EXHIBIT 10.4
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated July 29, 1997, by and among LogiMetrics,
Inc., a Delaware corporation (the "Company"), and the individuals and entities
listed on the signature pages hereto (collectively, the "Purchasers").
W I T N E S S E T H:
WHEREAS, on the terms and subject to the conditions set forth herein,
the Company desires to sell to the Purchasers, and the Purchasers desire to
purchase from the Company, (i) $2,750,000 in aggregate principal amount of the
Company's Class A 13% Convertible Senior Subordinated Pay-in-Kind Debentures due
July 29, 1999 (the "Debentures") convertible into an aggregate of 6,600,000
shares of Common Stock, par value $.01 per share (the "Common Stock"), of the
Company, subject to adjustment in certain circumstances (the Debentures to be in
substantially the form of Exhibit A hereto), (ii) Common Stock Purchase Warrants
- Series G (the "Series G Warrants") exercisable at any time prior to July 29,
2004 to purchase an aggregate of 7,350,000 shares of Common Stock, subject to
adjustment in certain circumstances, at an exercise price of $.50 per share
(each Series G Warrant to be in substantially the form of Exhibit B hereto),
(iii) Common Stock Purchase Warrants - Series H (the "Series H Warrants")
exercisable at any time prior to July 29, 2004 to purchase an aggregate of
1,100,000 shares of Common Stock, subject to adjustment in certain
circumstances, at an exercise price of $.60 per share (each Series H Warrant to
be in substantially the form of Exhibit C hereto), and (iv) Common Stock
Purchase Warrants - Series I (the "Series I Warrants" and, together with the
Series G Warrants and the Series H Warrants, the "Warrants") exercisable at any
time prior to July 29, 2004 to purchase an aggregate of 550,000 shares of Common
Stock, subject to adjustment in certain circumstances, at an exercise price of
$1.125 per share (each Series I Warrant to be in substantially the form of
Exhibit D hereto); and
WHEREAS, the Company is a party to an amended and restated credit
facility (the "Credit Facility") with North Fork Bank (the "Bank") pursuant to
which, among other things, the Bank has made available to the Company up to
$2,200,000 in revolving credit loans maturing on April 30, 1998 (unless extended
by the Bank) and a $640,000.04 term loan maturing on December 31, 1998; and
WHEREAS, the Credit Facility is secured by a perfected, first priority
security interest in all of the assets of the Company; and
WHEREAS, the Company has previously entered into a Unit Purchase
Agreement, dated March 7, 1996 (the "Cerberus Purchase Agreement"), with
Cerberus Partners, L.P. ("Cerberus") pursuant to which the Company issued to
Cerberus $1,500,000 in aggregate principal amount of its 12% Convertible Senior
Subordinated Debentures due December 31, 1998 (the "Old Cerberus Debentures")
convertible into an aggregate of 2,542,380 shares of Common Stock, subject to
adjustment in certain circumstances, and Common Stock Purchase Warrants - Series
C (the "Cerberus Warrants") exercisable at any time prior to March 7, 2003 to
purchase an aggregate of
2,542,380 shares of Common Stock, subject to adjustment in certain
circumstances, at an exercise price of $.01 per share; and
WHEREAS, in connection with certain waivers granted by Cerberus in
respect of the Old Cerberus Debentures, the Company has issued to Cerberus
certain notes in the aggregate principal amount of $45,000 (the "Old Cerberus
Interest Notes"); and
WHEREAS, in connection with the transactions contemplated hereby,
Cerberus has agreed to exchange (i) the Old Cerberus Debentures for $1,500,000
in aggregate principal amount of the Company's Amended and Restated Class B 13%
Convertible Senior Subordinated Debentures due July 29, 1999 (the "Cerberus
Debentures"), and (ii); the Old Cerberus Interest Notes for $45,000 in aggregate
principal amount of the Company's 13% Senior Subordinated Interest Notes (the
"Cerberus Interest Notes");
WHEREAS, pursuant to the terms of a Security Agreement, dated March 7,
1996 (the "Old Security Agreement"), the Cerberus Debentures and the Cerberus
Interest Notes are secured by a perfected security interest in all of the assets
of the Company, junior only to the security interest securing the Credit
Facility (and any authorized replacement thereof); and
WHEREAS, the Debentures and all Accrued Interest Debentures (as
defined below) are to rank pari passu with the Cerberus Debentures, the
additional securities issued in lieu of cash interest otherwise payable on the
Cerberus Debentures (the "Cerberus Accrued Interest Debentures") and the
Cerberus Interest Notes and are to be secured ratably with such Cerberus
Debentures, Cerberus Accrued Interest Debentures and Interest Notes (and any
authorized replacement thereof); and
WHEREAS, in order to secure the Debentures, the Accrued Interest
Debentures, the Cerberus Debentures, the Cerberus Accrued Interest Debentures
and the Interest Notes, the Company and Cerberus have entered into an amendment
and restatement of the Old Security Agreement (as amended and restated, the
"Security Agreement"); and
WHEREAS, the Company, the Purchasers and Xxxxxxx X. Brand have entered
into a Stockholders Agreement of even date herewith (the Stockholders
Agreement), pursuant to which, among other things, the Purchasers and Mr. Brand
have agreed to certain restrictions on the transfer of shares of Common Stock
beneficially owned by them and to certain provisions regarding the management of
the Company.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and intending to be legally bound, the parties hereto agree as follow:
Article I
Purchase and Sale of Securities
Section 1.1. Purchase and Sale of Securities. Upon the terms and
subject to the conditions of this Agreement, (a) on the date hereof the Company
shall issue and sell to the Purchasers (other than Broadband, as defined below),
and such Purchasers shall purchase from the Company, (i) $2,535,942 in aggregate
principal amount of the Debentures at a purchase price of $2,535,942, (ii)
Series G Warrants to purchase an aggregate of 6,866,129 shares of Common Stock
at an at an aggregate purchase price of $480,629, (iii) Series H Warrants to
purchase an aggregate of 1,074,114 shares of Common Stock at an aggregate
purchase price of $64,447, and (iv) Series I Warrants to purchase an aggregate
of 537,057 shares of Common Stock at an aggregate purchase price of $21,482 for
a total aggregate purchase price of $3,102,500 (the "Initial Purchase Price"),
and (b) at any time prior to 21 days from the date of this Agreement, unless
extended by the Company (the "Broadband Termination Date") upon not less than
two business days' prior written notice given by Broadband to the Company, the
Company shall issue and sell to MBF Broadband Systems, L.P. ("Broadband") (i)
$214,058 in aggregate principal amount of the Debentures at a purchase price of
$214,058, plus accrued interest on the Debentures from the date hereof, (ii)
Series G Warrants to purchase an aggregate of 483,871 shares of Common Stock at
an aggregate purchase price of $33,871, (iii) Series H Warrants to purchase an
aggregate of 25,886 shares of Common Stock at an aggregate purchase price of
$1,553, and (iv) Series I Warrants to purchase an aggregate of 12,943 shares of
Common Stock at an aggregate purchase price of $518 for a total aggregate
purchase price of $250,000 plus accrued interest on the Debentures from the date
hereof (the "Broadband Purchase Price" and, collectively, with the Initial
Purchase Price, the "Purchase Price"). The amount of Debentures and Warrants
(collectively, the "Securities") to be purchased by each Purchaser pursuant to
this Section 1.1 and the aggregate Purchase Price allocable to each Purchaser is
set forth on Exhibit E attached hereto. The Securities to be purchased by
Broadband pursuant to Section 1.1(b) hereof are hereinafter referred to as the
"Broadband Securities."
Section 1.2. Closing. The closing of the transactions contemplated by
Section 1.1(a) above (the "First Closing") shall take place at the offices of
the Company at 10:00 a.m. on the date hereof, or at such other time and place as
the parties hereto may mutually agree. The time and date of the First Closing is
hereinafter referred to as the "First Closing Date." At the First Closing, the
Purchasers (other than Broadband) shall pay the Initial Purchase Price in
immediately available funds by wire transfer to an account previously designated
by the Company; provided, however, that MBF Capital Corp. ("MBF") may pay up to
$35,000 of the Initial Purchase Price otherwise payable by it by delivering to
the Company a promissory note in such amount in form and substance satisfactory
to the Company. In exchange for the payment of the Initial Purchase Price, the
Company shall execute, issue and deliver to the Purchasers the Securities to be
purchased by them at the First Closing registered in the name of the respective
Purchasers as specified in Exhibit E attached hereto.
The closing of the transactions contemplated by Section 1.1(b) above
(the "Second Closing") shall take place at the offices of the Company at 10:00
a.m. on or prior to the
Broadband Termination Date on the date set forth in the notice provided by
Broadband to the Company pursuant to Section 1.1(b) hereof, or at such other
time and place as the parties hereto may mutually agree. The time and date of
the Second Closing is hereinafter referred to as the "Second Closing Date." At
the Second Closing, Broadband shall pay the Broadband Purchase Price in
immediately available funds by wire transfer to an account previously designated
by the Company. In exchange for the payment of the Broadband Purchase Price, the
Company shall execute, issue and deliver to Broadband the Broadband Securities
registered in the name of Broadband. In addition, on the Second Closing Date,
the Company shall provide to Broadband updates of the various schedules to this
Agreement so that the representations and warranties of the Company set forth
herein shall be true and complete in all material respects as of the Second
Closing Date. The Company also shall deliver to Broadband the Closing documents
referred to in Section 6.1(a), (b) and (h), in each case dated the Option
Closing Date.
Section 1.3. Non-Purchase by Broadband. If the Second Closing does not
occur on or prior to the Broadband Termination Date, Broadband shall have no
right to purchase the Broadband Securities and the Company shall have no
obligation to sell the Broadband Securities to Broadband. In such event, the
Company shall give prompt notice to Xxxxxx Xxxxxxxxx XxXxxxx, Inc. ("CRM") on
behalf of the Purchasers other than Broadband (the "Other Purchasers") that
Broadband did not purchase the Broadband Securities. For up to 10 days following
receipt of such notice by CRM, the Other Purchasers shall have the right to
purchase the Broadband Securities in exchange for the payment of the Broadband
Purchase Price, which right may be exercised in whole but not in part. In the
event that the Other Purchasers wish to purchase the Broadband Securities, CRM,
on behalf of the Other Purchasers, shall provide irrevocable written notice
thereof to the Company prior to the expiration of such 10-day period, which
notice shall specify the date, which shall not be less than two nor more than
five business days from the date of such notice, on which the Other Purchasers
will purchase the Broadband Securities (the "Interim Closing Date"). Upon
delivery of such notice, the Other Purchasers shall become irrevocably obligated
to purchase the Broadband Securities on the date specified in such notice. The
closing of the transactions contemplated by this Section 1.3 (the "Interim
Closing") shall take place at the offices of the Company at 10:00 a.m. on the
Interim Closing Date. On the Interim Closing Date, the Company shall deliver to
the Other Purchasers the Broadband Securities in such amounts and registered in
the names of the respective Other Purchasers as they may specify against receipt
from the Other Purchasers of the Broadband Purchase Price in immediately
available funds by wire transfer to an account previously designated by the
Company. In addition, on the Interim Closing Date, the Company shall provide to
the Other Purchasers purchasing the Broadband Securities updates of the various
schedules to this Agreement so that the representations and warranties of the
Company set forth herein shall be true and complete in all material respects as
of the Option Closing Date. The Company shall re-deliver to the Other Purchasers
purchasing the Broadband Securities the Closing documents referred to in Section
6.1(a), (b) and (h), in each case updated to the Interim Closing Date.
Notwithstanding the foregoing, Broadband shall have no liability to the Company
or any Other Purchaser in the event that Broadband does not purchase the
Broadband Securities.
Section 1.4. Optional Purchase. The Company hereby grants to the
Purchasers the option (the "Option"), exercisable in whole or in part at any
time during the nine-month period
immediately following the date hereof (the "Exercise Period"), to purchase up to
(i) $833,333 in aggregate principal amount of the Debentures, (ii) Series G
Warrants to purchase an aggregate of 2,000,000 shares of Common Stock at an
aggregate purchase price of $140,000, (iii) Series H Warrants to purchase an
aggregate of 333,333 shares of Common Stock at an aggregate purchase price of
$20,000, and (iv) Series I Warrants to purchase an aggregate of 166,667 shares
of Common Stock at an aggregate purchase price of $6,667 (collectively, the
"Additional Securities") for an aggregate purchase price of $1,000,000 (the
"Option Purchase Price"). The Additional Securities shall be allocated to each
Purchaser as specified on Exhibit F attached hereto. The Option shall not be
transferable by any Purchaser except that a Purchaser may assign part or all of
its rights under the Option to any other Purchaser. Notwithstanding the
foregoing, in the event that Broadband does not purchase the Broadband
Securities, then Broadband shall not be entitled to purchase any Additional
Securities pursuant to the Option. The Option may only be exercised on one
occasion during the Exercise Period. In the event that the Purchasers wish to
exercise the Option, CRM on behalf of the Purchasers shall provide the Company
with written notice thereof at any time during the Exercise Period, which notice
shall specify the amount of Additional Securities to be purchased and the date
on which the closing of such purchase shall occur (the "Option Closing Date"),
which date shall be not less than five nor more than 10 business days after the
date of such notice. Any notice given by CRM on behalf of the Purchasers
pursuant to this Section 1.4 shall be irrevocable; provided, however, that the
Purchasers shall have the right to change the amount of Additional Securities to
be purchased by them at any time prior to the close of business on the second
business day immediately preceding the Option Closing Date. The closing of the
transactions contemplated by this Section 1.4 (the "Option Closing") shall take
place at the offices of the Company at 10:00 a.m. on the Option Closing Date. On
the Option Closing Date, the Company shall deliver to the Purchasers the
Additional Securities in such amounts and registered in the names of the
respective Purchasers as they may specify against receipt from the Purchasers of
the Option Purchase Price in immediately available funds by wire transfer to an
account previously designated by the Company. In addition, on the Option Closing
Date, the Company shall provide to the Purchasers purchasing Additional
Securities updates of the various schedules to this Agreement so that the
representations and warranties of the Company set forth herein shall be true and
complete in all material respects as of the Option Closing Date. The Company
shall re-deliver to the Purchasers purchasing Additional Securities the Closing
documents referred to in Section 6.1(a), (b) and (h), in each case updated to
the Option Closing Date.
Article II
Representations and Warranties of the Company
The Company represents and warrants to the Purchasers as follows:
Section 2.1. Organization and Qualification. Each of the Company and
mmTech, Inc. ("mmTech") 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 result in a
material adverse change in the business, financial condition, results of
operations or prospects (financial and other) of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Change"). The Company has
previously provided to the Purchaser true and complete copies of (i) its
Certificate of Incorporation of and all amendments thereto and (ii) its by-laws
as currently in effect. Other than mmTech and LogiMetrics FSB, Inc., the Company
does not own any material amount of any shares of stock of any corporation or
any equity interest in a partnership, joint venture or other business entity,
and the Company does not control or have the right (whether or not presently
exercisable) to control any other corporation, partnership, joint venture or
other business entity by means of ownership, management contract or otherwise.
Section 2.2. Authorization. (a) The Company has the corporate power
and authority to execute and deliver this Agreement, the Security Agreement, the
Stockholders Agreement, the Debentures and the Warrants (collectively, the
"Transaction Documents") and to perform its obligations hereunder and
thereunder, all of which have been duly authorized by all requisite corporate
action. Each of the Agreement, the Stockholders Agreement and the Security
Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms.
(b) The Debentures have been duly authorized and, when issued in
accordance with the terms hereof, will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles. The Company has sufficient authorized and unissued shares of
Common Stock reserved for issuance upon the conversion of the Debentures in
accordance with their terms. The shares of Common Stock issuable upon the
conversion of the Debentures will, when issued in accordance with the terms of
the Debentures, be duly authorized, validly issued, fully paid and
non-assessable.
(c) The additional Debentures issued in payment of interest accrued on
the Debentures (the "Accrued Interest Debentures") have been duly authorized
and, when issued in accordance with the terms of the Debentures, will have been
duly executed, issued and delivered and will constitute valid and legally
binding obligations of the Company, enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles. The
Company has sufficient authorized and unissued shares of Common Stock reserved
for issuance upon the conversion of the Accrued Interest Debentures in
accordance with their terms. The shares of Common Stock issuable upon the
conversion of the Accrued Interest Debentures will, when issued in accordance
with the terms of the Debentures, be duly authorized, validly issued, fully paid
and non-assessable.
(d) The Warrants have been duly authorized and, when issued in
accordance with the terms hereof, will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles. The Company has sufficient authorized and unissued shares of
Common Stock reserved for issuance upon the exercise of the Warrants in
accordance with their terms. The shares of Common Stock issuable upon the
exercise of the Warrants will, when issued in accordance with the terms of the
Warrants (including the payment of the exercise price specified therein), be
duly authorized, validly issued, fully paid and non-assessable.
(e) The issuance of the Securities and the Additional Securities, the
conversion of the Debentures and the Accrued Interest Debentures and the
exercise of the Warrants will not (i) require the Company to issue any shares of
its capital stock or any security exercisable for or convertible or exchangeable
into shares of its capital stock to any person (other than warrants to purchase
shares of Common Stock issuable to MBF pursuant to the terms of the Consulting
Agreement dated of even date herewith between the Company and MBF (the
"Consulting Agreement")), or (ii) require any adjustment in the exercise price
or number of shares of the Company's capital stock issuable upon the exercise of
the Company's outstanding securities.
Section 2.3. Non-contravention. Except as set forth in Schedule 2.3,
neither the execution and delivery of this Agreement and the other Transaction
Documents by the Company nor the performance by the Company of its obligations
hereunder and thereunder will (i) contravene any provision contained in the
Company's Certificate of Incorporation or by-laws, (ii) 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 (A) any contract, agreement, commitment, indenture,
mortgage, lease, pledge, note, license, permit or other instrument or obligation
or (B) any judgment, order, decree, law, rule or regulation or other restriction
of any governmental authority, in each case to which the Company is a party or
by which it is bound or to which any of its assets or properties are subject,
(iii) result in the creation or imposition of any lien, claim, charge, mortgage,
pledge, security interest, equity, restriction or other encumbrance
(collectively, "Encumbrances") on any of the Company's assets or properties,
except as expressly contemplated by the Credit Facility, the Cerberus Debentures
and the Transaction Documents, or (iv) 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.
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 (i) for such
consents and approvals as have previously been obtained and are in full force
and effect, and (ii) for such filings and registrations as may be required under
applicable securities laws. Assuming that the representations and warranties
contained in Article III hereof are true and correct in all respects, the offer
and sale of the Securities and the Additional Securities 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. The Company's authorized
capital stock consists solely of 100,000,000 authorized shares of Common Stock,
of which 24,841,434 shares were issued and outstanding as of the date hereof;
and 200 shares of Preferred Stock, par value $.01 per share, of which, 30
shares, designated as Series A 12% Cumulative Convertible Redeemable Preferred
Stock, stated value $50,000 per share, were issued and outstanding as of the
date hereof. No shares of the Company's capital stock are held as treasury
shares. In addition, as of the date hereof 17,715,980 shares of Common Stock
were reserved for issuance upon the exercise or conversion of outstanding
securities of the Company. Except as set forth on Schedule 2.5, the Company does
not have (i) any shares of Common Stock or Preferred Stock reserved for
issuance, or (ii) any outstanding option, warrant, right, call or commitment
relating to its capital stock or any outstanding securities or obligations
convertible into or exchangeable for, or giving any person any right to
subscribe for or acquire from it, any shares of its capital stock (collectively,
"Company Securities"). There are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any Company Securities. There are no
pre-emptive or other subscription rights with respect to any shares of the
Company's capital stock or any securities convertible into or exchangeable for
shares of the Company's capital stock and all of the issued and outstanding
shares of capital stock of the Company have been duly authorized, validly
issued, are fully paid and are nonassessable. All of the Company's outstanding
securities were offered, issued, sold and delivered by the Company in compliance
with all applicable state and federal securities laws. None of such securities
were issued in violation of any pre-emptive or subscription rights of any
person.
Section 2.6. SEC Reports. (a) The Company has delivered to the
Purchaser a true and complete copy of each report, schedule and registration
statement, including the exhibits thereto (but excluding exhibits incorporated
therein by reference), filed by the Company with the Securities and Exchange
Commission (the "Commission") since January 1, 1996, which 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 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, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated in the notes thereto or, in the case of the unaudited statements, as
permitted by Form 10-Q) and fairly present (subject, in the case of the
unaudited statements, to normal, recurring audit adjustments) 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.
Section 2.7. Accuracy of Information. The information regarding the
Company and mmTech provided by the Company to Broadband specifically for use in
the private placement memorandum prepared by Broadband in connection with its
private placement of limited partnership interests did not, as of the date of
such information, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading.
Section 2.8. Absence of Certain Developments. Except as disclosed in
the SEC Documents or in Schedule 2.8, since March 31, 1997, there has not been
any Material Adverse Change. Except for the acquisition of mmTech or as
disclosed in the SEC Documents, and except for this Agreement and the
transactions contemplated hereby, since December 31, 1996 the Company has
conducted its business in the ordinary and usual course consistent with past
practices.
Section 2.9. Governmental Authorizations; Licenses; Etc. Except as
disclosed in the SEC Documents or in Schedule 2.9, the business of each of the
Company and mmTech has been operated in compliance with applicable laws, rules,
regulations, codes, ordinances, orders, policies and guidelines of all
governmental authorities (excluding Environmental Laws which are specifically
covered in Section 2.13 hereof), except for violations which, individually or in
the aggregate, would not result in a Material Adverse Change. Except as
disclosed in the SEC Documents or in Schedule 2.9, each of the Company and
mmTech 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 as
disclosed in the SEC Documents or in Schedule 2.9, to the Company's best
knowledge there is no action, case or proceeding pending or overtly threatened
by any governmental authority with respect to (i) any alleged violation by the
Company, mmTech or their respective affiliates of any law, rule, regulation,
code, ordinance, order, policy or guideline of any governmental authority, or
(ii) any alleged failure by the Company, mmTech or their respective affiliates
to have any permit, license, approval, certification or other authorization
required in connection with the operation of its business.
Section 2.10. Litigation. Except as disclosed in the SEC Documents or
in Schedule 2.10, there are no lawsuits, actions, proceedings, claims, orders or
investigations pending or, to the
Company's best knowledge, overtly threatened against the Company or mmTech (i)
relating to the Company, mmTech, their respective businesses or any product
alleged to have been manufactured or sold by either of them, (ii) seeking to
enjoin the transactions contemplated hereby, or (iii) which, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Change.
Section 2.11. Undisclosed Liabilities. Other than those reflected in
the financial statements included in the SEC Documents, there are no material
liabilities of the Company or mmTech of any kind or nature whatsoever, whether
known or unknown, absolute, accrued, contingent or otherwise, or whether due or
to become due, which are required to be disclosed on financial statements
prepared in accordance with generally accepted accounting principles, other than
liabilities incurred in the ordinary course of business consistent with past
practices since March 31, 1997.
Section 2.12. Taxes. Except as disclosed in the SEC Documents or in
Schedule 2.12, all federal, state, county, local and foreign tax returns and
reports of the Company and mmTech required to be filed have been duly filed.
Except as disclosed in the SEC Documents or in Schedule 2.12, 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 with respect to the employees,
properties, assets, income or franchises of the Company and mmTech have been
paid or duly provided for, or are being contested in good faith by appropriate
proceedings as previously disclosed to the Purchaser in writing and adequate
reserves therefor have been established pursuant to generally accepted
accounting principles, or have arisen after the date hereof in the ordinary
course of business. The Company has consulted with Deloitte & Touche, LLP, and
upon their advice believes that the issuance of the Securities and the
Additional Securities will not result in any original issue discount under the
Internal revenue Code of 1986, as amended, and the Company will take that
position in all relevant reports and filings.
Section 2.13. Environmental Matters. Except as disclosed in the SEC
Documents or in Schedule 2.13, to the Company's best knowledge (i) the business
of each of the Company and mmTech is being conducted in compliance with all
applicable Environmental Laws, (ii) the real property currently owned or
operated by the Company or mmTech (including, without limitation, 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, (iii) neither the Company nor
mmTech has received any notice from any governmental authority that the Company
or mmTech may be a "potentially responsible party" (as such term is defined
under the Comprehensive Environmental Response, Compensation and Control Act, 42
U.S.C. Section 9601, et seq.) in connection with any waste disposal site or
facility used by the Company or mmTech, and (iv) the Company, mmTech and the
Affected Property are not presently subject to a suit or judgment arising under
any Environmental Law.
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, (x) 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
(y) 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,
(i) 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 (ii) any common law or equitable doctrine (including,
without limitation, 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, but not limited to,
waste petroleum and petroleum products) as regulated under applicable
Environmental Laws.
Section 2.14. Proprietary Rights. Except as disclosed in the SEC
Documents or in Schedule 2.14, each of the Company and mmTech owns and possesses
all right, title and interest in the patents, patent registrations, patent
applications, trademarks, service marks, trademark and service xxxx
registrations and applications therefor, copyrights, copyright registrations,
copyrights applications, trade names, corporate names, technology, inventions,
computer software, data and documentation (including electronic media), product
drawings, trade secrets, know-how, customer lists, processes, other intellectual
property and proprietary information or rights used in their respective
businesses as presently conducted; or owns or possesses permits, licenses or
other agreements to or from third parties regarding the foregoing (collectively,
the "Proprietary Rights"). Except as disclosed in the SEC Documents or in
Schedule 2.14, to the Company's best knowledge, there is not pending or overtly
threatened against the Company or mmTech any claim by any third party contesting
the validity, enforceability, use or ownership of any Proprietary Right. Except
as disclosed in the SEC Documents or in Schedule 2.14, to the Company's best
knowledge, neither the Company nor mmTech has received any notice of any
infringement or misappropriation by, or conflict with, any third party with
respect to any of the Proprietary Rights.
Section 2.15. Books and Records. The stock records of the Company
fairly and accurately reflect in all material respects the record ownership of
all of the outstanding shares of the Company's capital stock. The other books
and records of the Company and mmTech,
including financial records and books of account, are complete and accurate in
all material respects and have been maintained in accordance with sound business
practices.
Section 2.16. Brokers. Except as previously disclosed to the
Purchasers, 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.
Section 2.17. Use of Proceeds. The Company will use the net proceeds
of the sale of the Securities and the Additional Securities (i) to pay interest
due and owing on the Cerberus Debentures, the Old Cerberus Interest Notes and
the Company's 12% Convertible Subordinated Debentures, (ii) to pay accrued and
unpaid dividends on the Company's Series A 12% Cumulative Convertible Redeemable
Preferred Stock, and (iii) for working capital and general corporate purposes.
Section 2.18. Absence of Questionable Payments. Neither the Company,
mmTech nor any affiliate, director, officer, employee, agent, representative or
other person acting on behalf of the Company or mmTech has: (i) 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 (ii) accepted or received any
unlawful contributions, payments, gifts or expenditures.
Section 2.19. 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. There is no fact or
circumstance that the Company has not disclosed to the Purchasers in writing
that the Company presently believes has resulted, or could reasonably be
expected to result, in a Material Adverse Change or could reasonably be expected
to have a material adverse effect on the ability of the Company to perform its
obligations under this Agreement.
Article III
Representations and Warranties of the Purchasers
The Purchasers hereby, severally and not jointly, represent and
warrant to the Company as follows:
Section 3.1. Organization. Each Purchaser that is not an individual is
either a corporation, limited liability company, general partnership or limited
partnership, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization. Schedule 3.1 hereto sets forth the
type of entity and the jurisdiction of organization for each Purchaser that is
not an individual.
Except as set forth in Schedule 3.1, each of the Purchasers is a "U.S.
person" as such term is defined in Section 7701(a)(30) of the Code. Each
Purchaser that is a U.S. person has previously provided the Company with a
completed Form W-9 certifying that such Purchaser is not subject to back-up
withholding with respect to amounts payable to such Purchaser by the Company.
Each Purchaser that is not a U.S. person has previously provided the Company
with a completed Form W-8 certifying that such Purchaser is not subject to
certain U.S. information return reporting or back-up withholding with respect to
amounts payable to such Purchaser by the Company.
Section 3.2. Authorization. Each Purchaser that is not an individual
has the power and authority (corporate, limited liability company, partnership
and other) to execute and deliver the Transaction Documents to which it is a
party and to perform its obligations hereunder and thereunder, all of which have
been duly authorized by all requisite corporate, limited liability company or
partnership action. Each Purchaser that is an individual has the capacity to
execute and deliver the Transaction Documents to which he or she is a party and
to perform his or her obligations hereunder and thereunder. Each such individual
Purchaser is under no impairment or other disability, legal, physical, mental or
otherwise, that would preclude or limit the ability of such Purchaser to perform
his or her obligations under the Transaction Documents to which he or she is a
party. Each Transaction Document to which it is a party has been duly
authorized, executed and delivered by each Purchaser and constitutes a valid and
binding agreement of such Purchaser, enforceable against such Purchaser in
accordance with its terms.
Section 3.3. Access to Information. The Purchasers have received
copies of the SEC Documents. Any Purchaser formed for the purpose of investing
in the Securities or the Additional Securities (a "New Purchaser") has provided
copies of the SEC Documents to each investor in such Purchaser (the
"Investors"). In addition, the Purchasers and their respective purchaser
representatives, if any, have 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 offering of the Securities and the Additional Securities.
Section 3.4. Accredited Investor. Each 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. No offering or sale of
interests in any Purchaser or any other security of such Purchaser was made to
any person, other than such "Accredited Investors." Schedule 3.4 hereto sets
forth a list of the New Purchasers. Other than such New Purchasers, no Purchaser
was formed for the purpose of investing in the Securities and the Additional
Securities.
Section 3.5. Investment Intent. (a) Each Purchaser is acquiring the
Securities, the Additional Securities and any Accrued Interest Debentures for
its own account for investment only and not for or with a view to resale or
distribution. No Purchaser has entered into any contract, undertaking, agreement
or arrangement with any person to sell, transfer or pledge to such person or
anyone else the Securities, the Additional Securities or any Accrued Interest
Debentures and no Purchaser has any present plans or intentions to enter into
any such contract, undertaking, agreement or arrangement.
(b) Each Purchaser has the financial ability to bear the economic risk
of losing its entire investment in the Securities, the Additional Securities and
the Accrued Interest Debentures, 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 overall commitment of each Purchaser to investments which are
not readily marketable is not disproportionate to its net worth, and an
investment in the Securities, the Additional Securities and the Accrued Interest
Debentures will not cause such overall commitment to become excessive. Each
Purchaser's need for diversification in its investment portfolio will not be
impaired by an investment in the Company.
(d) Each Purchaser has adequate means of satisfying its short term
needs for cash and has no present need for liquidity which would require it to
sell its Securities, Additional Securities or any Accrued Interest Debentures,
or any interest therein.
(e) Each Purchaser has substantial experience in making investment
decisions of this type and/or is relying on its own advisors in making this
investment decision and, therefore, either alone or together with its advisors,
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of an investment in the Company.
(f) Each Purchaser understands that the Securities, the Additional
Securities and the Accrued Interest Debentures constitute restricted securities
within the meaning of Rule 144 promulgated under the Securities Act, and that
none of the Securities, the Additional Securities, the Accrued Interest
Debentures or any interest therein, may be sold 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.
(g) Each Purchaser has considered and, to the extent such Purchaser
believed such discussion was necessary, discussed with its professional legal,
tax and financial advisers the suitability of an investment in the Company for
such Purchaser's particular tax and financial situation and each Purchaser has
determined that the Securities, the Additional Securities and the Accrued
Interest Debentures are a suitable investment for it.
(h) EACH PURCHASER UNDERSTANDS THAT AN INVESTMENT IN THE SECURITIES
BEING PURCHASED BY IT INVOLVES A HIGH DEGREE OF RISK, INCLUDING WITHOUT
LIMITATION, RISKS RELATING TO THE COMPANY'S HISTORY OF LOSSES, RISKS RELATING TO
THE RECENT CHANGE IN THE COMPANY'S BUSINESS FOCUS, RISKS RELATING TO THE
COMPANY'S DEPENDENCE UPON THE DEVELOPMENT OF NEW MARKETS OF UNCERTAIN SIZE AND
GROWTH PROSPECTS, THE COMPANY'S DEFAULTS UNDER SUBSTANTIALLY ALL OF ITS
INDEBTEDNESS AND OUTSTANDING PREFERRED STOCK, THE COMPANY'S CONTINUING NEED FOR
ADDITIONAL CAPITAL, THE COMPANY'S NEED FOR LIQUIDITY, THE EFFECTS OF
COMPETITION, THE
COMPANY'S RELIANCE ON KEY PERSONNEL, THE COMPANY'S DEPENDENCE ON TECHNOLOGY AND
TECHNOLOGICAL INNOVATION, THE EFFECTS OF GOVERNMENT REGULATION OF THE
TELECOMMUNICATIONS INDUSTRY, THE RESTRICTIONS ON TRANSFER OF THE SECURITIES, THE
SUBORDINATION PROVISIONS OF THE DEBENTURES, POTENTIAL CONFLICTS OF INTEREST AND
RELATED PARTY TRANSACTIONS INVOLVING THE COMPANY AND THE DIRECTORS AND OFFICERS
OF THE COMPANY, AND RISKS RELATING TO THE SUCCESSFUL EXECUTION OF THE COMPANY'S
BUSINESS AND OPERATING STRATEGY.
(i) Each New Purchaser has received representations and warranties
from each Investor in such New Purchaser similar to those contained in this
Section 3.5, and such representations and warranties specifically authorize the
Company to rely thereon.
(j) The offer and sale of interests in each New Purchaser to the
Investors therein did not require registration under the provisions of the
Securities Act or any applicable state securities or "blue sky" laws. Each New
Purchaser complied in all material respects with the requirements of applicable
state securities or "blue sky" laws with respect to such offer and sale.
(k) The placement materials used by each New Purchaser or its agents
in connection with the offer and sale of interests in such New Purchaser did not
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that no representation or warranty is made with respect to information regarding
the Company and mmTech provided to any such New Purchaser by the Company
expressly for use in such placement materials.
Section 3.6. Financial Resources. Each 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 any
Purchaser in connection with this Agreement or any of the transactions
contemplated hereby.
Section 3.8. Accuracy of Representations. No representation or
warranty made by the Purchaser in this Agreement or any document delivered, or
to be delivered, by it or on its behalf 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.
Article IV
Restrictions on Transfer; Other Covenants
Section 4.1. Limited Transferability. The Securities, the Additional
Securities, the Accrued Interest Debentures and the shares of Common Stock
issuable upon the conversion of the Debentures and the Accrued Interest
Debentures and the exercise of the Warrants (the "Issuable Shares") shall not be
transferable except in accordance with the provisions of this Article IV, which
provisions are intended to insure compliance with the provisions of the
Securities Act in respect of the transfer of any of such securities.
Section 4.2. Restrictive Legend. Except as otherwise provided in the
Stockholders Agreement, the Debentures, the Accrued Interest Debentures and any
certificates or other instrument representing the Warrants or the Issuable
Shares shall (unless otherwise permitted by the provisions of Section 4.4 below)
be stamped or otherwise imprinted with the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE AND CANNOT BE SOLD OR TRANSFERRED
UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS AN
EXEMPTION UNDER SUCH ACT OR LAWS IS AVAILABLE. THE
TRANSFERABILITY OF THESE SECURITIES IS FURTHER SUBJECT
TO THE PROVISIONS OF A PURCHASE AGREEMENT DATED AS OF
JULY 29, 1997 AMONG THE COMPANY AND THE PURCHASERS
NAMED THEREIN.
For purposes of this Article IV, any references to "Debentures,"
"Accrued Interest Debentures", "Warrants" or "Issuable Shares" shall include any
other securities issued in respect of any of such securities.
Section 4.3. Restrictions on Transfer. (a) Subject to the provisions
of Section 4.4, the Debentures, the Accrued Interest Debentures, the Warrants
and the Issuable Shares shall 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 in the event 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 wishing to
effect such transfer, reasonably satisfactory to the Company, that such transfer
does not require registration under the Securities Act or applicable state
securities laws. Notwithstanding the foregoing, any Purchaser may freely
transfer at any time or from time to time the Debentures, the Accrued Interest
Debentures, the Warrants and/or the Issuable Shares, or any interest therein, to
any other Purchaser or any general partner of such Purchaser, any
limited partner of such Purchaser, any other fund, account or other entity
managed, directly or indirectly, by any general partner of such Purchaser and
the respective subsidiaries and affiliates of any of the foregoing (each, a
"Permitted Transferee") without complying with the provisions of this Article IV
(a "Permitted Transfer") and the Company shall, or shall cause any registrar or
transfer agent to, promptly register any such Permitted Transfer on the books of
the Company; provided, however, that in connection with any such Permitted
Transfer, the Permitted Transferees shall acknowledge the restrictions on
transferability under applicable law and agree in writing to be bound by the
provisions of this Article IV.
(b) In addition to the restrictions set forth in paragraph (a) above,
for a period of 90 days after purchase (the "Restrictive Period"), no Purchaser
shall sell, assign, transfer or otherwise dispose of the Securities, the
Additional Securities, the Accrued Interest Debentures or any interest therein
(a "Transfer") (other than a Permitted Transfer) without the prior written
consent of the Company which may be withheld by the Company in its sole
discretion. Subject to the restrictions set forth in paragraph (a) above, from
and after the end of the Restrictive Period, a Purchaser may Transfer all or a
portion of its Securities, its Additional Securities, its Accrued Interest
Debentures, or any interest therein, without the consent of the Company.
Section 4.4. Lapse of Restrictions; Removal of Legends. The
restrictions on transfer set forth in Section 4.3 relating to the Warrants and
the Issuable Shares shall lapse upon the effectiveness of the registration
statement relating thereto which the Company is required to file and maintain
effective as specified therein. From and after the effective date of such
registration statement, the Purchasers shall be entitled to exchange the
Warrants and any certificates representing Issuable Shares for replacement
Warrants or certificates not bearing the restrictive legend set forth in Section
4.2 above.
Article V
[Reserved]
Article VI
Deliveries at Closing
Section 6.1. Deliveries by the Company. At the First Closing, the
Company shall deliver to the Purchasers the following in form and substance
reasonably satisfactory to the Purchasers' counsel:
(a) a certificate of the President or a Vice President of the Company,
dated the First Closing Date, to the effect that (i) the person signing such
certificate is familiar with this Agreement, (ii) all representations and
warranties made by the Company in this Agreement are true, correct and complete
in all material respects as of the First Closing, (iii) the Company has duly
performed or complied with, in all material respects, all of the covenants,
obligations and
agreements to be performed or complied with by it under the terms of this
Agreement on or prior to or at the First Closing, and (iv) except as disclosed
pursuant to this Agreement, there has been no Material Adverse Change or
prospective change which could reasonably be expected to result in a Material
Adverse Change since March 31, 1997;
(b) a certificate of the Secretary or Assistant Secretary of the
Company, dated the First 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 Purchasers may reasonably request;
(c) a certified copy of the resolutions of the Company's Board of
Directors authorizing the execution, delivery and consummation of this Agreement
and the transactions contemplated hereby;
(d) the Debentures and the Warrants, duly executed, issued and
delivered by the Company and registered in the names of the Purchasers as they
may specify;
(e) a duly executed counterpart of the Security Agreement;
(f) a duly executed counterpart of the Stockholders Agreement;
(g) a duly executed counterpart of the Consulting Agreement; and
(h) an opinion of Xxxxxxxxxx, Sandler, Kohl, Xxxxxx & Xxxxxx, P.A.,
counsel to the Company, covering such matters as the Purchasers may reasonably
request; and
(i) such other documents or instruments as the Purchasers reasonably
request to effect the transactions contemplated hereby.
Section 6.2. Deliveries by the Purchasers. At the First Closing, the
Purchasers shall deliver to the Company the following in form and substance
reasonably satisfactory to the Company's counsel:
(a) evidence that the Initial Purchase Price has been paid in full;
(b) a duly executed counterpart of the Stockholders Agreement;
(c) a duly executed counterpart of the Consulting Agreement; and
(d) such other documents or instruments as the Company reasonably
requests to effect the transactions contemplated hereby.
ARTICLE VII
Survival, Amendment and Waiver
Section 7.1. Survival of Representations and Warranties. The
representations and warranties contained in this Agreement or any certificate
delivered in connection herewith shall survive the applicable Closing, and shall
apply with respect to claims asserted in writing within one year thereof, as
applicable. 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.
Section 7.2. Amendments. This Agreement (including the provisions of
this Section 7.2) may not be amended or modified except by an instrument in
writing signed on behalf of all of the parties affected by such amendment or
modification.
Section 7.3. Extension; Waiver. The parties hereto may (i) extend the
time for performance of any of the obligations or other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations and
warranties of the other parties hereto contained herein or in any document
delivered pursuant hereto, and (iii) waive compliance with any of the agreements
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 its rights hereunder shall not constitute a waiver of
such rights.
ARTICLE VIII
Miscellaneous
Section 8.1. Notices. All notices, requests, claims, demands, waivers
and other communications hereunder shall be in writing and shall be deemed to
have been duly given when delivered by hand, when delivered by courier, three
days after being deposited in the mail (registered or certified mail, postage
prepaid, return receipt requested), or when received by facsimile transmission
upon receipt of a confirmed transmission report, as follows:
If to the Company: 00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Executive Officer
and if to the other parties at the address or facsimile transmission number
specified below its name on the signature pages hereto (or, in the case of
Persons who become parties hereto subsequently, at their last addresses or
facsimile transmission numbers shown on the record books of the Company). Any
party hereto, by notice given to the other parties hereto in
accordance with this Section 8.1 may change the address or facsimile
transmission number to which such notice or other communications are to be sent
to such party.
Section 8.2. Expenses. The Company shall pay its own expenses incident
to this Agreement and the transactions contemplated herein. The Company shall be
responsible for and shall pay at the First Closing the fees and disbursements of
counsel to the Purchasers incurred in connection with the negotiation, execution
and delivery of this Agreement and the other Transaction Documents and the
closing of the transactions contemplated hereby and thereby.
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 courts and irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.
Section 8.4. Assignment; Successors and Assigns; No Third Party
Rights. This Agreement may not be assigned by operation of law or otherwise, and
any attempted assignment shall be null and void; provided, however, that any
Purchaser may assign this Agreement (or any interest herein) to one or more
Permitted Transferees so long as such Purchaser also assigns to such Permitted
Transferees its rights and obligations under the other Transaction Documents to
which it is a party. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors, permitted
assigns and legal representatives. This Agreement shall be for the sole benefit
of the parties to this Agreement and their respective heirs, 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 heirs, successors, assigns and legal representatives, any legal or
equitable right, remedy or claim hereunder.
Section 8.5. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original agreement, but all of
which together shall constitute one and the same instrument.
Section 8.6. 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 8.7. Entire Agreement. This Agreement and the Transaction
Documents constitute the entire agreement among the parties with respect to the
matters covered hereby and
thereby and supersede all previous written, oral or implied understandings among
them with respect to such matters, including, without limitation, the letter
agreement, dated March 10, 1997, by and between the Company and MBF and the term
sheet attached thereto.
Section 8.8. 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 8.9. No Strict Construction. Each of the parties hereto
acknowledge that this Agreement has been prepared jointly by the parties hereto,
and shall not be strictly construed against either party.
[Remainder of page intentionally left blank]
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/Xxxxxxx X. Brand
_______________________________
Name:
Title:
XXXXXX XXXXXXXXX XxXXXXX, INC.
By: /s/Xxxxxx X. Xxxxxxx
_______________________________
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
L.A.D. EQUITY PARTNERS, L.P.
By: Flint Investments, Inc.
Its General Partner
By: /s/Xxxxxx X. Xxxxxxxxx
___________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
/s/Xxxxxx X. Xxxxxx
___________________________________
Xxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
/s/Xxxxxx X. Xxxxxxxxx
___________________________________
Xxxxxx X. Xxxxxxxxx, Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM 1997 ENTERPRISE FUND, LLC
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.,
Its Managing Member
By: /s/Xxxxxx X. Xxxxxxx
_______________________________
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM PARTNERS, L.P.
By: CRM Management, Inc.
Its General Partner
By: /s/Xxxxxx X. Xxxxxxx
____________________________
Name: Xxxxxx X. Xxxxxxx
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM RETIREMENT PARTNERS, L.P.
By: CRM Management, Inc.
Its General Partner
By: /s/Xxxxxx X. Xxxxxxx
____________________________
Name: Xxxxxx X. Xxxxxxx
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM MADISON PARTNERS, L.P.
By: CRM Management, Inc.
Its General Partner
By: /s/Xxxxxx X. Xxxxxxx
____________________________
Name: Xxxxxx X. Xxxxxxx
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM U.S. VALUE FUND, LTD.
By: CRM Management, Inc.
Its General Partner
By: /s/Xxxxxx X. Xxxxxxx
____________________________
Name: Xxxxxx X. Xxxxxxx
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM EURYCLEIA PARTNERS, L.P.
By: CRM Eurycleia Investments, LLC,
Its General Partner
By: CRM Management, Inc.,
Its Managing Member
By: /s/Xxxxxx X. Xxxxxxx
______________________________
Name: Xxxxxx X. Xxxxxxx
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
A.C. ISRAEL ENTERPRISES, INC.
By: /s/Xxx Xxxxxx
_____________________________
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: /s/Xxxxxx X. Xxxxxxx
__________________________
Name: Xxxxxx X. Xxxxxxx
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
______________________________
Xxxxxxx X. Xxxx, Xx.
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.,
Attorney-in-Fact
By: /s/Xxxxxx X. Xxxxxxx
___________________________
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial
Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
XXXXXX EQUITIES CORP.
By: /s/ Xxxxxxx Xxxxxxxxxxx
_________________________
Name:
Title:
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
WHITEHALL PROPERTIES, LLC
By: /s/Xxxxxxx Xxxxxxxxxxx
________________________
Name:
Title: Manager
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
KABUKI PARTNERS ADP, GP
By: /s/Xxxxxxx Xxxxxxxxxxx
___________________________
Name:
Title: General Partner
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
MBF CAPITAL CORP.
By: /s/Xxxx X. Xxxxxx
________________________
Name: Xxxx X. Xxxxxx
Title: President
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
MBF BROADBAND SYSTEMS, L.P.
By: MBF Broadband Systems, Inc.,
Its General Partner
By: /s/Xxxx X. Xxxxxx
________________________
Name: Xxxx X. Xxxxxx
Title: President
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
PHINEAS BROADBAND SYSTEMS, L.P.
By: MBF Broadband Systems, Inc.,
Its General Partner
By: /s/Xxxx X. Xxxxxx
________________________
Name: Xxxx X. Xxxxxx
Title: President
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
/s/Xxxx X. Xxxxxx
_____________________________
Xxxx X. Xxxxxx
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
XxXXXXX FAMILY PARTNERSHIP
By: /s/Xxxxxx X. XxXxxxx
_______________________________
Name: Xxxxxx X. XxXxxxx
Title: General Partner
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
/s/Xxxx X. Xxxxxx
_____________________________
Xxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
/s/Xxxxxxx X. Xxxxxxx
_____________________________
Xxxxxx X. Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
[SCHEDULES OMITTED]
EXHIBIT A
FORM OF DEBENTURE
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND CANNOT BE SOLD OR TRANSFERRED
UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS AN EXEMPTION UNDER SUCH ACT OR
LAWS IS AVAILABLE. THE TRANSFERABILITY OF THESE SECURITIES IS FURTHER SUBJECT TO
THE PROVISIONS OF A PURCHASE AGREEMENT DATED AS OF JULY 29, 1997 AMONG THE
COMPANY AND THE PURCHASERS NAMED THEREIN.
CLASS A 13% CONVERTIBLE SENIOR
SUBORDINATED PAY-IN-KIND DEBENTURE DUE 1999
[Date of Issuance]
LOGIMETRICS, INC., a Delaware corporation (the "Company"), hereby
promises to pay to the order of [name of purchaser] (together with its, his or
her successors and assigns, the "Holder") the principal amount of
_____________________ Dollars ($______________)in lawful money of the United
States, together with interest thereon calculated from the date hereof and
payable in accordance with the provisions of this debenture ("Debenture").
By accepting this Debenture, the Holder agrees that the obligations of
the Company to the Holder under this Debenture shall be subordinated only to the
Senior Debt (as hereinafter defined) of the Company, all upon the terms set
forth in paragraph 4 hereof.
This Debenture may be surrendered for transfer or exchange by the
Holder hereof upon surrender of this Debenture, together with a properly
completed bond power or other instrument of transfer, and any required signature
guarantees, at the office of the Company set forth in Section 11 hereof. Upon
proper surrender, the Company shall issue one or more replacement Debentures of
like tenor registered in the names and in the denominations requested by the
surrendering Holder and dated the date of issuance thereof; provided, however,
that (i) appropriate adjustments shall be made to reflect the date of issue and
principal amount of each such replacement Debenture, (ii) the aggregate
principal amount of all Debentures, excluding Accrued Interest Debentures (as
defined below), shall be limited to $3,583,333, and (iii) no Debenture shall be
issued in a principal amount of less than $50,000 unless in connection with a
transfer resulting from the complete liquidation of the original Holder of this
Debenture. All Debentures shall rank pari passu.
1. Payment of Interest. Subject to subparagraph 6(c)(xviii)(C) hereof,
interest will accrue from the date hereof at the rate of thirteen percent (13%)
per annum on the unpaid principal amount of this Debenture outstanding from time
to time on the basis of a 360-day year for the actual number of days elapsed.
Subject to paragraph 4 hereof, the Company will pay to the Holder all accrued
and unpaid interest on this Debenture on [first interest payment date following
the issuance date] and quarterly thereafter, in arrears, on the 15th day of
[January], the
15th day of [April], the 15th day of [July] and the 15th day of [October] (each,
an "Interest Payment Date") to and including the earlier to occur of the
Conversion Date (hereinafter defined) or the Due Date (hereinafter defined).
Interest will accrue at the greater of the Default Rate (hereinafter defined)
and the rate of fifteen percent (15%) per annum on any principal payment past
due under this Debenture and, unless prohibited under applicable law (and if so
prohibited then only to the extent not so prohibited), on any interest which has
not been paid on the date on which it is due and payable (without giving effect
to any applicable grace periods or paragraph 4 hereof) until such time as
payment therefor is actually delivered to the Holder.
On each Interest Payment Date other than the Due Date (as defined
below), in payment of the interest due on this Debenture on such Interest
Payment Date, the Company shall deliver to the Holder of this Debenture a new
Debenture (an "Accrued Interest Debenture"), in the form of this Debenture,
dated such Interest Payment Date (and bearing interest from such Interest
Payment Date) and having a principal amount corresponding to the interest due on
this Debenture on such Interest Payment Date. On the Due Date, in payment of the
interest due on this Debenture on such date, the Company shall deliver, at the
option of the Holder, either (a) a cash payment in such amount, or (b) the
number of shares of Common Stock, par value $.01 per share ("Common Stock"),
into which Accrued Interest Debentures would be convertible pursuant to Section
6 hereof if Accrued Interest Debentures had been issued to the Holder on the Due
Date in payment of such interest and such Accrued Interest Debentures were
converted by the Holder immediately thereafter. Unless the Holder gives the
Company not less than 10 days' prior written notice of the exercise of such
option, the Holder shall be deemed to have irrevocably elected to receive
payment of such interest in cash on the Due Date. Any exercise or deemed
exercise of such option shall be binding on any subsequent Holder of this
Debenture.
2. Payment of Principal on Debenture.
(a) Scheduled Payments. The Company will repay the principal
amount of this Debenture on [two years from date of issue] [date] ("Due Date").
(b) Optional Prepayment. At any time after nine months from the
date hereof, provided that the Registration Statement (hereinafter defined) is
effective and available for sales of Registrable Securities (hereinafter
defined) thereunder, the Company may at any time hereafter prepay, without
premium or penalty, all (but not less than all) of the outstanding principal
amount of the Debentures (including, for this purpose, the Accrued Interest
Debentures), together with interest accrued on such prepaid amount to the date
of payment; provided (i) the average closing price of the Company's Common Stock
on days the Common Stock traded during the 120-day period immediately preceding
the date of the notice provided for in paragraph (c) hereinbelow shall have been
not less than $5.00, and (ii) the closing price of the Common Stock for each of
the 30 trading days immediately preceding the date of such notice shall have
been not less than $5.00, adjusted in each case for stock splits, stock
dividends or other similar transactions affecting the price of the Common Stock.
All such prepayments shall be applied pro rata to all of the Debentures. At the
option of the Holder, interest accrued on the prepaid amount to the date of
payment shall be paid either (a) in cash or (b) by the issuance by the Company
to
the Holder of shares of Common Stock into which Accrued Interest Debentures
would be convertible pursuant to Section 6 hereof if Accrued Interest Debentures
had been issued to the Holder on such date in payment of such interest and such
Accrued Interest Debentures were converted by the Holder immediately thereafter.
Unless the Holder gives the Company not less than 10 days' prior written notice
of the exercise of such option, the Holder shall be deemed to have irrevocably
elected to receive payment of such interest in cash. Any exercise or deemed
exercise of such option shall be binding on any subsequent Holder of this
Debenture.
(c) Notice of Prepayment. The Company will give written notice of
its election to prepay this Debenture to the Holder in person or by registered
or certified mail, return receipt requested, at least thirty (30) and not more
than forty-five (45) days prior to the date of prepayment. On the date of
prepayment specified in the Company's notice, the Company will deliver to the
Holder of this Debenture in person or by registered or certified mail, return
receipt requested, a cashier's or certified check for the entire outstanding
principal amount being prepaid, together with all accrued interest thereon
through the date of prepayment.
3. Intentionally Omitted.
4. Subordination. The Company's payment, whether voluntary or
involuntary, whether in cash, property, securities or otherwise and whether by
application of offset or otherwise (hereinafter "Payment") of any of its
obligations under this Debenture, other than the issuance of Accrued Interest
Debentures, shall be subject to the following restrictions:
(a) Subordination to Senior Debt. Anything in this Debenture to
the contrary notwithstanding, the obligations of the Company in respect of the
principal of and interest (including any premium or penalty) on this Debenture
and any other amounts due under this Debenture (the "Subordinated Debt") shall
be subordinate and junior in right of payment, to the extent and in the manner
hereinafter set forth, to the Senior Debt. "Senior Debt", when used with respect
to the Company, means (i) the Company's indebtedness to North Fork Bank ("Bank")
under (A) that certain $640,000.04 Restated and Amended Term Loan Note, dated
April 25, 1997, and (B) that certain $2,200,000 Sixth Restated and Amended
Revolving Credit Note, dated April 25, 1997, in each case, together with
interest thereon and (ii) renewals, extensions, refinancings, deferrals,
restructurings, amendments, modifications and waivers of the indebtedness
described in clause (i) above.
(b) Default on Senior Debt. So long as the Senior Debt has not
been paid in full, if there shall occur a default in the payment when due of any
amount due and owing on account of Senior Debt (any of the foregoing being a
"Senior Debt Default") then, from and after the receipt of written notice
thereof from the holder of Senior Debt unless and until such Senior Debt Default
shall have been remedied or waived the Company will not make any Payment on any
Subordinated Debt, and the Holders of Subordinated Debt will not receive or
accept any direct or indirect Payment in respect thereof, and the Company may
not redeem or otherwise acquire any Subordinated Debt.
(c) Changes in Senior Debt. Any holder of Senior Debt may, at any
time and from time to time, without the consent of, or notice to, the Holder and
without incurring responsibility to the Holder, and without impairing or
releasing the obligations of the Holder hereunder:
(i) Change the manner, place or terms of payment or change or
extend the time of payment of or renew or alter the Senior Debt or any
portion thereof; provided, however, that without the written consent
of the Majority Holders (hereinafter defined) the principal amount of
and interest rate applicable from time to time to Senior Debt may not
be increased (other than pursuant to the terms of the Senior Debt as
such terms existed on the date of issuance hereof);
(ii) Sell, exchange, release or otherwise deal with any
collateral securing the Senior Debt or any other property by
whomsoever at any time pledged or mortgaged to secure, or however
securing, the Senior Debt or any portion thereof; and
(iii) Apply any sums by whomsoever paid or however released to
the Senior Debt or any portion thereof.
(d) Consent to Senior Debt. By acceptance of this Debenture, the
Holder hereby consents to the making of Senior Debt and hereby acknowledges that
each current and future holder of Senior Debt has relied, and in the future will
rely, upon the terms of this Debenture. The holders of Senior Debt shall have no
liability to the Holder and the Holder hereby waives any claim which it may have
now or hereafter against any holder of Senior Debt arising from any and all
actions which any holder of Senior Debt may take or omit to take in good faith
with regard to the Senior Debt or its rights or obligations hereunder.
(e) Payments in Trust. Until the Senior Debt has been repaid in
full, in the event the Holder shall receive any Payment in contravention of the
provisions of this paragraph 4 including, Payments arising under the
subordination provisions of any other indebtedness of the Company, the Holder
shall hold all such Payments so received in trust for the holders of Senior Debt
and shall forthwith turn over all such Payments to the holders of Senior Debt in
the form received (except for the endorsement or assignment of the Holder as
necessary, without recourse or warranty) to be applied to payment of the Senior
Debt whether or not then due and payable. Any Payment so received in trust and
turned over to the holders of Senior Debt shall not be deemed a Payment in
satisfaction of the Subordinated Debt by the Company.
(f) Payment in full of Senior Debt; Subrogation. If any Payment
to which a Holder of Subordinated Debt would otherwise have been entitled but
for the provisions of this paragraph 4 shall have been applied, pursuant to the
provisions of this paragraph 4, to the payment of Senior Debt, then and in such
case, the Holder of the Subordinated Debt (i) shall be entitled to receive from
the holders of Senior Debt at the time outstanding any payments or distributions
received by such holders of Senior Debt in excess of the amount sufficient to
pay all Senior Debt in cash in full (whether or not then due), and (ii)
following payment of the Senior
Debt in full, shall be subrogated to any right of the holders of Senior Debt to
receive any and all further payments or distributions applicable to Senior Debt,
until all the Subordinated Debt shall have been paid in full. If the Holder of
the Subordinated Debt shall have been subrogated to the rights of the holders of
Senior Debt due to the operation of this paragraph 4(f), the Company agrees to
take all such reasonable actions as are requested by such Holders of the
Subordinated Debt in order to cause such Holders to be able to obtain payments
from the Company with respect to such subrogation rights as soon as possible.
(g) No Impairment of the Company's Obligations. Nothing contained
in this paragraph 4, as between the Company and the Holder of this Debenture,
shall impair the obligation of the Company, which is absolute and unconditional,
to pay to the Holder the principal of and interest on this Debenture as and when
the same shall become due and payable in accordance with the terms hereof.
(h) Advances in Reliance. The Holder of this Debenture, by its
acceptance hereof, agrees that each holder of Senior Debt has advanced funds or
may in the future advance funds in reliance upon the terms and conditions
hereof.
(i) Non-Waiver of Rights. No right of any holder of Senior Debt
to enforce its right of subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company, or by any act or failure to act by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Debenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(j) Recaptured Payments. Any Payments received by a holder of
Senior Debt from the Company or the Holder which, in connection with an
Insolvency Event or Proceeding (hereinafter defined), is required to be remitted
to the payor or the bankrupt estate shall not be deemed a Payment to such holder
of Senior Debt for all purposes hereunder.
5. Security. The obligations of the Company to the Holder of this
Debenture (including the obligation to pay the Accrued Interest Debentures when
due) are secured by certain Collateral to the extent provided in the Amended and
Restated Security Agreement, dated as of March 7, 1996, as amended and restated
as of July 29, 1997 ("Security Agreement"), made by the Company in favor of
Holders of the Debentures. In addition to all rights and remedies provided
herein, Holders of the Debentures are entitled to the benefits provided in the
Security Agreement. By accepting this Debenture, the Holder hereof agrees to be
bound by the terms of the Security Agreement.
6. Conversion Rights.
(a) The Holder of this Debenture has the right (the "Conversion
Right"), exercisable at his, her or its option at any time during which the
principal amount of this Debenture is outstanding, to convert this Debenture,
but only in whole, into _____________
(___________) shares of Common Stock, subject to adjustment in certain
circumstances as provided herein.
(b) The Conversion Right is exercisable upon surrender of this
Debenture, together with a conversion notice, in the form attached hereto as
Exhibit A, duly executed and completed, evidencing the election of the Holder to
exercise the Conversion Right, at the Company's principal office at 00 Xxxxxxx
Xxxxx, Xxxxxxx, Xxx Xxxx 00000. The registered owner of this Debenture shall
become the record holder of the shares of Common Stock issuable upon conversion
as of the date of exercise of the Conversion Right (the "Conversion Date"). The
shares issued in connection with the Conversion Right shall be registered
initially in the name of the Holder, and delivered to the Holder no later than
two (2) business days after receipt of a properly completed conversion notice.
Upon conversion, the Company shall pay to the Holder accrued but unpaid interest
on this Debenture up to, but excluding, the Conversion Date. At the option of
the Holder, such accrued but unpaid interest shall be paid either (a) in cash or
(b) by the issuance by the Company to the Holder of shares of Common Stock into
which Accrued Interest Debentures would be convertible pursuant to Section 6
hereof if Accrued Interest Debentures had been issued to the Holder on such date
in payment of such interest and such Accrued Interest Debentures were converted
by the Holder immediately thereafter. Unless the Holder gives the Company not
less than 10 days' prior written notice of the exercise of such option, the
Holder shall be deemed to have irrevocably elected to receive payment of such
interest in cash. Any exercise or deemed exercise of such option shall be
binding on any subsequent Holder of this Debenture.
(c) In case, at any time or from time to time after the date of
issuance of this Debenture ("Issuance Date"), the Company shall issue or sell
shares of its Common Stock (other than any Common Stock issuable upon the
exercise or conversion of (i) the Debentures (and any replacement Debenture or
Debentures issued upon transfer or exchange of this Debenture), (ii) any Accrued
Interest Debentures (and any replacement Accrued Interest Debenture or Accrued
Interest Debentures issued upon transfer or exchange of the Accrued Interest
Debentures), (iii) the Company's Amended and Restated Class B 13% Convertible
Senior Subordinated Pay-in-Kind Debentures due 1999 (the "Class B Debentures")
(and any replacement Class B Debenture or Class B Debentures issued upon
transfer or exchange of the Class B Debentures), (iv) any additional securities
issued in lieu of cash interest otherwise payable on the Class B Debentures (the
"Class B Accrued Interest Debentures") (and any replacement Class B Accrued
Interest Debenture or Class B Accrued Interest Debentures issued upon transfer
or exchange of the Class B Accrued Interest Debentures), (v) securities
outstanding on the date hereof, (vi) awards made pursuant to the Company's Stock
Compensation Program (the "Plan"), (vii) awards made pursuant to any incentive
compensation plan or arrangement approved by the Company's Board of Directors or
by the Compensation Committee of the Company's Board of Directors, (viii) the
Company's Series G Warrants, (ix) the Company's Series H Warrants, or (x) the
Company's Series I Warrants) (such securities, collectively, the "Subject
Securities") for a consideration per share less than $.52 per share ("Trigger
Price"), or, if a Pro Forma Adjusted Trigger Price (hereinafter defined) shall
be in effect as provided below in this paragraph (c), then less than such Pro
Forma Adjusted Trigger Price per share, then and in each such case the Holder of
this Debenture, upon the conversion hereof as provided in paragraph (a) hereof,
shall be entitled to
receive, in lieu of the shares of Common Stock theretofore receivable upon the
conversion of this Debenture, a number of shares of Common Stock determined by
(a) dividing the Trigger Price by a Pro Forma Adjusted Trigger Price per share
to be computed as provided below in this paragraph (c), and (b) multiplying the
resulting quotient by the number of shares of Common Stock into which this
Debenture is then convertible. A Pro Forma Adjusted Trigger Price per share
shall be the price computed (to the nearest cent, a fraction of half cent or
more being considered a full cent):
by dividing (i) the sum of (x) the result obtained by
multiplying the number of shares of Common Stock of the
Company outstanding immediately prior to such issue or
sale by the Trigger Price (or, if a Pro Forma Adjusted
Trigger Price shall be in effect, by such Price), and
(y) the consideration, if any, received by the Company
upon such issue or sale, by (ii) the number of shares
of Common Stock of the Company outstanding immediately
after such issue or sale.
For the purpose of this paragraph (c):
(i) In case the Company splits its Common Stock or shall declare
any dividend, or make any other distribution, upon any stock of the
Company of any class payable in Common Stock, or in any stock or other
securities directly or indirectly convertible into or exchangeable for
Common Stock (any such stock or other securities being hereinafter
called "Convertible Securities"), such split, declaration or
distribution shall be deemed to be an issue or sale (as of the record
date for such split, dividend or other distribution), without
consideration, of such Common Stock or such Convertible Securities, as
the case may be.
(ii) In case the Company shall issue or sell any Convertible
Securities other than the Subject Securities, there shall be
determined the price per share for which Common Stock is issuable upon
the conversion or exchange thereof, such determination to be made by
dividing (a) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities,
plus the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the conversion or exchange thereof, by (b)
the maximum number of shares of Common Stock of the Company issuable
upon the conversion or exchange of all such Convertible Securities.
If the price per share so determined shall be less than the
Trigger Price (or, if a Pro Forma Adjusted Trigger Price shall be in
effect, less than such Price) as of the date of such issue or sale,
then such issue or sale shall be deemed to be an issue or sale for
cash (as of the date of issue or sale of such Convertible Securities)
of such maximum number of shares of Common Stock at the price per
share so determined, provided that, if such Convertible Securities
shall by their terms provide for an increase or increases, with the
passage of time, in the amount of additional consideration, if any,
payable to the Company, or in the rate of exchange, upon the
conversion or exchange thereof, the Pro Forma Adjusted Trigger Price
per share shall, forthwith upon any such increase becoming effective,
be readjusted to reflect the same, and provided, further, that upon
the expiration of such rights of conversion or exchange of such
Convertible Securities, if any thereof shall not have been exercised,
the Pro Forma Adjusted Trigger Price per share shall forthwith be
readjusted and thereafter be the price which it would have been had an
adjustment been made on the basis that the only shares of Common Stock
so issued or sold were those issued or sold upon the conversion or
exchange of such Convertible Securities, and that they were issued or
sold for the consideration actually received by the Company upon such
conversion or exchange, plus the consideration, if any, actually
received by the Company for the issue or sale of all such Convertible
Securities which shall have been converted or exchanged.
(iii) In case the Company shall grant any rights or options to
subscribe for, purchase or otherwise acquire Common Stock of any class
other than the Subject Securities, there shall be determined the price
per share for which Common Stock is issuable upon the exercise of such
rights or options, such determination to be made by dividing (a) the
total amount, if any, received or receivable by the Company as
consideration for the granting of such rights or options, plus the
minimum aggregate amount of additional consideration, if any, payable
to the Company upon the exercise of such rights or options, by (b) the
maximum number of shares of Common Stock issuable upon the exercise of
such rights or options.
If the price per share so determined shall be less than the
Trigger Price (or, if a Pro Forma Adjusted Trigger Price shall be in
effect, less than such Price) as of the date of such issue or sale,
then the granting of such rights or options shall be deemed to be an
issue or sale for cash (as of the date of the granting of such rights
or options) of such maximum number of shares of Common Stock at the
price per share so determined, provided that, if such rights or
options shall by their terms provide for an increase or increases,
with the passage of time, in the amount of additional consideration,
if any, payable to the Company upon the exercise thereof, the Pro
Forma Adjusted Trigger Price per share shall, forthwith upon any such
increase becoming effective, be readjusted to reflect the same, and
provided, further, that upon the expiration of such rights or options,
if any thereof shall not have been exercised, the Pro Forma Adjusted
Trigger Price per share shall forthwith be readjusted and thereafter
be the price which it would have been had an adjustment been made on
the basis that the only shares of Common Stock so issued or sold were
those issued or sold upon the exercise of such rights or options and
that they were issued or sold for the consideration actually received
by the Company upon such exercise, plus the consideration, if any,
actually received by the Company for the granting of all such rights
or options, whether or not exercised.
(iv) In case the Company shall grant any rights or options to
subscribe for, purchase or otherwise acquire Convertible Securities
other than the Subject Securities, such Convertible Securities shall
be deemed, for the purposes of
subparagraph (iii) above, to have been issued or sold for the total
amount received or receivable by the Company as consideration for the
granting of such rights or options plus the minimum aggregate amount
of additional consideration, if any, payable to the Company upon the
exercise of such rights or options, provided that, upon the expiration
of such rights or options, if any thereof shall not have been
exercised, the Pro Forma Adjusted Trigger Price per share shall
forthwith be readjusted and thereafter be the price which it would
have been had an adjustment been made upon the basis that the only
Convertible Securities so issued or sold were those issued or sold
upon the exercise of such rights or options and that they were issued
or sold for the consideration actually received by the Company upon
such exercise, plus the consideration, if any, actually received by
the Company for the granting of all such rights or options, whether or
not exercised.
(v) In case any shares of stock or other securities, other than
Common Stock of the Company, shall at any time be receivable upon the
conversion of this Debenture, and in case any additional shares of
such stock or any additional such securities (or any stock or other
securities convertible into or exchangeable for any such stock or
securities) shall be issued or sold for a consideration per share such
as to dilute the purchase rights evidenced by this Debenture, then and
in each such case the Pro Forma Adjusted Trigger Price per share shall
forthwith be adjusted, substantially in the manner provided for above
in this paragraph (c), so as to protect the Holder of this Debenture
against the effect of such dilution.
(vi) In case any shares of Common Stock or Convertible Securities
or any rights or options to subscribe for, purchase or otherwise
acquire any Common Stock or Convertible Securities shall be issued or
sold for cash, the consideration received therefor shall be deemed to
be the amount received by the Company therefor, after deducting any
expenses incurred and any underwriting or similar commissions,
compensation or concessions paid or allowed by the Company in
connection with such issue or sale.
(vii) In case any shares of Common Stock or Convertible
Securities or any rights or options to subscribe for, purchase or
otherwise acquire any Common Stock or Convertible Securities shall be
issued or sold for a consideration other than cash (or a consideration
which includes cash and other assets) then, for the purpose of this
paragraph (c), the Board of Directors of the Company shall promptly
determine the fair value of such consideration, and such Common Stock,
Convertible Securities, rights or options shall be deemed to have been
issued or sold on the date of such determination in good faith. Such
value shall not be more than the amount at which such consideration is
recorded in the books of the Company for accounting purposes except in
the case of an acquisition accounted for on a pooling of interest
basis. In case any Common Stock or Convertible Securities or any
rights or options to subscribe for, purchase or otherwise acquire any
Common Stock or Convertible Securities shall be issued or sold
together with other stock or securities or other assets of the Company
for a consideration which covers
both, the Board of Directors of the Company shall promptly determine
in good faith what part of the consideration so received is to be
deemed to be the consideration for the issue or sale of such Common
Stock or Convertible Securities or such rights or options.
The Company covenants and agrees that, should any determination
of fair value of consideration or of allocation of consideration be
made by the Board of Directors of the Company, pursuant to this
subparagraph (vii), it will, not less than seven (7) days after any
and each such determination, deliver to the Holder of this Debenture a
certificate signed by the President or a Vice President and the
Treasurer or an Assistant Treasurer of the Company reciting such value
as thus determined and setting forth the nature of the transaction for
which such determination was required to be made, the nature of any
consideration, other than cash, for which Common Stock, Convertible
Securities, rights or options have been or are to be issued, the basis
for its valuation, the number of shares of Common Stock which have
been or are to be issued, and a description of any Convertible
Securities, rights or options which have been or are to be issued,
including their number, amount and terms.
(viii) In case the Company shall take a record of the holders of
shares of its stock of any class for the purpose of entitling them (a)
to receive a dividend or a distribution payable in Common Stock or in
Convertible Securities, or (b) to subscribe for, purchase or otherwise
acquire Common Stock or Convertible Securities, then such record date
shall be deemed to be the date of the issue or sale of the Common
Stock issued or sold or deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution,
or the date of the granting of such rights of subscription, purchase
or other acquisition, as the case may be.
(ix) The number of shares of Common Stock outstanding at any
given time shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock,
but shall exclude shares in the treasury of the Company.
(x) Following each computation or readjustment of a Pro Forma
Adjusted Trigger Price as provided in this paragraph (c), the newly
computed or adjusted Pro Forma Adjusted Trigger Price shall remain in
effect until a further computation or readjustment thereof is required
by this paragraph (c).
(xi) In case at any time or from time to time after the Issuance
Date the holders of the Common Stock of the Company of any class (or
any other shares of stock or other securities at the time receivable
upon the exercise of this Debenture) shall have received, or, on or
after the record date fixed for the determination of eligible
stockholders, shall have become entitled to receive:
(A) other or additional stock or other securities or
property (other than cash) by way of dividend;
(B) any cash paid or payable out of capital or paid-in
surplus or surplus created as a result of a revaluation of
property by way of dividend; or
(C) other or additional (or less) stock or other securities
or property (including cash) by way of stock-split, spin-off,
split-off, split-up, reclassification, combination of shares or
similar corporate rearrangement;
(other than additional shares of Common Stock issued to holders of Common Stock
as a stock dividend or stock-split, adjustments in respect of which shall be
covered by the provisions of this paragraph (c)), then in each case the Holder
of this Debenture, upon the conversion hereof as provided in paragraph (a)
hereof, shall be entitled to receive, in lieu of, or in addition to, as the case
may be, the shares theretofore receivable upon the conversion of this Debenture,
the amount of stock or other securities or property (including cash in the cases
referred to in clauses (B) and (C) above) which such Holder would hold on the
date of such exercise if, on the Issuance Date, he, she or it had been the
holder of record of the number of shares of Common Stock of the Company into
which this Debenture is convertible and had thereafter, during the period from
the Issuance Date to and including the date of such conversion, retained such
shares and/or all other or additional (or less) stock or other securities or
property (including cash in the cases referred to in clauses (B) and (C) above)
receivable by him, her or it as aforesaid during such period, giving effect to
all adjustments called for during such period by paragraph (c) and subparagraph
(xii) hereof.
(xii) In case of any reorganization of the Company (or any other
corporation the stock or other securities of which are at the time
deliverable on the conversion of this Debenture) after the date
hereof, or in case, after such date, the Company (or any such other
corporation) shall consolidate with or merge into another corporation
or convey all or substantially all its assets to another corporation,
then and in each such case the Holder of this Debenture, upon the
conversion hereof as provided in paragraph (a) hereof, at any time
after the consummation of such reorganization, consolidation, merger
or conveyance, shall be entitled to receive the stock or other
securities or property to which such Holder would have been entitled
upon such consummation if such Holder had converted this Debenture
immediately prior thereto, all subject to further adjustments as
provided for herein; in each such case, the terms of this Debenture
shall be applicable to the shares of stock or other securities or
property receivable upon the conversion of this Debenture after such
consummation.
(xiii) The Company will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Debenture, but
will at all times in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder hereof
against dilution or other impairment. Without limiting the generality
of the foregoing, the Company will not increase the par value of any
shares of
stock receivable upon the conversion of this Debenture above the
amount payable therefor upon such exercise, and at all times will take
all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable
stock upon the conversion of this Debenture.
(xiv) In each case of an adjustment in the number of shares of
Common Stock or other stock, securities or property receivable on the
conversion of this Debenture, at the request of the Holder of this
Debenture the Company at its expense shall promptly cause independent
public accountants of recognized standing, selected by the Company, to
compute such adjustment in accordance with the terms of this Debenture
and prepare a certificate setting forth such adjustment and showing in
detail the facts upon which such adjustment is based, including a
statement of (A) the consideration received or to be received by the
Company for any additional shares issued or sold or deemed to have
been issued or sold, (B) the number of shares of Common Stock
outstanding or deemed to be outstanding and (C) the Pro Forma Adjusted
Trigger Price. The Company will forthwith mail a copy of each such
certificate to the Holder of this Debenture.
(xv) In case:
(A) the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time
deliverable upon the conversion of this Debenture) for the
purpose of entitling or enabling them to receive any dividend
(other than a cash or stock dividend at the same rate as the rate
of the last cash or stock dividend theretofore paid) or other
distribution, or to exercise any preemptive right pursuant to the
Company's charter, or to receive any right to subscribe for or
purchase any shares of stock of any class or any other
securities, or to receive any other right; or
(B) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the
assets of the Company to another corporation; or
(C) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then, and in each such case, the Company will mail or cause to be mailed to the
Holder of this Debenture a notice specifying, as the case may be, (i) the date
on which a record is to be taken for the purpose of such dividend, distribution
or right, and stating the amount and character of such dividend, distribution or
right, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding up is to
take place, and the times, if any is to be fixed, as of which the holders of
record of Common Stock (or such other stock or securities at the time
deliverable upon the exercise of this Debenture) shall be entitled to
exchange their shares of Common Stock of any class (or such other stock or
securities) for reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up or (iii) the amount and character of the
stock or other securities proposed to be issued or granted, the date of such
proposed issuance or grant and the persons or class of persons to whom such
stock or other securities are to be offered, issued or granted. Such notice
shall be mailed at least thirty (30) days prior to the date therein specified.
(xvi) The Company will at all times reserve and keep available,
solely for issuance and delivery upon the conversion of this Debenture
and other similar Debentures, such shares of Common Stock and other
stock, securities and property as from time to time shall be issuable
upon the exercise of this Debenture and all other similar Debentures
at the time outstanding.
(xvii) Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this
Debenture and (in the case of loss, theft or destruction) upon
delivery of an indemnity agreement in an amount reasonably
satisfactory to it, or (in the case of mutilation) upon surrender and
cancellation thereof, the Company will issue, in lieu thereof, a new
Debenture of like tenor.
(xviii) (A) On or prior to [90 days after date of issuance]
[date], the Company will file a registration statement ("Registration
Statement") with the Securities and Exchange Commission ("SEC")
covering the shares of Common Stock issuable upon conversion of the
Debentures and any Accrued Interest Debentures (and covering such
other securities as the Company shall determine in its sole
discretion) (collectively "Registrable Securities"), and will use its
best efforts to cause the Registration Statement to become effective
on or prior to the ninetieth day after such filing and to keep the
Registration Statement effective until the earlier of (i) seven years
from the date it is declared effective by the SEC, or (ii) the sale of
all of the Registrable Securities.
(B) The following provisions shall be applicable to
the Registration Statement:
(aa) The Company will use its best efforts to cause the
Registration Statement to become effective as promptly as
possible, and if any stop order shall be issued by the SEC
in connection therewith to use its reasonable efforts to
obtain the removal of such order. Following the effective
date of the Registration Statement, the Company shall, upon
the request of the Holder, forthwith supply such reasonable
number of copies of the Registration Statement, preliminary
prospectus and prospectus meeting the requirements of the
Act, and other documents necessary or incidental to a public
offering of the Registrable Securities, as shall be
reasonably requested by the Holder to permit the Holder to
make a public distribution of its, his or her Registrable
Securities; provided, however,
that by accepting this Debenture, the Holder agrees, if
requested by the managing underwriter(s) in connection with
an underwritten public offering of the Company's equity
securities, to enter into a customary agreement with such
managing underwriter(s) not to offer for sale or sell its,
his or her Registrable Securities for up to 180 days after
such offering. The Company will use its reasonable efforts
to qualify the Registrable Securities for sale in such
states as the holder of Registrable Securities shall
reasonably request, provided that no such qualification will
be required in any jurisdiction where, solely as a result
thereof, the Company would be subject to service of general
process or to taxation or qualification as a foreign
corporation doing business in such jurisdiction. The
obligations of the Company hereunder with respect to the
Holder's Registrable Securities are expressly conditioned on
the Holder's furnishing to the Company such appropriate
information concerning the Holder, the Holder's Registrable
Securities and the terms of the Holder's offering of such
Registrable Securities as the Company may reasonably
request.
(bb) The Company shall pay all expenses incurred in
complying with the provisions of this subparagraph (xviii),
including, without limitation, all registration and filing
fees (including all expenses incident to filing with the
National Association of Securities Dealers, Inc.), printing
expenses, fees and disbursements of counsel to the Company,
securities law and blue sky fees and expenses and the
expenses of any regular and special audits incident to or
required by any such registration. All underwriting
discounts and selling commissions applicable to the sales of
the Registrable Securities, and any state or federal
transfer taxes payable with respect to the sales of the
Registrable Securities and all fees and disbursements of
counsel for the Holder, if any, in each case arising in
connection with registration of the Registrable Securities
shall be payable by the Holder.
(cc) In connection with the registration of the
Registrable Securities pursuant to this subparagraph
(xviii), the Company shall indemnify and hold harmless the
Holder, its affiliates, officers, directors, partners,
employees, agents and representatives, each person, if any,
who controls the Holder within the meaning of the Securities
Act of 1933, as amended (the "Securities Act"), or the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), any person deemed to be an underwriter of the
Registrable Securities and any person claiming by or through
any of them (collectively, the "Indemnified Persons") from
and against all losses, claims, damages, expenses or
liabilities (or actions in respect thereof) arising out of
or are based upon any untrue statement of any material fact
contained in the Registration Statement or alleged untrue
statement, under which such securities were registered under
the Securities Act, any
preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise
out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to
make the statements made therein, in light of the
circumstances under which they are made, not misleading, or
any violation by the Company of the Securities Act, the
Exchange Act or state securities or blue sky laws applicable
to the Company and relating to action or inaction required
of the Company in connection with such registration or
qualification under such state securities or blue sky laws;
and will reimburse the Indemnified Persons for any legal or
any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the
Company will not be liable in any such case to any
Indemnified Person to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or omission made in the Registration Statement,
said preliminary prospectus or said final prospectus or said
amendment or supplement or any document incident thereto in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Holder.
(dd) The Holder will indemnify and hold harmless the
Company and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange
Act, each officer of the Company who signs the Registration
Statement and each director of the Company from and against
any and all such losses, claims, damages or liabilities
arising from any untrue statement in, or omission from, the
Registration Statement, any such preliminary or final
prospectus, amendment, or supplement or document incident
thereto if the statement or omission in respect of which
such loss, claim, damage or liability is asserted was made
in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the
Holder for use in connection with the preparation of the
Registration Statement or such prospectus or amendment or
supplement thereof.
(ee) The reimbursements required by clauses (cc) and
(dd) shall be made by periodic payments during the course of
the investigation or defense as and when bills are received
or expenses incurred; provided, however, that to the extent
that an indemnified party receives periodic payments for
legal or other expenses during the course of an
investigation or defense, and such party subsequently
received payments for such expenses from any other parties
to the proceeding, such payments shall be used by the
indemnified party to reimburse the indemnifying party for
such periodic payments. Any party which proposes to assert
the right to be indemnified under clause (cc) or (dd) will,
promptly after receipt of notice
of commencement of any action, suit or proceeding against
such party in respect of which a claim is to be made against
any indemnified party hereunder, notify each such
indemnifying party of the commencement of such action, suit
or proceeding, enclosing a copy of all papers served, but
the failure to so notify such indemnifying party of any such
action, suit or proceeding shall not relieve the
indemnifying party from any obligation which it may have to
any indemnified party hereunder unless and only to the
extent that the indemnifying party is prejudiced by said
lack of notice. In case any such action, suit or proceeding
shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in
and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other
expense, other than reasonable costs of investigation
subsequently incurred by such indemnified party in
connection with the defense thereof. The indemnified party
shall have the right to employ its own counsel in any such
action, but the reasonable fees and expenses of such counsel
shall be at the expense of such indemnified party, when and
as incurred, unless (A) the employment of counsel by such
indemnified party has been authorized by the indemnifying
party, (B) the indemnified party has reasonably concluded
(based on advice of counsel), that there may be legal
defenses available to it that are different from or in
addition to those available to the indemnifying party, (C)
the indemnified party shall have reasonably concluded (based
on advice of counsel) that there may be a conflict of
interest between the indemnifying party and the indemnified
party in the conduct of defense of such action (in which
case the indemnifying party shall not have the right to
direct the defense of such action on behalf of the
indemnified party), or (D) the indemnifying party shall not
in fact have employed counsel to assume the defense of such
action within 15 days after receipt of notice of such
action. An indemnifying party shall not be liable for any
settlement or any action or claim effected without its
consent, which shall not be unreasonably withheld.
(ff) If the indemnification provided for in this
subparagraph (xviii) is unavailable to any indemnified party
hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the
indemnifying
party and indemnified parties in connection with the actions
that resulted in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying
party and indemnified parties shall be determined by
reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state
a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified parties,
and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the
limitations set forth herein, any legal or other fees or
expenses reasonably incurred by such party in connection
with any investigation or proceeding.
(gg) The Company and the Holder agree that it would not
be just and equitable if contribution pursuant to clause
(ff) were determined by pro rata allocation or by any other
method of allocation that does not take account of the
equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding any other provision
hereof, in no event shall the contribution obligation of the
Holder be greater in amount than the excess of (A) the
dollar amount of net proceeds received by the Holder upon
the sale of the securities giving rise to such contribution
obligation over (B) the dollar amount of any damages that
the Holder has otherwise been required to pay by reason of
the untrue or alleged untrue statement or omission or
alleged omission giving rise to such obligation. No person
guilty of fraudulent misrepresentation (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.
(hh) Neither the filing of the Registration Statement
by the Company pursuant to this Agreement nor the making of
any request for prospectuses by the Holder shall impose upon
the Holder any obligation to convert his, her or its
Debentures or to sell his, her or its Registrable
Securities.
(ii) The Holder, upon receipt of notice from the
Company that an event has occurred which requires a
post-effective amendment to the Registration Statement or a
supplement to the prospectus included therein, shall
promptly discontinue the sale of his, her or its Registrable
Securities until the Holder receives a copy of a
supplemented or amended prospectus from the Company, which
the Company shall provide as soon as practicable after such
notice.
(C) In the event (a) the Registration Statement is not filed
by the Company with the SEC on or prior to [the ninetieth day
following the date of issuance hereof] [date], or (b) the Registration
Statement has not been declared effective by the SEC on or prior to
[the 180th day following the date of issuance hereof] [date], the
annual interest rate on the Debentures shall be the rate per annum
("Default Rate") which is 13% increased by one and one-half percent
(1-1/2%) per annum for the first three (3) months immediately
following the expiration of such ninety (90) day period or one hundred
eighty (180) day period, as the case may be, and by an additional
one-half of one percent (1/2%) per annum at the beginning of each
subsequent thirty (30) day period thereafter, until such time as the
requirements of clause (a) or (b) above, as the case may be, have been
satisfied, at which time all increases in the interest rate borne by
the Debentures resulting from the operation of this sentence shall
terminate and the interest rate borne by the Debentures shall revert
to the rate that otherwise would be in effect but for the operation of
this sentence; provided, however, that in no event shall the interest
rate borne by the Debentures exceed seventeen percent (17%) per annum
pursuant to this sentence.
7. Covenants.
(a) Affirmative Covenants: The Company will, and with respect to the
agreements set forth in subsections (i) through (viii) hereof, will cause each
subsidiary to:
(i) with respect to its properties, assets and business, maintain
insurance against loss or damage, to the extent that property, assets and
businesses of similar character are usually so insured by companies
similarly situated and operating like properties, assets or businesses with
responsible insurance companies satisfactory to the Majority Holders said
insurance to indicate the Agent (as defined in the Security Agreement) as
an additional insured;
(ii) duly pay and discharge all taxes or other claims which might
become a lien upon any of its properties except to the extent that such
items are being in good faith appropriately contested;
(iii) maintain, preserve and keep its properties in good repair,
working order and condition, and make all reasonable repairs, replacements,
additions, betterments and improvements thereto;
(iv) conduct its business in substantially the same manner and in
substantially the same fields as such business is now carried on and
conducted;
(v) comply with all statutes, rules and regulations and maintain
its corporate existence;
(vi) provide the Holder with the following financial information:
(A) annually, as soon as available, but in any event within one
hundred twenty (120) days after the last day of each fiscal year,
audited financial statements, including balance sheets as of the last
day of the fiscal year and statements of income and retained earnings
and changes in financial condition for such fiscal year each prepared
in accordance with generally accepted accounting principles,
consistently applied ("GAAP") for the period and prior periods by
independent Certified Public Accountants satisfactory to the Majority
Holders;
(B) as soon as available, but in any event within forty-five (45)
days after the end of each fiscal quarter, internally prepared
financial statements of the Company each prepared in accordance with
GAAP and jobs-in-progress reports for said period and prior periods;
(C) within a reasonable time after a written request therefor,
such other financial data or information as the Holder may reasonably
request from time to time;
(D) at the same time as it delivers the financial statements
required under the provisions of subsections (A) and (B) hereof, a
certificate signed by the president or the chief financial, or
accounting, officer of the Company, to the effect that no Event of
Default hereunder or material default under any other agreement to
which the Company is a party or by which it is bound, or by which any
of its properties or assets may be affected, and no event which, with
the giving of notice or the lapse of time, or both, would constitute
such an Event of Default, has occurred;
(E) on a monthly basis, no later than the tenth (10th) day after
each such month, backlog reports and accounts receivable agings of the
Company;
(vii) permit the Holder to make or cause to be made,
inspections and audits of any books, records and papers of the
Company and of any parent or subsidiary thereof and to make
extracts therefrom at all such reasonable times and as often as
the Holder may reasonably require;
(viii) immediately give notice to the Holder that an Event
of Default has occurred or that an event which, with the giving
of notice or lapse of time, or both, would constitute an Event of
Default, has occurred and specifying the action which the Company
has taken and proposes to take with respect thereto.
(b) Financial Covenants:
(i) At the end of each fiscal quarter, the Company shall
maintain a Tangible Net Worth of (-3,042,322) or greater (as
calculated in accordance with GAAP). For purposes hereof
"Tangible Net Worth" shall mean, at any date, (i) the net book
value of assets (other than patents, patent rights, trademarks,
trade names, franchises, copyrights, licenses, permits, goodwill
and other intangible assets classified as such in accordance with
GAAP) after all appropriate adjustments in accordance with GAAP
(including, without limitation, reserves for doubtful
receivables, obsolescence, depreciation and amortization) plus
(ii) subordinated indebtedness, in each case computed in
accordance with GAAP; and
(ii) At the end of each fiscal quarter, the Company shall
report a net income (gross income less taxes and extraordinary
items) of not less than $1.00.
(c) Negative Covenants: The Company will not, and will not
permit any subsidiary to:
(i) create, incur, assume or suffer to exist any liability
for borrowed money, except (A) indebtedness to the Bank or any
other financial institution constituting "Senior Debt" hereunder;
(B) indebtedness outstanding on the date hereof; (C) indebtedness
represented by the Company's 13% Senior Subordinated Interest
Note (the "Note") (and any replacement Note or Notes issued upon
transfer or exchange of the Note), (D) indebtedness represented
by the Debentures (and any replacement Debenture or Debentures
issued upon transfer or exchange of the Debentures); (E)
indebtedness represented by the Accrued Interest Debentures (and
any replacement Accrued Interest Debenture or Accrued Interest
Debentures issued upon transfer or exchange of the Accrued
Interest Debentures); (F) indebtedness represented by the Class B
Debentures (and any replacement Class B Debenture or Class B
Debentures issued upon transfer or exchange of the Class B
Debentures); (G) indebtedness represented by the Class B Accrued
Interest Debentures (and any replacement Class B Accrued Interest
Debenture or Class B Accrued Interest Debentures issued upon
transfer or exchange of the Class B Accrued Interest Debentures);
and (H) other indebtedness for borrowed money (whether or not
constituting a refinancing of existing indebtedness) so long as
(x) such indebtedness is not secured by collateral securing
repayment of the Debentures, (y) such indebtedness contains
provisions reasonably satisfactory to the Majority Holders
subordinating the payment of principal and interest thereon to
the prior payment of principal and interest on the Debentures,
and (z) the incurrence of which will not cause an Event of
Default, or an event which with notice or the lapse of time or
both would constitute an Event of Default, hereunder
(collectively, "Permitted Indebtedness");
(ii) create, incur, assume or suffer to exist, any mortgage,
pledge, lien or encumbrance of or upon or security interest in,
any of its property or assets now owned or hereafter acquired
except (A) mortgages, liens, pledges and security interests
securing Permitted Indebtedness; (B) other liens, charges and
encumbrances incidental to the conduct of its business or the
ownership of its property and assets which are not incurred in
connection with the borrowing of money or the obtaining of
advances or
credit and which do not materially impair the use thereof in the
operation of its business; (C) liens for taxes or other
governmental charges which are not delinquent or which are being
contested in good faith and for which a reserve shall have been
established in accordance with GAAP; (D) liens granted to secure
purchase money financing of equipment, provided such liens are
limited to the equipment financed; and (E) liens granted to
refinance unencumbered equipment provided such liens are limited
to the equipment refinanced and the incurrence of which will not
cause a default hereunder or in any Senior Debt;
(iii) assume, endorse, be or become liable for or guarantee
the obligations of any other person except by the endorsement of
negotiable instruments for deposit or collection in the ordinary
course of business;
(iv) (A) terminate any pension plan so as to result in any
material liability to The Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA (the
"PBGC"), (B) engage in or permit any person to engage in any
"prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended)
involving any pension plan which would subject the Company to any
material tax, penalty or other liability, (C) incur or suffer to
exist any material "accumulated funding deficiency" (as defined
in Section 302 of ERISA), whether or not waived, involving any
pension plan, or (D) allow or suffer to exist any event or
condition, which presents a material risk of incurring a material
liability to the PBGC by reason of termination of any pension
plan;
(v) amend, supplement or modify the terms of the Subject
Securities or increase the outstanding amount of any Subject
Securities (excluding awards granted under the Plan or under an
incentive compensation plan or arrangement approved by the
Company's Board of Directors or by the Compensation Committee of
the Company's Board of Directors) without the prior consent of
the Majority Holders;
(vi) enter into any merger or consolidation unless the
Company shall be the surviving entity in any such merger or
consolidation, and after giving effect to the transaction no
Event of Default and no event which with the giving of notice or
passage of time or both would constitute an Event of Default
shall have occurred and be continuing, or liquidate, wind-up or
dissolve itself or sell, transfer or lease or otherwise dispose
of all or any substantial part of its assets;
(vii) lend or advance money, credit or property to or invest
in (by capital contribution, loan, purchase or otherwise) any
firm, corporation, or other person except (A) investments in
United States Government obligations and certificates of deposit
of any bank institution with combined capital and surplus of at
least $200,000,000, (B) trade credit, (C) security deposits, or
acquire or otherwise cause any other entity to become a
subsidiary of the Company (as used herein the term "subsidiary"
means any corporation or other organization, whether incorporated
or unincorporated, of
which the Company or any other subsidiary of the Company
beneficially owns a majority of the voting or economic
interests), (D) loans made to Xxxxxx X. Xxxxxxxxxx and Xxxxxx
Deutsch in the aggregate principal amount of $162,950 existing on
the date hereof, and (E) loans made to Xxxxxx X. Xxxxxx and
Xxxxxxx Xxxxxxx in the aggregate amount of $675,000 existing on
the date hereof;
(viii) declare or pay any dividends or distributions on
account of its capital stock or purchase, redeem, retire or
otherwise acquire any of its capital stock or any securities
convertible into, exchangeable for, or giving any person the
right to acquire or otherwise subscribe for, any shares of the
Company's capital stock; provided, however, that so long as no
Event of Default or event which, with the giving of notice, the
lapse of time, or both would constitute an Event of Default
hereunder has occurred and is continuing, the Company may pay
regular quarterly dividends on the Preferred Stock in accordance
with the terms thereof; or
(ix) engage in any transaction with any person or entity who
directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, the
Company (an "Affiliate"), other than director and compensation
arrangements with Affiliates serving as officers and/or directors
of the Company approved by the Company's Board of Directors and
other than transactions with Affiliates entered into in the
ordinary course of business on terms which are at least as
favorable to the Company as those available from unrelated third
parties. As used herein, the term "control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of the Company, whether
through the ownership of voting securities, by contract or
otherwise, and the terms "controlled" and "controlling" have
meanings correlative thereto.
8. Events of Default.
(a) Definition. For the purposes of this Debenture, an Event of
Default hereunder will be deemed to have occurred if:
(i) the Company fails to pay the principal amount of this
Debenture when due (whether upon the Due Date, upon acceleration or
otherwise), whether or not such payment is prohibited by paragraph 4
hereof;
(ii) the Company fails to pay any interest, premium or
penalty on this Debenture when due and such failure has continued for a
period of ten (10) days;
(iii) the Company fails to perform or observe the provisions
set forth in Paragraphs 7(b) or 7(c) hereof;
(iv) the Company fails to perform or observe any provision
contained in this Debenture or the Security Agreement (other than those
specifically covered by the other provisions of this paragraph 8(a)) and,
if such failure is capable of being cured, such failure continues for a
period of 30 days after the Company's receipt of written notice thereof;
(v) the Company shall have failed to pay when due any amount
due and owing under any indebtedness of the Company for borrowed money or
any other default or event of default shall have occurred (and shall have
continued beyond the expiration of any applicable grace period) under any
indebtedness of the Company for borrowed money which would permit the
holder thereof to accelerate the maturity thereof or there shall have been
an acceleration of the stated maturity of any indebtedness of the Company
for borrowed money;
(vi) the Security Agreement shall at any time after its
execution and delivery and for any reason cease to constitute a valid and
perfected lien and security interest in and to the Collateral (as defined
therein) or the Company shall take any position inconsistent therewith or
any of the provisions of the Security Agreement that permit the Holder to
exercise its remedies thereunder cease to be in full force and effect;
(vii) the Company makes an assignment for the benefit of
creditors or admits in writing its inability to pay its debts generally as
they become due; or an order, judgment or decree is entered adjudicating
the Company as bankrupt or insolvent; or any order for relief with respect
to the Company is entered under the Federal Bankruptcy Code; or the Company
petitions or applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of the Company or of any substantial part
of the assets of the Company, or commences any proceeding relating to the
Company under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction
("Insolvency Event or Proceeding"); or any such petition or application is
filed, or any such proceeding is commenced, against the Company and either
(y) the Company by any act indicates its approval thereof, consents thereto
or acquiescence therein or (z) such petition application or proceeding is
not dismissed within 60 days;
(viii) a final judgment which in the aggregate with other
outstanding final judgments against the Company exceeds $250,000 shall be
rendered against the Company and within 90 days after entry thereof, such
judgment is not discharged or execution thereof stayed pending appeal, or
within 90 days after the expiration of such stay, such judgment is not
discharged;
(ix) any representation or warranty made by the Company in
the Purchase Agreement, dated July 29, 1997 between the Company and the
original Holder of this Debenture, the Security Documents (as defined in
such Purchase Agreement), or any other certificate or instrument delivered
in connection therewith shall have been untrue in any material respect when
made; or
(x) the Registration Statement shall not have become
effective [within 270 days after the date hereof] [on or prior to [date]].
(b) Consequences of Events of Default.
(i) If any Event of Default (other than the type described
in subparagraph 8(a)(vii) above) has occurred, the Holder or Holders of
Debentures representing a majority of the aggregate principal amount of
Debentures then outstanding (the "Majority Holders") may demand (by written
notice delivered to the Company) immediate payment of all or any portion of
the outstanding principal amount of the Debentures owed by such Holder or
Holders. If such Majority Holders demand immediate payment of all or any
portion of such Holder's or Holders' Debentures, the Company will, to the
extent permitted under the provisions of paragraph 4 hereof, immediately
pay to such Holder or Holders the principal amount of the Debentures
requested to be paid (plus accrued interest hereon). If an Event of Default
of the type described in subparagraph 8(a)(vii) above has occurred, then
all of the outstanding principal amount of the Debentures shall
automatically be immediately due and payable without any action on the part
of any Holders of the Debentures.
(ii) If an Event of Default has occurred, each Holder of the
Debentures will also have any other rights which such Holder may have
pursuant to applicable law, in each case provided such rights are
consistent with the provisions of paragraph 4 hereof.
9. Amendment and Waiver. Except as otherwise expressly provided
herein, the provisions of this Debenture may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Majority Holders, provided, however, neither the interest rate or principal
amounts payable under the Debentures, the dates on which interest or principal
under the Debentures is due nor the obligations to make payments on the
Debentures on a pro rata basis shall be amended without the prior written
consent of each Holder affected thereby, and further provided, however, that any
amendment or waiver which might in any way adversely affect the holders of
Senior Debt, including, but not limited to, any amendment or waiver affecting
the provisions of paragraph 4 or this paragraph 9 shall require the prior
written consent of each holder of Senior Debt. Any amendment or waiver effected
in accordance with this paragraph 9 shall be binding upon each Holder of this
Debenture and each future Holder of this Debenture.
10. Cancellation. After all principal and accrued interest at any time
owed on this Debenture has been paid in full, this Debenture will be surrendered
to the Company for cancellation and will not be reissued.
11. Place of Payment. Payments of principal and interest are to be
delivered to the Holder at the office of the Company, 00 Xxxxxxx Xxxxx, Xxxxxxx,
Xxx Xxxx 00000, or to such
other address or to the attention of such other Person as specified by prior
written notice to the Company.
12. Waiver of Presentment, Demand and Dishonor. The Company hereby
waives presentment for payment, protest, demand, notice of protest, notice of
non-payment and diligence with respect to this Debenture, and waives and
renounces all rights to the benefit of any statute of limitations or any
moratorium, appraisement, exemption or homestead now provided or that hereafter
may be provided by any federal or applicable state statute, including but not
limited to exemptions provided by or allowed under the Federal Bankruptcy Code,
both as to itself and as to all of its property, whether real or personal,
against the enforcement and collection of the obligations evidenced by this
Debenture and any and all extensions, renewals and modifications hereof.
No failure on the part of the Holder hereof or of any other Debentures
to exercise any right or remedy hereunder with respect to the Company, whether
before or after the happening of an Event of Default, shall constitute a waiver
of any future Event of Default or of any other Event of Default. No failure to
accelerate the debt of the Company evidenced hereby by reason of an Event of
Default or indulgence granted from time to time shall be construed to be a
waiver of the right to insist upon prompt payment thereafter; or shall be deemed
to be a novation of this Debenture or a reinstatement of such debt evidenced
hereby or a waiver of such right of acceleration or any other right, or be
construed so as to preclude the exercise of any right the Holder may have,
whether by the laws of the state governing this Debenture, by agreement or
otherwise; and the Company hereby expressly waives the benefit of any statute or
rule of law or equity that would produce a result contrary to or in conflict
with the foregoing.
13. Usury. The Holder and the Company intend that the obligations
evidenced by this Debenture conform strictly to the applicable usury laws from
time to time in force. All agreements between the Company and the Holder,
whether now existing or hereafter arising and whether oral or written, hereby
are expressly limited so that in no contingency or event whatsoever, whether by
acceleration of maturity hereof or otherwise, shall the amount paid or agreed to
be paid to the Holder, or collected by the Holder, by or on behalf of the
Company for the use, forbearance or detention of the money to be loaned to the
Company hereunder or otherwise, or for the payment or performance of any
covenant or obligation contained herein of the Company to the Holder, or in any
other document evidencing, securing or pertaining to such indebtedness evidenced
hereby, exceed the maximum amount permissible under applicable usury law. If
under any circumstances whatsoever fulfillment of any provision hereof or any
other document, at the time performance of such provisions shall be due, shall
involve transcending the limit of validity prescribed by law, then, ipso facto,
the obligation to be fulfilled shall be reduced to the limit of such validity;
and if under any circumstances the Holder ever shall receive from or on behalf
of the Company an amount deemed interest, by applicable law, which would exceed
the highest lawful rate, such amount that would be excessive interest under
applicable usury laws shall be applied to the reduction of the Company's
principal amount owing hereunder and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of principal and such other
indebtedness, the excess shall be deemed to have been a payment made by mistake
and shall be refunded to the Company or to any other person making such payment
on the Company's behalf.
14. Governing Law. The validity, construction and interpretation of
this Debenture will be governed by the internal laws, but not the law of
conflicts and choices of law, of the State of New York.
IN WITNESS WHEREOF, the Company has executed and delivered this Class
A 13% Convertible Senior Subordinated Pay-in-Kind Debenture this ___ day of
____________, 199__.
LOGIMETRICS, INC.
By: ______________________________
Name: Xxxxxxx X. Brand
Title: Chief Executive Officer
EXHIBIT A
ELECTION TO CONVERT
(All capitalized terms used and not otherwise
defined herein shall have the meanings
assigned to them in the Class A 13% Convertible Senior
Subordinated Pay-in-Kind Debentures)
LogiMetrics, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
TO WHOM IT MAY CONCERN:
The undersigned registered owner of the attached Class A 13%
Convertible Senior Subordinated Pay-in-Kind Debenture hereby irrevocably
exercises the option to convert such Debenture into Common Stock of LogiMetrics,
Inc. in accordance with the terms thereof, and directs that any shares issuable
and deliverable upon the conversion be issued in the name of and delivered to
the undersigned.
[Name of Debentureholder]
Dated: _____________, 199__
EXHIBIT B
FORM OF SERIES G WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND CANNOT BE SOLD OR TRANSFERRED
UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS AN EXEMPTION UNDER SUCH ACT OR
LAWS IS AVAILABLE. THE TRANSFERABILITY OF THESE SECURITIES IS FURTHER SUBJECT TO
THE PROVISIONS OF A PURCHASE AGREEMENT DATED AS OF JULY 29, 1997 AMONG THE
COMPANY AND THE PURCHASERS NAMED THEREIN.
LOGIMETRICS, INC.
Common Stock Purchase Warrant - Series G
LOGIMETRICS, INC. (the "Company"), a Delaware corporation, hereby
certifies that, for value received, [Name of Purchaser], or assigns, is
entitled, subject to the terms set forth below, to purchase from the Company
_____________________ (_____________) fully paid and non-assessable shares of
Common Stock, par value $.01 per share, of the Company (the "Common Stock"), at
a purchase price, subject to the provisions of Paragraph 3 hereof, of fifty
cents ($.50) per share (the "Purchase Price") at any time prior to July 29,
2004. The number and character of such shares are subject to adjustment as
provided below, and the term "Common Stock" shall mean, unless the context
otherwise requires, the stock or other securities or property at the time
deliverable upon the exercise of this Warrant.
1. EXERCISE OF WARRANT. The purchase rights evidenced by this Warrant
shall be exercised by the holder hereof ("Holder") surrendering this Warrant,
with the form of subscription at the end hereof duly executed by such Holder, to
the Company at its office in Bohemia, New York (or such other office as may be
designated by the Company from time to time), accompanied by payment (in cash or
by certified or official bank check). This Warrant may be exercised for less
than the full number of shares of Common Stock at the time called for hereby, in
which case the number of shares receivable upon the exercise of this Warrant as
a whole, and the sum payable upon the exercise of this Warrant as a whole, shall
be proportionately reduced. Upon any such partial exercise, the Company at its
expense will forthwith issue to the Holder hereof a new Warrant or Warrants of
like tenor calling for the number of shares of Common Stock as to which rights
have not been exercised, such Warrant or Warrants to be issued in the name of
the Holder hereof or his nominee.
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable
after the exercise of this Warrant and payment of the Purchase Price, and in any
event within five (5) business days thereafter, the Company, at its expense,
will cause to be issued in the name of and delivered to the Holder hereof a
certificate or certificates for the number of fully paid and non-assessable
shares of Common Stock or other securities or property to which such Holder
shall be entitled upon such exercise, plus, in lieu of any fractional share
interest to which such Holder would otherwise be entitled, cash equal to such
fraction multiplied by the then
current market value of one full share of Common Stock or other securities to
which such Holder shall be so entitled.
3. ADJUSTMENT FOR ISSUE OR SALE OF COMMON STOCK AT LESS THAN PURCHASE
PRICE. In case, at any time or from time to time after the date of issuance of
this Warrant ("Issuance Date"), the Company shall issue or sell shares of its
Common Stock (other than any Common Stock issuable upon the exercise or
conversion of (i) the Company's Class A 13% Senior Subordinated Convertible
Pay-in-Kind Debentures due 1999 (the "Debentures") (and any replacement
Debenture or Debentures issued upon transfer or exchange of the Debentures),
(ii) any additional securities issued in lieu of cash interest otherwise payable
on the Debentures ("Accrued Interest Debentures") (and any replacement Accrued
Interest Debenture or Accrued Interest Debentures issued upon transfer or
exchange of the Accrued Interest Debentures), (iii) the Company's Amended and
Restated Class B 13% Convertible Senior Subordinated Pay-in-Kind Debentures due
1999 (the "Class B Debentures") (and any replacement Class B Debenture or Class
B Debentures issued upon transfer or exchange of the Class B Debentures), (iv)
any additional securities issued in lieu of cash interest otherwise payable on
the Class B Debentures (the "Class B Accrued Interest Debentures") (and any
replacement Class B Accrued Interest Debenture or Class B Accrued Interest
Debentures issued upon transfer or exchange of the Class B Accrued Interest
Debentures), (v) securities outstanding on the date hereof, (vi) awards made
pursuant to the Company's Stock Compensation Program, (vii) awards made pursuant
to any incentive compensation plan or arrangement approved by the Company's
Board of Directors or by the Compensation Committee of the Company's Board of
Directors, (viii) the Company's Series G Warrants, (ix) the Company's Series H
Warrants, or (x) the Company's Series I Warrants) (such securities,
collectively, the "Subject Securities") for a consideration per share less than
fifty-two cents ($.52) per share (the "Trigger Price") (or, if a Pro Forma
Adjusted Trigger Price shall be in effect as provided below in this Paragraph 3,
then less than such Pro Forma Adjusted Trigger Price per share), then and in
each such case the Holder of this Warrant, upon the exercise hereof as provided
in Paragraph 1 hereof, shall be entitled to receive, in lieu of the shares of
Common Stock theretofore receivable upon the exercise of this Warrant, a number
of shares of Common Stock determined by (a) dividing the Trigger Price by a Pro
Forma Adjusted Trigger Price per share to be computed as provided below in this
Paragraph 3, and (b) multiplying the resulting quotient by the number of shares
of Common Stock called for on the face of this Warrant. A Pro Forma Adjusted
Trigger Price per share shall be the price computed (to the nearest cent, a
fraction of half cent or more being considered a full cent):
by dividing (i) the sum of (x) the result obtained by
multiplying the number of shares of Common Stock of the
Company outstanding immediately prior to such issue or
sale by the Trigger Price (or, if a Pro Forma Adjusted
Trigger Price shall be in effect, by such Price), and
(y) the consideration, if any, received by the Company
upon such issue or sale, by (ii) the number of shares
of Common Stock of the Company outstanding immediately
after such issue or sale.
For the purpose of this Paragraph 3:
3.1. Stock Splits, Dividends, etc., in Common Stock or Convertible
Securities. In case the Company splits its Common Stock or shall declare any
dividend, or make any other distribution, upon any stock of the Company of any
class payable in Common Stock, or in any stock or other securities directly or
indirectly convertible into or exchangeable for Common Stock (any such stock or
other securities being hereinafter called "Convertible Securities"), such split,
declaration or distribution shall be deemed to be an issue or sale (as of the
record date for such split, dividend or other distribution), without
consideration, of such Common Stock or such Convertible Securities, as the case
may be.
3.2. Issuance or Sale of Convertible Securities. In case the Company
shall issue or sell any Convertible Securities other than the Subject
Securities, there shall be determined the price per share for which Common Stock
is issuable upon the conversion or exchange thereof, such determination to be
made by dividing (a) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof, by (b) the maximum number of
shares of Common Stock of the Company issuable upon the conversion or exchange
of all such Convertible Securities.
If the price per share so determined shall be less than the Trigger
Price (or, if a Pro Forma Adjusted Trigger Price shall be in effect, less than
such Price) as of the date of such issue or sale, then such issue or sale shall
be deemed to be an issue or sale for cash (as of the date of issue or sale of
such Convertible Securities) of such maximum number of shares of Common Stock at
the price per share so determined, provided that, if such Convertible Securities
shall by their terms provide for an increase or increases, with the passage of
time, in the amount of additional consideration, if any, payable to the Company,
or in the rate of exchange, upon the conversion or exchange thereof, the Pro
Forma Adjusted Trigger Price per share shall, forthwith upon any such increase
becoming effective, be readjusted to reflect the same, and provided, further,
that upon the expiration of such rights of conversion or exchange of such
Convertible Securities, if any thereof shall not have been exercised, the Pro
Forma Adjusted Trigger Price per share shall forthwith be readjusted and
thereafter be the price which it would have been had an adjustment been made on
the basis that the only shares of Common Stock so issued or sold were those
issued or sold upon the conversion or exchange of such Convertible Securities,
and that they were issued or sold for the consideration actually received by the
Company upon such conversion or exchange, plus the consideration, if any,
actually received by the Company for the issue or sale of all such Convertible
Securities which shall have been converted or exchanged.
3.3. Grant of Rights or Options for Common Stock. In case the Company
shall grant any rights or options to subscribe for, purchase or otherwise
acquire Common Stock of any class other than the Subject Securities, there shall
be determined the price per share for which Common Stock is issuable upon the
exercise of such rights or options, such determination to be
made by dividing (a) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or options, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of such rights or options, by (b) the maximum number
of shares of Common Stock issuable upon the exercise of such rights or options.
If the price per share so determined shall be less than the Trigger
Price (or, if a Pro Forma Adjusted Trigger Price shall be in effect, less than
such Price) as of the date of such issue or sale, then the granting of such
rights or options shall be deemed to be an issue or sale for cash (as of the
date of the granting of such rights or options) of such maximum number of shares
of Common Stock at the price per share so determined, provided that, if such
rights or options shall by their terms provide for an increase or increases,
with the passage of time, in the amount of additional consideration, if any,
payable to the Company upon the exercise thereof, the Pro Forma Adjusted Trigger
Price per share shall, forthwith upon any such increase becoming effective, be
readjusted to reflect the same, and provided, further, that upon the expiration
of such rights or options, if any thereof shall not have been exercised, the Pro
Forma Adjusted Trigger Price per share shall forthwith be readjusted and
thereafter be the price which it would have been had an adjustment been made on
the basis that the only shares of Common Stock so issued or sold were those
issued or sold upon the exercise of such rights or options and that they were
issued or sold for the consideration actually received by the Company upon such
exercise, plus the consideration, if any, actually received by the Company for
the granting of all such rights or options, whether or not exercised.
3.4. Grant of Rights or Options for Convertible Securities. In case
the Company shall grant any rights or options to subscribe for, purchase or
otherwise acquire Convertible Securities other than the Subject Securities, such
Convertible Securities shall be deemed, for the purposes of subparagraph 3.2.
above, to have been issued or sold for the total amount received or receivable
by the Company as consideration for the granting of such rights or options plus
the minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of such rights or options, provided that, upon the
expiration of such rights or options, if any thereof shall not have been
exercised, the Pro Forma Adjusted Trigger Price per share shall forthwith be
readjusted and thereafter be the price which it would have been had an
adjustment been made upon the basis that the only Convertible Securities so
issued or sold were those issued or sold upon the exercise of such rights or
options and that they were issued or sold for the consideration actually
received by the Company upon such exercise, plus the consideration, if any,
actually received by the Company for the granting of all such rights or options,
whether or not exercised.
3.5. Dilution in Case of Other Stock or Securities. In case any shares
of stock or other securities, other than Common Stock of the Company, shall at
any time be receivable upon the exercise of this Warrant, and in case any
additional shares of such stock or any additional such securities (or any stock
or other securities convertible into or exchangeable for any such stock or
securities) shall be issued or sold for a consideration per share such as to
dilute the purchase
rights evidenced by this Warrant, then and in each such case the Pro Forma
Adjusted Trigger Price per share shall forthwith be adjusted, substantially in
the manner provided for above in this Paragraph 3, so as to protect the Holder
of this Warrant against the effect of such dilution.
3.6. Expenses, etc., Deducted. In case any shares of Common Stock or
Convertible Securities or any rights or options to subscribe for, purchase or
otherwise acquire any Common Stock or Convertible Securities shall be issued or
sold for cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor, after deducting any expenses incurred
and any underwriting or similar commissions, compensation or concessions paid or
allowed by the Company in connection with such issue or sale.
3.7. Determination of Consideration. In case any shares of Common
Stock or Convertible Securities or any rights or options to subscribe for,
purchase or otherwise acquire any Common Stock or Convertible Securities shall
be issued or sold for a consideration other than cash (or a consideration which
includes cash and other assets) then, for the purpose of this Paragraph 3, the
Board of Directors of the Company shall promptly determine the fair value of
such consideration, and such Common Stock, Convertible Securities, rights or
options shall be deemed to have been issued or sold on the date of such
determination in good faith. Such value shall not be more than the amount at
which such consideration is recorded in the books of the Company for accounting
purposes except in the case of an acquisition accounted for on a pooling of
interest basis. In case any Common Stock or Convertible Securities or any rights
or options to subscribe for, purchase or otherwise acquire any Common Stock or
Convertible Securities shall be issued or sold together with other stock or
securities or other assets of the Company for a consideration which covers both,
the Board of Directors of the Company shall promptly determine in good faith
what part of the consideration so received is to be deemed to be the
consideration for the issue or sale of such Common Stock or Convertible
Securities or such rights or options.
The Company covenants and agrees that, should any determination of
fair value of consideration or of allocation of consideration be made by the
Board of Directors of the Company, pursuant to this subparagraph 3.7, it will,
not less than seven (7) days after any and each such determination, deliver to
the Holder of this Warrant a certificate signed by the President or a Vice
President and the Treasurer or an Assistant Treasurer of the Company reciting
such value as thus determined and setting forth the nature of the transaction
for which such determination was required to be made, the nature of any
consideration, other than cash, for which Common Stock, Convertible Securities,
rights or options have been or are to be issued, the basis for its valuation,
the number of shares of Common Stock which have been or are to be issued, and a
description of any Convertible Securities, rights or options which have been or
are to be issued, including their number, amount and terms.
3.8. Record Date Deemed Issue Date. In case the Company shall take a
record of the Holders of shares of its stock of any class for the purpose of
entitling them (a) to receive a dividend or a distribution payable in Common
Stock or in Convertible Securities, or (b) to
subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the Common Stock issued or sold or deemed to have been issued or sold
upon the declaration of such dividend or the making of such other distribution,
or the date of the granting of such rights of subscription, purchase or other
acquisition, as the case may be.
3.9. Shares Considered Outstanding. The number of shares of Common
Stock outstanding at any given time shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock, but
shall exclude shares in the treasury of the Company.
3.10. Duration of Pro Forma Adjusted Trigger Price. Following each
computation or readjustment of a Pro Forma Adjusted Trigger Price as provided in
this Paragraph 3, the newly computed or adjusted Pro Forma Adjusted Trigger
Price shall remain in effect until a further computation or readjustment thereof
is required by this Paragraph 3.
4. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY, ETC.;
RECLASSIFICATIONS, ETC. In case at any time or from time to time after the
Issuance Date the Holders of the Common Stock of the Company of any class (or
any other shares of stock or other securities at the time receivable upon the
exercise of this Warrant) shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to receive:
(a) other or additional stock or other securities or property (other
than cash) by way of dividend;
(b) any cash paid or payable out of capital or paid-in surplus or
surplus created as a result of a revaluation of property by way
of dividend; or
(c) other or additional (or less) stock or other securities or
property (including cash) by way of stock-split, spin-off,
split-off, split-up, reclassification, combination of shares or
similar corporate rearrangement;
(other than additional shares of Common Stock issued to holders of Common Stock
as a stock dividend or stock-split, adjustments in respect of which shall be
covered by the provisions of Paragraph 3 hereof), then in each case the Holder
of this Warrant, upon the exercise hereof as provided in Paragraph 1 hereof,
shall be entitled to receive, in lieu of, or in addition to, as the case may be,
the shares theretofore receivable upon the exercise of this Warrant, the amount
of stock or other securities or property (including cash in the cases referred
to in clauses (b) and (c) above) which such Holder would hold on the date of
such exercise if, on the Issuance Date, he had been the holder of record of the
number of shares of Common Stock of the Company called for on the face of this
Warrant and had thereafter, during the period from the Issuance Date to and
including the date of such exercise, retained such shares and/or all other or
additional (or
less) stock or other securities or property (including cash in the cases
referred to in clauses (b) and (c) above) receivable by him as aforesaid during
such period, giving effect to all adjustments called for during such period by
Paragraphs 3 and 5 hereof.
5. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case
of any reorganization of the Company (or any other corporation the stock or
other securities of which are at the time deliverable on the exercise of this
Warrant) after the date hereof, or in case, after such date, the Company (or any
such other corporation) shall consolidate with or merge into another corporation
or convey all or substantially all its assets to another corporation, then and
in each such case the Holder of this Warrant, upon the exercise hereof as
provided in Paragraph 1 hereof, at any time after the consummation of such
reorganization, consolidation, merger or conveyance, shall be entitled to
receive the stock or other securities or property to which such Holder would
have been entitled upon such consummation if such Holder had exercised this
Warrant immediately prior thereto, all subject to further adjustments as
provided in Paragraphs 3 and 4 hereof; in each such case, the terms of this
Warrant shall be applicable to the shares of stock or other securities or
property receivable upon the exercise of this Warrant after such consummation.
6. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of
its charter or through reorganization, consolidation, merger, dissolution, sale
of assets or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Holder hereof against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the par value of any
shares of stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and at all times will take all such action
as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable stock upon the exercise of this
Warrant.
7. ACCOUNTANTS' CERTIFICATE AS TO ADJUSTMENTS. In each case of an
adjustment in the number of shares of Common Stock or other stock, securities or
property receivable on the exercise of this Warrant, at the request of the
Holder of this Warrant the Company at its expense shall promptly cause
independent public accountants of recognized standing, selected by the Company,
to compute such adjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment and showing in detail the
facts upon which such adjustment is based, including a statement of (a) the
consideration received or to be received by the Company for any additional
shares issued or sold or deemed to have been issued or sold, (b) the number of
shares of Common Stock outstanding or deemed to be outstanding and (c) the Pro
Forma Adjusted Trigger Price. The Company will forthwith mail a copy of each
such certificate to the Holder of this Warrant.
8. NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the Holders of its Common
Stock (or other stock or securities at the time deliverable upon
the exercise of this Warrant) for the purpose of entitling or
enabling them to receive any dividend (other than a cash or stock
dividend at the same rate as the rate of the last cash or stock
dividend theretofore paid) or other distribution, or to exercise
any preemptive right pursuant to the Company's charter, or to
receive any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any
other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the
assets of the Company to another corporation; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then, and in each such case, the Company will mail or cause to be mailed to the
Holder of this Warrant a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding up is to
take place, and the times, if any is to be fixed, as of which the holders of
record of Common Stock (or such other stock or securities at the time
deliverable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock of any class (or such other stock or securities)
for reclassification, consolidation, merger, conveyance, dissolution,
liquidation or winding up or (iii) the amount and character of the stock or
other securities proposed to be issued or granted, the date of such proposed
issuance or grant and the persons or class of persons to whom such stock or
other securities are to be offered, issued or granted. Such notice shall be
mailed at least thirty (30) days prior to the date therein specified.
9. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The
Company will at all times reserve and keep available, solely for issuance and
delivery upon the exercise of this Warrant and other similar Warrants, such
shares of Common Stock and other stock, securities and property as from time to
time shall be issuable upon the exercise of this Warrant and all other similar
Warrants at the time outstanding.
10. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement in an amount reasonably satisfactory to it, or (in the case
of mutilation) upon surrender and cancellation thereof, the Company will issue,
in lieu thereof, a new Warrant of like tenor.
11. REMEDIES. The Company stipulates that the remedies at law of the
Holder of this Warrant in the event of any default by the Company in its
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that the same may be specifically enforced.
12. NEGOTIABILITY, ETC. This Warrant is issued upon the following
terms, to all of which each taker or owner hereof consents and agrees:
(a) Title to this warrant may be transferred by endorsement (by the
Holder hereof executing the form of assignment at the end hereof
including guaranty of signature) and delivery in the same manner
as in the case of a negotiable instrument transferable by
endorsement and delivery.
(b) Any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is
granted power to transfer absolute title hereto by endorsement
and delivery hereof to a bona fide purchaser hereof for value;
each prior taker or owner waives and renounces all of his
equities or rights in this Warrant in favor of every such bona
fide purchaser, and every such bona fide purchaser shall acquire
title hereto and to all rights represented hereby.
(c) Until this Warrant is transferred on the books of the Company,
the Company may treat the registered Holder of this Warrant as
the absolute owner hereof for all purposes without being affected
by any notice to the contrary.
13. SUBDIVISION OF RIGHTS. This Warrant (as well as any new warrants
issued pursuant to the provisions of this paragraph) is exchangeable, upon the
surrender hereof by the Holder hereof, at the principal office of the Company
for any number of new warrants of like tenor and date representing in the
aggregate the right to subscribe for and purchase the number of shares of Common
Stock of the Company which may be subscribed for and purchased hereunder.
14. REGISTRATION RIGHTS.
a. Registration. On or prior to October 27, 1997, the Company
will file a registration statement ("Registration Statement") with the
Securities and Exchange Commission ("SEC") covering (x) the Warrants, and (y)
the shares of Common Stock issuable upon exercise of the Warrants (and covering
such other securities as the Company shall determine in its sole discretion)
(collectively "Registrable Securities"), and will use its best efforts to cause
the Registration Statement to become effective on or prior to the ninetieth day
after such filing and to keep the Registration Statement effective until the
earlier of (i) seven years from the date it is declared effective by the SEC, or
(ii) the sale of all of the Registrable Securities.
b. Additional Terms. Except as otherwise expressly stated herein,
the following provisions shall be applicable to the Registration Statement:
(i) The Company will use its best efforts to cause the
Registration Statement to become effective as promptly as possible, and if
any stop order shall be issued by the SEC in connection therewith to use
its reasonable efforts to obtain the removal of such order. Following the
effective date of the Registration Statement, the Company shall, upon the
request of the Holder, forthwith supply such reasonable number of copies of
the Registration Statement, preliminary prospectus and prospectus meeting
the requirements of the Securities Act of 1933, as amended (the "Securities
Act"), and other documents necessary or incidental to a public offering of
the Registrable Securities, as shall be reasonably requested by the Holder
to permit the Holder to make a public distribution of its, his or her
Registrable Securities; provided, however, that by accepting this Warrant,
the Holder agrees, if requested by the managing underwriter(s) in
connection with an underwritten public offering of the Company's equity
securities, to enter into a customary agreement with such managing
underwriter(s) not to offer for sale or sell its, his or her Registrable
Securities for up to 180 days after such offering.. The Company will use
its reasonable efforts to qualify the Registrable Securities for sale in
such states as the Holder of Registrable Securities shall reasonably
request, provided that no such qualification will be required in any
jurisdiction where, solely as a result thereof, the Company would be
subject to service of general process or to taxation or qualification as a
foreign corporation doing business in such jurisdiction. The obligations of
the Company hereunder with respect to the Holder's Registrable Securities
are expressly conditioned on the Holder's furnishing to the Company such
appropriate information concerning the Holder, the Holder's Registrable
Securities and the terms of the Holder's offering of such Registrable
Securities as the Company may reasonably request.
(ii) The Company shall pay all expenses incurred in complying
with the provisions of this Paragraph 14, including, without limitation,
all registration and filing fees (including all expenses incident to filing
with the National Association of Securities Dealers, Inc.), printing
expenses, fees and disbursements of counsel to the Company, securities law
and blue sky fees and expenses and the expenses of any regular and special
audits incident to or required by any such registration. All underwriting
discounts and selling commissions applicable to the sales of the
Registrable Securities, and any state or federal transfer taxes payable
with respect to the sales of the Registrable Securities and all fees and
disbursements of counsel for the Holder, if any, in each case arising in
connection with registration of the Registrable Securities shall be payable
by the Holder.
(iii) In connection with the registration of the Registrable
Securities pursuant to this Paragraph 14, the Company shall indemnify and
hold harmless the Holder, its affiliates, officers, directors, partners,
employees, agents and representatives, each person, if any, who controls
the Holder within the meaning of the Securities Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), any person
deemed to be an underwriter of the Registrable Securities and any person
claiming by or through any of them (collectively, the "Indemnified
Persons") from and against all losses, claims, damages, expenses or
liabilities (or actions in respect thereof) arising out of or are based
upon any untrue statement of any material fact contained in the
Registration Statement or alleged untrue statement, under which such
securities were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereto, or arise out of or are based upon the omission to state
therein a material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they
are made, not misleading, or any violation by the Company of the Securities
Act, the Exchange Act or state securities or blue sky laws applicable to
the Company and relating to action or inaction required of the Company in
connection with such registration or qualification under such state
securities or blue sky laws; and will reimburse the Indemnified Persons for
any legal or any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any such
case to any Indemnified Person to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
omission made in the Registration Statement, said preliminary prospectus or
said final prospectus or said amendment or supplement or any document
incident thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Holder.
(iv) The Holder will indemnify and hold harmless the Company and
each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, each officer of the Company who signs
the Registration Statement and each director of the Company from and
against any and all such losses, claims, damages or liabilities arising
from any untrue statement in, or omission from, the Registration Statement,
any such preliminary or final prospectus, amendment, or supplement or
document incident thereto if the statement or omission in respect of which
such loss, claim, damage or liability is asserted was made in reliance upon
and in conformity with information furnished in writing to the Company by
or on behalf of the Holder for use in connection with the preparation of
the Registration Statement or such prospectus or amendment or supplement
thereof.
(v) The reimbursements required by clauses (iii) and (iv) shall
be made by periodic payments during the course of the investigation or
defense as and when bills are received or expenses incurred; provided,
however, that to the extent that an indemnified party receives periodic
payments for legal or other expenses during the course of an investigation
or defense, and such party subsequently received payments for such expenses
from any other parties to the proceeding, such payments shall be used by
the indemnified party to reimburse the indemnifying party for such periodic
payments. Any party which proposes to assert the right to be indemnified
under clause (iii) or (iv) will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against any indemnified party
hereunder, notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served, but the
failure to so notify such indemnifying party of any such action, suit or
proceeding
shall not relieve the indemnifying party from any obligation which it may
have to any indemnified party hereunder unless and only to the extent that
the indemnifying party is prejudiced by said lack of notice. In case any
such action, suit or proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expense, other than reasonable
costs of investigation subsequently incurred by such indemnified party in
connection with the defense thereof. The indemnified party shall have the
right to employ its own counsel in any such action, but the reasonable fees
and expenses of such counsel shall be at the expense of such indemnified
party, when and as incurred, unless (A) the employment of counsel by such
indemnified party has been authorized by the indemnifying party, (B) the
indemnified party has reasonably concluded (based on advice of counsel),
that there may be legal defenses available to it that are different from or
in addition to those available to the indemnifying party, (C) the
indemnified party shall have reasonably concluded (based on advice of
counsel) that there may be a conflict of interest between the indemnifying
party and the indemnified party in the conduct of defense of such action
(in which case the indemnifying party shall not have the right to direct
the defense of such action on behalf of the indemnified party), or (D) the
indemnifying party shall not in fact have employed counsel to assume the
defense of such action within 15 days after receipt of notice of such
action. An indemnifying party shall not be liable for any settlement or any
action or claim effected without its consent, which shall not be
unreasonably withheld.
(vi) If the indemnification provided for in this Paragraph 14 is
unavailable to any indemnified party hereunder in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified parties in connection with the actions
that resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified parties,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable
by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the
limitations set forth herein, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
(vii) The Company and the Holder agree that it would not be just
and equitable if contribution pursuant to clause (vi) were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding any other provision hereof, in no
event shall the contribution obligation of the Holder be greater in amount
than the excess of (A) the dollar amount of proceeds received by the Holder
upon the sale of the securities giving rise to such contribution obligation
over (B) the dollar amount of any damages that the Holder has otherwise
been required to pay by reason of the untrue or alleged untrue statement or
omission or alleged omission giving rise to such obligation. No person
guilty of fraudulent misrepresentation (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.
(viii) Neither the filing of the Registration Statement by the
Company pursuant to this Agreement nor the making of any request for
prospectuses by the Holder shall impose upon the Holder any obligation to
exercise his, her or its Warrants or to sell his, her or its Registrable
Securities.
(ix) The Holder, upon receipt of notice from the Company that an
event has occurred which requires a post-effective amendment to the
Registration Statement or a supplement to the prospectus included therein,
shall promptly discontinue the sale of his, her or its Registrable
Securities until the Holder receives a copy of a supplemented or amended
prospectus from the Company, which the Company shall provide as soon as
practicable after such notice.
15. MAILING OF NOTICES, ETC. All notices, requests, claims, demands,
waivers and other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand, when delivered by
courier, three days after being deposited in the mail (registered or certified
mail, postage prepaid, return receipt requested), or when received by facsimile
transmission upon receipt of a confirmed transmission report, as follows:
If to the Company: 00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Executive Officer
and if to the Holder of this Warrant to the address furnished to the Company in
writing by the last Holder of this Warrant who shall have furnished an address
to the Company in writing. Either the Company or the Holder of this Warrant, by
notice given to the other parties hereto in accordance with this Section 15, may
change the address or facsimile transmission number to which such notice or
other communications are to be sent to such party.
16. HEADINGS, ETC. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect the meaning hereof.
17. CHANGE, WAIVER, ETC. Neither this Warrant nor any term hereof may
be changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
18. GOVERNING LAW. This Warrant shall be construed and enforced in
accordance with the laws of the State of New York.
LOGIMETRICS, INC.
By:
Dated: [date of issuance]
Attest:
[To be signed only upon exercise of Warrant]
To LOGIMETRICS, INC.:
The undersigned, the Holder of the within Series G Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, _____________ shares of Common Stock of
LOGIMETRICS, INC. and herewith makes payment of $____________ therefor, and
requests that the certificates for such shares be issued in the name of, and be
delivered to, ___________________-, whose address is _______________________.
Dated:
(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant)
Address:
[To be signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ______________________ the right represented by the within
Series G Warrant to purchase the ___________ shares of the Common Stock of
LOGIMETRICS, INC. to which the within Series G Warrant relates, and appoints
________________________ attorney to transfer said right on the books of
LOGIMETRICS, INC. with full power of substitution in the premises.
Dated:
(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant)
Address:
In the presence of
EXHIBIT C
FORM OF SERIES H WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND CANNOT BE SOLD OR TRANSFERRED
UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS AN EXEMPTION UNDER SUCH ACT OR
LAWS IS AVAILABLE. THE TRANSFERABILITY OF THESE SECURITIES IS FURTHER SUBJECT TO
THE PROVISIONS OF A PURCHASE AGREEMENT DATED AS OF JULY 29, 1997 AMONG THE
COMPANY AND THE PURCHASERS NAMED THEREIN.
LOGIMETRICS, INC.
Common Stock Purchase Warrant - Series H
LOGIMETRICS, INC. (the "Company"), a Delaware corporation, hereby
certifies that, for value received, [Name of Purchaser], or assigns, is
entitled, subject to the terms set forth below, to purchase from the Company
_______________________ (____________) fully paid and non-assessable shares of
Common Stock, par value $.01 per share, of the Company (the "Common Stock"), at
a purchase price, subject to the provisions of Paragraph 3 hereof, of sixty
cents ($.60) per share (the "Purchase Price") at any time prior to July 29,
2004. The number and character of such shares are subject to adjustment as
provided below, and the term "Common Stock" shall mean, unless the context
otherwise requires, the stock or other securities or property at the time
deliverable upon the exercise of this Warrant.
1. EXERCISE OF WARRANT. The purchase rights evidenced by this Warrant
shall be exercised by the holder hereof ("Holder") surrendering this Warrant,
with the form of subscription at the end hereof duly executed by such Holder, to
the Company at its office in Bohemia, New York (or such other office as may be
designated by the Company from time to time), accompanied by payment (in cash or
by certified or official bank check). This Warrant may be exercised for less
than the full number of shares of Common Stock at the time called for hereby, in
which case the number of shares receivable upon the exercise of this Warrant as
a whole, and the sum payable upon the exercise of this Warrant as a whole, shall
be proportionately reduced. Upon any such partial exercise, the Company at its
expense will forthwith issue to the Holder hereof a new Warrant or Warrants of
like tenor calling for the number of shares of Common Stock as to which rights
have not been exercised, such Warrant or Warrants to be issued in the name of
the Holder hereof or his nominee.
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable
after the exercise of this Warrant and payment of the Purchase Price, and in any
event within five (5) business days thereafter, the Company, at its expense,
will cause to be issued in the name of and delivered to the Holder hereof a
certificate or certificates for the number of fully paid and non-assessable
shares of Common Stock or other securities or property to which such Holder
shall be entitled upon such exercise, plus, in lieu of any fractional share
interest to which such Holder would otherwise be entitled, cash equal to such
fraction multiplied by the then
current market value of one full share of Common Stock or other securities to
which such Holder shall be so entitled.
3. ADJUSTMENT FOR ISSUE OR SALE OF COMMON STOCK AT LESS THAN PURCHASE
PRICE. In case, at any time or from time to time after the date of issuance of
this Warrant ("Issuance Date"), the Company shall issue or sell shares of its
Common Stock (other than any Common Stock issuable upon the exercise or
conversion of (i) the Company's Class A 13% Senior Subordinated Convertible
Pay-in-Kind Debentures due 1999 (the "Debentures") (and any replacement
Debenture or Debentures issued upon transfer or exchange of the Debentures),
(ii) any additional securities issued in lieu of cash interest otherwise payable
on the Debentures ("Accrued Interest Debentures") (and any replacement Accrued
Interest Debenture or Accrued Interest Debentures issued upon transfer or
exchange of the Accrued Interest Debentures), (iii) the Company's Amended and
Restated Class B 13% Convertible Senior Subordinated Pay-in-Kind Debentures due
1999 (the "Class B Debentures") (and any replacement Class B Debenture or Class
B Debentures issued upon transfer or exchange of the Class B Debentures), (iv)
any additional securities issued in lieu of cash interest otherwise payable on
the Class B Debentures (the "Class B Accrued Interest Debentures") (and any
replacement Class B Accrued Interest Debenture or Class B Accrued Interest
Debentures issued upon transfer or exchange of the Class B Accrued Interest
Debentures), (v) securities outstanding on the date hereof, (vi) awards made
pursuant to the Company's Stock Compensation Program, (vii) awards made pursuant
to any incentive compensation plan or arrangement approved by the Company's
Board of Directors or by the Compensation Committee of the Company's Board of
Directors, (viii) the Company's Series G Warrants, (ix) the Company's Series H
Warrants, or (x) the Company's Series I Warrants) (such securities,
collectively, the "Subject Securities") for a consideration per share less than
fifty-two cents ($.52) per share (the "Trigger Price") (or, if a Pro Forma
Adjusted Trigger Price shall be in effect as provided below in this Paragraph 3,
then less than such Pro Forma Adjusted Trigger Price per share), then and in
each such case the Holder of this Warrant, upon the exercise hereof as provided
in Paragraph 1 hereof, shall be entitled to receive, in lieu of the shares of
Common Stock theretofore receivable upon the exercise of this Warrant, a number
of shares of Common Stock determined by (a) dividing the Trigger Price by a Pro
Forma Adjusted Trigger Price per share to be computed as provided below in this
Paragraph 3, and (b) multiplying the resulting quotient by the number of shares
of Common Stock called for on the face of this Warrant. A Pro Forma Adjusted
Trigger Price per share shall be the price computed (to the nearest cent, a
fraction of half cent or more being considered a full cent):
by dividing (i) the sum of (x) the result obtained by
multiplying the number of shares of Common Stock of the
Company outstanding immediately prior to such issue or
sale by the Trigger Price (or, if a Pro Forma Adjusted
Trigger Price shall be in effect, by such Price), and
(y) the consideration, if any, received by the Company
upon such issue or sale, by (ii) the number of shares
of Common Stock of the Company outstanding immediately
after such issue or sale.
For the purpose of this Paragraph 3:
3.1. Stock Splits, Dividends, etc., in Common Stock or Convertible
Securities. In case the Company splits its Common Stock or shall declare any
dividend, or make any other distribution, upon any stock of the Company of any
class payable in Common Stock, or in any stock or other securities directly or
indirectly convertible into or exchangeable for Common Stock (any such stock or
other securities being hereinafter called "Convertible Securities"), such split,
declaration or distribution shall be deemed to be an issue or sale (as of the
record date for such split, dividend or other distribution), without
consideration, of such Common Stock or such Convertible Securities, as the case
may be.
3.2. Issuance or Sale of Convertible Securities. In case the Company
shall issue or sell any Convertible Securities other than the Subject
Securities, there shall be determined the price per share for which Common Stock
is issuable upon the conversion or exchange thereof, such determination to be
made by dividing (a) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof, by (b) the maximum number of
shares of Common Stock of the Company issuable upon the conversion or exchange
of all such Convertible Securities.
If the price per share so determined shall be less than the Trigger
Price (or, if a Pro Forma Adjusted Trigger Price shall be in effect, less than
such Price) as of the date of such issue or sale, then such issue or sale shall
be deemed to be an issue or sale for cash (as of the date of issue or sale of
such Convertible Securities) of such maximum number of shares of Common Stock at
the price per share so determined, provided that, if such Convertible Securities
shall by their terms provide for an increase or increases, with the passage of
time, in the amount of additional consideration, if any, payable to the Company,
or in the rate of exchange, upon the conversion or exchange thereof, the Pro
Forma Adjusted Trigger Price per share shall, forthwith upon any such increase
becoming effective, be readjusted to reflect the same, and provided, further,
that upon the expiration of such rights of conversion or exchange of such
Convertible Securities, if any thereof shall not have been exercised, the Pro
Forma Adjusted Trigger Price per share shall forthwith be readjusted and
thereafter be the price which it would have been had an adjustment been made on
the basis that the only shares of Common Stock so issued or sold were those
issued or sold upon the conversion or exchange of such Convertible Securities,
and that they were issued or sold for the consideration actually received by the
Company upon such conversion or exchange, plus the consideration, if any,
actually received by the Company for the issue or sale of all such Convertible
Securities which shall have been converted or exchanged.
3.3. Grant of Rights or Options for Common Stock. In case the Company
shall grant any rights or options to subscribe for, purchase or otherwise
acquire Common Stock of any class other than the Subject Securities, there shall
be determined the price per share for which Common Stock is issuable upon the
exercise of such rights or options, such determination to be
made by dividing (a) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or options, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of such rights or options, by (b) the maximum number
of shares of Common Stock issuable upon the exercise of such rights or options.
If the price per share so determined shall be less than the Trigger
Price (or, if a Pro Forma Adjusted Trigger Price shall be in effect, less than
such Price) as of the date of such issue or sale, then the granting of such
rights or options shall be deemed to be an issue or sale for cash (as of the
date of the granting of such rights or options) of such maximum number of shares
of Common Stock at the price per share so determined, provided that, if such
rights or options shall by their terms provide for an increase or increases,
with the passage of time, in the amount of additional consideration, if any,
payable to the Company upon the exercise thereof, the Pro Forma Adjusted Trigger
Price per share shall, forthwith upon any such increase becoming effective, be
readjusted to reflect the same, and provided, further, that upon the expiration
of such rights or options, if any thereof shall not have been exercised, the Pro
Forma Adjusted Trigger Price per share shall forthwith be readjusted and
thereafter be the price which it would have been had an adjustment been made on
the basis that the only shares of Common Stock so issued or sold were those
issued or sold upon the exercise of such rights or options and that they were
issued or sold for the consideration actually received by the Company upon such
exercise, plus the consideration, if any, actually received by the Company for
the granting of all such rights or options, whether or not exercised.
3.4. Grant of Rights or Options for Convertible Securities. In case
the Company shall grant any rights or options to subscribe for, purchase or
otherwise acquire Convertible Securities other than the Subject Securities, such
Convertible Securities shall be deemed, for the purposes of subparagraph 3.2.
above, to have been issued or sold for the total amount received or receivable
by the Company as consideration for the granting of such rights or options plus
the minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of such rights or options, provided that, upon the
expiration of such rights or options, if any thereof shall not have been
exercised, the Pro Forma Adjusted Trigger Price per share shall forthwith be
readjusted and thereafter be the price which it would have been had an
adjustment been made upon the basis that the only Convertible Securities so
issued or sold were those issued or sold upon the exercise of such rights or
options and that they were issued or sold for the consideration actually
received by the Company upon such exercise, plus the consideration, if any,
actually received by the Company for the granting of all such rights or options,
whether or not exercised.
3.5. Dilution in Case of Other Stock or Securities. In case any shares
of stock or other securities, other than Common Stock of the Company, shall at
any time be receivable upon the exercise of this Warrant, and in case any
additional shares of such stock or any additional such securities (or any stock
or other securities convertible into or exchangeable for any such stock or
securities) shall be issued or sold for a consideration per share such as to
dilute the purchase
rights evidenced by this Warrant, then and in each such case the Pro Forma
Adjusted Trigger Price per share shall forthwith be adjusted, substantially in
the manner provided for above in this Paragraph 3, so as to protect the Holder
of this Warrant against the effect of such dilution.
3.6. Expenses, etc., Deducted. In case any shares of Common Stock or
Convertible Securities or any rights or options to subscribe for, purchase or
otherwise acquire any Common Stock or Convertible Securities shall be issued or
sold for cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor, after deducting any expenses incurred
and any underwriting or similar commissions, compensation or concessions paid or
allowed by the Company in connection with such issue or sale.
3.7. Determination of Consideration. In case any shares of Common
Stock or Convertible Securities or any rights or options to subscribe for,
purchase or otherwise acquire any Common Stock or Convertible Securities shall
be issued or sold for a consideration other than cash (or a consideration which
includes cash and other assets) then, for the purpose of this Paragraph 3, the
Board of Directors of the Company shall promptly determine the fair value of
such consideration, and such Common Stock, Convertible Securities, rights or
options shall be deemed to have been issued or sold on the date of such
determination in good faith. Such value shall not be more than the amount at
which such consideration is recorded in the books of the Company for accounting
purposes except in the case of an acquisition accounted for on a pooling of
interest basis. In case any Common Stock or Convertible Securities or any rights
or options to subscribe for, purchase or otherwise acquire any Common Stock or
Convertible Securities shall be issued or sold together with other stock or
securities or other assets of the Company for a consideration which covers both,
the Board of Directors of the Company shall promptly determine in good faith
what part of the consideration so received is to be deemed to be the
consideration for the issue or sale of such Common Stock or Convertible
Securities or such rights or options.
The Company covenants and agrees that, should any determination of
fair value of consideration or of allocation of consideration be made by the
Board of Directors of the Company, pursuant to this subparagraph 3.7, it will,
not less than seven (7) days after any and each such determination, deliver to
the Holder of this Warrant a certificate signed by the President or a Vice
President and the Treasurer or an Assistant Treasurer of the Company reciting
such value as thus determined and setting forth the nature of the transaction
for which such determination was required to be made, the nature of any
consideration, other than cash, for which Common Stock, Convertible Securities,
rights or options have been or are to be issued, the basis for its valuation,
the number of shares of Common Stock which have been or are to be issued, and a
description of any Convertible Securities, rights or options which have been or
are to be issued, including their number, amount and terms.
3.8. Record Date Deemed Issue Date. In case the Company shall take a
record of the Holders of shares of its stock of any class for the purpose of
entitling them (a) to receive a dividend or a distribution payable in Common
Stock or in Convertible Securities, or (b) to
subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the Common Stock issued or sold or deemed to have been issued or sold
upon the declaration of such dividend or the making of such other distribution,
or the date of the granting of such rights of subscription, purchase or other
acquisition, as the case may be.
3.9. Shares Considered Outstanding. The number of shares of Common
Stock outstanding at any given time shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock, but
shall exclude shares in the treasury of the Company.
3.10. Duration of Pro Forma Adjusted Trigger Price. Following each
computation or readjustment of a Pro Forma Adjusted Trigger Price as provided in
this Paragraph 3, the newly computed or adjusted Pro Forma Adjusted Trigger
Price shall remain in effect until a further computation or readjustment thereof
is required by this Paragraph 3.
4. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY, ETC.;
RECLASSIFICATIONS, ETC. In case at any time or from time to time after the
Issuance Date the Holders of the Common Stock of the Company of any class (or
any other shares of stock or other securities at the time receivable upon the
exercise of this Warrant) shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to receive:
(a) other or additional stock or other securities or property (other
than cash) by way of dividend;
(b) any cash paid or payable out of capital or paid-in surplus or
surplus created as a result of a revaluation of property by way
of dividend; or
(c) other or additional (or less) stock or other securities or
property (including cash) by way of stock-split, spin-off,
split-off, split-up, reclassification, combination of shares or
similar corporate rearrangement;
(other than additional shares of Common Stock issued to holders of Common Stock
as a stock dividend or stock-split, adjustments in respect of which shall be
covered by the provisions of Paragraph 3 hereof), then in each case the Holder
of this Warrant, upon the exercise hereof as provided in Paragraph 1 hereof,
shall be entitled to receive, in lieu of, or in addition to, as the case may be,
the shares theretofore receivable upon the exercise of this Warrant, the amount
of stock or other securities or property (including cash in the cases referred
to in clauses (b) and (c) above) which such Holder would hold on the date of
such exercise if, on the Issuance Date, he had been the holder of record of the
number of shares of Common Stock of the Company called for on the face of this
Warrant and had thereafter, during the period from the Issuance Date to and
including the date of such exercise, retained such shares and/or all other or
additional (or
less) stock or other securities or property (including cash in the cases
referred to in clauses (b) and (c) above) receivable by him as aforesaid during
such period, giving effect to all adjustments called for during such period by
Paragraphs 3 and 5 hereof.
5. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case
of any reorganization of the Company (or any other corporation the stock or
other securities of which are at the time deliverable on the exercise of this
Warrant) after the date hereof, or in case, after such date, the Company (or any
such other corporation) shall consolidate with or merge into another corporation
or convey all or substantially all its assets to another corporation, then and
in each such case the Holder of this Warrant, upon the exercise hereof as
provided in Paragraph 1 hereof, at any time after the consummation of such
reorganization, consolidation, merger or conveyance, shall be entitled to
receive the stock or other securities or property to which such Holder would
have been entitled upon such consummation if such Holder had exercised this
Warrant immediately prior thereto, all subject to further adjustments as
provided in Paragraphs 3 and 4 hereof; in each such case, the terms of this
Warrant shall be applicable to the shares of stock or other securities or
property receivable upon the exercise of this Warrant after such consummation.
6. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of
its charter or through reorganization, consolidation, merger, dissolution, sale
of assets or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Holder hereof against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the par value of any
shares of stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and at all times will take all such action
as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable stock upon the exercise of this
Warrant.
7. ACCOUNTANTS' CERTIFICATE AS TO ADJUSTMENTS. In each case of an
adjustment in the number of shares of Common Stock or other stock, securities or
property receivable on the exercise of this Warrant, at the request of the
Holder of this Warrant the Company at its expense shall promptly cause
independent public accountants of recognized standing, selected by the Company,
to compute such adjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment and showing in detail the
facts upon which such adjustment is based, including a statement of (a) the
consideration received or to be received by the Company for any additional
shares issued or sold or deemed to have been issued or sold, (b) the number of
shares of Common Stock outstanding or deemed to be outstanding and (c) the Pro
Forma Adjusted Trigger Price. The Company will forthwith mail a copy of each
such certificate to the Holder of this Warrant.
8. NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the Holders of its Common
Stock (or other stock or securities at the time deliverable upon
the exercise of this Warrant) for the purpose of entitling or
enabling them to receive any dividend (other than a cash or stock
dividend at the same rate as the rate of the last cash or stock
dividend theretofore paid) or other distribution, or to exercise
any preemptive right pursuant to the Company's charter, or to
receive any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any
other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the
assets of the Company to another corporation; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then, and in each such case, the Company will mail or cause to be mailed to the
Holder of this Warrant a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding up is to
take place, and the times, if any is to be fixed, as of which the holders of
record of Common Stock (or such other stock or securities at the time
deliverable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock of any class (or such other stock or securities)
for reclassification, consolidation, merger, conveyance, dissolution,
liquidation or winding up or (iii) the amount and character of the stock or
other securities proposed to be issued or granted, the date of such proposed
issuance or grant and the persons or class of persons to whom such stock or
other securities are to be offered, issued or granted. Such notice shall be
mailed at least thirty (30) days prior to the date therein specified.
9. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The
Company will at all times reserve and keep available, solely for issuance and
delivery upon the exercise of this Warrant and other similar Warrants, such
shares of Common Stock and other stock, securities and property as from time to
time shall be issuable upon the exercise of this Warrant and all other similar
Warrants at the time outstanding.
10. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement in an amount reasonably satisfactory to it, or (in the case
of mutilation) upon surrender and cancellation thereof, the Company will issue,
in lieu thereof, a new Warrant of like tenor.
11. REMEDIES. The Company stipulates that the remedies at law of the
Holder of this Warrant in the event of any default by the Company in its
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that the same may be specifically enforced.
12. NEGOTIABILITY, ETC. This Warrant is issued upon the following
terms, to all of which each taker or owner hereof consents and agrees:
(a) Title to this warrant may be transferred by endorsement (by the
Holder hereof executing the form of assignment at the end hereof
including guaranty of signature) and delivery in the same manner
as in the case of a negotiable instrument transferable by
endorsement and delivery.
(b) Any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is
granted power to transfer absolute title hereto by endorsement
and delivery hereof to a bona fide purchaser hereof for value;
each prior taker or owner waives and renounces all of his
equities or rights in this Warrant in favor of every such bona
fide purchaser, and every such bona fide purchaser shall acquire
title hereto and to all rights represented hereby.
(c) Until this Warrant is transferred on the books of the Company,
the Company may treat the registered Holder of this Warrant as
the absolute owner hereof for all purposes without being affected
by any notice to the contrary.
13. SUBDIVISION OF RIGHTS. This Warrant (as well as any new warrants
issued pursuant to the provisions of this paragraph) is exchangeable, upon the
surrender hereof by the Holder hereof, at the principal office of the Company
for any number of new warrants of like tenor and date representing in the
aggregate the right to subscribe for and purchase the number of shares of Common
Stock of the Company which may be subscribed for and purchased hereunder.
14. REGISTRATION RIGHTS.
a. Registration. On or prior to October 27, 1997, the Company will
file a registration statement ("Registration Statement") with the Securities and
Exchange Commission ("SEC") covering (x) the Warrants, and (y) the shares of
Common Stock issuable upon exercise of the Warrants (and covering such other
securities as the Company shall determine in its sole discretion) (collectively
"Registrable Securities"), and will use its best efforts to cause the
Registration Statement to become effective on or prior to the ninetieth day
after such filing and to keep the Registration Statement effective until the
earlier of (i) seven years from the date it is declared effective by the SEC, or
(ii) the sale of all of the Registrable Securities.
b. Additional Terms. Except as otherwise expressly stated herein, the
following provisions shall be applicable to the Registration Statement:
(i) The Company will use its best efforts to cause the
Registration Statement to become effective as promptly as possible,
and if any stop order shall be issued by the SEC in connection
therewith to use its reasonable efforts to obtain the removal of such
order. Following the effective date of the Registration Statement, the
Company shall, upon the request of the Holder, forthwith supply such
reasonable number of copies of the Registration Statement, preliminary
prospectus and prospectus meeting the requirements of the Securities
Act of 1933, as amended (the "Securities Act"), and other documents
necessary or incidental to a public offering of the Registrable
Securities, as shall be reasonably requested by the Holder to permit
the Holder to make a public distribution of its, his or her
Registrable Securities; provided, however, that by accepting this
Warrant, the Holder agrees, if requested by the managing
underwriter(s) in connection with an underwritten public offering of
the Company's equity securities, to enter into a customary agreement
with such managing underwriter(s) not to offer for sale or sell its,
his or her Registrable Securities for up to 180 days after such
offering.. The Company will use its reasonable efforts to qualify the
Registrable Securities for sale in such states as the Holder of
Registrable Securities shall reasonably request, provided that no such
qualification will be required in any jurisdiction where, solely as a
result thereof, the Company would be subject to service of general
process or to taxation or qualification as a foreign corporation doing
business in such jurisdiction. The obligations of the Company
hereunder with respect to the Holder's Registrable Securities are
expressly conditioned on the Holder's furnishing to the Company such
appropriate information concerning the Holder, the Holder's
Registrable Securities and the terms of the Holder's offering of such
Registrable Securities as the Company may reasonably request.
(ii) The Company shall pay all expenses incurred in complying
with the provisions of this Paragraph 14, including, without
limitation, all registration and filing fees (including all expenses
incident to filing with the National Association of Securities
Dealers, Inc.), printing expenses, fees and disbursements of counsel
to the Company, securities law and blue sky fees and expenses and the
expenses of any regular and special audits incident to or required by
any such registration. All underwriting discounts and selling
commissions applicable to the sales of the Registrable Securities, and
any state or federal transfer taxes payable with respect to the sales
of the Registrable Securities and all fees and disbursements of
counsel for the Holder, if any, in each case arising in connection
with registration of the Registrable Securities shall be payable by
the Holder.
(iii) In connection with the registration of the Registrable
Securities pursuant to this Paragraph 14, the Company shall indemnify
and hold harmless the Holder, its affiliates, officers, directors,
partners, employees, agents and representatives, each person, if any,
who controls the Holder within the meaning of the Securities Act or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
any person
deemed to be an underwriter of the Registrable Securities and any
person claiming by or through any of them (collectively, the
"Indemnified Persons") from and against all losses, claims, damages,
expenses or liabilities (or actions in respect thereof) arising out of
or are based upon any untrue statement of any material fact contained
in the Registration Statement or alleged untrue statement, under which
such securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based upon the
omission to state therein a material fact required to be stated
therein or necessary to make the statements made therein, in light of
the circumstances under which they are made, not misleading, or any
violation by the Company of the Securities Act, the Exchange Act or
state securities or blue sky laws applicable to the Company and
relating to action or inaction required of the Company in connection
with such registration or qualification under such state securities or
blue sky laws; and will reimburse the Indemnified Persons for any
legal or any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be
liable in any such case to any Indemnified Person to the extent that
any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or omission made in the Registration
Statement, said preliminary prospectus or said final prospectus or
said amendment or supplement or any document incident thereto in
reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Holder.
(iv) The Holder will indemnify and hold harmless the Company and
each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act, each officer of the Company
who signs the Registration Statement and each director of the Company
from and against any and all such losses, claims, damages or
liabilities arising from any untrue statement in, or omission from,
the Registration Statement, any such preliminary or final prospectus,
amendment, or supplement or document incident thereto if the statement
or omission in respect of which such loss, claim, damage or liability
is asserted was made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Holder for use in connection with the preparation of the Registration
Statement or such prospectus or amendment or supplement thereof.
(v) The reimbursements required by clauses (iii) and (iv) shall
be made by periodic payments during the course of the investigation or
defense as and when bills are received or expenses incurred; provided,
however, that to the extent that an indemnified party receives
periodic payments for legal or other expenses during the course of an
investigation or defense, and such party subsequently received
payments for such expenses from any other parties to the proceeding,
such payments shall be used by the indemnified party to reimburse the
indemnifying party for such periodic payments. Any party which
proposes to assert the right to be indemnified under clause (iii) or
(iv) will, promptly after receipt of notice of commencement of any
action, suit or proceeding
against such party in respect of which a claim is to be made against
any indemnified party hereunder, notify each such indemnifying party
of the commencement of such action, suit or proceeding, enclosing a
copy of all papers served, but the failure to so notify such
indemnifying party of any such action, suit or proceeding shall not
relieve the indemnifying party from any obligation which it may have
to any indemnified party hereunder unless and only to the extent that
the indemnifying party is prejudiced by said lack of notice. In case
any such action, suit or proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party for any legal or other
expense, other than reasonable costs of investigation subsequently
incurred by such indemnified party in connection with the defense
thereof. The indemnified party shall have the right to employ its own
counsel in any such action, but the reasonable fees and expenses of
such counsel shall be at the expense of such indemnified party, when
and as incurred, unless (A) the employment of counsel by such
indemnified party has been authorized by the indemnifying party, (B)
the indemnified party has reasonably concluded (based on advice of
counsel), that there may be legal defenses available to it that are
different from or in addition to those available to the indemnifying
party, (C) the indemnified party shall have reasonably concluded
(based on advice of counsel) that there may be a conflict of interest
between the indemnifying party and the indemnified party in the
conduct of defense of such action (in which case the indemnifying
party shall not have the right to direct the defense of such action on
behalf of the indemnified party), or (D) the indemnifying party shall
not in fact have employed counsel to assume the defense of such action
within 15 days after receipt of notice of such action. An indemnifying
party shall not be liable for any settlement or any action or claim
effected without its consent, which shall not be unreasonably
withheld.
(vi) If the indemnification provided for in this Paragraph 14 is
unavailable to any indemnified party hereunder in respect of any
losses, claims, damages, liabilities or expenses referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified
parties in connection with the actions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, has been made
by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge,
access to information and
opportunity to correct or prevent such action. The amount paid or
payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth herein, any legal or other fees
or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
(vii) The Company and the Holder agree that it would not be just
and equitable if contribution pursuant to clause (vi) were determined
by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding any other provision
hereof, in no event shall the contribution obligation of the Holder be
greater in amount than the excess of (A) the dollar amount of proceeds
received by the Holder upon the sale of the securities giving rise to
such contribution obligation over (B) the dollar amount of any damages
that the Holder has otherwise been required to pay by reason of the
untrue or alleged untrue statement or omission or alleged omission
giving rise to such obligation. No person guilty of fraudulent
misrepresentation (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.
(viii) Neither the filing of the Registration Statement by the
Company pursuant to this Agreement nor the making of any request for
prospectuses by the Holder shall impose upon the Holder any obligation
to exercise his, her or its Warrants or to sell his, her or its
Registrable Securities.
(ix) The Holder, upon receipt of notice from the Company that an
event has occurred which requires a post-effective amendment to the
Registration Statement or a supplement to the prospectus included
therein, shall promptly discontinue the sale of his, her or its
Registrable Securities until the Holder receives a copy of a
supplemented or amended prospectus from the Company, which the Company
shall provide as soon as practicable after such notice.
15. MAILING OF NOTICES, ETC. All notices, requests, claims, demands,
waivers and other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand, when delivered by
courier, three days after being deposited in the mail (registered or certified
mail, postage prepaid, return receipt requested), or when received by facsimile
transmission upon receipt of a confirmed transmission report, as follows:
If to the Company: 00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Executive Officer
and if to the Holder of this Warrant to the address furnished to the Company in
writing by the last Holder of this Warrant who shall have furnished an address
to the Company in writing. Either the Company or the Holder of this Warrant, by
notice given to the other parties hereto in accordance with this Section 15, may
change the address or facsimile transmission number to which such notice or
other communications are to be sent to such party.
16. HEADINGS, ETC. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect the meaning hereof.
17. CHANGE, WAIVER, ETC. Neither this Warrant nor any term hereof may
be changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
18. GOVERNING LAW. This Warrant shall be construed and enforced in
accordance with the laws of the State of New York.
LOGIMETRICS, INC.
By:
Dated: [date of issuance]
Attest:
[To be signed only upon exercise of Warrant]
To LOGIMETRICS, INC.:
The undersigned, the Holder of the within Series H Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, _____________ shares of Common Stock of
LOGIMETRICS, INC. and herewith makes payment of $____________ therefor, and
requests that the certificates for such shares be issued in the name of, and be
delivered to, _______________, whose address is _________________________.
Dated:
(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant)
Address:
[To be signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________ the right represented by the within
Series H Warrant to purchase the ____________ shares of the Common Stock of
LOGIMETRICS, INC. to which the within Series H Warrant relates, and appoints
________________________ attorney to transfer said right on the books of
LOGIMETRICS, INC. with full power of substitution in the premises.
Dated:
(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant)
Address:
In the presence of
EXHIBIT D
FORM OF SERIES I WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND CANNOT BE SOLD OR TRANSFERRED
UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS AN EXEMPTION UNDER SUCH ACT OR
LAWS IS AVAILABLE. THE TRANSFERABILITY OF THESE SECURITIES IS FURTHER SUBJECT TO
THE PROVISIONS OF A PURCHASE AGREEMENT DATED AS OF JULY 29, 1997 AMONG THE
COMPANY AND THE PURCHASERS NAMED THEREIN.
LOGIMETRICS, INC.
Common Stock Purchase Warrant - Series I
LOGIMETRICS, INC. (the "Company"), a Delaware corporation, hereby
certifies that, for value received, [Name of Purchaser], or assigns, is
entitled, subject to the terms set forth below, to purchase from the Company
___________________ (___________) fully paid and non-assessable shares of Common
Stock, par value $.01 per share, of the Company (the "Common Stock"), at a
purchase price, subject to the provisions of Paragraph 3 hereof, of $1.125 per
share (the "Purchase Price") at any time prior to July 29, 2004. The number and
character of such shares are subject to adjustment as provided below, and the
term "Common Stock" shall mean, unless the context otherwise requires, the stock
or other securities or property at the time deliverable upon the exercise of
this Warrant.
1. EXERCISE OF WARRANT. The purchase rights evidenced by this Warrant
shall be exercised by the holder hereof ("Holder") surrendering this Warrant,
with the form of subscription at the end hereof duly executed by such Holder, to
the Company at its office in Bohemia, New York (or such other office as may be
designated by the Company from time to time), accompanied by payment (in cash or
by certified or official bank check). This Warrant may be exercised for less
than the full number of shares of Common Stock at the time called for hereby, in
which case the number of shares receivable upon the exercise of this Warrant as
a whole, and the sum payable upon the exercise of this Warrant as a whole, shall
be proportionately reduced. Upon any such partial exercise, the Company at its
expense will forthwith issue to the Holder hereof a new Warrant or Warrants of
like tenor calling for the number of shares of Common Stock as to which rights
have not been exercised, such Warrant or Warrants to be issued in the name of
the Holder hereof or his nominee.
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable
after the exercise of this Warrant and payment of the Purchase Price, and in any
event within five (5) business days thereafter, the Company, at its expense,
will cause to be issued in the name of and delivered to the Holder hereof a
certificate or certificates for the number of fully paid and non-assessable
shares of Common Stock or other securities or property to which such Holder
shall be entitled upon such exercise, plus, in lieu of any fractional share
interest to which such Holder would otherwise be entitled, cash equal to such
fraction multiplied by the then
current market value of one full share of Common Stock or other securities to
which such Holder shall be so entitled.
3. ADJUSTMENT FOR ISSUE OR SALE OF COMMON STOCK AT LESS THAN PURCHASE
PRICE. In case, at any time or from time to time after the date of issuance of
this Warrant ("Issuance Date"), the Company shall issue or sell shares of its
Common Stock (other than any Common Stock issuable upon the exercise or
conversion of (i) the Company's Class A 13% Senior Subordinated Convertible
Pay-in-Kind Debentures due 1999 (the "Debentures") (and any replacement
Debenture or Debentures issued upon transfer or exchange of the Debentures),
(ii) any additional securities issued in lieu of cash interest otherwise payable
on the Debentures ("Accrued Interest Debentures") (and any replacement Accrued
Interest Debenture or Accrued Interest Debentures issued upon transfer or
exchange of the Accrued Interest Debentures), (iii) the Company's Amended and
Restated Class B 13% Convertible Senior Subordinated Pay-in-Kind Debentures due
1999 (the "Class B Debentures") (and any replacement Class B Debenture or Class
B Debentures issued upon transfer or exchange of the Class B Debentures), (iv)
any additional securities issued in lieu of cash interest otherwise payable on
the Class B Debentures (the "Class B Accrued Interest Debentures") (and any
replacement Class B Accrued Interest Debenture or Class B Accrued Interest
Debentures issued upon transfer or exchange of the Class B Accrued Interest
Debentures), (v) securities outstanding on the date hereof, (vi) awards made
pursuant to the Company's Stock Compensation Program, (vii) awards made pursuant
to any incentive compensation plan or arrangement approved by the Company's
Board of Directors or by the Compensation Committee of the Company's Board of
Directors, (viii) the Company's Series G Warrants, (ix) the Company's Series H
Warrants, or (x) the Company's Series I Warrants) (such securities,
collectively, the "Subject Securities") for a consideration per share less than
fifty-two cents ($.52) per share (the "Trigger Price") (or, if a Pro Forma
Adjusted Trigger Price shall be in effect as provided below in this Paragraph 3,
then less than such Pro Forma Adjusted Trigger Price per share), then and in
each such case the Holder of this Warrant, upon the exercise hereof as provided
in Paragraph 1 hereof, shall be entitled to receive, in lieu of the shares of
Common Stock theretofore receivable upon the exercise of this Warrant, a number
of shares of Common Stock determined by (a) dividing the Trigger Price by a Pro
Forma Adjusted Trigger Price per share to be computed as provided below in this
Paragraph 3, and (b) multiplying the resulting quotient by the number of shares
of Common Stock called for on the face of this Warrant. A Pro Forma Adjusted
Trigger Price per share shall be the price computed (to the nearest cent, a
fraction of half cent or more being considered a full cent):
by dividing (i) the sum of (x) the result obtained by
multiplying the number of shares of Common Stock of the
Company outstanding immediately prior to such issue or
sale by the Trigger Price (or, if a Pro Forma Adjusted
Trigger Price shall be in effect, by such Price), and
(y) the consideration, if any, received by the Company
upon such issue or sale, by (ii) the number of shares
of Common Stock of the Company outstanding immediately
after such issue or sale.
For the purpose of this Paragraph 3:
3.1. Stock Splits, Dividends, etc., in Common Stock or Convertible
Securities. In case the Company splits its Common Stock or shall declare any
dividend, or make any other distribution, upon any stock of the Company of any
class payable in Common Stock, or in any stock or other securities directly or
indirectly convertible into or exchangeable for Common Stock (any such stock or
other securities being hereinafter called "Convertible Securities"), such split,
declaration or distribution shall be deemed to be an issue or sale (as of the
record date for such split, dividend or other distribution), without
consideration, of such Common Stock or such Convertible Securities, as the case
may be.
3.2. Issuance or Sale of Convertible Securities. In case the Company
shall issue or sell any Convertible Securities other than the Subject
Securities, there shall be determined the price per share for which Common Stock
is issuable upon the conversion or exchange thereof, such determination to be
made by dividing (a) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof, by (b) the maximum number of
shares of Common Stock of the Company issuable upon the conversion or exchange
of all such Convertible Securities.
If the price per share so determined shall be less than the Trigger
Price (or, if a Pro Forma Adjusted Trigger Price shall be in effect, less than
such Price) as of the date of such issue or sale, then such issue or sale shall
be deemed to be an issue or sale for cash (as of the date of issue or sale of
such Convertible Securities) of such maximum number of shares of Common Stock at
the price per share so determined, provided that, if such Convertible Securities
shall by their terms provide for an increase or increases, with the passage of
time, in the amount of additional consideration, if any, payable to the Company,
or in the rate of exchange, upon the conversion or exchange thereof, the Pro
Forma Adjusted Trigger Price per share shall, forthwith upon any such increase
becoming effective, be readjusted to reflect the same, and provided, further,
that upon the expiration of such rights of conversion or exchange of such
Convertible Securities, if any thereof shall not have been exercised, the Pro
Forma Adjusted Trigger Price per share shall forthwith be readjusted and
thereafter be the price which it would have been had an adjustment been made on
the basis that the only shares of Common Stock so issued or sold were those
issued or sold upon the conversion or exchange of such Convertible Securities,
and that they were issued or sold for the consideration actually received by the
Company upon such conversion or exchange, plus the consideration, if any,
actually received by the Company for the issue or sale of all such Convertible
Securities which shall have been converted or exchanged.
3.3. Grant of Rights or Options for Common Stock. In case the Company
shall grant any rights or options to subscribe for, purchase or otherwise
acquire Common Stock of any class other than the Subject Securities, there shall
be determined the price per share for which Common Stock is issuable upon the
exercise of such rights or options, such determination to be
made by dividing (a) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or options, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of such rights or options, by (b) the maximum number
of shares of Common Stock issuable upon the exercise of such rights or options.
If the price per share so determined shall be less than the Trigger
Price (or, if a Pro Forma Adjusted Trigger Price shall be in effect, less than
such Price) as of the date of such issue or sale, then the granting of such
rights or options shall be deemed to be an issue or sale for cash (as of the
date of the granting of such rights or options) of such maximum number of shares
of Common Stock at the price per share so determined, provided that, if such
rights or options shall by their terms provide for an increase or increases,
with the passage of time, in the amount of additional consideration, if any,
payable to the Company upon the exercise thereof, the Pro Forma Adjusted Trigger
Price per share shall, forthwith upon any such increase becoming effective, be
readjusted to reflect the same, and provided, further, that upon the expiration
of such rights or options, if any thereof shall not have been exercised, the Pro
Forma Adjusted Trigger Price per share shall forthwith be readjusted and
thereafter be the price which it would have been had an adjustment been made on
the basis that the only shares of Common Stock so issued or sold were those
issued or sold upon the exercise of such rights or options and that they were
issued or sold for the consideration actually received by the Company upon such
exercise, plus the consideration, if any, actually received by the Company for
the granting of all such rights or options, whether or not exercised.
3.4. Grant of Rights or Options for Convertible Securities. In case
the Company shall grant any rights or options to subscribe for, purchase or
otherwise acquire Convertible Securities other than the Subject Securities, such
Convertible Securities shall be deemed, for the purposes of subparagraph 3.2.
above, to have been issued or sold for the total amount received or receivable
by the Company as consideration for the granting of such rights or options plus
the minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of such rights or options, provided that, upon the
expiration of such rights or options, if any thereof shall not have been
exercised, the Pro Forma Adjusted Trigger Price per share shall forthwith be
readjusted and thereafter be the price which it would have been had an
adjustment been made upon the basis that the only Convertible Securities so
issued or sold were those issued or sold upon the exercise of such rights or
options and that they were issued or sold for the consideration actually
received by the Company upon such exercise, plus the consideration, if any,
actually received by the Company for the granting of all such rights or options,
whether or not exercised.
3.5. Dilution in Case of Other Stock or Securities. In case any shares
of stock or other securities, other than Common Stock of the Company, shall at
any time be receivable upon the exercise of this Warrant, and in case any
additional shares of such stock or any additional such securities (or any stock
or other securities convertible into or exchangeable for any such stock or
securities) shall be issued or sold for a consideration per share such as to
dilute the purchase
rights evidenced by this Warrant, then and in each such case the Pro Forma
Adjusted Trigger Price per share shall forthwith be adjusted, substantially in
the manner provided for above in this Paragraph 3, so as to protect the Holder
of this Warrant against the effect of such dilution.
3.6. Expenses, etc., Deducted. In case any shares of Common Stock or
Convertible Securities or any rights or options to subscribe for, purchase or
otherwise acquire any Common Stock or Convertible Securities shall be issued or
sold for cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor, after deducting any expenses incurred
and any underwriting or similar commissions, compensation or concessions paid or
allowed by the Company in connection with such issue or sale.
3.7. Determination of Consideration. In case any shares of Common
Stock or Convertible Securities or any rights or options to subscribe for,
purchase or otherwise acquire any Common Stock or Convertible Securities shall
be issued or sold for a consideration other than cash (or a consideration which
includes cash and other assets) then, for the purpose of this Paragraph 3, the
Board of Directors of the Company shall promptly determine the fair value of
such consideration, and such Common Stock, Convertible Securities, rights or
options shall be deemed to have been issued or sold on the date of such
determination in good faith. Such value shall not be more than the amount at
which such consideration is recorded in the books of the Company for accounting
purposes except in the case of an acquisition accounted for on a pooling of
interest basis. In case any Common Stock or Convertible Securities or any rights
or options to subscribe for, purchase or otherwise acquire any Common Stock or
Convertible Securities shall be issued or sold together with other stock or
securities or other assets of the Company for a consideration which covers both,
the Board of Directors of the Company shall promptly determine in good faith
what part of the consideration so received is to be deemed to be the
consideration for the issue or sale of such Common Stock or Convertible
Securities or such rights or options.
The Company covenants and agrees that, should any determination of
fair value of consideration or of allocation of consideration be made by the
Board of Directors of the Company, pursuant to this subparagraph 3.7, it will,
not less than seven (7) days after any and each such determination, deliver to
the Holder of this Warrant a certificate signed by the President or a Vice
President and the Treasurer or an Assistant Treasurer of the Company reciting
such value as thus determined and setting forth the nature of the transaction
for which such determination was required to be made, the nature of any
consideration, other than cash, for which Common Stock, Convertible Securities,
rights or options have been or are to be issued, the basis for its valuation,
the number of shares of Common Stock which have been or are to be issued, and a
description of any Convertible Securities, rights or options which have been or
are to be issued, including their number, amount and terms.
3.8. Record Date Deemed Issue Date. In case the Company shall take a
record of the Holders of shares of its stock of any class for the purpose of
entitling them (a) to receive a dividend or a distribution payable in Common
Stock or in Convertible Securities, or (b) to
subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the Common Stock issued or sold or deemed to have been issued or sold
upon the declaration of such dividend or the making of such other distribution,
or the date of the granting of such rights of subscription, purchase or other
acquisition, as the case may be.
3.9. Shares Considered Outstanding. The number of shares of Common
Stock outstanding at any given time shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock, but
shall exclude shares in the treasury of the Company.
3.10. Duration of Pro Forma Adjusted Trigger Price. Following each
computation or readjustment of a Pro Forma Adjusted Trigger Price as provided in
this Paragraph 3, the newly computed or adjusted Pro Forma Adjusted Trigger
Price shall remain in effect until a further computation or readjustment thereof
is required by this Paragraph 3.
4. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY, ETC.;
RECLASSIFICATIONS, ETC. In case at any time or from time to time after the
Issuance Date the Holders of the Common Stock of the Company of any class (or
any other shares of stock or other securities at the time receivable upon the
exercise of this Warrant) shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to receive:
(a) other or additional stock or other securities or property (other
than cash) by way of dividend;
(b) any cash paid or payable out of capital or paid-in surplus or
surplus created as a result of a revaluation of property by way
of dividend; or
(c) other or additional (or less) stock or other securities or
property (including cash) by way of stock-split, spin-off,
split-off, split-up, reclassification, combination of shares or
similar corporate rearrangement;
(other than additional shares of Common Stock issued to holders of Common Stock
as a stock dividend or stock-split, adjustments in respect of which shall be
covered by the provisions of Paragraph 3 hereof), then in each case the Holder
of this Warrant, upon the exercise hereof as provided in Paragraph 1 hereof,
shall be entitled to receive, in lieu of, or in addition to, as the case may be,
the shares theretofore receivable upon the exercise of this Warrant, the amount
of stock or other securities or property (including cash in the cases referred
to in clauses (b) and (c) above) which such Holder would hold on the date of
such exercise if, on the Issuance Date, he had been the holder of record of the
number of shares of Common Stock of the Company called for on the face of this
Warrant and had thereafter, during the period from the Issuance Date to and
including the date of such exercise, retained such shares and/or all other or
additional (or
less) stock or other securities or property (including cash in the cases
referred to in clauses (b) and (c) above) receivable by him as aforesaid during
such period, giving effect to all adjustments called for during such period by
Paragraphs 3 and 5 hereof.
5. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case
of any reorganization of the Company (or any other corporation the stock or
other securities of which are at the time deliverable on the exercise of this
Warrant) after the date hereof, or in case, after such date, the Company (or any
such other corporation) shall consolidate with or merge into another corporation
or convey all or substantially all its assets to another corporation, then and
in each such case the Holder of this Warrant, upon the exercise hereof as
provided in Paragraph 1 hereof, at any time after the consummation of such
reorganization, consolidation, merger or conveyance, shall be entitled to
receive the stock or other securities or property to which such Holder would
have been entitled upon such consummation if such Holder had exercised this
Warrant immediately prior thereto, all subject to further adjustments as
provided in Paragraphs 3 and 4 hereof; in each such case, the terms of this
Warrant shall be applicable to the shares of stock or other securities or
property receivable upon the exercise of this Warrant after such consummation.
6. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of
its charter or through reorganization, consolidation, merger, dissolution, sale
of assets or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Holder hereof against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the par value of any
shares of stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and at all times will take all such action
as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable stock upon the exercise of this
Warrant.
7. ACCOUNTANTS' CERTIFICATE AS TO ADJUSTMENTS. In each case of an
adjustment in the number of shares of Common Stock or other stock, securities or
property receivable on the exercise of this Warrant, at the request of the
Holder of this Warrant the Company at its expense shall promptly cause
independent public accountants of recognized standing, selected by the Company,
to compute such adjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment and showing in detail the
facts upon which such adjustment is based, including a statement of (a) the
consideration received or to be received by the Company for any additional
shares issued or sold or deemed to have been issued or sold, (b) the number of
shares of Common Stock outstanding or deemed to be outstanding and (c) the Pro
Forma Adjusted Trigger Price. The Company will forthwith mail a copy of each
such certificate to the Holder of this Warrant.
8. NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the Holders of its Common
Stock (or other stock or securities at the time deliverable upon
the exercise of this Warrant) for the purpose of entitling or
enabling them to receive any dividend (other than a cash or stock
dividend at the same rate as the rate of the last cash or stock
dividend theretofore paid) or other distribution, or to exercise
any preemptive right pursuant to the Company's charter, or to
receive any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any
other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the
assets of the Company to another corporation; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then, and in each such case, the Company will mail or cause to be mailed to the
Holder of this Warrant a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding up is to
take place, and the times, if any is to be fixed, as of which the holders of
record of Common Stock (or such other stock or securities at the time
deliverable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock of any class (or such other stock or securities)
for reclassification, consolidation, merger, conveyance, dissolution,
liquidation or winding up or (iii) the amount and character of the stock or
other securities proposed to be issued or granted, the date of such proposed
issuance or grant and the persons or class of persons to whom such stock or
other securities are to be offered, issued or granted. Such notice shall be
mailed at least thirty (30) days prior to the date therein specified.
9. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The
Company will at all times reserve and keep available, solely for issuance and
delivery upon the exercise of this Warrant and other similar Warrants, such
shares of Common Stock and other stock, securities and property as from time to
time shall be issuable upon the exercise of this Warrant and all other similar
Warrants at the time outstanding.
10. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement in an amount reasonably satisfactory to it, or (in the case
of mutilation) upon surrender and cancellation thereof, the Company will issue,
in lieu thereof, a new Warrant of like tenor.
11. REMEDIES. The Company stipulates that the remedies at law of the
Holder of this Warrant in the event of any default by the Company in its
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that the same may be specifically enforced.
12. NEGOTIABILITY, ETC. This Warrant is issued upon the following
terms, to all of which each taker or owner hereof consents and agrees:
(a) Title to this warrant may be transferred by endorsement (by the
Holder hereof executing the form of assignment at the end hereof
including guaranty of signature) and delivery in the same manner
as in the case of a negotiable instrument transferable by
endorsement and delivery.
(b) Any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is
granted power to transfer absolute title hereto by endorsement
and delivery hereof to a bona fide purchaser hereof for value;
each prior taker or owner waives and renounces all of his
equities or rights in this Warrant in favor of every such bona
fide purchaser, and every such bona fide purchaser shall acquire
title hereto and to all rights represented hereby.
(c) Until this Warrant is transferred on the books of the Company,
the Company may treat the registered Holder of this Warrant as
the absolute owner hereof for all purposes without being affected
by any notice to the contrary.
13. SUBDIVISION OF RIGHTS. This Warrant (as well as any new warrants
issued pursuant to the provisions of this paragraph) is exchangeable, upon the
surrender hereof by the Holder hereof, at the principal office of the Company
for any number of new warrants of like tenor and date representing in the
aggregate the right to subscribe for and purchase the number of shares of Common
Stock of the Company which may be subscribed for and purchased hereunder.
14. REGISTRATION RIGHTS.
a. Registration. On or prior to October 27, 1997, the Company
will file a registration statement ("Registration Statement") with the
Securities and Exchange Commission ("SEC") covering (x) the Warrants, and (y)
the shares of Common Stock issuable upon exercise of the Warrants (and covering
such other securities as the Company shall determine in its sole discretion)
(collectively "Registrable Securities"), and will use its best efforts to cause
the Registration Statement to become effective on or prior to the ninetieth day
after such filing and to keep the Registration Statement effective until the
earlier of (i) seven years from the date it is declared effective by the SEC, or
(ii) the sale of all of the Registrable Securities.
b. Additional Terms. Except as otherwise expressly stated herein,
the following provisions shall be applicable to the Registration Statement:
(i) The Company will use its best efforts to cause the
Registration Statement to become effective as promptly as possible, and if
any stop order shall be issued by the SEC in connection therewith to use
its reasonable efforts to obtain the removal of such order. Following the
effective date of the Registration Statement, the Company shall, upon the
request of the Holder, forthwith supply such reasonable number of copies of
the Registration Statement, preliminary prospectus and prospectus meeting
the requirements of the Securities Act of 1933, as amended (the "Securities
Act"), and other documents necessary or incidental to a public offering of
the Registrable Securities, as shall be reasonably requested by the Holder
to permit the Holder to make a public distribution of its, his or her
Registrable Securities; provided, however, that by accepting this Warrant,
the Holder agrees, if requested by the managing underwriter(s) in
connection with an underwritten public offering of the Company's equity
securities, to enter into a customary agreement with such managing
underwriter(s) not to offer for sale or sell its, his or her Registrable
Securities for up to 180 days after such offering.. The Company will use
its reasonable efforts to qualify the Registrable Securities for sale in
such states as the Holder of Registrable Securities shall reasonably
request, provided that no such qualification will be required in any
jurisdiction where, solely as a result thereof, the Company would be
subject to service of general process or to taxation or qualification as a
foreign corporation doing business in such jurisdiction. The obligations of
the Company hereunder with respect to the Holder's Registrable Securities
are expressly conditioned on the Holder's furnishing to the Company such
appropriate information concerning the Holder, the Holder's Registrable
Securities and the terms of the Holder's offering of such Registrable
Securities as the Company may reasonably request.
(ii) The Company shall pay all expenses incurred in
complying with the provisions of this Paragraph 14, including, without
limitation, all registration and filing fees (including all expenses
incident to filing with the National Association of Securities Dealers,
Inc.), printing expenses, fees and disbursements of counsel to the Company,
securities law and blue sky fees and expenses and the expenses of any
regular and special audits incident to or required by any such
registration. All underwriting discounts and selling commissions applicable
to the sales of the Registrable Securities, and any state or federal
transfer taxes payable with respect to the sales of the Registrable
Securities and all fees and disbursements of counsel for the Holder, if
any, in each case arising in connection with registration of the
Registrable Securities shall be payable by the Holder.
(iii) In connection with the registration of the Registrable
Securities pursuant to this Paragraph 14, the Company shall indemnify and
hold harmless the Holder, its affiliates, officers, directors, partners,
employees, agents and representatives, each person, if any, who controls
the Holder within the meaning of the Securities Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), any person
deemed to be an underwriter of the Registrable Securities and any person
claiming by or through any of them (collectively, the "Indemnified
Persons") from and against all losses, claims, damages, expenses or
liabilities (or actions in respect thereof) arising out of or are based
upon any untrue statement of any material fact contained in the
Registration Statement or alleged untrue statement, under which such
securities were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereto, or arise out of or are based upon the omission to state
therein a material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they
are made, not misleading, or any violation by the Company of the Securities
Act, the Exchange Act or state securities or blue sky laws applicable to
the Company and relating to action or inaction required of the Company in
connection with such registration or qualification under such state
securities or blue sky laws; and will reimburse the Indemnified Persons for
any legal or any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any such
case to any Indemnified Person to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
omission made in the Registration Statement, said preliminary prospectus or
said final prospectus or said amendment or supplement or any document
incident thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Holder.
(iv) The Holder will indemnify and hold harmless the Company
and each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, each officer of the Company who signs
the Registration Statement and each director of the Company from and
against any and all such losses, claims, damages or liabilities arising
from any untrue statement in, or omission from, the Registration Statement,
any such preliminary or final prospectus, amendment, or supplement or
document incident thereto if the statement or omission in respect of which
such loss, claim, damage or liability is asserted was made in reliance upon
and in conformity with information furnished in writing to the Company by
or on behalf of the Holder for use in connection with the preparation of
the Registration Statement or such prospectus or amendment or supplement
thereof.
(v) The reimbursements required by clauses (iii) and (iv)
shall be made by periodic payments during the course of the investigation
or defense as and when bills are received or expenses incurred; provided,
however, that to the extent that an indemnified party receives periodic
payments for legal or other expenses during the course of an investigation
or defense, and such party subsequently received payments for such expenses
from any other parties to the proceeding, such payments shall be used by
the indemnified party to reimburse the indemnifying party for such periodic
payments. Any party which proposes to assert the right to be indemnified
under clause (iii) or (iv) will, promptly after receipt of notice of
commencement of any action, suit or proceeding
against such party in respect of which a claim is to be made against any
indemnified party hereunder, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all
papers served, but the failure to so notify such indemnifying party of any
such action, suit or proceeding shall not relieve the indemnifying party
from any obligation which it may have to any indemnified party hereunder
unless and only to the extent that the indemnifying party is prejudiced by
said lack of notice. In case any such action, suit or proceeding shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled
to participate in and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expense, other than
reasonable costs of investigation subsequently incurred by such indemnified
party in connection with the defense thereof. The indemnified party shall
have the right to employ its own counsel in any such action, but the
reasonable fees and expenses of such counsel shall be at the expense of
such indemnified party, when and as incurred, unless (A) the employment of
counsel by such indemnified party has been authorized by the indemnifying
party, (B) the indemnified party has reasonably concluded (based on advice
of counsel), that there may be legal defenses available to it that are
different from or in addition to those available to the indemnifying party,
(C) the indemnified party shall have reasonably concluded (based on advice
of counsel) that there may be a conflict of interest between the
indemnifying party and the indemnified party in the conduct of defense of
such action (in which case the indemnifying party shall not have the right
to direct the defense of such action on behalf of the indemnified party),
or (D) the indemnifying party shall not in fact have employed counsel to
assume the defense of such action within 15 days after receipt of notice of
such action. An indemnifying party shall not be liable for any settlement
or any action or claim effected without its consent, which shall not be
unreasonably withheld.
(vi) If the indemnification provided for in this
Paragraph 14 is unavailable to any indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and indemnified parties in connection with
the actions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and
opportunity to correct or prevent such action. The amount paid or payable
by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the
limitations set forth herein, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
(vii) The Company and the Holder agree that it would not be
just and equitable if contribution pursuant to clause (vi) were determined
by pro rata allocation or by any other method of allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding any other provision hereof, in no
event shall the contribution obligation of the Holder be greater in amount
than the excess of (A) the dollar amount of proceeds received by the Holder
upon the sale of the securities giving rise to such contribution obligation
over (B) the dollar amount of any damages that the Holder has otherwise
been required to pay by reason of the untrue or alleged untrue statement or
omission or alleged omission giving rise to such obligation. No person
guilty of fraudulent misrepresentation (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.
(viii) Neither the filing of the Registration Statement by
the Company pursuant to this Agreement nor the making of any request for
prospectuses by the Holder shall impose upon the Holder any obligation to
sell his, her or its Registrable Securities.
(ix) The Holder, upon receipt of notice from the Company
that an event has occurred which requires a post-effective amendment to the
Registration Statement or a supplement to the prospectus included therein,
shall promptly discontinue the sale of his, her or its Registrable
Securities until the Holder receives a copy of a supplemented or amended
prospectus from the Company, which the Company shall provide as soon as
practicable after such notice.
15. MAILING OF NOTICES, ETC. All notices, requests, claims, demands,
waivers and other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand, when delivered by
courier, three days after being deposited in the mail (registered or certified
mail, postage prepaid, return receipt requested), or when received by facsimile
transmission upon receipt of a confirmed transmission report, as follows:
If to the Company: 00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Executive Officer
and if to the Holder of this Warrant to the address furnished to the Company in
writing by the last Holder of this Warrant who shall have furnished an address
to the Company in writing. Either the Company or the Holder of this Warrant, by
notice given to the other parties hereto in accordance with this Section 15, may
change the address or facsimile transmission number to which such notice or
other communications are to be sent to such party.
16. HEADINGS, ETC. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect the meaning hereof.
17. CHANGE, WAIVER, ETC. Neither this Warrant nor any term hereof may
be changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
18. GOVERNING LAW. This Warrant shall be construed and enforced in
accordance with the laws of the State of New York.
LOGIMETRICS, INC.
By:
Dated: [date of issuance]
Attest:
[To be signed only upon exercise of Warrant]
To LOGIMETRICS, INC.:
The undersigned, the Holder of the within Series I Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, ____________ shares of Common Stock of
LOGIMETRICS, INC. and herewith makes payment of $____________ therefor, and
requests that the certificates for such shares be issued in the name of, and be
delivered to, _______________, whose address is _________________________.
Dated:
(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant)
Address:
[To be signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________ the right represented by the within
Series I Warrant to purchase the ____________ shares of the Common Stock of
LOGIMETRICS, INC. to which the within Series I Warrant relates, and appoints
________________________ attorney to transfer said right on the books of
LOGIMETRICS, INC. with full power of substitution in the premises.
Dated:
(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant)
Address:
In the presence of
EXHIBIT E
LIST OF PURCHASERS AND ALLOCATION OF PURCHASE
[OMITTED]
EXHIBIT F
LIST OF PURCHASERS AND ALLOCATION OF OPTION
[OMITTED]
