EXCHANGE AGENT AGREEMENT
Date: August 11, 2003
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
In connection with the merger ("Merger") of MCE Acquisition Corporation, a
Michigan Corporation ("Sub") and wholly-owned subsidiary of Aeroflex
Incorporated, a Delaware Corporation ("PARENT"), with MCE Technologies, Inc. a
Michigan Corporation ("TARGET") pursuant to the Agreement and Plan of Merger
dated as of June 27, 2003, (the "Merger Agreement"), a copy of which has been
previously delivered to you, at the effective time of the Merger ("Effective
Time"), each issued and outstanding share of Common Stock, no par value, of
TARGET ("TARGET Common Stock") will be converted into the right to receive .2265
shares of Common Stock, par value $.10 per share, of PARENT ("PARENT Common
Stock"), subject to adjustment, based on a formula outlined in the Merger
Agreement. You will be notified of the actual exchange ratio and the Effective
Time by no later than the first business day following the Effective Time.
TARGET has delivered or will deliver to you (i) a copy of the letter of
transmittal ("Letter of Transmittal") to be sent to holders of record of shares
of TARGET Common Stock ("TARGET Shareholders"), and holders of TARGET Common
Stock Purchase Warrants ("TARGET Warrants" and such holders, "TARGET
Warrantholders") (ii) copies of all other documents or materials, if any, to be
forwarded to TARGET Shareholders and TARGET Warrantholders, (iii) a certified
copy of resolutions adopted by the Board of Directors of TARGET authorizing the
Merger, the appointment of an exchange agent and execution of an exchange agent
agreement, (iv) a list showing the names and addresses of all TARGET
Shareholders as of the Effective Time and the number of shares of TARGET Common
Stock held by each TARGET Shareholder immediately prior to the Effective Time
including the certificate detail relating thereto, (v) a list of certificates
(including certificate numbers) representing shares of TARGET Common Stock that
have been or are, as of such date, lost, stolen, destroyed or replaced or
restricted as to transfer (noting the text of the restrictive legends applicable
thereto) or with respect to which a stop transfer order has been noted and (vi)
a list showing the names and addresses of all TARGET Warrantholders as of the
Effective Time and the number of shares of TARGET Common Stock purchasable upon
the exercise of such TARGET Warrantholder's TARGET Warrants (such lists being
herein referred to as the ("Lists")).
1
As soon as practicable after the Effective Time, the Exchange Agent (as defined
below) will mail to each TARGET Shareholder and TARGET Warrantholder (a) a
notice advising such holder of the effectiveness of the Merger and the
applicable terms of the exchange effected thereby, (b) a Letter of Transmittal
with instructions, (c) a self-addressed return envelope, (d) tax certification
guidelines, and (e) any other material deemed appropriate by TARGET and PARENT.
This will confirm the appointment by TARGET, PARENT and Sub of American Stock
Transfer & Trust Company as the exchange agent ("Exchange Agent") and, in that
capacity, the authorization of the Exchange Agent to act as agent for the TARGET
Shareholders and TARGET Warrantholders for the purpose of receiving the PARENT
Common Stock to be issued in exchange for shares of TARGET Common Stock and
transmitting the same to the TARGET Shareholders upon satisfaction of the
conditions set forth herein. Your duties, liabilities and rights as Exchange
Agent are as set forth herein and will be governed, in addition, by the
applicable terms of the Merger Agreement.
In carrying out your duties as Exchange Agent, you are to act in accordance with
the following:
1. Examination of Letters of Transmittal. You are to examine Letters of
Transmittal, certificates representing shares of TARGET Common Stock,
TARGET Warrants and other documents delivered or mailed to you by or
for TARGET Shareholders and TARGET Warrantholders to ascertain, to the
extent reasonably determined by you, whether:
(a) the Letters of Transmittal appear to be duly executed and
properly completed in accordance with the instructions set
forth therein;
(b) the certificates for shares of TARGET Common Stock appear to
be properly surrendered and, if applicable, endorsed for
transfer;
(c) the TARGET Warrants are originally executed;
(d) the other documents, if any, used in exchange appear to be
duly executed any properly completed and in the proper form;
and
(e) the certificates for shares of TARGET Common Stock are free
of restrictions on transfer or stop orders except as set
forth on the Lists.
In the event you ascertain that any Letter of Transmittal or other document has
been improperly completed or executed, that any of the certificates for shares
of TARGET Common Stock are not in proper form, that the TARGET Warrants are
2
not originally executed or some other irregularity exists, you shall attempt to
resolve promptly the irregularity and may use your best efforts to contact the
appropriate TARGET Shareholder or TARGET Warrantholder by whatever means of
communication you deem most expedient to correct the irregularity and, upon
consultation with TARGET, shall endeavor to take such other reasonable action as
may be necessary to cause such irregularity to be corrected, and the
determination of any questions referred to TARGET or its counsel by you as to
the validity, form and eligibility, as well as the proper completion of
execution of the Letters of Transmittal and other documents, shall be final and
binding, and you may rely thereon as provided in Section 11 hereof. Any costs of
contacting TARGET Shareholders or TARGET Warrantholders for the purpose of
correcting irregularities shall be incurred for the account of TARGET.
2. Exchange of Shares and Warrants. As soon as practicable after the
Effective Time and after surrender to you of all certificates for
shares of TARGET Common Stock registered to a particular record holder
or holders (and only after surrender of all such certificates) and the
return of a properly completed and signed Letter of Transmittal
relating thereto, you shall cause to be issued and distributed to the
holder(s) in whose name such certificates were registered (or such
other person as shall have been specified pursuant to the terms hereof)
the whole number of shares of PARENT Common Stock issuable pursuant to
the Merger Agreement, registered in the name of such holder(s).
Until so surrendered, each certificate which immediately prior to the
Effective Time represented outstanding shares of TARGET Common Stock
shall, at and after the Effective Time, entitle the holder(s) thereof
only to receive, upon surrender of it and all other identically
registered certificates, the certificates representing shares of PARENT
Common Stock and contemplated by the preceding paragraph.
As soon as practicable after the Effective Time and after surrender to
you of all Warrants in the name of a particular holder or holders (and
only after surrender of all such TARGET Warrants) and the return of a
properly completed and signed Letter of Transmittal relating thereto,
you shall cause to be issued and distributed to the holder(s) in whose
name such TARGET Warrants were registered (or such other person as
shall have been specified pursuant to the terms hereof) the whole
number of shares of PARENT Common Stock issuable pursuant to the Merger
Agreement, registered in the name of such holder(s).
Until so surrendered, each TARGET Warrant which immediately prior to
the Effective Time represented the right to acquire outstanding shares
of TARGET Common Stock shall, at and after the Effective Time, entitle
the
3
holder(s) thereof only to receive, upon surrender of it and all
other TARGET Warrants, the certificates representing shares of PARENT
Common Stock and contemplated above.
No dividends or other distributions otherwise payable after the
Effective Time to a holder of record of certificates representing
shares of TARGET Common Stock shall be paid to such holder unless and
until such holder shall have surrendered all certificates representing
shares of TARGET Common Stock registered to such holder. The Exchange
Agent shall place and hold any other distributions not paid to such
holders pursuant to the requirements of the foregoing sentence and
shall (subject to applicable escheat laws) pay such distributions of
each holder of record entitled thereto after such holder shall have
surrendered all certificates for shares of TARGET Common Stock
registered to such holder. No interest shall be payable to such holders
on distributions held by the Exchange Agent.
If any certificates representing shares of PARENT Common Stock are to
be issued in a name other than that in which the certificate for shares
of TARGET Common Stock surrendered in exchange therefor is registered
or that in which the TARGET Warrants are issued, it shall be a
condition of the issuance or payment thereof that the certificate or
TARGET Warrant so surrendered shall be properly endorsed or assigned,
as the case may be, and otherwise in proper form for transfer and that
the person requesting such exchange shall pay to you any transfer or
other taxes required, or shall establish to your satisfaction that such
tax has been paid or is not payable.
Certificates to be delivered by mail shall be forwarded by first class
mail under the Exchange Agent's blanket surety bond, which TARGET and
PARENT understand protects TARGET and PARENT and the Exchange Agent
from loss or liability arising by virtue of the non-receipt or
non-delivery of such certificates. It is understood that the market
value of the securities in any one shipment sent by first class mail
will not be in excess of $250,000.00. In the event the market value
shall exceed $250,000.00, the envelope shall be mailed by registered
mail and shall be insured separately for the replacement value of its
contents at the time of mailing.
3. Lost Stolen or Destroyed Certificates and Warrants. In the event that
any TARGET Shareholder claims that any certificate representing shares
of TARGET Common Stock is lost, stolen or destroyed, the Exchange Agent
shall mail to such Shareholder an affidavit of loss and the
requirements for an indemnity bond. In the event that any TARGET
Warrantholder claims that any TARGET Warrant representing the right to
acquire shares of TARGET Common Stock is lost, stolen or destroyed, the
Exchange Agent
4
shall mail to such Shareholder an affidavit of loss and the
requirements for an indemnity bond. The Exchange Agent shall make
the distribution of certificates representing shares of PARENT Common
Stock only upon receipt of a properly completed affidavit of loss and
the requirements for an indemnity bond.
4. Reports. The Exchange Agent shall furnish, until otherwise notified,
monthly, or more frequently if requested by TARGET or PARENT, reports
to TARGET and PARENT showing:
(a) number of shares of TARGET Common Stock and number of TARGET
Warrants surrendered and number of full shares issued in
exchange therefor (previous, herewith and total); and
(b) fractional shares adjusted (previous, herewith and total).
5. IRS Filings. You shall arrange to comply with all requirements under
the tax laws of the United States, including those relating to missing
tax identification numbers, and shall file any appropriate reports with
the Internal Revenue Service ("IRS") (e.g., 1099, 1099B, etc.) You may
be required to deduct 28% from cash paid in lieu of fractional shares
to holders who have not supplied their correct taxpayer identification
number or required certification. Such funds will be turned over to the
IRS by you.
6. Restricted Certificates of PARENT Common Stock. Each of the persons
listed on Schedule A hereto may be deemed on "affiliate" of TARGET
within the meaning of Rule 145 under the Securities Act of 1933, as
amended, and applicable rules and regulations promulgated by the
Securities and Exchange Commission.
You are hereby authorized and instructed to place on each of the
certificates representing shares of PARENT Common Stock issued to each
of the aforesaid persons in exchange for the shares of TARGET Common
Stock held by them a legend reading in its entirety as follows:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 under the United States
Securities Act of 1933 applies. The shares represented by this
certificate may only be transferred pursuant to the provisions
of such Rule."
Save as provided above, all certificates in respect of shares of PARENT
common stock issued in exchange of shares or Warrants of TARGET, shall
be without legend notwithstanding the fact that certificates in respect
of TARGET shares submitted for exchange may bear a legend.
5
7. Copies of Documents. You shall take such action at TARGET's expense as
may from time to time be reasonably requested by TARGET to furnish
copies of the Letter of Transmittal to persons designated by TARGET.
8. Receipt or Disposal. Letters of Transmittal and telegrams, telexes,
facsimile transmissions and other materials submitted to you by TARGET
Shareholders and TARGET Warrantholders shall be preserved in terms of
applicable laws.
9. Maintenance of Records. You will keep and maintain complete and
accurate ledgers showing all shares exchanged by you and payments made
by you. You are authorized to cooperate with and furnish information to
any organization or its legal representatives designated from time to
time by TARGET or PARENT in any manner reasonably requested by any of
them in connection with the Merger and share exchange pursuant thereto.
10. Delivery of Surrendered Shares of TARGET Common Stock. All certificates
for shares of TARGET Common Stock and all TARGET Warrants surrendered
to you shall be retained by you as required by S.E.C. regulations.
11. Exchange Agents Duties and Obligations. As Exchange Agent, you:
(a) will have no duties or obligations other than those
specifically set forth herein, or as may subsequently be
agreed to in writing by you, PARENT and TARGET;
(b) will be regarded as making no representations or warranties
and having no responsibilities regarding the validity,
sufficiency, value or genuineness of any certificates for
shares of TARGET Common Stock surrendered to you or the
shares of TARGET Common Stock represented thereby; will not
be required or requested to make any representations as to
the validity or genuineness of any certificates for shares
of PARENT Common Stock or shares of PARENT Common Stock
represented thereby; and will not be responsible in any
manner whatsoever for the correctness of the statements made
herein or in the Merger Agreement or in any document
furnished to you by TARGET or PARENT;
(c) will be regarded as making no representations or warranties
and having no responsibilities regarding the validity,
sufficiency, value or genuineness of any TARGET Warrants
surrendered to you;
(d) will not be obligated to institute or defend any action,
suit or legal proceeding in connection with the Merger, or
your duties hereunder,
6
or take any other action which might in your judgment
involve, or result in, expense or liability to you, unless
TARGET or PARENT shall first furnish you an indemnity
satisfactory to you;
(e) may rely on, and shall be protected in acting upon, any
certificate, instrument, opinion, representation, notice
letter, telegram or other document delivered to you and
believed by you to be genuine and to have been signed by the
proper party or parties;
(f) may rely on, and shall be protected in acting upon, written
or oral instructions given by any officer of, or any party
authorized by, TARGET or PARENT with respect to any matter
relating to your actions as Exchange Agent;
(g) may consult with counsel satisfactory to you (including
counsel for TARGET or PARENT), and the written advice or
opinion of such counsel shall be full and complete
authorization and protection in the respect of any action
taken, suffered or omitted by you hereunder in good faith
and in accordance with such advice or opinion of such
counsel; and
(h) may retain an agent or agents of your choice to assist you
in performing your duties and obligations hereunder, at your
cost and without relieving you of any liability hereunder.
12. Termination of Exchange Agent's Duties and Obligations. This Agreement
shall terminate upon demand by TARGET or PARENT at which time all
undistributed certificates representing shares of PARENT Common Stock
and any dividends and distributions in respect of PARENT Common Stock
shall be delivered by the Exchange Agent to PARENT. The provisions of
Sections 13 and 14 below shall survive the termination of this
Agreement.
13. Indemnification of Exchange Agent. TARGET and PARENT hereby jointly and
severally covenant and agree to reimburse, indemnify and hold you
harmless from and against any and all claims, actions, judgments,
damages, losses, liabilities, costs, transfer or other taxes, and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) incurred or suffered without any negligence, bad faith or
willful misconduct on your part, arising out of or incident to this
Agreement or the administration of your duties hereunder, or arising
out of or incident to your compliance with instructions set forth
herein or with any instructions delivered to you pursuant hereto, or as
a result of defending yourself against any claim or liability resulting
from your actions as Exchange Agent, including any claim against you by
any tendering TARGET Shareholder or TARGET Warrantholder, which
covenant and agreement shall survive the termination hereof. You hereby
represent that you will notify TARGET and PARENT by letter, or
facsimile confirmed by letter, of any receipt by you of a written
assertion of a claim against
7
you, or any action commenced against you, within ten (10) business days
after your receipt of written notice of such assertion or your having
been served with the summons or other first legal process giving
information as to the nature and basis of any such assertion. However,
your failure to so notify TARGET and PARENT shall not operate in any
manner whatsoever to relieve TARGET and PARENT from any liability which
they may have on account of this Section 13 if no prejudice occurs. At
their election, TARGET and PARENT may assume the conduct of your
defense in any such action or claim at their sole cost and expense. In
the event that TARGET and PARENT elect to assume the defense of any
such action or claim and confirm to you in writing that the indemnity
provided for in this Section 13 applies to such action or claim, TARGET
and PARENT shall not be liable for the fees and expenses of any counsel
thereafter retained by you.
14. Compensation and Expenses. For services rendered as Exchange Agent
hereunder, your fees are approved as set forth in the schedule attached
to this Agreement.
15. Notices. Except as otherwise provided herein, no notice, instruction or
other communication by one party shall be binding upon the other party
unless hand delivered or sent by certified mail, return receipt
requested. Notice to you shall be sent or delivered to your above-noted
address or such other addresses as you shall hereafter designate in
writing in accordance herewith. Notice to TARGET and PARENT shall be
sent or delivered to:
To Target: MCE Technologies, Inc.
000 Xxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx
To Parent: Aeroflex Incorporated
00 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
16. Intentionally omitted.
17. Governing Law; Binding Upon Successors and Assigns. This Agreement
shall be constructed and enforced in accordance with the laws of the
State of New York, without regard to the principles thereof respecting
conflicts of laws, and shall inure to the benefit of, and the
obligations created
8
hereby shall be binding upon, the successors and assigns of the
parties hereto.
Executed this 11th day of August, 2003
MCE Technologies, Inc.
By: /s/ Xxxx X. Xxxxxxx
--------------------
Name: Xxxx X. Xxxxxxx
Title: President
Aeroflex Incorporated
By: /s/ Xxxxxxx Xxxxx
-------------------
Name: Xxxxxxx Xxxxx
Title: President
Agreed To and Accepted:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Xxxxxxx Xxxxxx
--------------------------
Name: Xxxxxxx Xxxxxx
--------------------------
Title: Vice President
--------------------------
9
Schedule A
Xxxx X. Xxxxxxx
Xxxxxxx Family Ventures LLC
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
E5 Limited Partnership
Xxxxx X. Xxxxx
Timbertop Investments II, Limited Partnership
Xxxxxxx X. Xxxxxxxx
National City Capital Corporation
Great Lakes Capital Investments I, LLC
Xxxx X. Xxxxx
Xxxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxx
Xxx X. Xxxxxxx
Xxxxxxx Xxxxxxx
Xxxxx Xxxxxxx
Xxxx Xxxxxxx
Transfer Agent Fee
$7,500 plus reasonable out-of-pocket expenses
