification, reorganization, recapitalization, merger,
consolidation, share exchange or any other transaction affecting the Company's
capital stock.
Section 8.14. Amendments. Subject to Section 4.4, this Agreement may
not be amended or modified except by an instrument in writing signed on behalf
of the Purchaser and the Company.
Section 8.15. Extension; Waiver. Subject to Section 4.4, any party
hereto may (a) extend the time for performance of any of the obligations or
other acts of any of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties of any of the other parties hereto contained
herein or in any document delivered pursuant hereto, and (c) waive compliance
with any of the agreements of any of the other parties hereto or satisfaction of
any of
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the conditions to such party's obligations contained herein. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party. The
failure of a party hereto to assert any of its rights hereunder shall not
constitute a waiver of such rights.
Section 8.16. Future Legends. At the request of the Purchaser, the
Company shall stamp or otherwise imprint such legend(s) as may be requested by
the Purchaser on one or more of certificates representing any Common Stock
Equivalents owned by the Purchaser or Transferred by the Purchaser to a third
party.
ARTICLE IX
DEFINITIONS
Section 9.1. Certain Definitions. As used herein:
"1998 Form 10-KSB": has the meaning set forth in Section 2.10(a).
"Additional Shares": has the meaning set forth in Section 1.4.
"Additional Share Purchase Price": has the meaning set forth in Section
1.4.
"Affected Property": has the meaning set forth in Section 2.12.
"Affiliate": of a specified Person means a Person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such specified Person. "Control" (including the terms
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
policies of a Person, whether through the ownership of voting securities, by
contract or credit arrangement, as trustee or executor, or otherwise.
"Agreement": means this Purchase Agreement (including the Schedules
hereto), as the same from time to time may be amended, supplemented or waived.
"Applicable Law": means, with respect to any Person, any and all
applicable provisions of any and all (i) constitutions, treaties, statutes, laws
(including the common law), rules, regulations, ordinances or codes of any
Governmental Authority, (ii) Governmental Approvals, and (iii) orders,
decisions, injunctions, judgments, awards and decrees of or agreements, in each
case specifically naming such Person, with any Governmental Authority.
"Antitrust Division": has the meaning set forth in Section 5.5.
"Backlog": has the meaning set forth in Section 2.29.
"Bank Account": has the meaning set forth in Section 2.16(b).
"Board": has the meaning set forth in Section 1.6(a).
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"Cash Funding": has the meaning set forth in Section 1.1(a).
"Certificate of Amendment": has the meaning set forth in Section
6.1(m).
"Closing": has the meaning set forth in Section 1.2.
"Closing Date": has the meaning set forth in Section 1.2.
"Code": means the Internal Revenue Code of 1986, as amended.
"Commission": has the meaning set forth in Section 2.6.
"Common Stock": has the meaning set forth in the recitals.
"Common Stock Equivalents": means, with respect to any holder of the
Company's securities, the number of shares of Common Stock owned by such holder
and the number of shares of Common Stock into or for which any Convertible
Securities owned by such holder shall be convertible, exchangeable or
exerciseable as of the date determination thereof.
"Company": has the meaning set forth at the head of this Agreement. The
term "Company" also shall include for all purposes of this Agreement (including
Article II) all Subsidiaries of the Company, unless the context otherwise
clearly, unambiguously and expressly requires. The fact that the term "Company"
sometimes is used in a particular sentence, paragraph or section herein with the
term "Subsidiary" or "Subsidiaries", and sometimes not used with such term in
the same sentence, paragraph or section, does not, in and of itself, mean that
Subsidiaries are not included in the term "Company" in the latter case.
"Company's Debt": has the meaning set forth in Section 1.5(a).
"Consent": means any consent, approval, authorization, waiver, permit,
grant, franchise, concession, agreement, license, exemption or order of,
registration, certificate, declaration or filing with, or report or notice to,
any Person, including any Governmental Authority.
"Contracts": has the meaning set forth in Section 2.20(a).
"Convertible Securities": means (i) any rights, options or warrants to
acquire Common Stock or any capital stock of the Company or any Subsidiary, and
(ii) any notes, debentures, shares of preferred stock or other securities or
rights, which are convertible or exercisable into, or exchangeable for, Common
Stock or any capital stock of the Company or any Subsidiary.
"Credit Support Payment": has the meaning set forth in Section 1.5(a).
"Damage Amount": has the meaning set forth in Section 1.4(d).
"Debt": means, as to any Person, all obligations for payment of
principal, interest, penalties and collection costs thereof, with respect to
money borrowed, whether incurred or assumed (including guarantees), and other
similar obligations in the nature of a borrowing by which such Person will be
obligated to pay.
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"DGCL": means Delaware General Corporation Law.
"Disbursement Letter": means the letter from the Company to the
Purchaser setting forth the wire transfer instructions in respect of the Cash
Funding.
"Disposition": has the meaning set forth in Section 1.6(b).
"DLJ": has the meaning set forth in Section 6.1(z).
"DLJ Engagement Letter": has the meaning set forth in Section 6.1(z).
"$" or "dollars": means lawful money of the United States of America.
"Employee Benefit Plans": has the meaning set forth in Section 2.24(a).
"Employment Agreements": has the meaning set forth in Section 3.6 of
the Stockholders Agreement.
"Encumbrance": means any mortgage, pledge, hypothecation, claim,
security interest, burden, title defect, title retention agreement, voting
agreement, preemptive right, option, lien, set-off right, right of first
refusal, right of first offer, charge, bailment or other encumbrance.
"Environmental Laws": has the meaning set forth in Section 2.12.
"ERISA": means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act": has the meaning set forth in Section 2.6.
"Existing Holders": has the meaning set forth in the head of the
Stockholders Agreement.
"Financial Statements": has the meaning set forth in Section 2.10(a).
"Former Outside Directors": has the meaning set forth in Section
6.1(t).
"Founder Options": has the meaning set forth in Section 4.3.
"FTC": has the meaning set forth in Section 5.5.
"Full Funding Date": has the meaning set forth in Section 1.1(c).
"Fully Diluted Basis": means, when used with respect to outstanding
shares of Common Stock at any time, all shares of Common Stock that would be
outstanding at such time (i) after giving effect to the transactions
contemplated by this Agreement and any other Transaction Documents (including
Section 6.1(t)), (ii) after giving effect to the application of any
anti-dilution or other similar provisions in any of the agreements or
instruments representing, evidencing or relating to any Convertible Securities
as a result of any of the transactions contemplated by this Agreement or any
other Transaction Documents (including Section 3.4 of the Stockholders
Agreement) unless such provisions are inapplicable or irrevocably and forever
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waived, (iii) after giving effect to the issuance of 81,000 shares of Common
Stock to Xxxxxx Xxxxxxx or his nominee, and (iv) assuming the exercise,
conversion or exchange of all Convertible Securities (it being understood and
agreed that any unexercised or unconverted warrants to purchase Common Stock
shall be deemed exercised or converted in the full face amounts thereof);
provided, however, that, for purposes of calculating the outstanding shares of
Common Stock on a Fully Diluted Basis at or any time after the Closing Date,
there shall be excluded from any such calculation (A) any shares of Common Stock
issuable or issued upon the exercise of any Future Options, and (B) the
Additional Shares and Investment Bank Shares (to the extent that such Additional
Shares and/or the Investment Bank Shares are not actually outstanding at such
time).
"Future Options": means (i) any Founder Options, (ii) any options
granted under the Plan at or immediately prior to the Closing by the Company and
listed on Schedule 4.2, (iii) any options granted under the Plan by the Company
after the Closing Date other than those options referred to in Section 6.1(t),
and (iv) the L-3 Stock Options.
"GAAP": means United States generally accepted accounting principles,
as in effect on the date hereof, consistently applied.
"Governmental Approvals": means any action, order, authorization,
Consent, approval, license, lease, waiver, franchise, concession, agreement,
license, ruling, permit, certification, exemption of, filing or registration by
or with, or report or notice to, any Governmental Authority.
"Governmental Authority": means any nation or government or other
political subdivision thereof, including any governmental department,
commission, board, bureau, agency, regulatory authority, instrumentality,
judicial or administrative body or any tribunal or arbitrator(s) having
jurisdiction over the matter or matters in question, or any self-regulatory
organization.
"HSR Act": means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended. "include", "includes", "included" and "including": shall be
construed as if followed by the phrase "without being limited to".
"include", "includes", "included", and "including": shall be construed
as if followed by the phrase "without being limited to".
"Intellectual Property": means: (i) any and all trademarks, service
marks, brand names, certification marks, trade dress, domain names, assumed
names, trade names, logos and other indications of origin, sponsorship or
affiliation, together with the goodwill associated therewith (whether the
foregoing are registered or unregistered), registrations thereof in any
jurisdiction and applications to register any of the foregoing in any
jurisdiction, and any extension, modification or renewal of any such
registration or application; (ii) any and all inventions, developments,
improvements, discoveries, know how, concepts and ideas, whether patentable or
not in any jurisdiction; (iii) any and all patents, revalidation's, industrial
designs, industrial models and utility models, patent applications (including
reissues, continuations, divisions, continuations-in-part and extensions) and
patent disclosures; (iv) any and all mask works and other semiconductor chip
rights and registrations thereof; (v) any and all non-public information,
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trade secrets and proprietary or confidential information and rights in any
jurisdiction to limit the use or disclosure thereof by any Person; (vi) any and
all writings and other works, whether copyrighted, copyrightable or not in any
jurisdiction, such works including computer programs and software (including
source code, object code, data and databases) and internet website pages; (vii)
any and all copyrights, copyright registrations and applications for
registration of copyrights in any jurisdiction, and any renewals or extensions
thereof; (viii) any and all other intellectual property or proprietary rights;
(ix) any and all agreements, licenses, immunities, covenants not to xxx and the
like relating to any of the foregoing; and (x) any and all claims or causes of
action arising out of or related to any infringement or misappropriation of any
of the foregoing.
"Inventories": means all inventories of raw materials, work in process,
finished products, goods, spare parts, replacement and component parts, and
office and other supplies (whether on hand, in transit or on order).
"Investment Bank": has the meaning set forth in Section 5.1.
"Investment Bank Shares": has the meaning set forth in Section 5.1.
"ISRA": has the meaning set forth in Section 5.4.
"L-3 Stock Options": has the meaning set forth in Section 1.8.
"Leases": means the real property leases, subleases, financial leases,
use agreements, licenses and occupancy agreements pursuant to which the Company
is the lessee, sublessee, user, licensee or occupant.
"Legacy Group I Loans": has the meaning set forth in the
Acknowledgement, Consent and Waiver dated as of March 7, 2000, among the Company
and the parties thereto.
"Liability Amount": has the meaning set forth in Section 1.1(e).
"Losses": has the meaning set forth in Section 7.2(a).
"Material Adverse Effect": has the meaning set forth in Section 2.1(a).
"Minority Stockholders": has the meaning set forth in Section 4.4(a).
"Newbridge": has the meaning set forth in Section 2.36.
"Non-Purchaser Directors": has the meaning set forth in Section
3.1(a)(iv) of the Stockholders Agreement.
"Notice": has the meaning set forth in Section 8.1.
"PBGC": has the meaning set forth in Section 2.24(c).
"Pension Plan": has the meaning set forth in Section 2.24(g).
"Permitted Encumbrances": has the meaning set forth in Section 2.19(d).
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"Person" or "person": means any natural person, firm, partnership,
association, corporation, company, limited liability company, trust, business
trust or other entity, or any Governmental Authority.
"Plan": has the meaning set forth in Section 4.2.
"Pledged Shares": has the meaning set forth in Section 1.1(d).
"Preferred Stock": has the meaning set forth in Section 2.5(a).
"Proceeds": has the meaning set forth in Section 2.16(a).
"Projections": has the meaning set forth in Section 2.37.
"Public Offering": means a consummated firmly underwritten public
offering of the Common Stock of the Company pursuant to an effective
registration statement filed with the Commission under the Securities Act, with
respect to which (i) the Company's Common Stock is listed on the New York Stock
Exchange or admitted for trading on the NASDAQ National Market (or any
successor, exchange market or organization thereto), and (ii) the Company makes
an offering for at least 20% of the outstanding Common Stock.
"Purchase Price": has the meaning set forth in the recitals.
"Purchaser": means L-3 Communications Corporation.
"Purchaser Credit Support": has the meaning set forth in Section
1.5(a).
"Purchaser Indemnified Party": has the meaning set forth in Section
7.2(a).
"Purchaser Shares": has the meaning set forth in the recitals.
"Report": has the meaning set forth in Section 5.5.
"Registration Rights Agreement": has the meaning set forth in Section
6.1(g).
"Registration Statement": has the meaning set forth in Section 5.2.
"Regulated Substances": has the meaning set forth in Section 2.12.
"Released Pledged Shares": has the meaning set forth in Section 1.1(d).
"Required Prepayment Notice": has the meaning set forth in Section
1.1(c).
"Reverse Stock Split": has the meaning set forth in Section 5.3.
"Rule 144A": has the meaning set forth in Section 5.7(b).
"Rule 14f-1 Materials": has the meaning set forth in Section 5.10(a).
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"Secured Promissory Note": has the meaning set forth in Section 1.1(a).
"Securities Act": has the meaning set forth in Section 2.4.
"SEC Documents": has the meaning set forth in Section 2.6.
"Stockholders Agreement": has the meaning set forth in Section 6.1(v).
"Signal": has the meaning set forth in Section 2.20(a).
"Signal Agreements": has the meaning set forth in Section 2.20(d).
"Special Director Majority": has the meaning set forth in Section
4.4(a).
"Special Stockholder Majority": has the meaning set forth in Section
4.4(a).
"SpeedUSNY": has the meaning set forth in Section 1.1(b).
"Stock Pledge Agreement": has the meaning set forth in Section 1.1(d).
"Subsidiary": means each corporation or other Person in which a Person
owns or controls, directly or indirectly, capital stock or other equity
interests representing at least (i) 50% of the outstanding voting stock or other
equity interests, or (ii) 50% of the outstanding capital stock or other equity
interests.
"Tangible Property": has the meaning set forth in Section 2.19(c).
"Tax Return": means any return, report, declaration, form, claim for
refund or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Taxes": means any federal, state, provincial, local or foreign income,
alternative, minimum, accumulated earnings, personal holding company, franchise,
capital stock, net worth, capital, profits, windfall profits, gross receipts,
value added, sales, use, goods and services, excise, customs duties, transfer,
conveyance, mortgage, registration, stamp, documentary, recording, premium,
severance, environmental (including taxes under Section 59A of the Code), real
property, personal property, ad valorem, intangibles, rent, occupancy, license,
occupational, employment, unemployment insurance, social security, disability,
workers' compensation, payroll, health care, withholding, estimated or other
similar tax, duty or other governmental charge or assessment or deficiencies
thereof, and including any interest, penalties or additions to tax attributable
to the foregoing.
"Technology": has the meaning set forth in Section 1.6(a).
"Technology Option": has the meaning set forth in Section 1.6(a).
"Third Party Claim": has the meaning set forth in Section 7.2(d).
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"Xxxxxxxx", "Xxxxxxxxxxxx" (xx any correlative term): means a sale,
assignment, pledge, hypothecation, gift, placement in trust (voting or
otherwise) or transfer by operation of law of, creation of a security interest
in, or other Encumbrance on, or any other encumbering or disposal (directly or
indirectly and whether or not voluntary), and shall include any transfer by will
or intestate succession.
"Transfer Taxes": has the meaning set forth in Section 8.2(c).
"Transaction Documents": means this Agreement, the Secured Promissory
Note, the Stock Pledge Agreement, the Registration Rights Agreement, the
Stockholders Agreement, the Employment Agreements and each document or
instrument to be delivered to the Purchaser pursuant to this Agreement
(including pursuant to Article VI).
"Treasury Regulations": means the regulations prescribed pursuant to
the Code.
"WARN Act": means Worker Adjustment and Training Notification Act.
Section 9.2. Construction.
(a) All references herein to a Section, Article, Exhibit or Schedule
are to a Section, Article, Exhibit or Schedule of or to this Agreement, unless
otherwise indicated.
(b) Unless the context of this Agreement clearly requires otherwise,
references to any gender includes all genders.
(c) The words "herein", "hereof", and "hereunder" and words of similar
import shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The terms defined in the singular shall have a
comparable meaning when used in the plural and vice versa.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
LOGIMETRICS, INC.
By: /s/ Xxxxxx X. Xxxxxx
_______________________________
Name: Xxxxxx X. Xxxxxx
Title: President
L-3 COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
_______________________________
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
EXHIBIT A
SECURED PROMISSORY NOTE
$6,500,000.00 July 10, 2000
FOR VALUE RECEIVED, L-3 COMMUNICATIONS CORPORATION, a Delaware
corporation ("L-3"), hereby promises to pay to the order of LOGIMETRICS, INC., a
Delaware corporation (the "Holder"), the principal amount of SIX MILLION FIVE
HUNDRED THOUSAND DOLLARS and 00/100 ($6,500,000.00), such principal to be due
and payable on earlier of (a) the consummation of the Public Offering (as
defined in that certain Purchase Agreement, dated the date hereof, between the
Holder and L-3 (as the same may be amended from time to time, the "Agreement"))
and (b) January 2, 2001 (the "Maturity Date").
1. PAYMENTS. All payments of principal and any Default Interest (as
defined below) hereunder shall be made in United States Dollars and in
immediately available funds. All payments made hereunder shall be credited (a)
first, against any fees, costs or expenses due hereunder from L-3 to the Holder,
(b) second, against any accrued and unpaid Default Interest on this Note, and
(c) third, against principal outstanding under this Note.
2. SECURITY INTEREST. This Note will be initially secured by a pledge
of 43.33% of the Purchaser Shares (as defined in the Agreement) pursuant to a
Stock Pledge Agreement, dated the date hereof (as the same may be amended from
time to time, the "Stock Pledge Agreement"). As provided in the Stock Pledge
Agreement, for every prepayment, payment or set-off by L-3 of all or a portion
of the principal amount of this Note (including pursuant to Section 1.1(c), 1.5
or 7.3 of the Agreement), a number of Purchaser Shares equal to the Released
Pledged Shares (as defined in the Agreement) will be released from the
Encumbrance (as defined in the Agreement) of the Stock Pledge Agreement and
delivered to L-3. As provided in the Stock Pledge Agreement, upon L-3's payment
of this Note in full, all Purchaser Shares then subject to the Encumbrance (as
defined in the Agreement) of the Stock Pledge Agreement will be automatically
released from the Encumbrance (as defined in the Agreement) of the Stock Pledge
Agreement and delivered to L-3.
3. PREPAYMENT. From time to time, pursuant to Section 1.1(c) of the
Agreement and subject to Section 1.1(b) of the Agreement, L-3 shall prepay all
or a portion of the outstanding principal amount, such prepayment to be made
within five (5) business days after receipt by L-3 of the Required Prepayment
Notice (as defined in the Agreement).
4. SET-OFF. If the Holder is required to indemnify any indemnified
party pursuant to Article VII of the Agreement (as determined by a court of
competent jurisdiction or by an arbitration award), then L-3 shall be entitled,
in addition to any other right or remedy it may have, to exercise rights of
set-off against any amounts then due and payable or that may thereafter become
due and payable to the Holder under this Note.
5. OTHER DEBT. If L-3 or any of its Affiliates (as defined in the
Agreement) provides Purchaser Credit Support (as defined in the Agreement), in
respect of all or any portion of the
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Company's Debt (as defined in the Agreement), then the amount of the Purchaser
Credit Support shall constitute, to the extent of the amount of the Purchaser
Credit Support, a Credit Support Payment (as defined in the Agreement);
provided, however, (a) if the Company's Debt has been paid in full and none of
the Purchaser Credit Support has been utilized or called upon, then the Credit
Support Payment shall be deemed not to have been made, and (b) if, at any time,
the amount of the Purchaser Credit Support shall have been permanently reduced
by reason other than the payment by or on behalf of the Purchaser of any amount
in respect of such Purchaser Credit Support, then the Credit Support Payment
shall be deemed not to have been made, but only to the extent of such reduction.
6. CANCELLATION OF NOTE. L-3's obligations of payment under this Note
may be cancelled pursuant to the provisions of Section 1.1(b) of the Agreement,
which provisions are incorporated herein by reference in their entirety.
7. EVENTS OF DEFAULT; REMEDIES.
(a) "Event of Default" means the occurrence of one or more of the
following events: (i) the failure of L-3 to pay the principal amount of this
Note on the Maturity Date for a period of two business days after written notice
of such failure is given to L-3 by the Holder; (ii) the commencement of any
proceeding instituted by or against L-3 under any laws relating to bankruptcy,
insolvency, receivership or arrangements with creditors and such proceeding is
not dismissed, stayed or vacated within 60 days; (iii) the dissolution,
liquidation or winding up of the affairs of L-3; (iv) an assignment for the
benefit of creditors by L-3; or (v) the insolvency or written admission of
inability of L-3 to pay its debts as they mature.
(b) Upon the occurrence and during the continuance of an Event of
Default and the expiration of the applicable cure period (if any), interest
shall accrue on the outstanding principal at an overdue rate equal to 10% per
annum ("Default Interest").
(c) If an Event of Default shall have occurred and be continuing,
the Holder shall have, in addition to all other rights given by law or by this
Note, the right, at its option, by written notice to L-3 to declare all the
indebtedness described herein or evidenced hereby and the collection fees
thereof to be immediately due and payable, and upon such delivery or mailing of
such notice, all such indebtedness and collection fees shall become immediately
due and payable.
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8. NOTICES. All notices, consents, requests, waivers or other
communications (each a "Notice") which, by provision of this Note, is required
or permitted to be given or served to L-3 shall be given and served for all
purposes (a) if hand delivered, (b) if sent by nationally recognized overnight
courier, or (c) if sent by registered or certified mail, postage prepaid, return
receipt requested to the following address:
L-3 Communications Corporation
Narda Microwave
000 Xxxxxxxx Xxxx
Hauppauge, N Y 11788
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Mr. John Mega
with copies to:
L-3 Communications Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx, Esq.; and
Xxxxxxx Breed Xxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Gerkis, Esq.
Each Notice shall be deemed effective upon receipt (or refusal of receipt).
9. AMENDMENTS; WAIVERS; CONSENTS. This Note may not be waived, changed,
modified or discharged orally, but only by an agreement in writing which is
signed by both L-3 and the Holder. Except as otherwise provided in this Note,
the Agreement or the Stock Pledge Agreement, L-3 hereby waives presentment,
demand for payment, diligence, notice of dishonor and all other notices or
demands in connection with the delivery, acceptance, performance, default or
endorsement of this Note.
10. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Note shall be
governed by, and construed in accordance with, the internal laws of the State of
New York, without reference to the choice of law principles thereof. L-3 hereby
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York and the United States District Court for the Southern District of New
York for the purpose of any suit, action, proceeding or judgment relating to or
arising out of this Note and the transactions contemplated hereby. Service of
process in connection with any such suit, action or proceeding may be served on
L-3 anywhere in the world by the same methods as are specified for the giving of
notices under this Note. L-3 hereby irrevocably consents to the jurisdiction of
any such court in any such suit, action or proceeding and to the laying of venue
in such court. L-3 hereby irrevocably waives any objection
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to the laying of venue of any such suit, action or proceeding brought in such
court and irrevocably waives any claim that any such suit, and action or
proceeding brought in any such court has been brought in an inconvenient forum.
11. SUCCESSORS. This Note shall inure to the benefit of the Holder and
its successors and assigns.
A-4
IN WITNESS WHEREOF, L-3 has duly executed this Note as of the date
first above written.
L-3 COMMUNICATIONS CORPORATION
By:
------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
A-5
EXHIBIT B
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT dated as of July 10, 2000, made by L-3
Communications Corporation, a Delaware corporation ("Pledgor"), in favor of
LogiMetrics, Inc., a Delaware corporation ("Pledgee").
WHEREAS, pursuant to the Purchase Agreement, dated July 10, 2000, (as
the same may be amended from time to time, the "Purchase Agreement"), between
Pledgor and Pledgee. Pledgee sold to Pledgor and Pledgor purchased from Pledgee,
on the date hereof, 53.5% of the issued and outstanding shares of Pledgee's
Common Stock on a Fully Diluted Basis (as such terms are defined in the Purchase
Agreement) (the "Purchaser Shares");
WHEREAS, pursuant to the Purchase Agreement, Pledgor has agreed to
pledge 43.33% of the Purchaser Shares (the "Pledged Stock") to Pledgee to secure
the obligations of Pledgor under the Secured Promissory Note, dated the date
hereof (the "Secured Promissory Note") (collectively, the "Secured
Obligations"); and
WHEREAS, it is a condition to Pledgee's willingness to enter into the
Purchase Agreement that Pledgor shall have executed this Agreement;
NOW, THEREFORE, in consideration of the premises and in order to induce
Pledgee to enter in the Purchase Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms used herein
shall have the same meanings of terms defined in the Purchase Agreement.
2. Pledge. Pledgor hereby pledges, assigns, hypothecates, transfers and
delivers to Pledgee all the Pledged Stock and hereby grants to Pledgee a first
lien on, and first priority security interest in, the Pledged Stock and in all
Proceeds (as defined below) thereof as collateral security for the prompt and
complete payment and performance when due of all the Secured Obligations.
"Proceeds" means all "proceeds" as defined in Section 9-306(1) of the New York
Uniform Commercial Code (the "Code") and shall, in any event, include, without
limitation, all dividends, distributions or other income from the Pledged Stock,
and any and all collections on the foregoing or distributions with respect to
the foregoing. Pledgee hereby acknowledges receipt and possession of the Pledged
Stock, to be held by Pledgee in accordance with this Agreement.
3. Stock Dividends, Distributions, etc. If, while this Agreement is in
effect, Pledgor shall become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate representing a stock
dividend or a distribution in connection with any reclassification, increase or
reduction of capital, or issued in connection with any reorganization), option
or rights, as an addition to, in substitution of, or in exchange for, any shares
of any Pledged Stock, Pledgor agrees to accept the same as Pledgee's agent and
to hold the same in trust on behalf of and for the benefit of Pledgee and to
deliver the same forthwith to Pledgee in the exact form received, with the
endorsement of Pledgor when necessary, and/or appropriate undated stock powers
duly executed in blank, to be held by Pledgee, subject to the
B-1
terms hereof, as additional collateral security for the Secured Obligations. All
property so distributed in respect of the Pledged Stock which is received by
Pledgor shall, until delivered to Pledgee, be held by Pledgor as Pledgee's agent
(and in trust on its behalf and for its benefit) as additional collateral
security for the Secured Obligations.
4. Collateral. The Pledged Stock and Proceeds thereof are referred to
herein collectively as the "Collateral". Certificates or instruments
representing or evidencing the Collateral shall be delivered to and held by
Pledgee. For every prepayment, payment or set-off by Pledgor of all or a portion
of the principal amount of the Secured Promissory Note (including pursuant to
Section 1.1(c), 1.5 or 7.3 of the Purchase Agreement), a number of shares of
Pledged Stock equal to the Released Pledged Shares shall be released from the
Encumbrance of this Agreement and such Released Pledged Shares shall no longer
constitute part of the Collateral. Upon payment of the Secured Obligations in
full, all the Collateral shall automatically be released from the Encumbrance of
this Agreement. Notwithstanding anything in this Agreement or any of the other
Transaction Documents to the contrary, if the Purchaser pays the Liability
Amount, then all Purchaser Shares then subject to the Encumbrance of this
Agreement shall be automatically released from the Encumbrance of this Agreement
and delivered to the Purchaser.
5. Cash Dividends; Voting Rights. Unless a Triggering Event (as defined
below) shall have occurred, Pledgor shall be entitled to receive all cash
dividends paid in respect of the Pledged Stock, to vote the Pledged Stock and to
give consents, waivers and ratification in respect of the Pledged Stock;
provided, however, that no vote shall be cast or consent, waiver or ratification
given or action taken that would impair the Collateral or violate any provision
of this Agreement.
6. Rights of Pledgee. If a Triggering Event shall have occurred, (a)
any of or all the Pledged Stock included in the Collateral may, without notice,
be registered in the name of Pledgee or its nominee and Pledgee shall have the
right to exchange certificates or instruments representing or evidencing the
Pledged Stock included in the Collateral for certificates or instruments of
smaller or larger denominations, (b) Pledgee may collect and receive all cash
dividends and other distributions made thereon, and (c) Pledgee or its nominee
may thereafter, after notice to Pledgor, exercise all voting and corporate
rights at any meeting of any corporation or other entity issuing any of the
Pledged Stock and give consents, waivers and ratification in respect of the
Pledged Stock, in each case as if it were the sole and absolute owner thereof.
7. Remedies. If any portion of the Secured Obligations shall at any
time become, or shall be declared, due and payable (or if any stay or legal bar
to such Secured Obligations becoming or being declared due and payable is in
effect, if but for the operation of such stay or legal bar such obligations
would have become, or could have been declared, due and payable by their terms)
and remain unpaid for a period of 30 days from the date upon which such portion
of the Secured Obligations have become, or shall have been declared (or would
have so become, or could have so been declared), due and payable (a "Triggering
Event"), Pledgee shall have the right to exercise all rights and remedies of a
secured party under the Code.
8. Representations, Warranties and Covenants. Pledgor represents and
warrants that: (a) Pledgor has full corporate power, authority and legal right
to pledge, assign, transfer, deliver, deposit and set over all the Pledged Stock
pursuant to this Agreement; (b) this Agreement has
B-2
been duly authorized, executed and delivered by Pledgor and constitutes a legal,
valid and binding obligation of the Pledgor enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and by equitable principles, including those limiting the availability of
specific performance, injunctive relief and other equitable remedies and those
providing for equitable defenses; (c) (assuming the accuracy of Pledgee's
representations and warranties contained in Sections 2.2 and 2.5 of the Purchase
Agreement) the pledge, assignment and delivery of the Pledged Stock and the
other Collateral pursuant to this Agreement creates a valid first lien on and,
and a first priority security interest in, such shares of the Pledged Stock and
the other Collateral, respectively, subject to no prior or pari passu
Encumbrance or to any agreement granting to any third party a security interest
in the property or assets of Pledgor which would include the Pledged Stock or
the other Collateral; and (d) no consent, approval, authorization or other order
of any person and no consent, authorization approval, or other action by, and no
notice to or filing with, any Governmental Authority is required to be made or
obtained by Pledgor either (i) for the pledge of the Collateral by Pledgor
pursuant to this Agreement, or (ii) for the exercise by Pledgee of the voting or
other rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except such as may be required in
connection with such disposition by laws affecting the offering and sale of
securities generally.
Pledgor covenants and agrees that it will defend Pledgee's right and
security interest in and to the Collateral against the claims and demands of all
Persons whomsoever; and covenants and agrees that it will have like title to and
right to pledge any other property at any time hereafter pledged to Pledgee as
Collateral hereunder and will likewise defend Pledgee's right thereto and
security interest therein.
9. No Disposition, etc. Without the prior written consent of Pledgee,
Pledgor will not sell or otherwise dispose of, grant any Encumbrance on or any
option or right with respect to, or mortgage, hypothecate, assign, pledge,
transfer, charge or otherwise encumber any of the Collateral, any interest
therein or any proceeds thereof, except for the lien and security interest
provided for by this Agreement.
10. Further Assurances. Pledgor agrees that any time and from time to
time upon the written request of Pledgee, it will, at its expense, execute and
deliver such further documents and do such further acts and things as Pledgee
may reasonably request in order to effect the purposes of this Agreement.
11. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions thereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. Section Headings. The section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
B-3
13. No Waiver; Cumulative Remedies. Pledgee shall not by any act
(except by a written instrument executed by Pledgee pursuant to Section 14) be
deemed to have waived any right or remedy hereunder. No failure to exercise, nor
any delay in exercising, on the part of Pledgee any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power of privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by Pledgee of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which Pledgee would otherwise have
on any future occasion. The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by Applicable Law.
14. Waivers and Amendments; Successors and Assigns; Governing Law. This
Agreement may be amended, supplemented or waived by written instrument executed
by Pledgor and Pledgee. This Agreement shall be binding upon the successors and
assigns of Pledgor and shall inure to the benefit of Pledgee and its successors
and assigns. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (REGARDLESS OF
THE LAWS THAT MIGHT BE APPLICABLE UNDER ANY PRINCIPLES OF CONFLICTS OF LAWS).
B-4
IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly
executed and delivered as of the day and year first above written.
L-3 COMMUNICATIONS CORPORATION
By:
---------------------------
Name:
Title:
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EXHIBIT C
[LETTERHEAD OF XXXXXXXXXX XXXXXXX PC]
Xxxx X. Xxxxxxxx Tel 000.000.0000 Fax 000.000.0000
Member of the Firm xxxxxxxxx@xxxxxxxxxx.xxx
July 10, 2000
L-3 Communications Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
We have acted as counsel to LogiMetrics, Inc., a Delaware corporation (the
"Company"), in connection with the transactions contemplated by the Purchase
Agreement, dated as of July 10, 2000 (the "Purchase Agreement"), by and between
the Company and L-3 Communications Corporation ("L-3"). This opinion is being
furnished to you pursuant to Section 6.1(e) of the Purchase Agreement.
Capitalized terms used herein have the respective meanings ascribed thereto in
the Purchase Agreement unless otherwise defined herein.
In connection with this opinion, we have examined copies of (i) the
Purchase Agreement, (ii) the Registration Rights Agreement, dated July 10, 2000
(the "Registration Rights Agreement"), among the Company, L-3 and the Existing
Holders, (iii) the Employment Agreements, each dated July 10, 2000, by and
between the Company and each of Xxxxxxx X. Brand and Xxxxxx X. Xxxxxx, (iv) the
Secured Promissory Note, made by L-3 in favor of the Company, (v) the Stock
Pledge Agreement, dated July 10, 2000, made by L-3 in favor of the Company, and
(vi) the Stockholders Agreement, dated July 10, 2000, among the Company, L-3 and
the Existing Holders (collectively, the "Transaction Documents") and such
corporate records, certificates and other documents, and such questions of law,
as we have considered necessary or appropriate for the purposes of this opinion.
With your approval, we have, without independent investigation or
verification, relied as to certain factual matters material to the opinions
contained herein (i) on information obtained from public officials, officers and
representatives of the Company and other sources believed by us to be
responsible, and (ii) upon the representations and warranties made by the
parties in the Transaction Documents and certificates and other written
statements of representatives of the parties to the Transaction Documents. Also,
with your approval, we have assumed, without independent investigation or
verification, that (i) the Transaction Documents have been duly authorized,
executed and delivered by the parties to such Transaction Documents (other than
the Company) and constitute valid and binding obligations
C-1
L-3 Communications Corporation July 10, 2000
Page 2
of such parties (other than the Company), enforceable against such parties
(other than the Company) in accordance with their respective terms, (ii) all
documents submitted to us as originals are authentic, (iii) all documents
submitted to us as certified, conformed or other copies of original documents
conform to such authentic, original documents, and (iv) the signatures on all
documents examined by us are genuine. We are not expressing any opinion as to
the effect of the compliance or noncompliance of L-3 with any laws or
regulations applicable to L-3 because of its legal or regulatory status or the
nature of its business.
Based upon the foregoing and subject to the qualifications and limitations
stated herein, we hereby advise you that, in our opinion:
1. The Company is a corporation duly organized, validly existing and in
good standing under the Delaware General Corporation Law (the "DGCL") and has
the corporate power to own its properties and to conduct its business as
presently conducted.
2. mmTech, Inc. is a corporation duly organized, validly existing and in
good standing under the New Jersey Business Corporation Act and has the
corporate power to own its properties and to conduct its business as presently
conducted.
3. The Company has the corporate power to execute, deliver and perform each
of the Transaction Documents to which the Company is a party. Each of the
Transaction Documents to which the Company is a party has been duly and validly
authorized by all necessary corporate action on the part of the Company. The
Company has duly executed and delivered each of the Transaction Documents to
which the Company is a party.
4. Each of the Transaction Documents to which the Company is a party
constitutes a valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles,
except that we are not expressing any opinion as to the validity or
enforceability of the indemnification provisions of Section 2.8 of the
Registration Rights Agreement.
5. The Certificate of Amendment has been duly authorized by all necessary
corporate action, has been duly filed under the DGCL and has become effective.
6. The execution and delivery of the Transaction Documents to which the
Company is a party and performance by the Company of its obligations thereunder
will not: (i) violate (A) the Certificate of Incorporation or By-laws of the
Company, (B) the DGCL or any federal or New Jersey statute or regulation known
to us and applicable to the Company or its
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L-3 Communications Corporation July 10, 2000
Page 3
Subsidiaries or, (C) any order, judgment or decree of any court or
governmental authority known to us and specifically binding on the Company, its
Subsidiaries or their respective properties, other than, in the case of clause
(C) only, such violations that would not, individually or in the aggregate, have
a Material Adverse Effect with respect to the Company and its Subsidiaries; or
(ii) based solely upon review of the material contracts, agreements and
instruments identified in the officer's certificate attached hereto as Annex I
("Material Contracts") result in the breach of, constitute a default under or
result in the creation or imposition of any Encumbrance pursuant to the terms of
any Material Contract surviving the transactions contemplated by the Purchase
Agreement, other than (i) as disclosed in the Agreement, (ii) those that have
been waived in accordance with Section 6.1(s) of the Purchase Agreement, and
(iii) such breaches, defaults or Encumbrances that would not, individually or in
the aggregate, have a Material Adverse Effect with respect to the Company and
its Subsidiaries.
7. To our knowledge, there are no preemptive or other subscription rights
(legal, contractual or otherwise) with respect to the Purchaser Shares or the
Additional Shares. The Purchaser Shares have been duly authorized and, upon
payment of the purchase price specified in Purchase Agreement, will be validly
issued, fully paid and non-assessable. The Additional Shares have been duly
authorized and, when issued and delivered to L-3 in exchange for the payment by
L-3 from time to time of the portion of the Additional Share Purchase Price
attributable thereto as specified in the Purchase Agreement, the portion of the
Additional Shares so issued and delivered will be validly issued, fully paid and
non-assessable. The Additional Shares have been reserved for issuance by the
Company.
8. To our knowledge, no authorization, consent, approval or order of, or
filing, declaration or registration with, or notice to, any court or
governmental agency or body of the United States of America, the State of New
Jersey or the State of Delaware (insofar as the DGCL is concerned) is required
for the execution and delivery of the Transaction Documents to which the Company
is a party by the Company and the performance by the Company of its obligations
thereunder, other than those required under (i) the New Jersey Industrial Site
Recovery Act (which have been made), (ii) pursuant to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1977, as amended, and (iii) pursuant to applicable
federal and state securities laws, as to which no opinion is expressed except as
provided in paragraph 9 hereof.
9. Assuming the representations and warranties of L-3 contained in Article
III of the Purchase Agreement are true and correct in all respects, the offer
and sale of the Purchaser Shares and the Additional Shares as contemplated by
the Purchase Agreement are exempt from the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended, and from the "Blue Sky"
laws of the State of New Jersey.
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L-3 Communications Corporation July 10, 2000
Page 4
In rendering the opinions set forth in paragraphs 6 and 7 above, we have
assumed that the Company will have sufficient authorized and unissued shares of
Common Stock so that, after giving effect to the issuance of the Additional
Shares, the number of shares of Common Stock issued by the Company will not
exceed the number of shares authorized. If such issuance were to occur today,
the Company has sufficient authorized and unissued shares.
Our opinions in paragraphs 6 and 8 are based upon and limited to a review
of those laws which, in our experience, are normally applicable to transactions
of the type contemplated by the Transaction Documents.
In rendering the opinion set forth in paragraph 9 above, with your approval
we have relied, without independent verification, on the officer's certificate
attached hereto as Annex II.
Whenever our opinion with respect to the existence or absence of facts is
indicated to be based on our knowledge or awareness, we are referring to the
actual knowledge of the Xxxxxxxxxx Xxxxxxx PC attorneys who have represented the
Company in connection with the transactions contemplated by the Transaction
Documents. We have not undertaken any independent investigation to determine the
existence or absence of any facts and no inference as to our knowledge
concerning any facts should be drawn as a result of the limited representation
undertaken by us.
This opinion is limited to the laws of the State of New Jersey, applicable
laws of the United States and the provisions of the Delaware General Corporation
Law ("DGCL") and we are expressing no opinion as to the effect of the laws of
any other jurisdiction or as to the laws that might be applied by any court
outside the State of New Jersey or the State of Delaware (with respect to the
DGCL only). By their terms, each of the Purchase Agreement and the Registration
Rights Agreement purports to be governed by the internal laws of the State of
New York. The opinion set forth above in paragraph 4 is the opinion which we
would provide to you if New Jersey law governed the Transaction Documents and
may be relied upon solely to the extent that the application of the laws of the
State of New York to the matters set forth above would not have different
consequences from those which would result from application of the laws of the
State of New Jersey. We express no opinion as to the similarity of applicable
laws of the State of New York to those of the State of New Jersey. In addition,
we express no opinion in paragraph 4 above as to the enforceability of the
choice of law provisions contained in the Transaction Documents.
We disclaim any obligation to advise you of any developments or matters in
areas covered by this opinion that occur or come to our attention after the date
of this opinion.
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L-3 Communications Corporation July 10, 2000
Page 5
This opinion has been furnished by us to you in our capacity as counsel to
the Company and may not be relied upon by any other person without our prior
written consent.
Very truly yours,
C-5
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
AMONG
LOGIMETRICS, INC.
AND
L-3 COMMUNICATIONS CORPORATION
AND
THE OTHER PARTIES LISTED ON THE SIGNATURE PAGES HEREOF
DATED AS OF JULY 10, 2000
LOGIMETRICS, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as of July 10,
2000, among LogiMetrics, Inc., a Delaware corporation (the "Company"), L-3
Communications Corporation, a Delaware corporation ("L-3"), and the other
signatories hereto (the "Existing Holders").
In consideration of the mutual agreements and covenants set forth below and
other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the parties to this Agreement agree as follows:
1. Definitions.
1.1 Definitions. For the purposes of this Section 1 and other Sections of
this Agreement, the following words shall have the meanings set forth below:
"Agreement" shall mean this Agreement, as the same may be amended,
supplemented or modified from time to time in accordance with its terms.
"Applicable Securities Laws" shall mean the securities laws or Blue Sky
laws of any jurisdiction (U.S. or foreign) applicable under the relevant
circumstances, including the United States or any subdivision thereof.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock" shall mean the shares of Common Stock of the Company, par
value $.01 per share.
"Company" shall have the meaning set forth in the first paragraph hereof.
"Company's Notice" shall have the meaning set forth in Section 2.3.
"Convertible Securities" shall mean (i) any rights, options or warrants to
acquire Common Stock or any capital stock of the Company, and (ii) any notes,
debentures, shares of preferred stock or other securities or rights, which are
convertible or exercisable into, or exchangeable for, Common Stock or any
capital stock of the Company.
"CRM Related Persons" shall have the meaning set forth in Section 3.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Existing Holders" shall have the meaning set forth in the first paragraph
hereof.
"Existing Holder Registrable Stock" shall mean: (i) the Common Stock held
by the Existing Holders and listed on Schedule 1 hereto; (ii) any Common Stock
issued or issuable
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upon conversion of any Convertible Security held by the Existing Holders
and listed on Schedule 1 hereto; and (iii) any Common Stock issued or issuable,
directly or indirectly, with respect to any of the securities referred to in
clause (i) or clause (ii) above, by reason of a stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. Each share of Existing Holder Registrable
Stock shall cease to be Registrable Stock when transferred to any Person in
accordance with a registered public offering.
"Incidental Registration" shall have the meaning set forth in Section 2.3.
"Initiating Holders" shall mean the Long-Form Initiating Holders or the
Short-Form Initiating Holders, as applicable.
"Investors' Notice" shall have the meaning set forth in Section 2.3.
"L-3" shall have the meaning set forth in the first paragraph hereof.
"L-3 Registrable Stock" shall mean: (i) any Common Stock now or hereafter
held by L-3; (ii) any Common Stock issued or issuable upon conversion of any
Convertible Security held by L-3; and (iii) any Common Stock issued or issuable,
directly or indirectly, with respect to any of the securities referred to in
clause (i) or clause (ii) above, by reason of a stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. Each share of L-3 Registrable Stock shall
cease to be Registrable Stock when transferred to any Person in accordance with
a registered public offering.
"Long-Form Initiating Holders" shall mean the Major Investor(s) referred to
in either Section 2.1(a) or 2.1(b), as the case may be.
"Long-Form Registration Statement" shall mean a registration statement on
Form S-1 or Form S-2, or any similar form of registration statement adopted by
the Commission from and after the date hereof.
"Major Investor" shall mean, as of any date, with respect to any holder of
Registrable Stock, such holder of Registrable Stock so long as it owns
Registrable Stock as of such date that represents (i) in the case of a holder of
L-3 Registrable Stock, not less than five percent (5%) of the outstanding L-3
Registrable Stock as of such date, and (ii) in the case of a holder of Existing
Holder Registrable Stock, not less than five percent (5%) of the outstanding
Existing Holder Registrable Stock as of such date.
"Notice" shall have the meaning set forth in Section 3.1.
"Person" or "person" shall mean any natural person, firm, partnership,
association, corporation, company, limited liability company, trust, business
trust or other entity, or any governmental authority.
"Prospective Sellers" shall have the meaning set forth in Section
2.6(a)(ii).
D-2
"Public Offering" shall mean a consummated firmly underwritten public
offering of the Common Stock of the Company pursuant to an effective
registration statement filed with the Commission under the Securities Act, with
respect to which (i) the Company's Common Stock is listed on the NASDAQ National
Market (or any successor, exchange market or organization thereto), and (ii) the
Company makes an offering for at least twenty percent (20%) of the outstanding
Common Stock.
"Purchase Agreement" shall have the meaning set forth in Section 2.13.
The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act.
"Registrable Stock" shall mean the Existing Holder Registrable Stock and/or
the L-3 Registrable Stock, as the context requires.
"Registration Expenses" shall have the meaning set forth in Section 2.7.
"Requesting Holders" shall have the meaning set forth in Section 2.1(d).
"Rule 144" shall mean Rule 144 promulgated by the Commission under the
Securities Act.
"Rule 144A" shall have the meaning set forth in Section 2.11(b).
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Short-Form Initiating Holders" shall have the meaning set forth in Section
2.1(c).
"Short-Form Registration Statement" shall mean a registration statement on
Form S-3 or any similar form of registration statement adopted by the Commission
from and after the date hereof.
1.2 Rules of Construction. Words such as "herein", "hereinafter", "hereto",
"hereby" and "hereunder", when used with reference to this Agreement, refer to
this Agreement as a whole, unless the context otherwise requires. The words
"include", "includes", "included" and "including" shall be construed as if
followed by the phrase "without being limited to". A reference to a particular
gender means a reference to any gender.
2. Registration Provisions.
2.1 Required Registrations.
(a) If, at any time after the date hereof, one or more Major
Investor(s) that is a holder of L-3 Registrable Stock proposes to effect the
registration of any shares of Registrable Stock, pursuant to a Long-Form
Registration Statement, then such Major Investor(s) may request the Company in
writing to effect such registration under the Applicable Securities Laws,
stating (i) the form of registration statement under the Applicable Securities
Laws to be used, (ii) the
D-3
number of shares of L-3 Registrable Stock to be disposed of, and (iii)
the intended method of disposition of such shares; provided, however, that such
Major Investor(s) include in such registration 5% of the L-3 Registrable Stock
then outstanding.
(b) If, at any time after the earlier to occur of (i) the consummation
of the Public Offering, and (ii) March 31, 2001, one or more Major Investor(s)
that is a holder of not less than 20% of the Existing Holder Registrable Stock
proposes to effect the registration of any shares of Registrable Stock, pursuant
to a Long-Form Registration Statement, then such Major Investor(s) may request
the Company in writing to effect such registration under the Applicable
Securities Laws, stating (A) the form of registration statement under the
Applicable Securities Laws to be used, (B) the number of shares of Existing
Holder Registrable Stock to be disposed of, and (C) the intended method of
disposition of such shares; provided, however, that such Major Investor(s)
include in such registration 5% of the Existing Holder Registrable Stock then
outstanding.
(c) If at any time after the earlier of (i) January 2, 2001 and (ii)
the consummation of a Public Offering, provided that the Company is entitled to
file a registration statement on a Short-Form Registration Statement, any
holder(s) of Registrable Stock proposes to effect the registration of, pursuant
to a Short-Form Registration Statement, shares of Registrable Stock that are
reasonably expected to have an aggregate offering price of at least $1,000,000
(the "Short-Form Initiating Holders"), then such holder(s) of Registrable Stock
may request the Company in writing to effect such registration under the
Applicable Securities Laws, stating (i) the form of registration statement under
the Applicable Securities Laws to be used, (ii) the number of shares of
Registrable Stock to be disposed of, and (iii) the intended method of
disposition of such shares.
(d) Upon receipt of the request of the Long-Form Initiating Holders
pursuant to Section 2.1(a) or 2.1(b) or the Short-Form Initiating Holders
pursuant to Section 2.1(c), the Company shall give prompt written notice thereof
to all other holders of Registrable Stock. Subject to the provisions of Section
2.2, the Company shall, subject to the terms of this Agreement, use its best
efforts to effect the registration under the Applicable Securities Laws of all
shares of Registrable Stock specified in the requests of the Long-Form
Initiating Holders or the Short-Form Initiating Holders, as the case may be, and
the requests (stating (i) the number of shares of Registrable Stock to be
disposed of, and (ii) the intended method of disposition of such shares) of
other holders of shares of Registrable Stock, as applicable ("Requesting
Holders") given within 30 days after receipt of such notice from the Company.
2.2 Limitations on Required Registration.
(a) The Company shall not be required to prepare and file more than
four Long-Form Registration Statements pursuant to Section 2.1(a) requested by
holders of L-3 Registrable Stock or more than two Long Form Registration
Statements pursuant to Section 2.1(b) requested by holders of Existing Holder
Registrable Stock, which actually become and are declared effective (it being
understood and agreed that only a Long-Form Registration Statement that either
(i) pursuant to which all the shares of Registrable Stock covered thereby have
been sold or
D-4
disposed of, or (ii) has been effective for at least 180 days, shall be
deemed to have become or declared effective for purposes of being included in
such four or two Long-Form Registration Statements, as the case may be).
(b) Whenever a registration requested by the holders of Registrable
Stock is for a firmly underwritten offering and the managing underwriter(s)
determine that the number of shares of Common Stock so included which are to be
sold by the holders of Registrable Stock is limited due to market conditions,
the shares to be offered shall be allocated (i) first, to the Initiating
Holders, pro rata, based upon the number of shares of Registrable Stock then
held by such holders, respectively, and (ii) thereafter, the remaining available
portion, if any, shall be allocated among all the Requesting Holders, pro rata,
based upon the number of shares of Registrable Stock then held by such
Requesting Holders, respectively. If any holder of Registrable Stock disapproves
of the terms of the underwriting, such Person may elect to withdraw therefrom by
written notice to the Company and the Initiating Holders. The Registrable Stock
so withdrawn shall also be withdrawn from registration; provided, however, that,
if by the withdrawal of such Registrable Stock a greater number of shares of
Registrable Stock held by other holders of Registrable Stock may be included in
such registration (up to the maximum of any limitation imposed by the managing
underwriter(s)), then the Company shall offer to all holders of Registrable
Stock who have included Registrable Stock in the registration the right to
include additional Registrable Stock in the same priority and proportion used in
determining the limitation imposed by the provisions of this Section 2.2(b).
(c) The Company shall not be required to prepare and file a
registration statement pursuant to Section 2.1(a) or 2.1(b) for a period of not
more than 90 days following receipt by the Company of the Long-Form Initiating
Holders' request for registration, if (i) the Company in good faith gives
written notice within five days after such receipt by the Company of such
request to all holders of Registrable Stock that the Company is commencing to
prepare a Company-initiated registration statement, and (ii) the Company
actively employs in good faith all reasonable efforts to cause such registration
statement to become effective.
(d) If the Company receives a Long-Form Initiating Holders' request
within 90 days of the date on which a previous registration statement filed
pursuant to Section 2.1(a) or 2.1(b) has become effective, the Company shall not
be required to commence preparation of such Long-Form Registration Statement in
accordance with such request until 90 days has elapsed since such effective
date.
(e) If the Company shall furnish to the Initiating Holders pursuant to
this Section 2.2(e) a certificate signed by the chief executive or chief
financial officer of the Company stating that the Company, in good faith, has
determined that (i) there exists material non-public information about the
Company which the Company has a bona fide business purpose for preserving as
confidential, or (ii) is undertaking (or is about to undertake) a proposed
acquisition or financing that would significantly impact the pricing of the
contemplated public offering, and in each case the Company provides the
Initiating Holders written notice thereof promptly after the Company makes such
determination, then the Company shall have the right to defer the filing or the
declaration of effectiveness of a registration statement required to be
D-5
effected pursuant to Section 2.1, for a period of not more than (A) 90 days,
in the case of a Long-Form Registration Statement, or (B) 60 days, in the
case of a Short-Form Registration Statement, after receipt of the request of the
Initiating Holders; provided, however, that in no event shall the Company be
entitled to defer such filing or declaration of effectiveness pursuant to this
Section 2.2(e) more than 120 days in any 12-month period.
2.3 Incidental Registration. If the Company at any time proposes to
register any of its securities for sale for its own account or for the account
of any other Person (other than a registration (a) requested pursuant to Section
2.1, or (b) relating solely to the sale of securities to participants in a
Company stock plan or in a Rule 145 transaction) (an "Incidental Registration"),
then the Company shall each such time give written notice (the "Company's
Notice"), at its expense, to all holders of Registrable Stock of its intention
to do so at least 20 days prior to the filing of a registration statement with
respect to such Incidental Registration with the Commission. If any holder of
Registrable Stock desires to dispose of all or part of its Registrable Stock, it
may request registration thereof in connection with the Incidental Registration
by delivering to the Company, within 10 days after receipt of the Company's
Notice, written notice of such request (the "Investors' Notice") stating the
number of shares of Registrable Stock to be disposed of and the intended method
of disposition of such shares by such holder. The Company shall, subject to the
terms of this Agreement, use commercially reasonable efforts to cause all shares
of Registrable Stock specified in the Investors' Notice to be registered under
the Securities Act so as to permit the sale or other disposition (in accordance
with the intended methods thereof as aforesaid) by such holder or holders of the
shares so registered, subject, however, to the limitations set forth in Section
2.4.
2.4 Limitations on Incidental Registration.
(a) If the Incidental Registration of which the Company gives notice
pursuant to Section 2.3 is for the purpose of permitting a disposition of
securities by the Company pursuant to a firm commitment underwritten offering,
the notice shall so state, and the Company shall have the right to limit the
aggregate size of the offering or the number of shares to be included therein by
stockholders of the Company if requested to do so in good faith by the managing
underwriter(s) of the offering and only securities which are to be included in
the underwriting may be included in the registration.
(b) Whenever an Incidental Registration is initiated pursuant to
Section 2.3 and the number of shares which may be registered pursuant to Section
2.3 is limited by the provisions of Section 2.4(a), the holders of Registrable
Stock shall have priority (pro rata as between holders of L-3 Registrable Stock
on the one hand and holders of Existing Holder Registrable Stock on the other
hand based on the percentage of total Registrable Stock then held by the holders
of L-3 Registrable Stock in the aggregate and the holders of Existing Holder
Registrable Stock in the aggregate) as to sales over the other holders of the
Company's securities exercising similar incidental registration rights and the
Company shall cause such other holders to withdraw from such registration to the
extent necessary to allow all requesting holders of Registrable Stock to include
all of the shares so requested by them (pro rata in accordance with the
preceding parenthetical) to be included within such registration. Whenever the
number of shares which
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may be registered pursuant to Section 2.3 is still limited by the
provisions of Sections 2.4(a) after the withdrawal of such other holders of the
Company's securities, the Company shall have priority as to sales over the
holders of Registrable Stock and each holder hereby agrees that it shall
withdraw its securities from such registration to the extent necessary to allow
the Company to include all the shares which the Company desires to sell for its
own account to be included within such registration. The holders of Registrable
Stock given rights by Section 2.3 shall share in the available portion of the
registration in question, such sharing to be based upon the priority and
proportion set forth, first, in the parenthetical above, and then, within each
group comprising holders of L-3 Registrable Stock or Existing Holder Registrable
Stock, as the case may be, based upon the numbers of shares of L-3 Registrable
Stock or Existing Holder Registrable Stock, as the case may be, that the holders
thereof wish to include in the Incidental Registration.
2.5 Designation of Underwriter. In the case of any registration initiated
by the holders of Registrable Stock pursuant to the provisions of Section 2.1
which is proposed to be effected pursuant to a firm commitment underwriting, the
Company, with the consent of the Initiating Holders (which consent will not be
unreasonably withheld or delayed), shall designate the managing underwriter(s)
(and all holders of Registrable Stock participating in the registration shall
sell their shares only pursuant to such underwriting).
2.6 Registration Procedures.
(a) If and when the Company is required by the provisions of this
Agreement to effect the registration of shares of Registrable Stock, the Company
shall, by notice to each holder of Registrable Stock included in such
registration, keep such holder advised in writing as to the initiation, progress
and effective date of each registration, qualification and compliance pursuant
hereto, and, at the expense of the Company:
(i) prepare and file with the Commission or other applicable
securities authorities a registration statement with respect to
such shares and use its best efforts to cause such registration
statement to become and remain effective as provided herein;
(ii) prepare and file with the Commission or other applicable
securities authorities such amendments and supplements
(pre-effective and post-effective) to such registration statement
and the prospectuses used in connection therewith as may be
necessary to keep such registration statement effective and current
and to comply with the provisions of the Securities Act or other
Applicable Securities Law with respect to the sale or other
disposition of all shares covered by such registration statement,
including such amendments and supplements as may be necessary to
reflect the intended method of disposition from time to time of the
holder or holders of Registrable Stock who have requested that any
of their shares be sold or otherwise disposed of in connection with
the registration (the "Prospective Sellers"), and as may be
necessary to keep each registration, qualification or compliance
effective until each Prospective Seller shall have
D-7
completed the distribution described in the registration statement
relating thereto;
(iii) furnish to each Prospective Seller such number of copies of
each prospectus, including preliminary prospectuses, in conformity
with the requirements of the Securities Act or other Applicable
Securities Law, and such other documents, as the Prospective Seller
may reasonably request in order to facilitate the public sale or
other disposition of the shares owned by it;
(iv) use its best efforts to register or qualify the shares covered
by such registration statement under such other securities or Blue
Sky or other Applicable Securities Law of such jurisdictions as
each Prospective Seller shall reasonably request to enable such
Prospective Seller to consummate the public sale or other
disposition of the shares owned by such Prospective Seller;
provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any
such jurisdictions;
(v) furnish to each Prospective Seller a signed counterpart,
addressed to the Prospective Sellers and the underwriters, if any,
of: (A) an opinion of counsel for the Company, dated the effective
date of the registration statement or the closing date of any
underwritten public offering, in customary form, covering such
matters as are customarily covered by opinions for an underwritten
public offering in opinions of issuers' counsel delivered to
underwriters and selling shareholders; and (B) "comfort" letters
signed by the independent public accountants, within the meaning of
Applicable Securities Laws, who have certified the Company's
financial statements included in the registration statement,
covering substantially the same matters, with respect to the
registration statement (and the prospectus included therein) and
with respect to the events subsequent to the date of the financial
statements, as are customarily covered (at the time of such
registration) in accountants' letters delivered to the underwriters
in connection with underwritten public offerings of securities;
(vi) cause all such Registrable Stock to be listed on each national
securities exchange or be included for quotation on each national
securities market on which similar securities issued by the Company
are then listed;
(vii) provide a transfer agent and registrar for all such
Registrable Stock not later than the effective date of such
registration statement;
(viii) enter into such customary agreements (including an
underwriting agreement) and take all such other customary actions
as the holders of a majority of the Registrable Stock covered by
such registration statement
D-8
reasonably request in order to expedite or facilitate the
disposition of such Registrable Stock;
(ix) comply with the provisions of Applicable Securities Laws with
respect to the disposition of all securities covered by such
registration statement;
(x) promptly notify each Prospective Seller (i) when the
registration statement, any pre-effective amendment, the prospectus
or any prospectus supplement or post-effective amendment has been
filed, and, with respect to the registration statement or any
post-effective amendment thereof, when the same has become
effective, (ii) of any request by any applicable securities
authority for amendments of or supplements to the registration
statement or the prospectus or for additional information, (iii) of
the issuance by any applicable securities authority of any stop
order suspending the effectiveness of the registration statement or
the initiation of any proceedings for that purpose, (iv) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the registrable securities for
sale in any jurisdiction or the initiation or threatening of any
proceedings for such purpose, and (v) of the happening of any event
which makes any statement of a material fact made in the
registration statement, the prospectus or any document incorporated
therein by reference untrue or which requires the making of any
changes in the registration statement, the prospectus or any
document incorporated therein by reference in order to make the
statement of a material fact therein not misleading;
(xi) use its reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of the registration
statement;
(xii) upon the occurrence of any event contemplated by clause (x)
above, promptly prepare a supplement or post-effective amendment to
the registration statement or the prospectus or any document
incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the
Registrable Stock, the registration statement and the prospectus
will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein
not misleading;
(xiii) make generally available to each purchaser of Registrable
Stock consolidated earnings statements satisfying the requirements
of Applicable Securities Laws; and
(xiv) make available for inspection by any Prospective Seller, any
underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent
retained by any such Prospective Seller or underwriter, all
financial and other records, pertinent corporate documents and
properties of the Company, and cause the
D-9
Company's officers, directors and employees to supply all
information reasonably requested by any such Prospective Seller,
underwriter, attorney, accountant or agent in connection with the
preparation of such registration statement.
(b) Each Prospective Seller shall furnish to the Company such
information as the Company may reasonably require from the Prospective Seller
for inclusion in the registration statement (and the prospectus included
therein).
(c) The Prospective Sellers shall not (until further notice) effect
sales of the shares covered by the registration statement after receipt of
notice from the Company to suspend sales in order to permit the Company to
correct or update a registration statement or prospectus.
(d) In the case of an underwritten offering of Common Stock effected
pursuant to this Agreement, the Company and each Prospective Seller shall enter
into such customary agreements (including an underwriting agreement) and take
all such other customary actions as the managing underwriter(s) reasonably
request(s) in order to expedite or facilitate the disposition of such
Registrable Stock.
2.7 Expenses of Registration. All expenses incurred in effecting any
registration requested pursuant to Section 2.1 or 2.3, including all
registration and filing fees, stock exchange or market listing or filing fees,
fees and expenses of complying with Applicable Securities Laws, printing
expenses, expenses of compliance with Blue Sky laws, fees and disbursements of
counsel for the Company and its independent public accountants, reasonable
expenses of any special audits required by any such registration, the fees and
disbursements of any counsel and accountant retained by the holders of more than
fifty percent (50%) of the Registrable Stock being registered, and expenses of
all marketing and promotional efforts requested by the managing underwriter(s)
and any fees and expenses disbursements of underwriters customarily paid by
issuers ("Registration Expenses") shall be borne by the Company; provided,
however, that the Prospective Sellers shall bear underwriting discounts or
brokerage fees or commissions relating to the sale of their Registrable Stock
and any legal fees or disbursements for their counsel (except as aforesaid);
provided further, however, that the Company shall be required to bear the
Registration Expenses for a maximum of six registrations upon the request of the
holders of Registrable Stock pursuant to Section 2.1(c).
2.8 Indemnification.
(a) In the event of any registration of any of its securities under the
Securities Act pursuant to this Agreement, the Company shall indemnify and hold
harmless each holder requesting or joining in a registration of such securities,
its directors and officers, if any, each underwriter (as defined in the
Securities Act), each other Person who participates or is to participate in the
offering of such holder's securities and each controlling Person of any such
holder or underwriter, if any (within the meaning of the Securities Act), from
and against any losses, claims, damages or liabilities, joint or several (or
actions in respect thereof), to which such holder, director, officer,
underwriter, participating Person or controlling Person may be subject under the
Securities Act or other Applicable Securities Laws, or under any other statute
D-10
or at common law, insofar as such losses, claims, damages or liabilities (or
actions, whether or not commenced, in respect thereof) arise out of or are based
upon (i) any untrue statement (or alleged untrue statement) of any material fact
contained in any registration statement under which such securities were
registered under the Securities Act or other Applicable Securities Laws, or any
preliminary prospectus or final prospectus contained therein, or any summary
prospectus issued in connection with any securities being registered, or any
amendment or supplement thereto, or any other document, or (ii) any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (iii) any
violation by the Company of the Securities Act or other Applicable Securities
Law, or any rule or regulation promulgated under the Securities Act or any other
Applicable Securities Law, or any other law applicable to the Company in
connection with any such registration, qualification or compliance, and shall
reimburse each such holder, director, officer, underwriter, participating Person
or controlling Person for any legal or other expenses reasonably incurred by
such holder, director, officer, underwriter, participating Person or controlling
Person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company shall not be
liable to any holder, director, officer, underwriter, participating Person or
controlling Person in any such case to the extent that any such loss, claim,
damage liability or action arises out of or is based upon any such untrue
statement or omission made in such registration statement, preliminary
prospectus, final prospectus, summary prospectus, or amendment or supplement
thereto, or any other document in reliance upon and in conformity with written
information furnished to the Company by such holder, underwriter, participating
Person or controlling Person, respectively, specifically stating that it is for
use therein. The indemnity provided for herein shall remain in full force and
effect regardless of any investigation made by or on behalf of such holder,
director, officer, underwriter, participating Person or controlling Person, and
shall survive transfer of such securities by such holder.
(b) If the indemnification provided for in Section 2.8(a) is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or actions referred to therein, then the Company in lieu of
indemnifying such indemnified party thereunder shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or actions, in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and of the indemnified parties
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or actions, as well as any other
relevant equitable considerations. The relative fault of the Company and of the
indemnified parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 2.8(b) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a
D-11
result of the losses, claims, damages and liabilities or actions in respect
thereof referred to in the immediately preceding paragraph shall be
deemed to include any legal fees and other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 2.8(b), (i) no holder
of Registrable Stock shall be required to contribute any amount in excess of the
proceeds to it from the sale of Registrable Stock by it pursuant to the
registration statement, (ii) no underwriter shall be required to contribute any
amount in excess of the proceeds to it from the offering pursuant to the
registration statement, and (iii) no Person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(c) The provisions of this Section 2.8 shall be in addition to any
other rights to indemnification or contribution which an indemnified party may
have pursuant to law, equity, contract or otherwise, and shall remain in full
force and effect regardless of any investigation made by or on behalf of an
indemnified party.
(d) Promptly after receipt by an indemnified party under Section 2.8(a)
or 2.8(b) of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
Company under such Section, notify the Company in writing of the commencement
thereof; but the omission so to notify the Company shall not relieve it from any
liability which it may have to any indemnified party otherwise than under such
Section or to the extent that it has not been prejudiced as a result of such
failure. In case any such claim shall be brought against any indemnified party,
it shall notify the Company of the commencement thereof, and the Company shall
be entitled to participate therein and, to the extent that it shall wish, to
assume the defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the Company and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the Company, the indemnified party or parties shall have the right
to select separate counsel to assert such legal defenses (in which case the
Company shall not have the right to direct the defense of such action on behalf
of the indemnified party or parties). Upon the permitted assumption by the
Company of the defense of such action, and approval by the indemnified party of
counsel, the Company shall not be liable to such indemnified party under this
Section 2.8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof (other than reasonable
costs or investigation) unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence, (ii) the Company
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time, (iii) the Company and
its counsel do not actively and vigorously pursue the defense of such action, or
(iv) the Company has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. The Company shall not, without
the consent of the indemnified party, consent to entry of any judgment or enter
into any settlement of any such claim (whether or not the indemnified party is
an actual or potential party to such claim) unless such judgment or settlement
(A) includes as an unconditional term thereof the giving by the claimant or
plaintiff to
D-12
such indemnified party of a release from all liability in respect of such claim
or litigation, and (B) does not include a statement as to an admission of fault,
culpability or a failure to act on behalf of any indemnified party. No
indemnified party shall consent to entry of any judgment or enter into any
settlement of such action the defense of which has been assumed by the Company
without the consent of the Company, such consent not to be unreasonably withheld
or delayed.
2.9 Information by Holders. Each holder of Registrable Stock shall furnish
to the Company such information regarding such holder and the distribution
proposed by such holder as the Company may reasonably request in writing and as
shall be required in connection with any registration, qualification or
compliance referred to in this Agreement.
2.10 Waiver of Other Registration Rights. Each Existing Holder hereby
forever and irrevocably (a) waives any rights heretofore granted by the Company
with respect to the registration of any Registrable Stock under Applicable
Securities Laws, and (b) releases the Company from any commitment, covenant,
agreement or obligation to register any Registrable Stock under Applicable
Securities Laws. Without limiting the effect of the foregoing, each of the
Existing Holders and the Company agrees that the Registration Rights Agreement
dated as of October 21, 1998, is terminated upon the execution and delivery of
this Agreement by the parties hereto and shall be of no force and effect.
2.11 Rule 144 and Rule 144A. With a view to making available to each holder
of Registrable Stock the benefits of certain rules and regulations of the
Commission which may permit the sale of the Registrable Stock to the public
without registration, the Company agrees that so long as a holder owns any
Registrable Stock:
(a) the Company shall, at any time after any of the Company's shares of
capital stock are registered under the Securities Act or the Exchange Act: (i)
make and keep available public information, as those terms are contemplated by
Rule 144 under the Securities Act (or any successor or similar rule then in
force); (ii) timely file with the Commission all reports and other documents
required to be filed under the Securities Act and the Exchange Act; and (iii)
furnish to each holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of the Securities Act and
the Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other information as such holder may reasonably request in
order to avail itself of any rule or regulation of the Commission allowing such
holder to sell any Registrable Stock without registration (it being understood
and agreed that (A) the Company's covenants and agreements contained in this
clause (a) shall not be operative until such time as the Company shall have
filed with the Commission its Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1999, and its Quarterly Reports on Form 10-QSB for the fiscal
quarters ended September 30, 1999, December 31, 1999 and March 31, 2000, and (B)
the Company agrees to make such filings as soon as practicable); and
(b) each holder of Registrable Stock and each prospective holder of
Registrable Stock who may consider acquiring Registrable Stock in reliance upon
Rule 144A under the Securities Act (or any successor or similar rule then in
force) ("Rule 144A") shall have
D-13
the right to request from the Company, and the Company will provide upon such
request, such information regarding the Company and its business, assets and
properties, if any, as is at the time required to be made available by the
Company under Rule 144A so as to enable such holder to transfer Registrable
Stock to such prospective holder in reliance upon Rule 144A.
2.12 Holdback.
(a) Each holder of Registrable Stock hereby agrees that it shall not,
to the extent requested by the managing underwriter(s) of Common Stock (or other
securities of the Company), sell or otherwise transfer or dispose of (other than
to donees who agree in writing to be similarly bound) (or agree to do the same)
any Common Stock or any Convertible Securities or any other equity securities or
equity-linked securities of the Company, during a reasonable and customary
period of time specified by the managing underwriter(s) (but in any event not to
exceed 180 days), in connection with any registration statement effected
pursuant to this Agreement (except to the extent such holder of Registrable
Stock sells any Registrable Stock in such registration pursuant to and in
accordance with this Agreement); provided, however, that the Company shall have
the right to issue Common Stock upon the due exercise or conversion of
Convertible Securities. In order to enforce the foregoing covenant, the Company
may impose stop-transfer instructions with respect to the Registrable Stock of
each holder until the end of such reasonable and customary period.
(b) The Company hereby agrees that it shall not, to the extent
requested by the managing underwriter(s) of Common Stock (or other securities of
the Company), issue, sell or otherwise transfer or dispose of (or agree to do
the same) any Common Stock or any Convertible Securities or any other equity
securities or equity-linked securities of the Company, during a reasonable and
customary period of time specified by the managing underwriter(s) (but in any
event not to exceed 180 days), in connection with any registration statement
effected pursuant to this Agreement; provided, however, that the Company shall
have the right to issue Common Stock upon the due exercise or conversion of
Convertible Securities.
(c) No registration shall be requested to be effected pursuant to
Section 2.1 during the period(s) of time in which the restrictions on transfer
of equity securities or equity-linked securities of the Company specified in
Section 2.12(a) or 2.12(b) are in effect.
(d) Notwithstanding the foregoing, none of the provisions of this
Section 2.12 shall apply to Cerberus Partners, L.P.; provided, however, that if
Cerberus Partners, L.P. is a Prospective Seller, then the provisions of this
Section 2.12 shall apply to it.
2.13 Limitations on Subsequent Registration Rights. From and after the date
of this Agreement, the Company shall not enter into any agreement granting any
holder or prospective holder of any securities of the Company registration
rights with respect to such securities without the prior written consent of the
holders of at least a majority of the then outstanding L-3 Registrable Stock and
at least a majority of the then outstanding Existing Holder Registrable Stock.
Notwithstanding the foregoing, the Company may enter into an agreement (the "New
Agreement") granting registration rights no more favorable than the rights set
forth herein to one or more investments banks or their Affiliates to whom Common
Stock or Convertible Securities
D-14
are issued or transferred in accordance with the terms of the Purchase
Agreement, dated the date hereof, between the Company and L-3, as the same may
be amended or supplemented from time to time (the "Purchase Agreement");
provided, however, that if L-3 is to be granted any registration or other rights
pursuant to the New Agreement, then the Existing Holders shall be granted
registration or other rights substantially similar to those registration or
other rights granted to L-3 under the New Agreement.
3. Miscellaneous.
3.1 Notices. All notices, requests, claims, demands, approvals, consents,
waivers and other communications hereunder (each a "Notice") shall be in writing
and shall be (a) personally delivered, (b) transmitted by telecopy facsimile,
provided that the original copy thereof also is sent by pre-paid, first class,
registered or certified mail (return receipt requested), or by next-day or
overnight mail (to any United States address) or by an internationally
recognized express delivery service (to any foreign address), (c) sent by first
class, registered or certified mail, return receipt requested or by next-day or
overnight mail (to any United Stated address), postage and charges prepaid, or
(d) delivered by an internationally recognized express delivery service (to any
foreign address), postage and charges prepaid:
(i) if to X-0,
X-0 Xxxxxxxxxxxxxx Xxxxxxxxxxx
Narda Microwave
000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Mr. John Mega
with copies to:
L-3 Communications Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx, Esq.; and
Xxxxxxx Breed Xxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Gerkis, Esq.;
(ii) if to the Company,
D-15
LogiMetrics, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Executive Officer
with copies to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.;
L-3 Communications Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx, Esq.; and
Xxxxxxx Breed Xxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Gerkis, Esq.;
If to Xxxxxx Xxxxxxxxx XxXxxxx, Inc., or any of the Existing Holders listed
on Schedule 3.1 (the "CRM Related Persons"):
To such Person
c/o Cramer Xxxxxxxxx XxXxxxx, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, III,
Executive Vice President
With copies to:
D-16
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxx Xxxxxx, Esq.
if to any other Existing Holder, at the address set forth on the signature pages
of this Agreement, or in each case, at such other address and numbers as may
have been furnished in a Notice by such Person to the other parties. Any Notice
shall be deemed effective or given upon receipt (or refusal of receipt).
3.2 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof. Each party hereto hereby
irrevocably submits to the nonexclusive jurisdiction of the courts of the State
of New York and of the United States of America sitting in the City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that the venue thereof may not be appropriate,
that such suit, action or proceeding is improper or that this Agreement or any
of the documents referred to in this Agreement may not be enforced in or by said
courts, and each party hereto irrevocably agrees that all claims with respect to
such suit, action or proceeding shall be heard and determined in such a New York
state or federal court. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party in the manner provided in
Section 3.1 and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
3.3 Severability. Should any Section or any part of a Section within this
Agreement be rendered void, invalid or unenforceable by any court of law for any
reason, such invalidity or unenforceability shall not void or render invalid or
unenforceable any other Section or part of a Section in this Agreement.
3.4 Section Headings. Section headings contained in this Agreement are
inserted as a matter of convenience and for reference purposes only, and in no
way define, limit, extend or describe the scope of this Agreement or the intent
of any provision hereof.
3.5 Amendments and Waivers. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated orally or in writing, except that
any term of this
D-17
Agreement may be amended and the observance of any such term may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of (a) the Company, (b) the holders
of at least a majority of the then outstanding L-3 Registrable Stock, and (c)
the holders of at least a majority of the then outstanding Existing Holder
Registrable Stock; provided, however, that no such waiver shall extend to or
affect any other obligation not expressly waived or impair any right consequent
therein. L-3 may waive any of its rights or the obligations of the Company owing
to L-3 hereunder without obtaining the consent of any other Person. Each
Existing Holder may waive any of its rights or the obligations of the Company
owing to such Existing Holder hereunder without obtaining the consent of any
other Person.
3.6 Successors and Assigns. All rights, covenants and agreements of the
parties contained in this Agreement shall be binding upon and inure to the
benefit of their respective successors and permitted assigns. The Company may
not assign this Agreement.
3.7 Specific Performance. The parties hereto recognize that the capital
stock of the Company cannot be readily purchased or sold on the open market and
that it is to the benefit of the Company, L-3 and the Existing Holders that this
Agreement be carried out; and for those and other reasons, the parties hereto
would be irreparably damaged if this Agreement is not specifically enforced in
the event of a breach hereof. If any controversy concerning the rights or
obligations to purchase or sell any capital stock of the Company arises, or if
this Agreement is breached, the parties hereto hereby agree that remedies at law
might be inadequate and that, therefore, such rights and obligations, and this
Agreement, shall be enforceable by specific performance. The remedy of specific
performance shall not be an exclusive remedy, but shall be cumulative of all
other rights and remedies of the parties hereto at law, in equity or under this
Agreement.
3.8 Entire Agreement. This Agreement contains the entire agreement and
understanding of the parties and there are no further or other agreements or
understandings, written or oral, in effect between the parties relating to the
subject matter hereof unless expressly referred to herein and supersedes all
prior agreements and understandings relating to the subject matter hereof.
3.9 Fees and Expenses. Each party hereto shall pay its respective fees and
expenses in connection with the negotiation, execution and delivery of this
Agreement and the other documents and transactions contemplated hereby.
3.10 Further Assurances. Each party hereto shall cooperate and take such
actions as may be reasonably requested by another party in order to carry out
the provisions and purposes of this Agreement and the transactions contemplated
hereby.
3.11 Condition to Effectiveness. This Agreement shall become effective upon
the closing of the Purchase Agreement.
3.12 Counterparts. This Agreement may be executed (including by facsimile
transmission) with counterpart signature pages or in one or more counterparts,
each of which
D-18
shall be deemed an original but all of which together shall constitute one
and the same instrument.
3.13 Recapitalization. This Agreement shall apply to (a) the Common Stock
held by L-3 and the Existing Holders, as well as any Common Stock hereafter
acquired by L-3 and/or the Existing Holders (including any Common Stock issued
upon the exercise, conversion or exchange of any Convertible Securities), and
(b) any and all shares of capital stock of the Company which may be issued in
respect of, in exchange for or in substitution of Common Stock, by reason of any
stock dividend, split, reverse split, combination, reclassification, merger,
recapitalization, share exchange or other transaction.
3.14 Attorneys' Fees. If any party initiates any legal action arising out
of or in connection with this Agreement, the prevailing party in such legal
action shall be entitled to recover from the other party all reasonable
attorneys' fees, expert witness fees and expenses incurred by the prevailing
party in connection therewith.
[Signature Pages Follow]
D-19
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
LOGIMETRICS, INC.
By:
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
L-3 COMMUNICATIONS CORPORATION
By:
---------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
-------------------------------------
Xxxxxx X. Xxxxxx
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
D-20
-------------------------------------
Xxxxxxx X. Brand
00 Xxxxxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
LFH, LLC
By:
---------------------------------
Name: Xxxxxxx Brand
Title:
000 Xxxxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
-------------------------------------
Xxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
XXXXXX XXXXXXXXX XxXXXXX LLC
By:
---------------------------------
Name:
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
D-21
L.A.D. EQUITY PARTNERS, L.P.
By: Flint Investments, Inc.
Its General Partner
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
-------------------------------------
Xxxxxx X. Xxxxxxxxx, Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM 1998 ENTERPRISE FUND, LLC
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.,
Its Managing Member By:
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Operating Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
X-00
XXX 0000 XXXXXXXXXX FUND, LLC
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.
Its Managing Member By:
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Operating Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM PARTNERS, L.P.
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.
Its General Partner
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
D-23
CRM RETIREMENT PARTNERS, L.P.
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.
Its General Partner By:
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM MADISON PARTNERS, L.P.
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.
Its General Partner
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM U.S. VALUE FUND, LTD.
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.
Its General Partner
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
D-24
EURYCLEIA PARTNERS, L.P.
By: Marchessini & Company,
Its General Partner
By:
---------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
A.C. ISRAEL ENTERPRISES, INC.
By:
---------------------------------
Name: Xxx Xxxxxx
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM-EFO PARTNERS, L.P.
By: CRM-EFO Investments, LLC
Its General Partner
By: CRM Management, Inc.,
Its Managing Member
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
D-25
-------------------------------------
Xxxxxxx Xxxxxxxxxxx
Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
XXXXXX EQUITIES CORP.
By:
---------------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: President
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
WHITEHALL PROPERTIES, LLC
By:
---------------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: President
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
D-26
KABUKI PARTNERS ADP, GP
By:
---------------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: General Partner
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
XxXXXXX FAMILY PARTNERSHIP L.P.
By:
---------------------------------
Name: Xxxxxx X. XxXxxxx
Title: General Partner
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
-------------------------------------
Xxxxxxx X. Xxxx, Xx.
By: Xxxxxx Xxxxxxxxx XxXxxx, Inc.
Attorney-in-Fact
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
-------------------------------------
Xxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
D-27
-------------------------------------
Xxxxxx X. Xxxxxxx, III
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
-------------------------------------
Xxxx X. Xxxxxx
000 X. 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
MBF CAPITAL CORPORATION
By:
---------------------------------
Name: Xxxx X. Xxxxxx
Title: President
MBF BROADBAND SYSTEMS, L.P.
By: MBF Broadband Systems, Inc.,
Its General Partner
By:
---------------------------------
Name: Xxxx X. Xxxxxx
Title: President
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
D-28
PHINEAS BROADBAND SYSTEMS
By: MBF Broadband Systems, Inc.
Its General Partner
By:
---------------------------------
Name: Xxxx X. Xxxxxx
Title: President
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CERBERUS PARTNERS, L.P.
By: Cerberus Associates, LLC,
Its General Partner
By:
---------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
D-29
-------------------------------------
Xxxxx Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
D-30
SCHEDULE 1: EXISTING HOLDER REGISTRABLE STOCK
D-31
SCHEDULE 3.1: THE CRM RELATED PERSONS
Xxxxxx Xxxxxxxxx XxXxxxx LLC
Xxxxxx X. Xxxxxxxxx, Xxxxx
CRM 1997 Enterprise Fund, LLC
CRM 1998 Enterprise Fund, LLC
CRM Partners, L.P.
CRM Retirement Partners, L.P.
CRM Madison Partners, L.P.
CRM U.S. Value Fund, LTD.
CRM-EFO Partners, X.X.
XxXxxxx Family Partnership L.P.
Xxxxxx X. Xxxxxx
Xxxx X. Xxxxxx
D-32
EXHIBIT E
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LOGIMETRICS, INC.
LogiMetrics, Inc. a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify that:
The following amendment to the Certificate of Incorporation of the
Corporation approved by the Board of Directors and stockholders of the
Corporation, was duly adopted in accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware:
"The first paragraph of Article FOURTH of the Certficate of
Incorporation, as amended, of LogiMetrics, Inc., is hereby amended to read in
its entirety as follows:
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is 355,000,000 shares, of which
350,000,000 shares are designated as Common Stock, having a par value
of $.01 per share ("Common Stock") and 5,000,000 shares are designated
as Preferred Stock, $.01 per value per share ("Preferred Stock").
IN WITNESS WHEREOF, the Corporation has caused this Certifcate to be
signed and attested by its duly authorized officers, this 20th day of April,
2000.
LOGIMETRICS, INC.
By:
-----------------------
Xxxxxx X. Xxxxxx
President and Chief
Operating Officer
ATTEST:
------------------------------
Xxxx X. Xxxxxx, Secretary
E-1
EXHIBIT F
STOCKHOLDERS AGREEMENT
dated July 10, 2000
among
LogiMetrics, Inc.
L-3 Communications Corporation
and
the Existing Holders named herein
F-1
TABLE OF CONTENTS
Page
ARTICLE I Representations and Warranties..............................................1
Section 1.1. Representations and Warranties of the Company.......................1
Section 1.2. Representations and Warranties of Existing Holders..................1
ARTICLE II Actions by Existing Holders.................................................2
Section 2.1. Amendment of Class A Debentures and Class B Debentures..............2
Section 2.2. Consent, Conversion of Securities and Waivers by Existing
Holders..........................................................3
Section 2.3. Warrants Held by Existing Holders...................................4
ARTICLE III Management Covenants........................................................6
Section 3.1. Nomination and Election of Directors................................6
Section 3.2. Replacement of Directors............................................7
Section 3.3. Certain Covenants...................................................8
Section 3.4. Committees of the Board.............................................8
Section 3.5. Proxies.............................................................8
Section 3.7. SEA Section 14(f) and Rule 14f-1....................................8
ARTICLE IV Transfers..................................................................10
Section 4.1. Right of First Offer...............................................10
Section 4.2. Legend.............................................................11
ARTICLE V Miscellaneous..............................................................12
Section 5.1. Notices............................................................12
Section 5.2. Governing Law; Consent to Jurisdiction.............................14
Section 5.3. Assignment; Successors and Assigns; No Third Party Rights..........14
Section 5.4. Counterparts.......................................................14
Section 5.5. Titles and Headings................................................14
Section 5.6. Entire Agreement...................................................14
Section 5.7. Severability.......................................................15
Section 5.8. No Strict Construction.............................................15
Section 5.9. Acknowledgement....................................................15
Section 5.10. Effectiveness; Termination.........................................15
Section 5.11. Amendments.........................................................16
Section 5.12. Extension; Waiver..................................................16
Section 5.13. Enforcement........................................................16
Section 5.14. Technology Transfer Option.........................................17
Section 5.15. Legal Fees.........................................................17
F-2
LIST OF EXHIBITS
EXHIBIT A Form of the Employment Agreement
LIST OF SCHEDULES
Schedule 1.2(a) Existing Holder Securities
Schedule 2.3 Existing Holder Warrant Exchange
Schedule 5.1 CRM Related Persons
F-3
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated July 10, 2000 (this "Agreement"), among
LogiMetrics, Inc., a Delaware corporation (the "Company"), L-3 Communications
Corporation, a Delaware corporation (the "Purchaser"), and the other signatories
hereto (the "Existing Holders"). Capitalized and other defined terms used herein
and not otherwise defined herein shall have the respective meanings specified
the Purchase Agreement (defined below).
W I T N E S S E T H:
WHEREAS, the Purchaser has agreed to purchase shares of Common Stock of
the Company, par value $.01 per share (the "Common Stock"), pursuant to the
terms and conditions of the Purchase Agreement, dated as of even date herewith,
between the Company and the Purchaser (the "Purchase Agreement");
WHEREAS, in connection with the Closing, and as a condition required by
the Purchaser, the Existing Holders have or will have, immediately prior to the
Closing, converted all of the their convertible debt into Common Stock and taken
certain other actions as set forth herein which are required by the Purchase
Agreement;
WHEREAS, this Agreement is a condition (i) to the willingness of the
Purchaser to effect the Closing under the Purchase Agreement and to consummate
the transactions contemplated thereby, and (ii) to the willingness of the
Existing Holders to give their consents to the Purchase Agreement and to the
transactions contemplated thereby;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
Representations and Warranties
Section 1.1. Representations and Warranties of the Company. Each
representation and warranty made by the Company in the Purchase Agreement and
the other Transaction Documents, including, in any certificates delivered
pursuant thereto, in each case, to the extent limited as therein set forth and
by any schedules attached thereto, is herein incorporated by reference and made
a part hereof, and hereby reaffirmed and restated to and for the benefit of each
the other parties hereto, with the understanding that this Agreement is and
shall be deemed a Transaction Document.
Section 1.2. Representations and Warranties of Existing Holders. Each
of the Existing Holders represents and warrants to each of the other parties
hereto, as follows:
(a) Such Existing Holder owns and, subject to this Agreement, has the
complete and unrestricted power and the unqualified right to vote the Common
Stock and/or Convertible Securities, listed by class and number of shares of
Common Stock and/or Convertible Securities,
F-4
set forth in Schedule 1.2(a) opposite such Existing Holder's name (the "Existing
Holder Securities").
(b) Such Existing Holder has all requisite right, power and authority
and full legal capacity to enter into this Agreement, to carry out such Existing
Holder's respective obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by such
Existing Holder and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of such Existing
Holder, and no other actions (corporate or otherwise) on the part of such
Existing Holder or any other Person are necessary for such Existing Holder to
enter into this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by such Existing Holder and
constitutes a legal, valid and binding obligation of such Existing Holder
enforceable against such Existing Holder in accordance with its terms.
(c) The execution, delivery and performance of this Agreement by such
Existing Holder, and the consummation of the transactions contemplated hereby,
do not and will not (i) conflict with, or result in a breach of or default
under, any terms or conditions of the organizational documents of any such
Existing Holder that is an entity, (ii) violate any Applicable Law, (iii) result
in any breach of, or constitute a default (or event which with the giving of
notice or lapse of time, or both, would become a breach or a default) under, or
give to any other Person any right of termination, amendment, acceleration or
cancellation pursuant to, any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument to
which such Existing Holder is a party or by which any of such Existing Holder's
Common Stock or Convertible Securities or any of such Existing Holder's other
assets may be bound, or (iv) result in the creation of any Encumbrance on such
Existing Holder's Common Stock or Convertible Securities (other than the
Encumbrances created by this Agreement).
ARTICLE II
Actions by Existing Holders
Section 2.1. Amendment of Class A Debentures and Class B Debentures.
(a) The Company represents and warrants to each of the other parties
hereto that the Existing Holders collectively constitute the "Majority Holders"
as defined in each of the Class A 13% Senior Subordinated Convertible
Pay-in-Kind Debentures due July 29, 1999 and the Amended and Restated Class B
13% Convertible Senior Subordinated Pay-in-Kind Debentures due July 29, 1999
(respectively, the "Class A Debentures" and the "Class B Debentures" and,
collectively, the "Debentures"). Each Existing Holder has the power and
authority to vote and give its consent (as herein voted and given) to amend the
Debentures pursuant to Section 9 of the Debentures.
(b) Pursuant to Section 9 of the Class A Debentures, the Existing
Holders and the Company hereby irrevocably and forever amend (and hereby vote
and give their consent to such amendment) each of the Class A Debentures to
delete and terminate in their entirety (i) Section 6(c)(xviii) of each of the
Class A Debentures, and (ii) any other provisions in respect of the Class
F-5
A Debentures or any of the registration rights of each holder of the Class A
Debentures and the registration obligations of the Company relating to the
Common Stock issuable upon the conversion of any of the Class A Debentures.
(c) Pursuant to Section 9 of the Class B Debentures, the Existing
Holders and the Company hereby irrevocably and forever amend (and hereby vote
and give their consent to such amendment) each of the Class B Debentures to
delete and terminate in their entirety (i) Section 6(c)(xviii) of each of the
Class B Debentures, and (ii) any other provisions in respect of the Class B
Debentures or any of the registration rights of each holder of the Class B
Debentures and the registration obligations of the Company relating to the
Common Stock issuable upon the conversion of any of the Class B Debentures.
(d) The Existing Holders and the Company hereby irrevocably and forever
amend the Acknowledgment, Consent and Waiver, dated as of March 7, 2000, among
the Company and the other parties thereto (the "Acknowledgement, Consent and
Waiver") to delete and terminate in their entirety (i) Section 3 of the
Acknowledgment, Consent and Waiver and (ii) any other provision in respect of
the registration obligations of the Company and the registration rights of the
other parties thereunder.
(e) The amendments pursuant to Section 2.1(b), 2.1(c) and 2.1(d) shall
be effective immediately prior to the conversion of the Debentures held by the
Existing Holders pursuant to Section 2.2.
Section 2.2. Consent, Conversion of Securities and Waivers by Existing
Holders. In order to induce the Purchaser to execute and deliver the Purchase
Agreement and to consummate the transactions contemplated thereby, effective
immediately prior to the Closing, each Existing Holder hereby irrevocably and
forever:
(a) consents to the execution and delivery by the Company of the
Purchase Agreement and the other Transaction Documents, and to the consummation
of the transactions contemplated thereunder solely upon the terms and conditions
therein set forth;
(b) except as provided in Section 2.3, converts all Existing Holder
Securities consisting of Convertible Securities held by such holder into Common
Stock upon the terms of such securities, except that the Class A Debentures
shall be converted at the modified conversion price of $0.3451 per share
(instead of the existing conversion price of approximately $0.4167); e.g., the
holder of a Class A Debenture in the principal amount of $42,586 will receive
123,402 shares of Common Stock upon conversion (instead of 102,207 shares of
Common Stock);
(c) extends the maturity date of the outstanding principal amount of
the Legacy Group I Loans (as defined in the Acknowledgement, Consent and Waiver)
made by such holder, if any, to the earlier of (i) the fifth day following the
consummation of a Public Offering and (ii) June 30, 2001, provided that (A) all
accrued and unpaid interest and fees under and expenses related to the Legacy
Group I Loans (as defined in the Acknowledgement, Consent and Waiver) shall have
been paid in full at Closing with the Proceeds (it being understood and agreed
by the parties hereto that execution and delivery of this Agreement by each
Existing Holder constitutes acknowledgment by such Existing Holder that payment
of the amounts set forth in the
F-6
Disbursement Letter in accordance with the instructions set forth therein
constitutes full payment of such accrued and unpaid interest, fees and expenses
owing to such Existing Holder), and (B) all of the Legacy Group II Loans (as
defined in the Acknowledgement, Consent and Waiver) shall have been paid in
full, together with all accrued and unpaid interest and fees thereon and
expenses related thereto, at Closing with the Proceeds (it being understood and
agreed by the parties hereto that execution and delivery of this Agreement by
each Existing Holder constitutes acknowledgment by such Existing Holder that
payment of the amounts set forth in the Disbursement Letter in accordance with
the instructions set forth therein constitutes full payment of such Legacy Group
II Loans and full payment of such accrued and unpaid interest, fees and expenses
owing to such Existing Holder);
(d) waives any anti-dilution or similar rights to which such Existing
Holder may be entitled in respect of any Existing Holder Securities owned by
such Existing Holder, whether beneficially or of record, as a result of the
Purchase Agreement or any Transaction Documents or any transaction contemplated
by the Purchase Agreement or any of the Transaction Documents, including,
without limitation, the purchase of Common Stock by the Purchaser pursuant to
the Purchase Agreement or by an investment bank or banks as contemplated by
Section 5.1 of the Purchase Agreement;
(e) waives the right to exercise any anti-dilution or other similar
right to which the Existing Holder may be entitled in respect of any securities
owned by such holder, whether beneficially or of record, as a result of any
previous transactions in which such a right may have arisen;
(f) agrees that each of the Stockholder Agreement, dated as of July 29,
1997, by and among the Company and the other parties thereto and Section 5.1 of
the Unit Purchase Agreement, dated as of March 7, 1996, by and between the
Company and Cerberus Partners L.P. is terminated upon the execution and delivery
of the Purchase Agreement by the respective parties thereto and shall be of no
further force and effect thereafter (it being understood and agreed that the
Company also hereby irrevocably and forever agrees that such Stockholder
Agreement, dated as of July 29, 1997, is so terminated and shall be of no
further force and effect thereafter);
(g) waives application of any provision of any agreement or instrument
to which the Company or any of its Subsidiaries (as defined in the Purchase
Agreement) is a party or by which any of their respective assets is bound, that
conflicts with any provision of any Transaction Document;
(h) consents to the execution, delivery and performance of the
Transaction Documents and the consummation of the transactions contemplated
thereby; and
(i) waives any default, event of default or "Event of Default" of or
under any agreement or instrument to which such Existing Holder and the Company
or any of the Company's Subsidiaries is a party or by which any of their
respective properties are bound.
F-7
Section 2.3. Warrants Held by Existing Holders.
(a) Effective immediately prior to the Closing, the Existing Holders
have irrevocably and forever exchanged any and all Existing Holder Securities
consisting of warrants for Common Stock held by such Existing Holder, if any
("Existing Holder Warrants") for shares of Common Stock of the Company on the
terms set forth on Schedule 2.3 (the "Existing Holder Warrant Exchange").
(b) The Company represents and warrants to the other parties hereto
that (i) the Existing Holder Warrant Exchange has been approved by all requisite
corporate action on the part of the Company and hereby confirms, ratifies and
agrees with the Existing Holder Warrant Exchange, and (ii) neither the Existing
Holder Warrant Exchange nor any of the transactions contemplated thereby
requires registration under the provisions of the Securities Act or any
applicable state securities or "blue sky" laws.
(c) Each Existing Holder that has participated in the Existing Holder
Warrant Exchange hereby represents and warrants to the other parties hereto as
follows:
(i) Such Existing Holder hereby confirms, ratifies and agrees with the
Existing Holder Warrant Exchange with respect to itself or himself.
(ii) Such Existing Holder has received copies of the SEC Documents and
has reviewed therein the discussion of risk factors relating to the Company. In
addition, such Existing Holder has had an opportunity to ask questions of and
receive answers from representatives of the Company concerning the business of
the Company, its condition and prospects (financial and other) and the terms and
conditions of the Existing Holder Warrant Exchange.
(iii) Such Existing Holder is an "Accredited Investor" as such term is
defined in Rule 501 of the rules and regulations of the Commission promulgated
under the Securities Act.
(iv) Such Existing Holder has acquired the Common Stock issued to it or
him in connection with the Existing Holder Warrant Exchange (the "Exchange
Shares") for its own account for investment only and not for or with a present
view to resale or distribution other than in transactions that are in compliance
with the Securities Act and applicable state securities laws. Such Existing
Holder has not entered into any contract, undertaking, agreement or arrangement
with any Person to sell, transfer or pledge to such Person or anyone else any of
the Exchange Shares, and such Existing Holder has no present plans or intentions
to enter into any such contract, undertaking, agreement or arrangement.
(v) Such Existing Holder has the financial ability to bear the economic
risk of losing its entire investment in the Exchange Shares, is prepared to bear
the economic risk of its investment therein for an indefinite time and can
afford to sustain a complete loss of its investment therein.
(vi) Such Existing Holder understands that the Exchange Shares
constitute restricted securities within the meaning of Rule 144 promulgated
under the Securities Act, and that none of the Exchange Shares or any interest
therein may be sold or otherwise transferred except pursuant to an effective
registration statement under the Securities Act or in a transaction exempt from
registration under the Securities Act, and understands the meaning and effect of
such restriction.
F-8
(vii) Such Existing Holder acknowledges that the Exchange Shares may
not be transferred, and the Company shall not be required to register any
transfer thereof on the books of the Company, unless such transfer is made
pursuant to an effective registration statement, in compliance with Rule 144, or
pursuant to another exemption under the Securities Act; provided, however, that
the Company shall not be required to register any transfer if any securities are
offered or sold otherwise than pursuant to an effective registration statement
or pursuant to Rule 144 unless the Company shall have received an opinion of
counsel to such Existing Holder, reasonably satisfactory to the Company, that
such transfer does not require registration under the Securities Act or
applicable state securities laws.
(viii) No Person is or will be entitled to a broker's, finder's,
investment banker's, financial adviser's or similar fee from such Existing
Holder in connection with the Existing Holder Warrant Exchange or any of the
transactions contemplated hereby.
ARTICLE III
Management Covenants
Section 3.1. Nomination and Election of Directors.
(a) The Board has set the number of directors at three (to be increased
to seven immediately after SEA Section 14(f) and Rule 14f-1 are complied with)
and, the parties hereto agree to exercise their best efforts to ensure that the
composition of the Board shall be determined as follows:
(i) the Purchaser shall have the right to select and nominate,
from time to time, a number of individuals equal to the excess of seven
over the number of Non-Purchaser Directors that the Existing Holders
are entitled to select and nominate pursuant to clause (ii) below (the
"Purchaser Directors"), among whom shall include the Chairman of the
Board, so long as the Purchaser continues to be the owner of at least
25% of the outstanding Common Stock on a Fully Diluted Basis; provided,
however, that, until such time as Section 14(f) of the Securities
Exchange Act of 1934, as amended ("SEA Section 14(f)") and Rule 14f-1
promulgated thereunder ("Rule 14f-1") are complied with by the Company,
none of the Purchaser Directors shall take office;
(ii) the Existing Holders shall have the right to select and
nominate by a Majority Vote of the Existing Holders, from time to time,
(A) three individuals, so long as the Existing Holders continue to be
the beneficial owners of at least 15% of the outstanding Common Stock
on a Fully Diluted Basis, or (B) two individuals, so long as the
Existing Holders continue to be the owners of at least 10% of the
outstanding Common Stock on a Fully Diluted Basis;
(iii) upon selection and nomination of any Purchaser Directors
pursuant to clause (i) above, the Purchaser shall provide each of the
Company and the Existing Holders with a notice signed by the Purchaser
indicating such selected and nominated Purchaser Directors;
F-9
(iv) upon selection and nomination of the directors pursuant to
clause (ii) above (the "Non-Purchaser Directors"), the designated
representative of the Existing Holders shall provide each of the
Company and the Purchaser with a notice signed by those Existing
Holders who have provided the Majority Vote of the Existing Holders
indicating such selected and nominated Non-Purchaser Directors; the
initial designated representative of the Existing Holders shall be
Xxxxxx X. Xxxxxxx, III; the designated representative of the Existing
Holders may be changed from time to time upon notice to the Company and
the Purchaser signed by those Existing Holders who have provided the
Majority Vote of the Existing Holders;
(v) so long as the Purchaser is entitled to select and nominate
Purchaser Directors pursuant to clause (i) above, the Purchaser shall
at all times have the right, exercisable by the Purchaser in its sole
discretion, to remove, with or without cause, one or more of the
Purchaser Directors, and to replace such removed directors. If
necessary to effect such removal, each of the Existing Holders shall
vote for such removal at a meeting of the stockholders or shall execute
a written consent to such effect without a meeting and consents to the
prompt holding of a special meeting for that purpose; and
(vi) so long as the Existing Holders are entitled to select and
nominate the Non-Purchaser Directors pursuant to clause (ii) above, the
Existing Holders shall at all times have the right, exercisable by a
Majority Vote of the Existing Holders in their sole discretion, to
remove, with or without cause, one or more of the Non-Purchaser
Directors. If necessary to effect such removal, the Purchaser shall
vote for such removal at a meeting of the stockholders or shall execute
a written consent to such effect without a meeting and consents to the
prompt holding of a special meeting for that purpose.
(b) The Board has elected, effective upon the Closing having occurred,
as the members of the Board the following three individuals as the initial
Non-Purchaser Directors: Xxxx-Xxxxxxxx Xxxxxxxx, Xxxx Xxxxxxx and Xxxxxx Xxxxxx.
(c) Immediately after SEA Section 14(f) and Rule 14f-1 are complied
with, the parties hereto will cause the following four individuals to be elected
to the Board as the initial Purchaser Directors: Xxxxx Xxxxx, Xxxxxx XxXxxxx,
Xxxxxxxxxxx X. Xxxxxxx and Xxxx Mega.
(d) The execution and delivery of this Agreement by the parties hereto
shall be deemed to satisfy the notice requirements under Section 3.1(a)(iii) and
Section 3.1(a)(iv).
(e) As used herein, the "Majority Vote of Existing Holders", at any
time, means the written action or approval of the Existing Holders that hold a
majority of the Common Stock Equivalents then held by all Existing Holders.
(f) As used herein, "Common Stock Equivalents" means, with respect to
any holder of the Company's securities, the number of shares of Common Stock
owned by such holder and the number of shares of Common Stock into or for which
any Convertible Securities owned by such holder shall be convertible,
exchangeable or exercisable as of the date of determination thereof.
Section 3.2. Replacement of Directors. In the event of the death,
resignation or removal of a Purchaser Director, the Company shall use its best
efforts to, and the Existing
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Holders shall cause the Non-Purchaser Directors to, elect a person designated by
the remaining Purchaser Directors as the successor to such Purchaser Director.
In the event of the death, resignation or removal of a Non-Purchaser Director,
the Company shall use its best efforts to, and the Purchaser shall cause the
Purchaser Directors to, elect a person designated by the remaining Non-Purchaser
Directors as the successor to such Non-Purchaser Director.
Section 3.3. Certain Covenants. Each of the Purchaser and the Existing
Holders shall vote, in person or by proxy, all shares of Common Stock over which
such party may have or share voting power, at any annual or special meeting of
stockholders of the Company called for the purpose of voting on the election of
directors, or to execute written consents of stockholders without a meeting with
respect to the election of directors, to vote in favor of the election of each
director selected and nominated in accordance with Section 3.1 and against any
other nominees and to take all other necessary and appropriate actions within
such party's control to cause such events to occur. The Company shall use its
best efforts to cause persons to be so nominated, elected or removed, as the
case may be, in accordance with the applicable provisions of this Agreement.
Each of the Purchaser and the Existing Holders shall vote all shares of Common
Stock over which such party may have or share voting power and shall take all
other actions within such party's control necessary and appropriate (including
removing any director) to ensure that the Company's certificate of incorporation
and by-laws do not at any time conflict with the provisions of this Agreement
and shall not vote to approve (or consent to the approval of) any amendment to
the Company's certificate of incorporation or by-laws which would be
inconsistent with this Agreement.
Section 3.4. Committees of the Board. If one or more committees of the
Board are in existence, such committees shall be constituted to include at least
one Non-Purchaser Director.
Section 3.5. Proxies. Neither the Purchaser nor any Existing Holder
shall give any proxy or power of attorney to any Person in respect of Common
Stock Equivalents owned by the Purchaser or any Existing Holder that permits the
holder thereof to vote in his discretion on any matter that may be submitted to
the Company's stockholders for their consideration and approval, unless such
proxy or power of attorney is made subject to and is exercised in conformity
with the provisions of this Agreement.
Section 3.6. Executive Officers. The Company shall have entered into an
employment agreement in substantially the form of Exhibit A attached hereto with
each of Xxxxxx Xxxxxx and Xxxxxxx Brand (collectively, the "Employment
Agreements"). Subject to the terms and conditions of the Employment Agreements,
each of Xxxxxx Xxxxxx and Xxxxxxx Brand shall serve at the pleasure of the
Board, and the Board shall have the absolute right, in its sole discretion, to
remove and appoint officers, with or without cause, subject to all Applicable
Laws.
Section 3.7. SEA Section 14(f) and Rule 14f-1.
(a) The Company shall promptly comply with SEA Section 14(f) and Rule
14f-1 in connection with the Transaction Documents.
(b) From and after the Closing, until such time as SEA Section 14(f)
and Rule 14f-1 are complied with in connection with the Transaction Documents,
the Company will operate (and
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will cause its Subsidiaries to operate) the business of the Company and its
Subsidiaries in the ordinary course consistent with past practice. Without
limiting the generality of the foregoing, except to the extent expressly
permitted or contemplated by the Transaction Documents, the Company will not
take (and will cause its Subsidiaries not to take) any of the following actions
without the prior written consent of the Purchaser:
(i) grant (or commit to grant) any increase in the compensation
(including incentive or bonus compensation) of any employee of the
Company or institute, adopt or amend (or commit to institute, adopt or
amend) any compensation or benefit plan, policy, program or arrangement
or collective bargaining agreement applicable to any employee of the
Company;
(ii) enter into any new employment agreement or collective
bargaining agreement or commitment (including any commitment to pay
retirement or other benefits) to or with any of the employees of the
Company;
(iii) except as contemplated by the Letter of Intent, dated
February 17, 2000, between the Company and Signal Technology
Corporation and the other agreements previously entered into in
connection therewith, sell, assign, license, dispose of, or transfer
any of the assets of the Company having a fair market value of at least
$10,000 individually or $50,000 in the aggregate other than sales of
Inventories in the ordinary course of business consistent (in kind and
amount) with past practice, or incur any liabilities or obligations
(including liabilities with respect to indebtedness, capital leases or
guarantees thereof) in excess of $50,000 individually or in the
aggregate;
(iv) (A) enter into or terminate any lease of real estate, (B)
create any Encumbrances on any of the assets of the Company except for
Permitted Encumbrances, or (C) make any modifications of or changes in
or terminate any existing Contract other than as may be required to
consummate the transactions contemplated by the Transaction Documents;
(v) make any capital expenditure or capital expenditure commitment
(other than in an emergency) in excess of $50,000 in the aggregate;
(vi) repay or prepay any liability or obligation prior to its
stated maturity;
(vii) make, give or grant any bid or proposal, or any customer
option relating to any Contract (A) involving an amount in excess of
$50,000 (or amend, supplement or terminate any existing bid or
proposal, or any existing customer option relating to any Contract,
involving an amount in excess of $50,000), (B) involving a loss to the
Company, or (C) not in the ordinary course of business, consistent with
past practice;
(viii) declare, authorize, make or pay any dividend or
distribution on any securities of the Company or any of its
Subsidiaries;
(ix) issue (or commit to issue) any capital stock or Convertible
Securities of the Company or any of its Subsidiaries except for shares
of Common Stock issuable upon (A) upon the conversion of Convertible
Securities outstanding prior to the date hereof,
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(B) upon the exercise of unissued stock options under the Plan, or (C)
as contemplated by Sections 4.2 and 4.3 of the Purchase Agreement;
(x) amend the certificate of incorporation or by-laws of the
Company or any of its Subsidiaries;
(xi) take any action or omit to take any action that would cause
any of the representations or warranties of the Company contained in
any of the Transaction Documents not to be true and correct at any time
between the date hereof and such time as SEA Section 14(f) and Rule
14f-1 are complied with in connection with the Transaction Documents;
and
(xii) agree to take any of the actions referred to in clauses (i)
through (xi) above.
(c) Notwithstanding any provisions in this Agreement or any other
Transaction Document, until such time as SEA Section 14(f) and Rule 14f-1 are
complied with in connection with the Transaction Documents and the Purchaser
Directors have taken office as directors, none of the Proceeds in excess of
$5,000 may be transferred from the Company to a third party without the prior
written consent of the Purchaser.
(d) Each of the Existing Holders will use such Existing Holder's
reasonable best efforts to take all actions within such Existing Holder's
control to cause the Company and its Subsidiaries to comply with Section 3.7(b).
ARTICLE IV
Transfers
Section 4.1. Right of First Offer.
(a) At such time as the Purchaser ceases to be the owner of at least
25% of the Common Stock on a Fully Diluted Basis, then the provisions of this
Section 4.1 shall cease to have any further force and effect.
(b) If at any time and from time to time after the Closing one or more
of the Existing Holders holding or having the power to Transfer 10% or more of
the Common Stock Equivalents (collectively, the "Major Selling Stockholder")
wishes to Transfer in a single transaction or a series of related transactions
all or any part of such Major Selling Stockholder's Convertible Securities or
Common Stock (or any interest therein) (i) representing 10% or more of the
Common Stock Equivalents to any Person (excluding normal market transactions
where the Major Selling Stockholder does not know the identity of the purchaser
in any such normal market transaction), or (ii) representing a percentage of the
Common Stock Equivalents which (to the actual knowledge of Major Selling
Stockholder), together with the holdings of Common Stock Equivalents by a Person
to which the Transfer is proposed to be made, would result in such Person owning
10% or more of the Common Stock Equivalents after giving effect to the Transfer
(in either case, the "Offered Stock"), then such Major Selling Stockholder
shall, prior to consummating any such desired Transfer, give a written notice to
the Purchaser (at the addresses for Offer Notices set forth in Section 5.1),
which notice shall include the proposed offer price per
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Common Stock Equivalent being offered (the "Offer Price"), the payment terms and
the telecopy number to which any Reply Notice is to be sent (an "Offer Notice").
(c) The Purchaser shall have the right to purchase, at the Offer Price
and on all the other terms and conditions set forth in the Offer Notice, all
(but not less than all) the Offered Stock pursuant to this Section 4.1.
(d) The Purchaser shall be irrevocably deemed to have rejected the
offer contained in the Offer Notice unless the Purchaser provides the Major
Selling Stockholder with written notice of acceptance of such offer by telecopy
to the person that sent the Offer Notice at the telecopy number specified in the
Offer Notice to which any Reply Notice is to be sent (a "Reply Notice") within
one business day after the Offer Notice is deemed to be given by the Major
Selling Stockholder pursuant to the provisions hereof. A Reply Notice shall
constitute an irrevocable agreement by the Purchaser to purchase all, but not
less than all, of the Offered Stock on the terms specified in the Offer Notice.
No later than one business day after the Reply Notice is given, the Purchaser
shall deliver a certified check or checks in the amount of the aggregate Offer
Price to the Major Selling Stockholder against delivery of duly endorsed
certificates representing the Offered Stock to be purchased. Such Offered Stock
shall be delivered free and clear of all Encumbrances other than those imposed
by this Agreement and excluding any registration requirements imposed by the
Securities Act and applicable state securities or blue sky laws.
(e) If the Purchaser does not elect to purchase all the Offered Stock,
the Major Selling Stockholder shall have the right to Transfer all or a portion
of the Offered Stock within 90 days after the Offer Notice is received by the
Major Selling Stockholder at a price not lower than 90% of the Offer Price, and
on terms and conditions (with the exception of price) no more favorable to the
transferee(s) than those contained in the Offer Notice; provided, however, if
the Major Selling Stockholder does not Transfer all the Offered Stock within
such 90-day period, the Purchaser's rights with respect to any of the remaining
Offered Stock and the procedures under this Section 4.1 shall recommence in
their entirety; provided further, however, nothing stated in this Section 4.1 or
elsewhere in this Agreement shall limit in any way the right of such Major
Selling Stockholder or any other Existing Holder to Transfer at any time any of
such party's Common Stock or Common Stock Equivalents, including any Offered
Stock to which this Section 4.1(e) applies in a transaction not subject to
Section 4.1(b).
Section 4.2. Legend. Each of the Purchaser and the Existing Holders
acknowledges that all the certificates now or hereafter representing any Common
Stock or Common Stock Equivalents held by such Person shall, to the extent
required by applicable law or regulation, be stamped or otherwise imprinted with
the following (or a substantially similar) legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT SUCH REGISTRATION
UNLESS AN EXEMPTION UNDER SUCH ACT OR LAWS IS AVAILABLE.
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Any such legend shall be removed upon either (a) registration under the
Securities Act of the securities represented by the certificate(s) in question,
or (b) receipt of a legal opinion reasonably satisfactory to the Company to the
effect that such legend is not required by the Securities Act to be placed on
the certificate(s) in question.
ARTICLE V
Miscellaneous
Section 5.1. Notices. (a) Subject to the provisions of Section 4.1
applicable to an Offer Notice and a Reply Notice, which provisions shall
supersede any conflicting provision of this Article V, all notices, requests,
claims, demands, approvals, consents, waivers and other communications hereunder
(each a "Notice") shall be in writing and shall be delivered by hand, delivered
by courier, deposited in the mail (registered or certified mail, postage
prepaid, return receipt requested), or sent by facsimile transmission upon
receipt of a confirmed transmission report, as follows:
If to the Company: LogiMetrics, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: President
with copies to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.;
L-3 Communications Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx, Esq.; and
Xxxxxxx Breed Xxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Gerkis, Esq.
F-15
If to the Purchaser (except, in the case of L-3 Communications Corporation
any Offer Notice) Xxxxx Microwave
000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Mega
with copies to:
L-3 Communications Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx, Esq.; and
Xxxxxxx Breed Xxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Gerkis, Esq.
If to the Purchaser (in the case of any Offer L-3 Communications Corporation
Notice) 000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. XxXxxxx
with copies to:
L-3 Communications Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx, Esq.
If to Xxxxxx Xxxxxxxxx XxXxxxx, Inc., or any of the Existing Holders listed on
Schedule 5.1 (the "CRM Related Persons"):
To such Person
c/o Cramer Xxxxxxxxx XxXxxxx, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, III,
Executive Vice President
With copies to:
F-16
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxx Xxxxxx, Esq.
If to any other Existing Holder: at the address set forth on the signature pages
of this Agreement.
Any party hereto, by Notice given to the other party hereto in accordance with
this Section 5.1, may change the address or facsimile transmission number to
which such Notices are to be sent to such party. All Notices shall be deemed
effective and given upon confirmed receipt or refusal of receipt.
Section 5.2. Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of New York, without reference to the choice of law principles thereof.
Each of the parties hereto irrevocably submits to the exclusive jurisdiction of
the courts of the State of New York and the United States District Court for the
Southern District of New York for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action
or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this Agreement.
Each of the parties hereto irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such
court. Each party hereto irrevocably waives any objection to the laying of venue
of any such suit, action or proceeding brought in such court and irrevocably
waives any claim that any such suit, and action or proceeding brought in any
such court has been brought in an inconvenient forum.
Section 5.3. Assignment; Successors and Assigns; No Third Party Rights.
This Agreement may not be assigned by the Company, the Purchaser or any Existing
Holder, except to any of its controlled Affiliates (provided that such
controlled Affiliate continues to remain at all times thereafter a controlled
Affiliate of the assigning party) or to any successor-in-interest to
substantially all of its business. In the event of any permitted assignment of
this Agreement, the assigning party shall not be released from such party's
obligations hereunder. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, permitted assigns
and legal representatives. This Agreement shall be for the sole benefit of the
parties to this Agreement and their respective successors, permitted assigns and
legal representatives and is not intended, nor shall be construed, to give any
Person, other than the parties hereto and their respective successors, permitted
assigns and legal representatives, any legal or equitable right, remedy or claim
hereunder.
Section 5.4. Counterparts. This Agreement may be executed (including by
facsimile transmission) with counterpart signature pages or in multiple
counterparts, each of which shall be deemed an original agreement, but all of
which together shall constitute one and the same instrument.
F-17
Section 5.5. Titles and Headings. The titles and headings in this
Agreement are for reference purposes only, and shall not in any way affect the
meaning or interpretation of this Agreement.
Section 5.6. Entire Agreement. This Agreement constitutes the entire
agreement and understanding between the parties with respect to the matters
covered hereby and supersedes all previous written, oral or implied agreements
or understandings between them with respect to such matters.
Section 5.7. Severability. The invalidity of any portion hereof shall
not affect the validity, force or effect of the remaining portions hereof. If it
is ever held that any restriction hereunder is too broad to permit enforcement
of such restriction to its fullest extent, such restriction shall be enforced to
the maximum extent permitted by law.
Section 5.8. No Strict Construction. Each of the parties hereto
acknowledges that this Agreement has been prepared jointly by the parties
hereto, and shall not be strictly construed against either party.
Section 5.9. Acknowledgement. Each of the parties hereto acknowledges
that the representations and warranties contained in this Agreement and in any
document or instrument delivered to such party pursuant hereto or in connection
herewith shall not be deemed waived or otherwise affected by any investigation
by another party hereto, or such party's officers, directors, employees,
counsel, accountants, advisors, representatives and agents.
Section 5.10. Effectiveness; Termination.
(a) This Agreement shall become effective only upon the Closing, and
shall terminate upon the earliest to occur of (i) the consummation of the Public
Offering, (ii) with respect to Purchaser or any Existing Holder, when such party
shall have irrevocably Transferred all of such party's interests in the Common
Stock and Convertible Securities of the Company to one or more Person(s) that
are not Affiliates of the Purchaser or such Existing Holder, as the case may be,
(iii) the consummation of a Company Sale, to the extent approved by a Special
Director Majority or a Special Stockholder Majority in accordance with Section
4.4 of the Purchase Agreement, and (iv) the written mutual consent of the
Purchaser and such of the Existing Holders as would then be collectively
entitled to cast the Majority Vote of Existing Holders.
(b) For purposes of this Section 5.10, the term "Company Sale" shall
mean any of (i) a Transfer of all or substantially all of the assets of the
Company to any Person, or group of related Persons, other than to a wholly owned
Subsidiary of the Company, in one transaction or a series of related
transactions, (ii) a merger, consolidation, recapitalization, share exchange or
reorganization of the Company in which the holders of voting stock of the
Company immediately prior thereto will not own at least 50% of the voting shares
of the continuing or surviving entity (whether or not the Company) immediately
thereafter, (iii) the sale or other disposition of voting stock of the Company
representing 50% or more of the total voting power of the Company's outstanding
capital stock (including Common Stock Equivalents) in one transaction or a
series of related transactions to any Person, or group of related Persons, other
than a Stockholder or any of its Affiliates, (iv) the issuance of additional
shares of voting stock
F-18
(including, but not limited to, the issuance of rights to purchase shares of
voting stock), if, as a result thereof, any Person, or group of related Persons,
other than the Purchaser and/ or any of its Affiliates, would beneficially own
50% or more of the total voting power of the Company's outstanding capital stock
in one transaction or a series of related transactions, (v) the formation of any
form of partnership, joint venture, association or other business organization
or strategic alliance, in which the Company would participate if, as a result
thereof, all or substantially all of the assets of the Company would be
Transferred to any Person not wholly owned by the Company or one or more wholly
owned Subsidiaries of the Company, and (vi) to the extent not otherwise referred
to in clauses (i) through (v) of this Section 5.10, any event referred to in
clauses (A) or (B) of Section 4.4(a) of the Purchase Agreement.
Section 5.11. Amendments. This Agreement may not be amended or modified
except by an instrument in writing signed on behalf of the Company, the
Purchaser and such of the Existing Holders as would then be collectively
entitled to cast the Majority Vote of Existing Holders.
Section 5.12. Extension; Waiver. Subject to the limitations of Section
4.4 of the Purchase Agreement, any party hereto may (a) extend the time for
performance of any of the obligations or other acts of any of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties of any
of the other parties hereto contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any of the agreements of any of
the other parties hereto or satisfaction of any of the conditions to such
party's obligations contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of a party
hereto to assert any of such party's rights hereunder shall not constitute a
waiver of such rights.
Section 5.13. Enforcement.
(a) Each party hereto acknowledges that it would be impossible to
determine the amount of damages that would result from any breach of any of the
provisions of this Agreement, that the remedy at law for any breach, or
threatened breach, of any of such provisions would likely be inadequate and,
accordingly, each other party shall, in addition to any other rights or remedies
which such party may have, be entitled to obtain such equitable and injunctive
relief as may be available from any court of competent jurisdiction to compel
specific performance of, or restrain any party from violating, any of such
provisions. In connection with any action or proceeding for injunctive relief,
each party hereto hereby waives the claim or defense that a remedy at law alone
is adequate and, to the maximum extent permitted by law, consents to have each
provision of this Agreement specifically enforced against such party, without
the necessity of posting bond or other security against such party, and consents
to the entry of injunctive relief against such party enjoining or restraining
any breach or threatened breach of such provisions of this Agreement.
(b) If any party hereto initiates any legal action arising out of or in
connection with this Agreement, the prevailing party in such legal action shall
be entitled to recover from the other party all reasonable costs and expenses
(including attorneys' fees and expert witness fees and expenses) incurred by the
prevailing party in connection therewith.
F-19
(c) The Non-Purchaser Directors shall have the right to enforce the
covenants of the Purchaser contained in this Agreement and the other Transaction
Documents on behalf of the Company.
(d) Notwithstanding anything to the contrary contained in this
Agreement or the Purchase Agreement or as otherwise elsewhere provided, the
Existing Holders shall have the right to enforce Section 4.4 of the Purchase
Agreement on behalf of the Company if the Non-Purchaser Directors fail so to
enforce such Section 4.4; provided, however, this right to enforce such Section
4.4 under this Section 5.13(d) shall exist only so long as the Existing Holders
continue to be the owners of at least 10% of the outstanding Common Stock on a
Fully Diluted Basis.
Section 5.14. Technology Transfer Option. Notwithstanding Section
1.6(a) of the Purchase Agreement, until the exercise of the Technology Option
pursuant to Section 1.6(a) of the Purchase Agreement, the Company and the
Existing Holders acknowledge and agree that the Purchaser may conduct its
business and utilize the Technology in any manner as the Purchaser sees fit and
at any time and from time to time may sell, transfer, license, lease, create
Encumbrances on or otherwise dispose of any (each a "Disposition") of the
Technology as it sees fit in the ordinary course of its business (it being
understood and agreed that upon the occurrence of any Disposition, the
Technology subject to such Disposition thereafter will no longer be subject to
the Technology Option).
Section 5.15. Legal Fees. Each party shall bear their own legal fees
and expenses in connection with the negotiation, execution and delivery of this
Agreement, any other Transaction Document and any ancillary documents thereto.
Notwithstanding the foregoing, the Company agrees to pay the legal fees and
expenses incurred by Xxxxxx Xxxxxxxxx XxXxxxx, LLC ("CRM, LLC") not to exceed
$115,000. Each Existing Holder hereby irrevocably and forever waives any right
under any document that obligates the Company to pay any legal fees or expenses
incurred by such Existing Holder (or to reimburse such Existing Holder for any
such legal fees or expenses), except to the extent set forth in the next
preceding sentence.
[Signature Pages Follow]
F-20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
LOGIMETRICS, INC.
By:___________________________________________
Name: Xxxxxx X. Xxxxxx
Title: President
L-3 COMMUNICATIONS CORPORATION
By:___________________________________________
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice-President
______________________________________
Xxxxxx X. Xxxxxx
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
F-21
______________________________________
Xxxxxxx X. Brand
00 Xxxxxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
LFH, LLC
By:___________________________________________
Name: Xxxxxxx Brand
Title:
000 Xxxxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
______________________________________
Xxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
XXXXXX XXXXXXXXX XxXXXXX LLC
By:___________________________________________
Name:
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
F-22
L.A.D. EQUITY PARTNERS, L.P.
By: Flint Investments, Inc.
Its General Partner
By:___________________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
______________________________________
Xxxxxx X. Xxxxxxxxx, Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM 1998 ENTERPRISE FUND, LLC
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.,
Its Managing Member
By:___________________________________________
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Operating Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
F-23
CRM 1997 ENTERPRISE FUND, LLC
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.
Its Managing Member
By:___________________________________________
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Operating Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM PARTNERS, L.P.
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.
Its General Partner
By:___________________________________________
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM RETIREMENT PARTNERS, L.P.
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.
Its General Partner
By:___________________________________________
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Financial Officer
F-24
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM MADISON PARTNERS, L.P.
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.
Its General Partner
By:___________________________________________
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM U.S. VALUE FUND, LTD.
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.
Its General Partner
By:___________________________________________
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
EURYCLEIA PARTNERS, L.P.
By: Marchessini & Company,
Its General Partner
By:___________________________________________
Name: Xxxx Xxxxxx
Title: Vice President
F-25
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
A.C. ISRAEL ENTERPRISES, INC.
By:___________________________________________
Name: Xxx Xxxxxx
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM-EFO PARTNERS, L.P.
By: CRM-EFO Investments, LLC
Its General Partner
By: CRM Management, Inc.,
Its Managing Member
By:___________________________________________
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
F-26
______________________________________
Xxxxxxx Xxxxxxxxxxx
Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
XXXXXX EQUITIES CORP.
By:___________________________________________
Name: Xxxxxxx Xxxxxxxxxxx
Title: President
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
WHITEHALL PROPERTIES, LLC
By:___________________________________________
Name: Xxxxxxx Xxxxxxxxxxx
Title: President
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
F-27
KABUKI PARTNERS ADP, GP
By:___________________________________________
Name: Xxxxxxx Xxxxxxxxxxx
Title: General Partner
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
XxXXXXX FAMILY PARTNERSHIP L.P.
By:___________________________________________
Name: Xxxxxx X. XxXxxxx
Title: General Partner
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
______________________________________
Xxxxxxx X. Xxxx, Xx.
By: Xxxxxx Xxxxxxxxx XxXxxx, Inc.
Attorney-in-Fact
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
______________________________________
Xxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
F-28
______________________________________
Xxxxxx X. Xxxxxxx, III
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
______________________________________
Xxxx X. Xxxxxx
000 X. 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
MBF CAPITAL CORPORATION
By:___________________________________________
Name: Xxxx X. Xxxxxx
Title: President
MBF BROADBAND SYSTEMS, L.P.
By: MBF Broadband Systems, Inc.,
Its General Partner
By:___________________________________________
Name: Xxxx X. Xxxxxx
Title: President
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
F-29
PHINEAS BROADBAND SYSTEMS
By: MBF Broadband Systems, Inc.
Its General Partner
By:___________________________________________
Name: Xxxx X. Xxxxxx
Title: President
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CERBERUS PARTNERS, L.P.
By: Cerberus Associates, LLC,
Its General Partner
By:___________________________________________
Name: Xxxx Xxxxxxx
Title: Managing Director
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
F-30
______________________________________
Xxxxx Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
F-31
EXHIBIT A
FORM OF THE EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This Employment Agreement dated as of July 10, 2000 (this "Agreement"),
between LOGIMETRICS, INC., a Delaware corporation (the "Company"), and XXXXXX X.
XXXXXX (the "Employee").
RECITALS
WHEREAS, that in connection with the purchase by L-3 Communications
Corporation ("L-3") of an equity interest in the Company, the Company and the
Employee desire to terminate the employment agreement, dated April 25, 1997 (the
"Existing Agreement"), by and between the Company and the Employee, and enter
into a new agreement for the Employee's services providing for all terms and
conditions of the Employee's continued employment;
WHEREAS, the covenant not to compete set forth in Section 6 is necessary
to protect the Company's legitimate business interests; and
WHEREAS, the Company desires to continue the employment of the Employee
with the Company on the terms and conditions hereof, and the obligations of the
Company and L-3 to effect the closing under the Purchase Agreement, dated July
10, 2000 (the "Purchase Agreement"), between the Company and the Employee, were
conditioned upon the Employee's agreement to be employed by the Company pursuant
to the terms and conditions of this Agreement (including Section 6), and the
Employee desires to be so employed by the Company;
NOW THEREFORE, the Company and the Employee, in consideration of the
premises, the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, and
intending to be legally bound, hereby agree as follows:
SECTION 1. EMPLOYMENT GENERALLY
1.1. Employment. The Company hereby offers the Employee employment, and
the Employee hereby accepts such offer of employment and agrees to perform his
duties and responsibilities hereunder, in accordance with the terms and
conditions hereinafter set forth.
1.2. Position and Duties. During the Employment Term (as defined in
Section 2), the Employee shall serve on a full-time basis and devote his entire
working time, attention and
energy exclusively to the Company as Senior Vice President--Administration. The
Employee shall report to the individual acting as or appointed as the President
of the Company. The Employee will perform such executive, managerial and
administrative duties as determined by the President of the Company, will use
his best efforts to promote the interests of the Company, and will comply with
all lawful directives, policies, procedures and directions as may from time to
time be given or determined by the Company.
1.3. Outside Activities. The Employee shall not engage in any activity
or investment if such activity or investment interferes with the performance of
his duties hereunder. Notwithstanding the foregoing, the Employee may engage in
charitable, educational, civic and similar activities and continue to be a
member of boards of directors of other businesses and charitable organizations,
and become a member of boards of directors of other businesses and charitable
organizations, subject to approval by the Board of Directors of the Company, to
the extent that such activities do not adversely affect the performance of his
duties hereunder.
1.4. Other Agreements Superseded. This Employment Agreement supersedes
and replaces all prior agreements and understandings (including the Existing
Agreement), between the Company and the Employee, whether written or oral,
relating to the subject matter hereof, and all such prior agreements and
understandings shall be null and void and without further effect as of the date
hereof.
SECTION 2. EMPLOYMENT TERM. Subject to the provisions of Section 4, the
term of this Agreement shall be for a period commencing on the date hereof and
ending on the earlier of (a) the second anniversary of the date hereof and (b)
termination of the Employee's employment pursuant to this Agreement (the
"Employment Term").
SECTION 3. COMPENSATION.
3.1. Base Salary. The Company agrees to pay, and the Employee agrees to
accept, as base compensation for all services to be rendered by the Employee
hereunder (including any services as an officer, director, employee or member of
any committee of the Company or any of its affiliates), the sum of $210,000 per
year (less appropriate deductions) (the "Base Salary"). The Base Salary shall be
payable in accordance with the ordinary payroll practices of the Company. During
the Employment Term, the Company shall, in good faith,
review the Base Salary in accordance with the Company's customary procedures and
practices regarding the salaries of similarly situated employees and may, if
determined by the Company to be appropriate, increase the Base Salary following
such review (it being understood and agreed by the Employee that the Company
shall not be obligated to increase the Base Salary), and "Base Salary" for all
purposes herein shall be deemed to be a reference to such higher amount.
3.2. Additional Employee Benefits. Initially, the Employee shall receive
such employee benefits that are provided generally to the Company's employees as
of the date of the Purchase Agreement (collectively, the "LogiMetrics
Benefits"). After the date hereof, any of the LogiMetrics Benefits may be
amended, supplemented, terminated or modified from time to time by the Company,
so long as the Company provides the Employee with employee benefits similar to
those provided to other comparably situated Company employees.
3.3. Withholding. All payments due to the Employee hereunder shall be
subject to all applicable taxes required to be withheld by the Company pursuant
to federal, state or local law. The Employee shall be solely responsible for
income and earnings taxes imposed on the Employee by reason of any cash or
non-cash compensation and benefits provided hereunder.
3.4 Option Grants. The Company shall, no later than the date hereof,
grant to the Employee options (the "Employee Options") to purchase 750,000
shares of the Company's common stock, par value $.01 per share (the "Common
Stock") pursuant to Section 4.2 of the Purchase Agreement, including, having an
exercise price of $0.54 per share (it being understood and agreed that such
number of shares of Common Stock and such exercise price are before giving
effect to the Reverse Stock Split (as defined in the Purchase Agreement)). The
Employee shall enter into the non-qualified stock option agreement with the
Company to evidence the grant of the Employee Options in the form attached
hereto as Schedule A.
3.5 Annual Bonus. The Employee shall be entitled to participate in any
cash bonus plan or arrangement in which key employees of the Company are
entitled to participate now or during the Employment Term. Any amount payable to
the Employee pursuant to any such cash bonus plan or arrangement shall be
determined by the Board of Directors of the Company or the Compensation
Committee thereof, in its sole discretion.
3.6 Deferred Payments. Not later than the date hereof, the Company shall
pay to
the Employee the sum of $124,056 in full payment of (a) unpaid salary previously
deferred by the Employee, and (b) certain expense reimbursements previously
deferred by the Employee.
3.7 Term Life Insurance. The Company shall reimburse the Employee up to
$2,000 in any calendar year for premiums paid by the Employee to maintain a term
insurance policy insuring the life of the Employee in the face amount of
$1,000,000.
3.8 Vacation. The Employee shall be entitled to four weeks of vacation
in each calendar year during the Employment Term and shall be entitled to carry
over all, part or none of such vacation in accordance with any vacation policy
maintained by the Company for senior executives.
3.9 Expense Reimbursement. The Company shall pay or reimburse the
Employee for all reasonable travel or other expenses incurred by the Employee in
connection with the performance of his duties and obligations under this
Agreement, subject to the Employee's presentation of appropriate vouchers and/or
receipts in accordance with such procedures as the Company may from time to time
establish for senior officers and to preserve any deductions for Federal income
taxation purposes to which the Company may be entitled.
SECTION 4. TERMINATION.
4.1. Termination Events. The Employee's employment with the Company and
the Employment Term shall terminate upon the earliest occurrence of any of the
following events:
(a) The death or resignation of the Employee.
(b) The termination of the Employee's employment by the Company for
Cause (as defined in Section 4.3(a)).
(c) The termination of the Employee's employment by the Company for
Employee Disability.
(d) The termination of the Employee's employment by the Employee for
Good Reason.
(e) The termination of the Employee's employment other than pursuant
to clauses (a), (b), (c) or (d) above.
4.2. Effect of Termination.
(a) If the Employee's employment with the Company is terminated pursuant
to Section 4.1(a), 4.1(b) or 4.1(c), then the Company shall pay the Employee (or
his estate in the event of his death) any portion of the Base Salary accrued
hereunder on or prior to the date of termination but not paid. The Employee
shall not be entitled to any other payments hereunder.
(b) If the Employee's employment with the Company is terminated pursuant
to Section 4.1(d) or 4.1(e), the Employee shall continue to be paid his Base
Salary in accordance with the Company's usual payroll practices until the later
to occur of (i) the second anniversary of the date hereof and (ii) six months
after the end of the Employment Term (the "Severance Period").
4.3. Definitions.
(a) As used herein, the term "Cause" shall mean: (i) gross neglect of or
willful and continuing refusal by the Employee to substantially perform his
duties hereunder (other than due to death or Disability); (ii) any breach of the
provisions of Section 5 or Section 6 by the Employee; (iii) willfully engaging
in conduct that is demonstrably injurious to the Company or the Company's
subsidiaries or affiliates by the Employee; and/or (iv) conviction of, or plea
of nolo contendere, by Employee to (A) any felony, or (B) a misdemeanor
involving moral turpitude.
Termination of the Employee pursuant to Section 4.1(b) shall be made by
delivery to the Employee of written notice, given at least five days prior to
such termination, from the Board of Directors of the Company (the "Board")
specifying the particulars of the conduct by the Employee set forth in any of
clauses (i) through (iv) above. Termination shall be effected by a majority vote
of the Board at a meeting at which the Employee shall have had the opportunity
(along with counsel) to be heard, unless, within five days after receiving such
notice, the Employee shall have cured Cause to the reasonable satisfaction of
the Board; provided, however, that no cure shall be possible if termination for
Cause is made pursuant to clause (ii) or (iv) above. As long as the Employee is
on the Board, he shall reasonably cooperate to cause a valid Board meeting to
occur.
(b) As used herein, the term "Disability" shall mean the Employee's
absence
from the full-time performance of the Employee's duties pursuant to a reasonable
determination made in accordance with the Company's then existing disability
plan that the Employee is disabled as a result of incapacity due to physical or
mental illness that lasts, or is reasonably expected to last, for at least six
months.
(c) As used herein, the term "Good Reason" means (i) any reduction by
the Company in Employee's Base Salary, (ii) any material adverse change in the
reporting lines described in Section 1.2, (iii) any material diminution or
material adverse change in the Employee's titles, duties or responsibilities,
unless due to a promotion or increased responsibility of the Employee, or (iv)
the relocation of the Company's executive offices more than 50 miles outside
Eatontown, New Jersey or Bohemia, New York without the Employee's prior written
consent.
4.4. Other Consequences of Termination.
(a) In the event of the termination of the Employment Term, for whatever
reason, the Employee agrees to cooperate with the Company and to be reasonably
available to the Company with respect to continuing and/or future matters
arising out of the Employee's employment or any other relationship with the
Company or its affiliates, whether such matters are business-related, legal or
otherwise. The Company agrees to reimburse the Employee for the Employee's
reasonable out-of-pocket expenses incurred in complying with the terms of this
Section 4.4(a) upon delivery by the Employee to the Company of valid receipts
for such expenses.
(b) Subject to the other provisions of this Agreement and the terms of
any benefit plan or arrangement in which the Employee participates, the payments
upon termination pursuant to this Section 4 shall constitute the exclusive
payments due the Employee upon termination under this Agreement. The Employee
shall not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise.
(c) Upon the termination of the Employment Term for any reason, the
Employee or his estate shall surrender to the Company all correspondence,
letters, files, contracts, mailing lists, customer lists, advertising materials,
ledgers, supplies, equipment, checks, and all other materials and records of any
kind that are the property of the Company or
any of its subsidiaries or affiliates, that may be in the Employee's possession
or under his control, including all copies of any of the foregoing.
(d) The provisions of this Section 4 and of Sections 5 and 6 shall
survive the expiration or earlier termination of the Employment Term and this
Agreement.
SECTION 5. CONFIDENTIALITY; PUBLIC STATEMENTS
5.1. Confidential and Proprietary Information. (a) In addition to the
confidential and proprietary information that the Employee heretofore developed,
conceived, learned or became aware of as an employee, proprietor, owner,
director, officer or stockholder of LogiMetrics (the "Prior Trade Secrets"), the
Company and its affiliates may, pursuant to the Employee's employment hereunder,
provide to him and confide in him additional confidential and proprietary
information (collectively, the "Additional Trade Secrets"), including without
limitation: (i) business methods and systems, techniques and methods of
operation developed by the Company or its affiliates and which the Employee
recognizes to be unique assets of the business of the Company and its
affiliates; (ii) any sales prospects, customer lists, products, research or data
of any kind; (iii) any information relating to strategic plans, sales costs,
profits or the financial condition of the Company, its affiliates or any of
their customers or prospective customers, which is not generally known to the
public; or (iv) computer programs and software, including without limitation
source code, object code and data. All the Prior Trade Secrets and all the
Additional Trade Secrets are herein sometimes referred to collectively as "Trade
Secrets". The Employee shall not, either during or at any time after the
termination of his employment with the Company, directly or indirectly, in any
manner utilize or disclose any Trade Secrets to any individual, firm,
corporation, company, association or other entity without the prior consent of
the Company (unless legally compelled to do so, but subject to the provisions of
Section 5.1(b)). The term "Trade Secrets", however, does not include
information, knowledge or factual data that: (A) becomes part of the public
knowledge or literature other than by reason of any inaction or action of the
Employee; or (B) was disclosed to the Employee without restriction by a third
party having the right to disclose the same. The Employee further covenants and
agrees that he will promptly deliver to the Company all tangible evidence of
Trade Secrets, prior to or at the termination of the Employee's employment.
(b) If the Employee becomes legally compelled (by deposition,
interrogatory,
request for documents, order, subpoena, civil investigative demand or similar
process issued by a court of competent jurisdiction or by a governmental body)
to disclose any Intellectual Property (as defined below) of the Company or any
of its affiliates, then the Employee will give prompt prior written notice of
such requirement to the Company so that the Company or any of its affiliates may
seek a protective order or other appropriate remedy and/or waive compliance with
the terms of this Agreement. If such protective order or other remedy is not
obtained, and irrespective of whether or not compliance with the provisions
hereof is waived, then it is agreed that only that portion of the Intellectual
Property of the Company or any of its affiliates, which the Employee is advised
in writing by the Employee's counsel is legally required to be disclosed, will
be disclosed by the Employee, and reasonable efforts will be made by him to
obtain assurance that confidential treatment will be accorded such portion of
such Intellectual Property.
5.2. Trade Secrets
(a) The Employee agrees that any Trade Secret, invention, improvement,
patent, patent application or writing, and any program, method, process, system
or novel technique (whether or not capable of being trademarked, copyrighted or
patented) (collectively, "Intellectual Property"), conceived, devised,
developed, owned or otherwise obtained by him, whether solely or jointly with
others, either (i) as an employee, proprietor, owner, officer, director or
stockholder of LogiMetrics prior to the date hereof, or (ii) during the
Employment Term relating to the business of the Company or any of its
Subsidiaries, shall in each and every case be and become the property of the
Company. The Employee agrees to give the Company prompt notice of his
conception, invention, authorship, development or acquisition of any
Intellectual Property and, without additional consideration, to execute such
instruments of transfer, assignment, conveyance or confirmation and such other
documents, and to do all appropriate lawful acts, as may be requested by the
Company to transfer, assign, confirm, and perfect in the Company or its
affiliates all legally protectable rights in any Intellectual Property
throughout the world.
(b) The Employee hereby assigns and conveys to and confirms in the
Company the entire right, title and interest in and to the Intellectual
Property, conceived, devised, developed, owned or otherwise obtained by him,
whether solely or jointly with others, as an employee, proprietor, owner,
officer, director or stockholder of LogiMetrics or any of its
subsidiaries (or any predecessor company) prior to the date hereof (the "Prior
Intellectual Property"), or on or after the date hereof and through the end of
the Employment Term relating to the business of the Company or any of its
Subsidiaries (the "Future Intellectual Property") and every priority right that
is or may be predicated upon or arises from any of the Prior Intellectual
Property or any of the Future Intellectual Property.
(c) The Employee, upon the Company's reasonable request and at its
expense, but without additional consideration to the Employee, shall execute
such instruments of transfer, assignment, conveyance or confirmation and such
other documents, and shall do all appropriate lawful acts, as may be requested
by the Company to transfer, assign, confirm and perfect in the Company or its
affiliates all legally protectable rights in any Intellectual Property, whether
Prior Intellectual Property or Future Intellectual Property, throughout the
world.
(d) The Employee represents and warrants that no entity in which the
Employee has an equity interest has any right, title or interest in and to the
Company's Intellectual Property. Without limiting the rights or remedies of the
Company in the event of a breach of the foregoing representation and warranty,
the Employee will cause any such entity in which the Employee has an equity
interest to execute such instruments of transfer, assignment, conveyance or
confirmation and such other documents, and shall do all appropriate lawful acts,
as may be requested by the Company to transfer, assign, confirm and perfect in
the Company or its affiliates all legally protectable rights in any Intellectual
Property, whether Prior Intellectual Property or Future Intellectual Property,
throughout the world.
5.3. Prohibited Public Statements. During the Employment Term, the
Employee shall not make any public statement reflecting adversely on the
Company, its affiliates or their business prospects, except for such statements
which the Employee is required to make by law.
SECTION 6. NON-COMPETE. In further consideration of the Company's
covenants and agreements contained in this Agreement, the Employee agrees to
abide by the terms and conditions contained in this Section 6. The Employee
further acknowledges the sufficiency and receipt of the consideration given in
this Agreement for purposes of enforcing the non-compete provisions contained in
this Section 6.
During the Non-Competition Period (as defined below), Employee will not,
and
will cause his affiliates not to, directly or indirectly, design, manufacture,
market or sell products or provide services which are competitive to those
products manufactured and sold by LogiMetrics during the Employment Term or at
the end of the Employment Term or those services provided by LogiMetrics to its
customers (including improvements or extensions of such products or services)
("Competitive Products and Services").
During the Non-Competition Period, the Employee will not, and will cause
his affiliates not to, directly or indirectly, induce or solicit, or aid or
assist any person or entity to induce or solicit, any employees, salespersons,
agents, consultants, distributors, representatives, advisors, customers or
suppliers of Buyer or the Business to terminate, curtail or otherwise limit
their employment by or business relationship with Buyer or the Business.
As used herein, "Non-Competition Period" shall mean the period beginning
on the date hereof and ending on the 180th day following the last day of the
Employment Term.
The parties hereto agree that the provisions of this Section 6 are
reasonable. If a court determines, however, that any provision of this Section 6
is unreasonable, either in period of time, geographical area or otherwise, then
the parties hereto agree that the provisions of this Section 6 should be
interpreted and enforced to the maximum extent which such court deems
reasonable.
SECTION 7. ENTIRE AGREEMENT. This Agreement constitutes the full and
complete understanding and agreement of the Employee and the Company respecting
the subject matter hereof, and supersedes all prior understandings and
agreements, oral or written, express or implied, respecting the Employee's
employment with the Company.
SECTION 8. HEADINGS. The headings of this Agreement are for convenience
of reference only and are not to be considered in the interpretation of the
terms and conditions of this Agreement.
SECTION 9. NOTICES. Any notice, consent, approval or other communication
required or permitted to be given under this Agreement (each a "Notice") shall
be in writing and shall be given by personal delivery, by nationally recognized
overnight courier or by registered or certified mail, postage prepaid, addressed
as follows:
If to the Company:
LogiMetrics, Inc.
000 Xxxxxxxxxx Xxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chairman of the Board of Directors
With a copy to:
L-3 Communications Corporation
Xxxxx Microwave East Division
000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: President
If to the Employee, at his personal residence, as reflected in the
personnel records of the Company.
Any party may change the persons and addresses to which notices are to
be sent by giving a Notice of such change to the other party in the manner
provided herein for giving Notices.
A Notice given hereunder shall be deemed given upon actual receipt or
refusal of receipt.
SECTION 10. WAIVER OF BREACH. No waiver by either party of any condition
or of the breach by the other party of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances shall
be deemed or construed as a further or continuing waiver of any such condition
or breach or a waiver of any other condition, or of the breach of any other term
or covenant set forth in this Agreement. Moreover, the failure of either party
to exercise any right hereunder shall not bar the later exercise thereof.
SECTION 11. BINDING; NONALIENATION. This Agreement shall inure to the
benefit of and be binding on (a) the Company and its successors and assigns, and
(b) the Employee. The Employee shall not pledge, hypothecate, anticipate or in
any way create a lien upon any amounts provided under this Agreement. This
Agreement and the benefits payable hereunder shall not be assignable by the
Employee; provided, however, that nothing in this
Section shall preclude the Employee from designating a beneficiary to receive
any benefit payable hereunder upon his death, or the executors, administrators
or other legal representatives of the Employee or his estate from assigning any
rights hereunder to which they become entitled, to the person or persons
entitled thereto under applicable law.
SECTION 12. GOVERNING LAW. This Agreement shall be governed in all
respects, including as to validity, interpretation and effect by the internal
laws of the State of New York without giving effect to the conflict of laws
rules thereof.
SECTION 13. CONTINUATION OF COVENANTS. Those covenants and agreements of
the Employee contained in this Agreement that by the terms thereof are intended
to continue to operate after termination of the Employee's employment, including
without limitation the covenants and agreements in Sections 5 and 6, shall
survive termination of the Employee's employment with the Company.
SECTION 14. INVALIDITY OR UNENFORCEABILITY. If any term or provision of
this Agreement is held to be invalid or unenforceable, for any reason, then such
invalidity or unenforceability shall not affect any other term or provision
hereof and this Agreement shall continue in full force and effect as if such
invalid or unenforceable term or provision (to the extent of the invalidity or
unenforceability) had not been contained herein.
SECTION 15. COUNTERPARTS. This Agreement may be executed (including by
facsimile transmission) with counterpart signature pages or in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
SECTION 16. AMENDMENTS. No provision of this Agreement may be amended,
waived or discharged unless such waiver, amendment or discharge is agreed to in
writing and signed by the parties.
SECTION 17. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any
state having jurisdiction, this being in addition to any other remedy to which
they are entitled at law or in equity.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
LOGIMETRICS, INC.
By:
----------------------------
Name:
Title:
-------------------------------
XXXXXX X. XXXXXX
EMPLOYMENT AGREEMENT
This Employment Agreement dated as of July 10, 2000 (this "Agreement"),
between LOGIMETRICS, INC., a Delaware corporation (the "Company"), and XXXXXXX
X. BRAND (the "Employee").
RECITALS
WHEREAS, that in connection with the purchase by L-3 Communications
Corporation ("L-3") of an equity interest in the Company, the Company and the
Employee desire to terminate the employment agreement, dated April 25, 1997 (the
"Existing Agreement"), by and between the Company and the Employee, and enter
into a new agreement for the Employee's services providing for all terms and
conditions of the Employee's continued employment;
WHEREAS, the covenant not to compete set forth in Section 6 is necessary
to protect the Company's legitimate business interests; and
WHEREAS, the Company desires to continue the employment of the Employee
with the Company on the terms and conditions hereof, and the obligations of the
Company and L-3 to effect the closing under the Purchase Agreement, dated July
10, 2000 (the "Purchase Agreement"), between the Company and the Employee, were
conditioned upon the Employee's agreement to be employed by the Company pursuant
to the terms and conditions of this Agreement (including Section 6), and the
Employee desires to be so employed by the Company;
NOW THEREFORE, the Company and the Employee, in consideration of the
premises, the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, and
intending to be legally bound, hereby agree as follows:
SECTION 1. EMPLOYMENT GENERALLY
1.1. Employment. The Company hereby offers the Employee employment, and
the Employee hereby accepts such offer of employment and agrees to perform his
duties and responsibilities hereunder, in accordance with the terms and
conditions hereinafter set forth.
1.2. Position and Duties. During the Employment Term (as defined in
Section 2),
the Employee shall serve on a full-time basis and devote his entire
working time, attention and energy exclusively to the Company as Senior Vice
President--Technology. The Employee shall report to the individual acting as or
appointed as the President of the Company. The Employee will perform such
executive, managerial and administrative duties as determined by the President
of the Company, will use his best efforts to promote the interests of the
Company, and will comply with all lawful directives, policies, procedures and
directions as may from time to time be given or determined by the Company.
1.3. Outside Activities. The Employee shall not engage in any activity
or investment if such activity or investment interferes with the performance of
his duties hereunder. Notwithstanding the foregoing, the Employee may engage in
charitable, educational, civic and similar activities and continue to be a
member of boards of directors of other businesses and charitable organizations,
and become a member of boards of directors of other businesses and charitable
organizations, subject to approval by the Board of Directors of the Company, to
the extent that such activities do not adversely affect the performance of his
duties hereunder.
1.4. Other Agreements Superseded. This Employment Agreement supersedes
and replaces all prior agreements and understandings (including the Existing
Agreement) between the Company and the Employee, whether written or oral,
relating to the subject matter hereof, and all such prior agreements and
understandings shall be null and void and without further effect as of the date
hereof.
SECTION 2. EMPLOYMENT TERM. Subject to the provisions of Section 4, the
term of this Agreement shall be for a period commencing on the date hereof and
ending on the earlier of (a) the second anniversary of the date hereof and (b)
termination of the Employee's employment pursuant to this Agreement (the
"Employment Term").
SECTION 3. COMPENSATION.
3.1. Base Salary. The Company agrees to pay, and the Employee agrees to
accept, as base compensation for all services to be rendered by the Employee
hereunder (including any services as an officer, director, employee or member of
any committee of the Company or any of its affiliates), the sum of $210,000 per
year (less appropriate deductions) (the "Base Salary"). The Base Salary shall be
payable in accordance with the ordinary payroll
practices of the Company. During the Employment Term, the Company shall, in good
faith, review the Base Salary in accordance with the Company's customary
procedures and practices regarding the salaries of similarly situated employees
and may, if determined by the Company to be appropriate, increase the Base
Salary following such review (it being understood and agreed by the Employee
that the Company shall not be obligated to increase the Base Salary), and "Base
Salary" for all purposes herein shall be deemed to be a reference to such higher
amount.
3.2. Additional Employee Benefits. Initially, the Employee shall receive
such employee benefits that are provided generally to the Company's employees as
of the date of the Purchase Agreement (collectively, the "LogiMetrics
Benefits"). After the date hereof, any of the LogiMetrics Benefits may be
amended, supplemented, terminated or modified from time to time by the Company,
so long as the Company provides the Employee with employee benefits similar to
those provided to other comparably situated Company employees.
3.3. Withholding. All payments due to the Employee hereunder shall be
subject to all applicable taxes required to be withheld by the Company pursuant
to federal, state or local law. The Employee shall be solely responsible for
income and earnings taxes imposed on the Employee by reason of any cash or
non-cash compensation and benefits provided hereunder.
3.4 Annual Bonus. The Employee shall be entitled to participate in any
cash bonus plan or arrangement in which key employees of the Company are
entitled to participate now or during the Employment Term. Any amount payable to
the Employee pursuant to any such cash bonus plan or arrangement shall be
determined by the Board of Directors of the Company or the Compensation
Committee thereof, in its sole discretion.
3.5 Deferred Payments. Not later than the date hereof, the Company shall
pay to the Employee the sum of $217,000 in full payment of (a) unpaid salary
previously deferred by the Employee, and (b) certain expense reimbursements
previously deferred by the Employee.
3.6 Term Life Insurance. The Company shall reimburse the Employee up to
$2,000 in any calendar year for premiums paid by the Employee to maintain a term
insurance policy insuring the life of the Employee in the face amount of
$1,000,000.
3.7 Vacation. The Employee shall be entitled to four weeks of vacation
in each calendar year during the Employment Term and shall be entitled to carry
over all, part or none of
such vacation in accordance with any vacation policy maintained by the Company
for senior executives.
3.8 Expense Reimbursement. The Company shall pay or reimburse the
Employee for all reasonable travel or other expenses incurred by the Employee in
connection with the performance of his duties and obligations under this
Agreement, subject to the Employee's presentation of appropriate vouchers and/or
receipts in accordance with such procedures as the Company may from time to time
establish for senior officers and to preserve any deductions for Federal income
taxation purposes to which the Company may be entitled.
SECTION 4. TERMINATION.
4.1. Termination Events. The Employee's employment with the Company and
the Employment Term shall terminate upon the earliest occurrence of any of the
following events:
(a) The death or resignation of the Employee.
(b) The termination of the Employee's employment by the Company for
Cause (as defined in Section 4.3(a)).
(c) The termination of the Employee's employment by the Company for
Employee Disability.
(d) The termination of the Employee's employment by the Employee for
Good Reason.
(e) The termination of the Employee's employment other than pursuant
to clauses (a), (b), (c) or (d) above.
4.2. Effect of Termination.
(a) If the Employee's employment with the Company is terminated pursuant
to Section 4.1(a), 4.1(b) or 4.1(c), then the Company shall pay the Employee (or
his estate in the event of his death) any portion of the Base Salary accrued
hereunder on or prior to the date of termination but not paid. The Employee
shall not be entitled to any other payments hereunder.
(b) If the Employee's employment with the Company is terminated pursuant
to Section 4.1(d) or 4.1(e), the Employee shall continue to be paid his Base
Salary in accordance
with the Company's usual payroll practices until the later to occur of (i) the
second anniversary of the date hereof and (ii) 12 months after the end of the
Employment Term (the "Severance Period").
4.3. Definitions.
(a) As used herein, the term "Cause" shall mean: (i) gross neglect of or
willful and continuing refusal by the Employee to substantially perform his
duties hereunder (other than due to death or Disability); (ii) any breach of the
provisions of Section 5 or Section 6 by the Employee; (iii) willfully engaging
in conduct that is demonstrably injurious to the Company or the Company's
subsidiaries or affiliates by the Employee; and/or (iv) conviction of, or plea
of nolo contendere, by Employee to (A) any felony, or (B) a misdemeanor
involving moral turpitude.
Termination of the Employee pursuant to Section 4.1(b) shall be made by
delivery to the Employee of written notice, given at least five days prior to
such termination, from the Board of Directors of the Company (the "Board")
specifying the particulars of the conduct by the Employee set forth in any of
clauses (i) through (iv) above. Termination shall be effected by a majority vote
of the Board at a meeting at which the Employee shall have had the opportunity
(along with counsel) to be heard, unless, within five days after receiving such
notice, the Employee shall have cured Cause to the reasonable satisfaction of
the Board; provided, however, that no cure shall be possible if termination for
Cause is made pursuant to clause (ii) or (iv) above. As long as the Employee is
on the Board, he shall reasonably cooperate to cause a valid Board meeting to
occur.
(b) As used herein, the term "Disability" shall mean the Employee's
absence from the full-time performance of the Employee's duties pursuant to a
reasonable determination made in accordance with the Company's then existing
disability plan that the Employee is disabled as a result of incapacity due to
physical or mental illness that lasts, or is reasonably expected to last, for at
least six months.
(c) As used herein, the term "Good Reason" means (i) any reduction by
the Company in Employee's Base Salary, (ii) any material adverse change in the
reporting lines described in Section 1.2, (iii) any material diminution or
material adverse change in the
Employee's titles, duties or responsibilities, unless due to a promotion or
increased responsibility of the Employee, or (iv) the relocation of the
Company's executive offices more than 50 miles outside Eatontown, New Jersey or
Bohemia, New York without the Employee's prior written consent.
4.4. Other Consequences of Termination.
(a) In the event of the termination of the Employment Term, for whatever
reason, the Employee agrees to cooperate with the Company and to be reasonably
available to the Company with respect to continuing and/or future matters
arising out of the Employee's employment or any other relationship with the
Company or its affiliates, whether such matters are business-related, legal or
otherwise. The Company agrees to reimburse the Employee for the Employee's
reasonable out-of-pocket expenses incurred in complying with the terms of this
Section 4.4(a) upon delivery by the Employee to the Company of valid receipts
for such expenses.
(b) Subject to the other provisions of this Agreement and the terms of
any benefit plan or arrangement in which the Employee participates, the payments
upon termination pursuant to this Section 4 shall constitute the exclusive
payments due the Employee upon termination under this Agreement. The Employee
shall not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise.
(c) Upon the termination of the Employment Term for any reason, the
Employee or his estate shall surrender to the Company all correspondence,
letters, files, contracts, mailing lists, customer lists, advertising materials,
ledgers, supplies, equipment, checks, and all other materials and records of any
kind that are the property of the Company or any of its subsidiaries or
affiliates, that may be in the Employee's possession or under his control,
including all copies of any of the foregoing.
(d) The provisions of this Section 4 and of Sections 5 and 6 shall
survive the expiration or earlier termination of the Employment Term and this
Agreement.
SECTION 5. CONFIDENTIALITY; PUBLIC STATEMENTS
5.1. Confidential and Proprietary Information. (a) In addition to the
confidential and proprietary information that the Employee heretofore developed,
conceived, learned or
became aware of as an employee, proprietor, owner, director, officer or
stockholder of LogiMetrics (the "Prior Trade Secrets"), the Company and its
affiliates may, pursuant to the Employee's employment hereunder, provide to him
and confide in him additional confidential and proprietary information
(collectively, the "Additional Trade Secrets"), including without limitation:
(i) business methods and systems, techniques and methods of operation developed
by the Company or its affiliates and which the Employee recognizes to be unique
assets of the business of the Company and its affiliates; (ii) any sales
prospects, customer lists, products, research or data of any kind; (iii) any
information relating to strategic plans, sales costs, profits or the financial
condition of the Company, its affiliates or any of their customers or
prospective customers, which is not generally known to the public; or (iv)
computer programs and software, including without limitation source code, object
code and data. All the Prior Trade Secrets and all the Additional Trade Secrets
are herein sometimes referred to collectively as "Trade Secrets". The Employee
shall not, either during or at any time after the termination of his employment
with the Company, directly or indirectly, in any manner utilize or disclose any
Trade Secrets to any individual, firm, corporation, company, association or
other entity without the prior consent of the Company (unless legally compelled
to do so, but subject to the provisions of Section 5.1(b)). The term "Trade
Secrets", however, does not include information, knowledge or factual data that:
(A) becomes part of the public knowledge or literature other than by reason of
any inaction or action of the Employee; or (B) was disclosed to the Employee
without restriction by a third party having the right to disclose the same. The
Employee further covenants and agrees that he will promptly deliver to the
Company all tangible evidence of Trade Secrets, prior to or at the termination
of the Employee's employment.
(b) If the Employee becomes legally compelled (by deposition,
interrogatory, request for documents, order, subpoena, civil investigative
demand or similar process issued by a court of competent jurisdiction or by a
governmental body) to disclose any Intellectual Property (as defined below) of
the Company or any of its affiliates, then the Employee will give prompt prior
written notice of such requirement to the Company so that the Company or any of
its affiliates may seek a protective order or other appropriate remedy and/or
waive compliance with the terms of this Agreement. If such protective order or
other remedy is not obtained, and irrespective of whether or not compliance with
the provisions hereof is waived, then it is agreed that only that portion of the
Intellectual Property of the Company or any of its affiliates, which
the Employee is advised in writing by the Employee's counsel is legally required
to be disclosed, will be disclosed by the Employee, and reasonable efforts will
be made by him to obtain assurance that confidential treatment will be accorded
such portion of such Intellectual Property.
5.2. Trade Secrets
(a) The Employee agrees that any Trade Secret, invention, improvement,
patent, patent application or writing, and any program, method, process, system
or novel technique (whether or not capable of being trademarked, copyrighted or
patented) (collectively, "Intellectual Property"), conceived, devised,
developed, owned or otherwise obtained by him, whether solely or jointly with
others, either (i) as an employee, proprietor, owner, officer, director or
stockholder of LogiMetrics prior to the date hereof, or (ii) during the
Employment Term relating to the business of the Company or any of its
Subsidiaries, shall in each and every case be and become the property of the
Company. The Employee agrees to give the Company prompt notice of his
conception, invention, authorship, development or acquisition of any
Intellectual Property and, without additional consideration, to execute such
instruments of transfer, assignment, conveyance or confirmation and such other
documents, and to do all appropriate lawful acts, as may be requested by the
Company to transfer, assign, confirm, and perfect in the Company or its
affiliates all legally protectable rights in any Intellectual Property
throughout the world.
(b) The Employee hereby assigns and conveys to and confirms in the
Company the entire right, title and interest in and to the Intellectual
Property, conceived, devised, developed, owned or otherwise obtained by him,
whether solely or jointly with others, as an employee, proprietor, owner,
officer, director or stockholder of LogiMetrics or any of its subsidiaries (or
any predecessor company) prior to the date hereof (the "Prior Intellectual
Property"), or on or after the date hereof and through the end of the Employment
Term relating to the business of the Company or any of its Subsidiaries (the
"Future Intellectual Property"), and every priority right that is or may be
predicated upon or arises from any of the Prior Intellectual Property or any of
the Future Intellectual Property.
(c) The Employee, upon the Company's reasonable request and at its
expense, but without additional consideration to the Employee, shall execute
such instruments of transfer, assignment, conveyance or confirmation and such
other documents, and shall do all appropriate
lawful acts, as may be requested by the Company to transfer, assign, confirm and
perfect in the Company or its affiliates all legally protectable rights in any
Intellectual Property, whether Prior Intellectual Property or Future
Intellectual Property, throughout the world.
(d) The Employee represents and warrants that no entity in which the
Employee has an equity interest has any right, title or interest in and to the
Company's Intellectual Property. Without limiting the rights or remedies of the
Company in the event of a breach of the foregoing representation and warranty,
the Employee will cause any such entity in which the Employee has an equity
interest to execute such instruments of transfer, assignment, conveyance or
confirmation and such other documents, and shall do all appropriate lawful acts,
as may be requested by the Company to transfer, assign, confirm and perfect in
the Company or its affiliates all legally protectable rights in any Intellectual
Property, whether Prior Intellectual Property or Future Intellectual Property,
throughout the world.
5.3. Prohibited Public Statements. During the Employment Term, the
Employee shall not make any public statement reflecting adversely on the
Company, its affiliates or their business prospects, except for such statements
which the Employee is required to make by law.
SECTION 6. NON-COMPETE. In further consideration of the Company's
covenants and agreements contained in this Agreement, the Employee agrees to
abide by the terms and conditions contained in this Section 6. The Employee
further acknowledges the sufficiency and receipt of the consideration given in
this Agreement for purposes of enforcing the non-compete provisions contained in
this Section 6.
During the Non-Competition Period (as defined below), Employee will not,
and will cause his affiliates not to, directly or indirectly, design,
manufacture, market or sell products or provide services which are competitive
to those products manufactured and sold by LogiMetrics during the Employment
Term or at the end of the Employment Term or those services provided by
LogiMetrics to its customers (including improvements or extensions of such
products or services) ("Competitive Products and Services").
During the Non-Competition Period, the Employee will not, and will cause
his affiliates not to, directly or indirectly, induce or solicit, or aid or
assist any person or entity to induce or solicit, any employees, salespersons,
agents, consultants, distributors, representatives,
advisors, customers or suppliers of Buyer or the Business to terminate, curtail
or otherwise limit their employment by or business relationship with Buyer or
the Business.
As used herein, "Non-Competition Period" shall mean the period beginning
on the date hereof and ending on the first anniversary of the last day of the
Employment Term.
The parties hereto agree that the provisions of this Section 6 are
reasonable. If a court determines, however, that any provision of this Section 6
is unreasonable, either in period of time, geographical area or otherwise, then
the parties hereto agree that the provisions of this Section 6 should be
interpreted and enforced to the maximum extent which such court deems
reasonable.
SECTION 7. ENTIRE AGREEMENT. This Agreement constitutes the full and
complete understanding and agreement of the Employee and the Company respecting
the subject matter hereof, and supersedes all prior understandings and
agreements, oral or written, express or implied, respecting the Employee's
employment with the Company.
SECTION 8. HEADINGS. The headings of this Agreement are for convenience
of reference only and are not to be considered in the interpretation of the
terms and conditions of this Agreement.
SECTION 9. NOTICES. Any notice, consent, approval or other communication
required or permitted to be given under this Agreement (each a "Notice") shall
be in writing and shall be given by personal delivery, by nationally recognized
overnight courier or by registered or certified mail, postage prepaid, addressed
as follows:
If to the Company:
LogiMetrics, Inc.
000 Xxxxxxxxxx Xxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chairman of the Board of Directors
With a copy to:
L-3 Communications Corporation
Xxxxx Microwave East Division
000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: President
If to the Employee, at his personal residence, as reflected in the
personnel records of the Company.
Any party may change the persons and addresses to which notices are to
be sent by giving a Notice of such change to the other party in the manner
provided herein for giving Notices.
A Notice given hereunder shall be deemed given upon actual receipt or
refusal of receipt.
SECTION 10. WAIVER OF BREACH. No waiver by either party of any condition
or of the breach by the other party of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances shall
be deemed or construed as a further or continuing waiver of any such condition
or breach or a waiver of any other condition, or of the breach of any other term
or covenant set forth in this Agreement. Moreover, the failure of either party
to exercise any right hereunder shall not bar the later exercise thereof.
SECTION 11. BINDING; NONALIENATION. This Agreement shall inure to the
benefit of and be binding on (a) the Company and its successors and assigns, and
(b) the Employee. The Employee shall not pledge, hypothecate, anticipate or in
any way create a lien upon any amounts provided under this Agreement. This
Agreement and the benefits payable hereunder shall not be assignable by the
Employee; provided, however, that nothing in this Section shall preclude the
Employee from designating a beneficiary to receive any benefit payable hereunder
upon his death, or the executors, administrators or other legal representatives
of the Employee or his estate from assigning any rights hereunder to which they
become entitled, to the person or persons entitled thereto under applicable law.
SECTION 12. GOVERNING LAW. This Agreement shall be governed in all
respects, including as to validity, interpretation and effect by the internal
laws of the State of New York without giving effect to the conflict of laws
rules thereof.
SECTION 13. CONTINUATION OF COVENANTS. Those covenants and
agreements of the Employee contained in this Agreement that by the terms thereof
are intended to continue to operate after termination of the Employee's
employment, including without limitation the covenants and agreements in
Sections 5 and 6, shall survive termination of the Employee's employment with
the Company.
SECTION 14. INVALIDITY OR UNENFORCEABILITY. If any term or provision of
this Agreement is held to be invalid or unenforceable, for any reason, then such
invalidity or unenforceability shall not affect any other term or provision
hereof and this Agreement shall continue in full force and effect as if such
invalid or unenforceable term or provision (to the extent of the invalidity or
unenforceability) had not been contained herein.
SECTION 15. COUNTERPARTS. This Agreement may be executed (including by
facsimile transmission) with counterpart signature pages or in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
SECTION 16. AMENDMENTS. No provision of this Agreement may be amended,
waived or discharged unless such waiver, amendment or discharge is agreed to in
writing and signed by the parties.
SECTION 17. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
LOGIMETRICS, INC.
By:
----------------------------
Name:
Title:
-------------------------------
XXXXXXX X. BRAND
SCHEDULE 1.2(a)
EXISTING HOLDER SECURITIES
LogiMetrics, Inc.
Schedule 1.2(a)
As of 7/10/00
Existing Holders (1)
Common Series A P/S Class A Class B Class C Warrants Warrants
Name Stock Held Conversion Debentures Debentures Debentures Series B Series C
---------- ------------ ---------- ---------- ---------- -------- --------
Xxxxxxx X. Brand 4,367,800 0 0 0 2,639,010 0 0
LFH LLC (2) 10,000,000
Xxxxxx X. Xxxxxx 940,251 23,585 0 0 0 0 0
Xxxx X. Xxxxxx 180,000 0 413,780 0 0 520,000 0
Phineas Broadband Systems, L.P. (3)
MBF Broadband Systems, Inc. (3) 827,572
MBF Capital Corp. (1)
Cerberus Partners, L.P. 0 0 0 4,095,437 0 0 2,542,380
Xxxxxxx Xxxxxxxxxxx 182,170 47,170 0 0 0 0 0
Kabuki Partners ADP, GP (4) 135,000 165,515 234,901
Whitehall Properties, L.L.C. (4) 466,500 801,467 811,713
Xxxxxx Equities Corp. (4) 763,500 1,602,938 1,328,494
Xxxxxx X. Xxxxxx 590,372 0 1,602,938 960,472 0 0
A.C. Israel Enterprises, Inc. 590,372 0 1,602,938 960,472 0 0
CRM Partners, L.P. 317,471 0 1,276,894 0 0 0
CRM 1997 Enterprise Fund, LLC 342,000 0 1,480,310 0 0
CRM 1998 Enterprise Fund, LLC 593,972 0 0 2,612,486 0 0
CRM Retirement Partners, LP 211,941 0 709,385 0 0 0
CRM Madison Partners, LP 188,471 0 709,385 0 0 0
L.A.D. Equity Partners, LP 0 0 496,116 0 0 0
Xxxxx Xxxxxx 65,508 0 288,132
CRM-EFO Partners, LP 167,710 0 400,733 240,118 0 0
CRM U.S. Value Fund, Ltd. 57,000 0 240,437 0 0 0
Eurycleia Partners, L.P. 164,642 0
Xxxxxxx X. Xxxx, Xx. 32,756 0 240,437 144,074 0
Xxxxxx Xxxxxxxxx XxXxxxx, LLC and as agent 0 0 1,414,424 0 0 0
CRM, Inc., as agent 1,250,000
XxXxxxx Family Partnership L.P. 57,836 0 160,296 96,044 0 0
Xxxxxx X. Xxxxxxxxx Xxxxx 57,836 0 160,296 96,044 0 0
Xxxx X. Xxxxxx 57,836 0 160,296 96,044 0 0
Xxxxxx X. Xxxxxxx III 28,920 0 80,148 48,030 0 0
Warrants Warrants Warrants Warrants Warrants ISO's Non-
Name Series E Series F Series G Series H Series I Vested Quals Totals
-------- -------- -------- -------- -------- ------ ----- ------
Xxxxxxx X. Brand 0 0 0 0 0 20,000 0 7,026,810
LFH LLC (2) 10,000,000
Xxxxxx X. Xxxxxx 296,042 134,906 0 0 0 415,000 410,000 2,219,784
Xxxx X. Xxxxxx 0 0 20,000 170,000 1,303,780
Phineas Broadband Systems, L.P. (3) 500,000 1,000,000 500,000 2,000,000
MBF Broadband Systems, Inc. (3) 483,872 25,886 12,943 1,350,273
MBF Capital Corp. (1) 381,350 381,350
Cerberus Partners, L.P. 0 0 0 0 0 0 0 6,637,817
Xxxxxxx Xxxxxxxxxxx 0 0 0 0 0 0 229,340
Kabuki Partners ADP, GP (4) 96,775 5,177 2,589 639,957
Whitehall Properties, L.L.C. (4) 500,493 25,886 12,943 2,619,002
Xxxxxx Equities Corp. (4) 1,000,988 51,772 25,886 4,773,578
Xxxxxx X. Xxxxxx 0 0 967,742 51,772 25,886 0 0 4,199,183
A.C. Israel Enterprises, Inc. 0 0 967,742 51,772 25,886 0 0 4,199,183
CRM Partners, L.P. 0 0 758,245 40,565 20,282 0 0 2,413,457
CRM 1997 Enterprise Fund, LLC 0 0 923,930 49,428 24,713 0 0 2,820,381
CRM 1998 Enterprise Fund, LLC 0 0 0 0 0 0 0 3,206,458
CRM Retirement Partners, LP 0 0 421,248 22,536 11,268 0 0 1,376,378
CRM Madison Partners, LP 0 0 421,248 22,536 11,268 0 0 1,352,908
L.A.D. Equity Partners, LP 0 0 299,231 16,008 8,004 0 0 819,359
Xxxxx Xxxxxx 353,640
CRM-EFO Partners, LP 0 0 241,936 12,943 6,471 0 0 1,069,911
CRM U.S. Value Fund, Ltd. 0 0 145,161 7,766 3,883 0 0 454,247
Eurycleia Partners, L.P. 96,264 5,150 2,575 268,631
Xxxxxxx X. Xxxx, Xx. 0 0 145,161 7,766 3,883 574,077
Xxxxxx Xxxxxxxxx XxXxxxx, LLC and as agent 0 0 659,905 18,249 9,126 0 2,101,704
CRM, Inc., as agent 1,250,000
XxXxxxx Family Partnership L.P. 0 0 96,774 5,177 2,589 0 0 418,716
Xxxxxx X. Xxxxxxxxx Xxxxx 0 0 96,774 5,177 2,589 0 0 418,716
Xxxx X. Xxxxxx 0 0 96,774 5,177 2,589 0 0 418,716
Xxxxxx X. Xxxxxxx III 0 0 48,387 2,589 1,294 0 0 209,368
Notes:
(1) PIK calculated up to and including July 10, 2000.
(2) Mr. Brand is the sole officer and director of LFH LLC. Accordingly, Mr.
Brand is deemed to be the beneficial owner of all shares of Common Stock
beneficially owned by the above named entity.
(3) Xx. Xxxxxx is the sole officer, director and shareholder of MBF Capital
Corporation and MBF Broadband Systems, Inc., the general partner of both MBF
Broadband Systems, Inc., and Phineas Broadband Systems, L.P. Accordingly, Xx.
Xxxxxx is deemed to be the beneficial owner of all shares of Common Stock
beneficially owned by the above named entities.
(4) Xx. Xxxxxxxxxxx is the controlling general partner of Kabuki Partners ADP,
GP, a member of Whitehall Properties LLC, and an officer of Xxxxxx Equities
Corp. Accordingly, Xx. Xxxxxxxxxxx may be deemed to be the beneficial owner of
all shares of Common Stock beneficially owned by the above named entities.
See footnotes on Attachment 2.5(b) also.
Schedule 5.1
CRM Related Persons
Xxxxxx Xxxxxxxxx XxXxxxx, LLC
Xxxxxx X. Xxxxxxxxx, Xxxxx
CRM 1997 Enterprise Fund, LLC
CRM 1998 Enterprise Fund, LLC
CRM Partners, L.P.
CRM Retirement Partners, L.P.
CRM Madison Partners, L.P.
CRM U.S. Value Fund, LTD.
CRM-EFO Partners, X.X.
XxXxxxx Family Partnership L.P.
Xxxxxx X. Xxxxxx
Xxxx X. Xxxxxx
EXHIBIT G
[Letterhead of XXXXXXX BREED ABOTT & XXXXXX LLP]
000-000-0000
July 10, 2000
LogiMetrics, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Re: LogiMetrics, Inc.
Ladies and Gentlemen:
We have acted as special counsel to L-3 Communications Corporation, a
Delaware corporation ("L-3"). This opinion is being delivered pursuant to
Section 6.2(h) of the Purchase Agreement, dated July 10, 2000 (the "Agreement"),
between L-3 and LogiMetrics, Inc., a Delaware corporation ("LogiMetrics"). All
capitalized terms used herein and not defined herein shall have the respective
meanings ascribed to them in the Agreement.
The Agreement provides, among other things, for the issuance and sale
by LogiMetrics to L-3 of the Purchaser Shares at the Closing, as well as the
issuance and sale of additional shares of the Common Stock of LogiMetrics after
the Closing, as described more particularly in the Agreement.
We have examined (i) the Agreement, (ii) the Secured Promissory Note,
dated the date hereof (the "Secured Promissory Note"), (iii) the Stock Pledge
Agreement, dated the date hereof (the "Stock Pledge Agreement"), and (iv) the
originals or certified, photostatic or facsimile copies of such records and
other documents as we have deemed relevant and necessary as the basis of the
opinions set forth below. The Agreement, the Secured Promissory Note and the
Stock Pledge Agreement are herein sometimes referred to collectively as the
"Transaction Documents".
In such examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, photostatic or facsimile copies and the
authenticity of the originals of such copies.
As to various questions of fact material to the opinions rendered
herein, we have relied upon the representations and warranties in the documents
examined by us and upon certificates
G-1
and oral statements and other information of public officers and officers of
L-3. We have assumed the due execution and delivery, pursuant to due
authorization, of the documents that we have examined by each party thereto
(including L-3), that each such party (including L-3) has the full power,
authority and legal right to enter into and perform its obligations under each
such document to which it is a party, that each such document constitutes the
valid and legally binding obligation of each party (other than, in the case of
the Transaction Documents, L-3), enforceable against such party in accordance
with its terms, and that all necessary consents, approvals, authorizations,
registrations, declarations and filings (governmental or otherwise) and all
other conditions precedent with respect to the legal and valid execution and
delivery of, and performance under, the documents that we have examined by each
party thereto (including L-3, except to the extent set forth below in Paragraph
No. 1) have been made or satisfied or have occurred and are in full force and
effect.
The phrase "to our knowledge" (or words of similar import) is limited
to the actual knowledge, without independent inquiry, of the lawyers presently
at our firm who have performed substantive legal services in connection with the
issuance of this opinion. No other inference as to our knowledge should be drawn
from our representation of L-3.
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, we are of the opinion that:
1. To our knowledge, neither the execution and delivery by L-3 of any
of the Transaction Documents nor the performance by L-3 of its obligations
thereunder requires any consent, approval or authorization of, or any
registration, declaration or filing with, (a) the Secretary of State of the
State of Delaware under the General Corporation Law of the State of Delaware
(the "DGCL"), or (b) the State of New York or the United States of America or
any of their respective agencies, other than (i) as have been obtained or made,
and (ii) those required under or pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1977, as amended, or applicable Federal or state securities
laws, in each case as to which no opinion is expressed.
2. The Transaction Documents constitute legal, valid and binding
obligations of L-3, enforceable in accordance with their respective terms.
The opinions set forth above are subject to the qualification that we
express no opinion as to the validity, binding effect or enforceability of any
provision of any of the Transaction Documents related to (1) forum selection or
submission to jurisdiction (including, without limitation, any waiver of any
objection to venue in any court or of any objection that a court is an
inconvenient forum) to the extent that the validity, binding effect or
enforceability of any such provision is to be determined by any court other than
a court of the State of New York, or (2) choice of governing law to the extent
that the validity, binding effect or enforceability of any such provision is to
be determined by any court other than a court of the State of New York or a
Federal district court sitting in the State of New York in each case, applying
the choice of law principles of the State of New York.
G-2
Without limitation, we express no opinion as to the availability of
specific performance, injunctive relief or other equitable relief as a remedy
for noncompliance with any of the terms of the Transaction Documents.
Our opinions are subject to the qualification that indemnification
provisions in any of the Transaction Documents may be unenforceable to the
extent that such indemnification may be held to be in violation of or against
public policy, including, without limitation, limitations under certain
circumstances on enforceability of provisions indemnifying a party against loss
attributable to or liability for its own negligent acts.
In rendering this opinion, we have not performed any investigation or
review of or examined any records of any court, regulatory body, administrative
agency or other governmental body with regard to the existence of any actions,
suits, proceedings, inquiries or investigations.
Our opinions set forth in paragraph 1 above are based upon and limited
to a review of those laws, rules and regulations that, in our experience, are
normally applicable to transactions of the type contemplated by the Transaction
Documents.
We express no opinion as to (x) any provision of the Transaction
Documents requiring written amendments or waivers of such document insofar as it
suggests that oral or other modifications, amendments or waivers could not
effectively be agreed upon by the parties, (y) the perfection or priority of any
lien, security interest or other Encumbrance, or (z) any provision of the
Transaction Documents providing for (or purporting to provide for) liquidated
damages, including Sections 1.1 and 1.4 of the Agreement.
Our opinions are subject to the effect of bankruptcy, insolvency,
reorganization, fraudulent or preferential transfer, fraudulent conveyance,
moratorium or similar laws from time to time in effect affecting creditors'
rights generally and subject to the effect of general principles of equity
(including, without limitation, standards of materiality, good faith, fair
dealing, reasonableness, equitable defenses and limits as to the availability of
equitable defenses), whether applied by a court of law or equity.
The foregoing opinions are based upon and are limited to the Federal
laws of the United States, the laws of the State of New York and the DGCL. We
are members of the Bar of the State of New York. We are not admitted to practice
in the State of Delaware. We render no opinion with respect to the laws of any
other jurisdiction. We render no opinion with respect to (i) laws, rules or
regulations relating to export licensing, (ii) the Communications Act of 1934,
as amended, and the rules and regulations promulgated thereunder, and (iii) any
provision contained in the Transaction Documents purporting to waive or having
the effect of waiving the right to trial by jury or any other rights under the
constitution or laws of the United States of America or any state. The opinions
expressed herein are subject to the effect of judicial decisions that may permit
the introduction of parol evidence to modify the terms of the interpretation of
agreements. Our opinions are based upon, and limited to, laws and regulations as
in effect on the date hereof
G-3
and our knowledge of the facts relevant to such opinion as of the date of this
letter. We assume no obligation to supplement this letter if any applicable laws
change after the date hereof or if we become aware of any facts that might
change the opinions expressed herein after the date hereof. Our opinions are
limited to the matters set forth in this letter, and no other opinions should be
inferred beyond the matters expressly stated.
The opinions expressed herein are solely for the benefit of LogiMetrics
in connection with the Transaction Documents and may not be relied on in any
manner or for any purpose by any other Person and may not be quoted in whole or
in part without our prior written consent.
Very truly yours,
X-0
XXXXXXX X
X-0 XXXXXXXXXXXXXX XXXXXXXXXXX
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
July 10, 2000
LogiMetrics, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Re: LogiMetrics, Inc.
Ladies and Gentlemen:
I am the General Counsel of L-3 Communications Corporation ("L-3"), a
Delaware corporation. This opinion is being delivered pursuant to Section 6.2(h)
of the Purchase Agreement dated as of July 10, 2000 (the "Agreement"), between
LogiMetrics, Inc., a Delaware corporation ("LogiMetrics"), L-3 and the other
parties thereto. All capitalized terms used herein and not defined herein shall
have the meanings ascribed to them in the Agreement.
I have examined (a) the Agreement, (b) the Secured Promissory Note
dated the date hereof (the "Promissory Note"), (c) the Stock Pledge Agreement
dated the date hereof (the "Stock Pledge Agreement"), and (d) the originals or
certified, photostatic or facsimile copies of such records and other documents
as we have deemed relevant and necessary as the basis of the opinion set forth
below. The Agreement, the Promissory Note and the Stock Pledge Agreement are
herein sometimes referred to as the "Transaction Documents".
In rendering my opinions set forth below, I have assumed the
authenticity of all documents submitted to me as originals, the genuineness of
all signature and the conformity to authentic originals of all documents
submitted to me as copies. I also have assumed, with respect to all parties to
agreements or instruments relevant hereto other than L-3, that such parties had
the requisite power and authority (corporate or otherwise) to execute, deliver
and perform such agreements or instruments, that such agreements or instruments
have been duly authorized by all requisite action (corporate or otherwise), and
have been executed and delivered by such parties, and that such agreements or
instruments are the valid, binding and enforceable obligations of such parties.
In all such examinations, I have assumed the legal capacity of all
natural persons executing documents (other than the capacity of officers of L-3
executing documents in such capacity), the genuineness of all signatures on
original or certified copies (other than those of such officers of L-3) and the
conformity to original or certified documents of all copies submitted to me as
conformed or reproduction copies.
As to various questions of fact relevant to the opinion expressed
herein, I have relied upon, and assumed the accuracy of, the representations and
warranties contained in the
H-1
Agreement and certificates and oral or written statements and other information
of or from public officials, officers or other representatives of L-3 and other
persons and assume compliance on the part of all parties to the Agreement their
covenants and agreements contained therein.
To the extent it may be relevant to the opinions expressed herein, I
have assumed the due execution and delivery, pursuant to due authorization, of
the documents that I have examined, by each party thereto other than L-3, that
each such other party has the full power, authority and legal right to enter
into and perform its obligations under each such document to which it is a
party, that each such document constitutes the legal, valid and binding
obligation of each such other party, enforceable against such party in
accordance with its terms, and that all necessary consents, approvals,
authorizations, registrations, declarations and filings (governmental or
otherwise) have been made by each party thereto other than L-3 and are in full
force and effect.
Whenever my opinion is stated to be "to my knowledge", or "known to me"
(or words of similar import), that phrase shall mean that I have no actual
knowledge of the inaccuracy of such statement; however, except as expressly
indicated, I have not undertaken any independent investigation to determine the
accuracy of such statement and no inference should be drawn that I have any such
knowledge solely from my position with L-3.
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, I am of the opinion that:
1. L-3 is duly incorporated, validly existing and in good standing
under the General Corporation Law of the State of Delaware (the "DGCL") and has
all requisite corporate power and authority to own, operate or lease the
properties and assets now owned, operated or leased by it and to carry on its
business as now being conducted.
2. L-3 has the requisite corporate power and authority to enter into
the Transaction Documents and to carry out its obligations thereunder. The
execution, delivery and performance of the Transaction Documents and the
consummation of the transactions contemplated thereby have been duly authorized
by all requisite corporate action of L-3.
3. The Transaction Documents have been duly executed and delivered by
L-3.
4. The execution, delivery and performance of the Transaction Documents
by L-3 will not: (a) contravene any provision of the certificate of
incorporation or by-laws of L-3; (b) to my knowledge, violate any statute,
ordinance, rule, regulation, order, judgment or decree of any court or of any
governmental or regulatory body, agency or authority specifically binding on L-3
or by which any of its properties or assets is bound; or (c) to my knowledge,
result in a violation or breach by L-3 of, or constitute a default by L-3 under,
any of the provisions of any agreement or other instrument to which L3 is a
party, or by which it or any of its properties or assets specifically is bound,
except, in the case of clauses (b) and (c), for such violations, breaches or
defaults that would not have a material adverse effect on L-3.
The foregoing opinions are based upon and are limited to the laws of
the State of New York and the DGCL. I am admitted to practice law in the State
of New York. I am not admitted to practice law in the State of Delaware. I
render no opinion with respect to the laws of any other jurisdiction. My
opinions are based upon, and limited to, laws and regulations as in effect
H-2
on the date hereof and my knowledge of the facts relevant to such opinions as of
the date of this letter. I assume no obligation to supplement this letter if any
applicable laws change after the date hereof or if I become aware of any facts
that might change the opinions expressed herein after the date hereof. My
opinions are limited to the matters set forth in this letter, and no other
opinions should be inferred beyond the matters expressly stated.
The opinions expressed herein are solely for the benefit of LogiMetrics
in connection with the Transaction Documents and may not be relied on in any
manner or for any purpose by any other Person and may not be quoted in whole or
in part without my prior written consent.
Very truly yours,
Xxxxxxxxxxx X. Xxxxxxx
H-3
