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AGREEMENT AND PLAN OF MERGER
by and among
LOGIMETRICS, INC.
MM-TECH ACQUISITION CORP.
MM-TECH, INC.
AND
XXXXXXX X. BRAND
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Dated as of December 18, 1996
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of December
18, 1996, by and among LogiMetrics, Inc., a Delaware corporation ("Parent"),
mm-Tech Acquisition Corp., a New Jersey corporation and a wholly-owned
subsidiary of Parent ("Acquisition"), mm-Tech, Inc., a New Jersey corporation
(the "Company"), and Xxxxxxx X. Brand (the "Stockholder").
RECITALS
WHEREAS, the Boards of Directors of the Parent, Acquisition and the Company
deem it advisable and in the best interests of their respective shareholders to
effect the Merger (as defined below) of Acquisition with and into the Company in
accordance with the terms and conditions of this Agreement and applicable
provisions of law and the Boards of Directors of each of the Parent, Acquisition
and the Company have approved the Merger; and
WHEREAS, the Parent, as the sole stockholder of Acquisition, and the
Stockholder, as the sole stockholder of the Company, have approved the Merger,
this Agreement and the transactions contemplated hereby;
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the terms below shall have the following meanings. Any of
these terms, unless the context otherwise requires, may be used in the singular
or plural depending upon the reference.
"Books and Records" shall mean all records pertaining to the assets,
liabilities, customers, or suppliers of the Company or the Parent or Acquisition
(as the case may be) or any Subsidiary (including the corporate minute book,
corporate tax returns, stock ledger and related items).
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Contract" shall mean, with respect to the Company or the Parent (as the
case may be) or any Subsidiary, any of the agreements, contracts, leases, notes,
loans, evidence of indebtedness, purchase orders, letters of credit, franchise
agreements, undertakings, covenants not to complete, employment agreements,
licenses, instruments, obligations or other commitments to which the Company or
the Parent or any Subsidiary is a party or to which any of its assets are
subject, whether oral or written, express or implied.
"Encumbrances" shall mean any claim, lien, pledge, option, charge,
easement, security interest, right-of-way, encumbrance or other right of third
parties.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"GAAP" shall mean generally accepted accounting principles consistently
applied.
"Inventory" shall mean all of the Company's or the Parent's (as the case
may be) or any Subsidiary's inventory and supplies and all other materials
utilized in connection with the conduct of the business operations of the
Company or the Parent.
"LogiMetrics Common Stock" shall mean the common stock, par value $.01 per
share, of the Parent.
"Material Adverse Effect" shall mean, with respect to the Company or the
Parent (as the case may be), a material adverse effect on (i) its assets, the
business or the condition (financial or otherwise), properties, liabilities,
reserves, working capital, earnings, technology, Prospects or relations with
customers, suppliers, distributors, employees or regulators of such entity or
any Subsidiary or (ii) the right or ability of such entity to consummate the
transactions contemplated hereby.
"Prospects" shall mean, with respect to the Company, the Parent or
Acquisition (as the case may be), and any Subsidiary taken as a whole, the
future of the Company's or the Parent's or Acquisition's business based upon the
Company's or (in the case of Acquisition) the Parent's business plans or other
projections and shall not mean the expectations of the other party.
"Subsidiary" means any corporation, association or other entity in which
the Company, Acquisition or the Parent (as appropriate in the context) controls,
directly or indirectly 50% or more of the outstanding securities or 50% or more
of the total equity interest of such entity.
"Tax" or "Taxes" shall mean all Federal, state, local, foreign and other
taxes, assessments or other government charges, including, without limitation,
income, estimated income, business, occupation, franchise, property, sales,
transfer, use, employment, commercial rent or withholding taxes, including
interest, penalties and additions in connection therewith for which the Company
or the Parent (as the case may be) or any Subsidiary may be liable.
"Tech Common Stock" shall mean the common stock, no par value, of the
Company.
ARTICLE II
THE MERGER AND RELATED TRANSACTIONS
Section 2.1 The Merger. At the Effective Time (as defined in Section 2.2
below), Acquisition shall be merged with and into the Company in accordance with
the applicable provisions of the New Jersey Business Corporation Act (the
"NJBCA") (the "Merger") and the separate existence of Acquisition shall cease.
The Company shall be the surviving corporation in the Merger and shall continue
to be governed by the NJBCA. The separate corporate existence of the Company
with all its rights, privileges, powers and franchises shall continue unaffected
by the Merger. The Merger shall have the effects specified in the NJBCA. From
and after the Effective Time, the Company is sometimes referred to herein as the
"Surviving Corporation."
Section 2.2 Certificate of Merger. On the Closing Date (as defined in
Section 2.7), the parties hereto shall cause a certificate of merger (the
"Certificate of Merger") meeting the requirements of N.J.S.A. 14A:10-4.1 to be
properly executed and filed with the Secretary of State of New Jersey in
accordance with the NJBCA. The Merger shall be effective at the time and on the
date of the filing of the Certificate of Merger in accordance with the NJBCA, or
at such other time and date as may be specified in the Certificate of Merger
(the "Effective Time").
Section 2.3 Certificate of Incorporation of Surviving Corporation. The
Certificate of Incorporation of the Company as in effect immediately prior to
the Effective Time shall be the Certificate of Incorporation of the Surviving
Corporation until amended in accordance with applicable law.
Section 2.4 By-laws of Surviving Corporation. The By-laws of Acquisition as
in effect immediately prior to the Effective Time shall be the By-laws of the
Surviving Corporation until amended in accordance with applicable law.
Section 2.5 Board of Directors of Surviving Corporation. The Board of
Directors of the Surviving Corporation shall consist of Xxxxxxx X. Brand and
Xxxxxx X. Xxxxxx, who shall serve until their successors have been duly elected
or appointed and qualify in the manner provided in the Certificate of
Incorporation or by-laws of the Surviving Corporation or as otherwise provided
by law, or until their earlier death, resignation or removal.
Section 2.6 Officers of Surviving Corporation. The officers of the
Surviving Corporation shall be as follows:
President Xxxxxxx X. Brand
Treasurer Xxxxxxx X. Brand
Vice President Xxxxxxx X. Xxxxxxx
Secretary Xxxxxxx X. Brand
Assistant Secretary Xxxxxx X. Xxxxxx,
who shall serve until their successors have been duly elected or appointed and
qualify in the manner provided in the Certificate of Incorporation or by-laws of
the Surviving Corporation or as otherwise provided by law, or until their
earlier death, resignation or removal.
Section 2.7 Closing. The closing of the transactions contemplated hereby
(the "Closing") shall take place at the offices of counsel to the Parent at
10:00 A.M. local time within five business days of the satisfaction or waiver of
the conditions set forth in Article IX hereof, or at such other time and place
as is mutually agreed to by the Parent and the Company. The time and date of the
Closing is herein called the "Closing Date".
ARTICLE III
CONVERSION OF SHARES
Section 3.1 Conversion.
At the Effective Time, by virtue of the Merger and without any action on
the part of the holders thereof, the outstanding shares of capital stock of each
of Acquisition and the Company shall be converted as follows:
(a) Each outstanding share of capital stock of
Acquisition shall be converted into and exchanged for one (1)
fully paid and non-assessable share of common stock, no par
value, of the Surviving Corporation;
(b) Each outstanding share of Tech Common Stock shall
be converted into 192,478 fully paid and non-assessable shares
of LogiMetrics Common Stock; and
(c) Each share of Tech Common Stock held in the
treasury of the Company or by any Subsidiary of the Company
and each share of Tech Common Stock held by the Parent,
Acquisition or their respective Subsidiaries immediately prior
to the Effective Time shall be canceled, retired and cease to
exist and no payment shall be made with respect thereto.
All shares of Tech Common Stock converted in accordance with this Section
3.1 shall, at the Effective Time, no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and any holder
of a certificate representing any such shares of Tech Common Stock shall cease
to have any rights with respect thereto, except the right to receive, on a per
share basis, the consideration specified in this Section 3.1.
Section 3.2. Legended Certificates. The Certificate(s) representing shares
of LogiMetrics Common Stock issued to the Stockholder pursuant to the Merger and
the provisions of this Agreement shall bear the following legend:
"The securities represented hereby have not been registered
either with the Securities and Exchange Commission or with any
state securities commission and may not be sold or otherwise
transferred except pursuant to an effective registration
statement under the Securities Act of 1933, as amended, or
pursuant to an exemption from such registration."
Section 3.3 Closing of the Company Stock Transfer Books. At the Effective
Time, the stock transfer books of the Company shall be closed and no transfer of
any capital stock of the Company shall thereafter be made or recognized.
ARTICLE IV
[RESERVED]
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE STOCKHOLDER
The following representations and warranties are made by the Company and
the Stockholder, on a joint and several basis, to Acquisition and the Parent,
and shall continue in full force and effect after the date hereof and, subject
to the survival provisions hereinbelow, after the Closing Date.
Section 5.01. Organization and Capitalization. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New Jersey, with an authorized capital stock consisting of 100 shares
of common stock, no par value, of which 100 shares are currently issued and
outstanding. No shares of Tech Common Stock are held as treasury shares or are
owned by any Subsidiary of the Company. All of such issued and outstanding
shares are duly authorized, have been validly issued, and are fully paid and
non-assessable. Except as set forth on Schedule 5.01, there are no outstanding
pre-emptive, conversion or other rights, options, warrants, or agreements
granted or issued by or binding upon the Company for the purchase or acquisition
of any shares of its capital stock. The Stockholder is, and as of the Effective
Time will be, the sole record and beneficial owner of all of the issued and
outstanding shares of capital stock of the Company. Except as set forth on
Schedule 5.01, the Company does not own, directly or indirectly, any outstanding
stock or securities convertible into capital stock of any other corporation or
participating interest in any partnership, joint venture or other business
enterprise.
Section 5.02. Power and Authority. The Company has all requisite corporate
power and authority to own, lease and operate its properties and assets and to
conduct its business as presently conducted and as proposed to be conducted and
is duly qualified or licensed to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of its properties or
assets or the nature of its business activities requires such qualification. All
such jurisdictions are listed on Schedule 5.02.
Section 5.03. Certificate of Incorporation and By-Laws of the Company. A
copy of the Certificate of Incorporation of the Company (and all amendments
thereto), certified as of a recent date by the Secretary of State of New Jersey,
and a copy of the By-laws of the Company, certified by its corporate secretary,
are attached hereto as Schedule 5.03 and are true, complete and correct.
Section 5.04. Authority for Agreement. The Board of Directors of the
Company has approved this Agreement and has authorized the execution and
delivery and performance hereof. The Company has full corporate power, authority
and legal right to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement is a legal, valid and binding obligation of
the Company, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights in general. The Stockholder has approved the Merger, this
Agreement and the transactions contemplated hereby by written consent, a true
and complete copy of which has been provided to the Parent. Such consent has not
been amended, modified or rescinded and remains in full force and effect.
Section 5.05 No Violation to Result. Except as set forth on Schedule 5.05,
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby:
(a) are not in violation or breach of, do not conflict with or constitute a
default under, and will not accelerate or permit the acceleration of the
performance required by, any of the terms of the charter documents or By-laws of
the Company or any Contract, note, debt instrument, security agreement or
mortgage, or any other contract or agreement, written or oral, to which the
Company is a party or by which any of its properties or assets is bound;
(b) will not be an event which, after notice or lapse of time or both, will
result in any such violation, breach, conflict, default or acceleration;
(c) will not result in a violation under any law, judgment, decree, order,
rule, regulation or other legal requirement of any governmental authority, court
or arbitration tribunal whether Federal, state, provincial, municipal or local
(within the U.S. or otherwise) at law or in equity, and applicable to the
Company; and
(d) will not result in the creation or imposition of any Encumbrance in
favor of any third person upon any of the properties or assets of the Company.
Section 5.06. No Existing Defaults. Except as set forth in Schedule 5.06,
the Company is not in default:
(a) under any of the material terms of any Contract, note, debt instrument,
security agreement or mortgage or under any other commitment, contract,
agreement, license, lease or other instrument, whether written or oral, to which
it is a party or by which any of its properties or assets is bound;
(b) under any material law, judgment, decree, order, rule regulation or
other legal requirement or any governmental authority, court or arbitration
tribunal, whether Federal, state, provincial, municipal or local (within the
U.S. or otherwise), at law or in equity, and applicable to it or to any of its
properties or assets; or
(c) in the payment of any material monetary obligation or debt.
There exists no condition or event which, after notice or lapse of time or
both, would constitute a default in connection with any of the foregoing.
Section 5.07. Financial Statements. (a) The unaudited financial statements
of the Company for the fiscal years ended October 31, 1996 and 1995,
respectively (which financial statements, including, without limitation, any
notes thereto are hereinafter collectively called the "Financial Statements"),
all of which are attached hereto as Schedule 5.07, are complete and correct in
all material respects, fairly present the financial position of the Company and
the results of operations as of the respective dates and for the periods
indicated thereon in all material respects and have been prepared in accordance
with GAAP (except that the Financial Statements do not contain footnotes
prepared in accordance with GAAP). The Company has no material liability or
obligation, fixed, contingent, known, unknown or otherwise, not reflected in the
October 31, 1996 balance sheet included in the Financial Statements and all
provisions, reserves and allowances provided for therein are adequate, except
for liabilities or obligations incurred between October 31, 1996 and the date of
this Agreement in the ordinary and usual course of business consistent with past
practices and with the representations and warranties set forth herein, except
for expenses incurred in connection with the transactions contemplated by this
agreement.
Section 5.08. No Adverse Changes. Since October 31, 1996, except as
disclosed in Schedule 5.08 hereto there has not been any:
(a) action which has resulted in or, to the best of the Company's and the
Stockholder's knowledge, may result in a Material Adverse Effect on the assets,
liabilities, business, condition (financial or otherwise), operations or results
of the Company and its Subsidiaries taken as a whole;
(b) failure to operate the business of the Company or its Subsidiaries in
the ordinary course consistent with past practice;
(c) revaluation by the Company of any material assets of the Company or its
Subsidiaries including, without limitation, writing off notes or accounts
receivable other than in the ordinary course of business consistent with past
practice; or
(d) issuance by the Company of any shares of stock or other equity
securities (other than pursuant to any stock option plans, employee benefit
plans, or obligations to employees or directors).
Section 5.09. Employee Plans and Agreements. Schedule 5.09 lists all bonus,
deferred compensation, pension, retirement, profit-sharing, thrift, savings,
employee stock ownership, stock bonus, stock purchase, restricted stock and
stock option plans, all employment or severance contracts, health and medical
insurance plans, life insurance and disability insurance plans, other material
employee benefit plans, contracts or arrangements which cover employees of the
Company including, but not limited to, "employee benefit plans" within the
meaning of Section 3(3) of ERISA. The Company has complied, in all material
respects, with all laws rules and regulations relating to such plans. Except as
set forth on Schedule 5.09, neither the Company nor any of its affiliates
sponsors, contributes to, or is otherwise obligated to, any multi-employer plan
as defined in ERISA.
Section 5.10. [Reserved]
Section 5.11. Taxes. (a) Except as set forth on Schedule 5.11 the Company
has prepared (or caused to be prepared) and timely and properly filed (or caused
to be timely and properly filed) with the appropriate federal, state,
provincial, municipal or local authorities (within the U.S. or otherwise) all
material tax returns, information returns and other reports required to be filed
and has paid or accrued (or caused to be so paid or accrued) in full all
material taxes, interest, penalties, assessments or deficiencies, if any, due
to, or claimed to be due by, any taxing authority. The balance sheets included
in the Financial Statements include appropriate provisions for all taxes,
interest, penalties, assessments or deficiencies, if any, for the periods
indicated thereon to the extent not theretofore paid. The Company has not
executed or filed with any taxing authority any agreement extending the period
for assessment or collection of any taxes. The Company is not a party to any
pending action or proceeding, nor is any such action or proceeding threatened,
by any governmental authority for the assessment or collection of taxes, and no
claim for assessment or collection of taxes has been asserted against the
Company, and during the course of any audit currently in process or not
completed, no issues have been suggested by any representative of any such
governmental authority that, if asserted, would result in a proposed assessment
of taxes, interest or penalties, against the Company.
(b) Neither the Company nor the Stockholder has taken or agreed to take any
action or has any knowledge of any fact or circumstance that would prevent the
Merger from qualifying as a tax-free reorganization within the meaning of
Section 368 of the Code.
Section 5.12. Accounts Receivable. All of the accounts receivable of the
Company as reported on the Financial Statements represent bona fide claims
against debtors for sales made or services performed in the ordinary and usual
course of business and in accordance with applicable orders, contracts,
standards or requirements. Such receivables are, and shall be, subject to no
defenses, counter-claims or rights of setoff and, other than collected amounts
of such receivables as of the date of this Agreement, will be fully collectible
in the ordinary and usual course of business without unreasonable cost to the
Surviving Corporation in collection efforts, except to the extent of any reserve
with respect thereto expressly set forth in said financial statements.
Section 5.13. Condition of Assets. The October 31, 1996 balance sheet of
the Company included in the Financial Statements reflects all of the properties
and assets of the Company except for (i) property and assets disposed of or
acquired by the Company since October 31, 1996 in the ordinary and usual course
of business and consistent with the representations and warranties of the
Company contained herein, and (ii) leased properties and assets. All of the
properties and assets of the Company are in good operating condition, free from
any defect, ordinary wear and tear excepted.
Section 5.14. Title to Assets. Except as otherwise set forth on Schedule
5.14 hereto, the Company has good and marketable title to the assets that are
material to the operation or conduct of its business, free and clear of any and
all Encumbrances and defects in title. As of the Effective Time, the Company
will have good and marketable title to such properties and assets, free and
clear of any and all liens, encumbrances, security agreements, equities,
options, claims, charges, pledges, restrictions, encroachments, defects in title
and easements except as otherwise set forth on Schedule 5.14 hereto.
Section 5.15. Inventory. The Inventory of the Company as reported on the
Financial Statements will consist solely of items of a quality and quantity
usable or saleable in the normal course of business, subject to normal
obsolescence in accordance with the Company's historical operations.
Section 5.16. Prepaid Items, etc. The prepaid items recorded on the
Company's balance sheet included in the Financial Statements constitute a full
and complete presentation of each and every prepaid item which the Company is
entitled to list, in accordance with GAAP on the asset side of its balance
sheet.
Section 5.17. Intellectual Property. Schedule 5.17 hereto constitutes a
true and complete list of all trademarks, certification marks, trade names,
service marks, copyrights, patents, patent applications and product composition
formula owned or used by the Company (collectively, "Intellectual Property").
The Company owns or possesses adequate licenses or other rights to use all
trademarks, certification marks, trade names, service marks, copyrights,
patents, patent applications, trade secrets, product composition formulae,
computer programs, product development records and other proprietary processes
and information used in its business, and the same are sufficient in all
respects to conduct the business as currently conducted. Except as described in
Schedule 5.17 hereto, the Company is not required to pay any royalty, license
fee or similar type of compensation in connection with the conduct of its
business as it is now or heretofore has been conducted or as proposed to be
conducted. All patents, patent applications and rights to inventions or
discoveries (whether or not patentable) owned or held by any officer, director,
stockholder, employee, consultant or agent of the Company relating to the
business of the Company have been duly and effectively transferred to the
Company and, except as described on Schedule 5.17 hereto, to the best knowledge
of the Company and the Stockholder, none of the operations of the Company
infringe, and no one has asserted to the Company that such operations do
infringe, the patents, patent applications, trademarks, certifications marks,
trade names, service marks, trade secrets or other intellectual property rights
of anyone.
Section 5.18. Real Property. Schedule 5.18 constitutes a true and complete
list of all leaseholds of real property leased by the Company or to which the
Company may have any leasehold rights (the "Premises"). With respect to each and
every parcel of land described in Schedule 5.18 hereto and the portion of the
buildings, structures and improvements thereon leased by the Company
(collectively, the "Facilities"):
(a) except as otherwise disclosed on Schedule 5.18, there are no
outstanding written or oral leases or tenancies of any kind (including tenancies
by sufferance and/or holdover tenancies arising under expired written or oral
leases) covering or in any way affecting the Facilities or any part or parts
thereof;
(b) except as a matter of record, no person, firm or corporation other than
the Company has any rights (including rights arising under an installment
contract, option to purchase, easement, right-of-way, or otherwise) with respect
to the Facilities or any part or parts thereof;
(c) except as otherwise disclosed on Schedule 5.18, the Company is not in
violation of or in default under the terms of any oral or written lease or other
agreement covering or in any way affecting the Facilities;
(d) the Facilities are subject to a valid certificate of occupancy and are
sufficient and adequate for the conduct and the operation of the business of the
Company;
(e) except as otherwise disclosed on Schedule 5.18, the Company has not
granted to any person, firm or corporation any right or rights in and to the
Facilities or any part or parts thereof which would prevent or interfere with
Acquisition's occupancy and possession of the Facilities; and
(f) to the best of the Company's and the Stockholder's knowledge, the
Company has performed all obligations imposed by any governmental authority in
connection with the improvement of the Facilities.
Section 5.19. Buildings. Each of the Facilities constituting part of the
Premises is of sound structural integrity, ordinary wear and tear excepted and
is usable and adequate for its intended purpose and to conduct the business of
the Company as such business is now being conducted.
Section 5.20. Utilities. To the best knowledge of the Company and the
Stockholder, there are no restraints respecting availability of public
utilities, including, but not limited to, adequate amounts of water, sewer, gas
and electricity and the Facilities are adequately serviced by all such
utilities; all payments, assessments, deposits and other charges relating to
such utilities and any other existing on-site improvements or off-site
improvements (including public or quasi-public utilities or services) have been
paid in full to the extent that they are due.
Section 5.21. Machinery and Equipment. The Company owns or has adequate
rights to all machinery and equipment (including, without limitation, machinery
and equipment under development or construction) used or necessary for use in
its trade or business, and all such machinery and equipment is in operating
condition and free from any defect, ordinary wear and tear excepted.
Section 5.22. Vehicles. The Company owns all cars, trucks, and other motor
vehicles used or necessary for use in its trade or business and each such car,
truck, aircraft or motor vehicle is in good operating condition and free from
any defect and is identified and listed on Schedule 5.22 hereto.
Section 5.23. Brokers. Neither the Company, the Stockholder nor any of
their affiliates, officers, directors, employees or agents has engaged or
incurred any liability to any broker, finder or agent with respect to this
Agreement or any transaction contemplated hereby.
Section 5.24. Contracts. Schedule 5.24 hereto constitutes a true and
complete list of each Contract or agreement requiring aggregate payments by the
Company or receipt by the Company of amounts in excess of $10,000 and to which
the Company is a party, or by which the Company or its assets is bound, in any
respect, including, but not limited to, each such contract which is:
(a) a license or a lease;
(b) a contract, agreement or commitment for the purchase, sale or lease of
materials, equipment, real or personal property, capital assets or supplies;
(c) a contract, agreement or commitment for the sale by the Company of
products or the performance of any services;
(d) a management, advisory or collective bargaining agreement or a
non-competition or nondisclosure agreement;
(e) a pension, profit sharing, bonus, retirement, deferred compensation,
stock option, employee stock purchase, insurance or other employee benefit plan
or arrangement;
(f) a contract or agreement with an agent, dealer or sales representative
or franchisee;
(g) a contract or agreement with employees, consultants, stockholders,
directors or officers, or any agreement relating to a power of attorney;
(h) a loan or guaranty agreement, credit agreement, note or other evidence
of indebtedness, forward contract, consignment agreement, custody agreement, or
indenture or instrument evidencing liens or secured transactions (exclusive of
the contracts, agreements and the like referred to in subsection (k) below);
(i) a contract, license or other agreement relating to a patent, invention
or discovery (whether or not patentable), trade secret, trademark, service xxxx,
certification xxxx, trade name or copyright or application for any of the
foregoing;
(j) a contract of insurance; or
(k) notwithstanding the foregoing $10,000 threshold, Schedule 5.24 includes
a copy of each form of agreement between the Company and its customers and an
accounts receivable listing relating to the rendering of services or products to
customers and/or to the receipt of payment by the Company for such services or
products.
Each of the contracts or agreements listed in Schedule 5.24 hereto is in full
force and effect, is a valid and binding obligation of against the Company,
enforceable against the Company in accordance with its terms, and no event has
occurred which constitutes or, with the giving of notice or passage of time, or
both, would constitute, a default or breach thereunder of the Company. The
Company has delivered or caused to be delivered or made available to Acquisition
correct and complete copies of each contract or agreement listed in Schedule
5.24 hereto and all modifications or amendments thereto.
Section 5.25. Litigation. Except as set forth on Schedule 5.25 hereto,
there is no litigation, suit, proceeding, action, claim or investigation, at law
or in equity, pending or, to the best of the Company's and the Stockholder's
knowledge, threatened against or affecting the Stockholder, the Company or its
Subsidiaries or involving any of their respective property or assets.
Section 5.26. Compliance with Laws. To the best of the Company's and the
Stockholder's knowledge, the Company has complied with all laws, municipal
by-laws, regulations, rules, orders, judgments, decrees and other requirements
and policies imposed by any governmental authority applicable to it, its
properties or the operation of its business. Without limiting the generality of
the foregoing, the Company is in compliance in all material respects with:
(a) all applicable laws relating to the protection of human health and
safety, including, without limitation, the Occupational Safety and Health Act of
1970, as amended, and all regulations and standards issued thereunder by the
Secretary of Labor or the Occupational Safety and Health Administrator or other
governmental agency or authority acting at any time thereunder;
(b) all applicable laws relating to protection of the environment,
including, without limitation, the Resource Conservation and Recovery Act
("RCRA") and the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA");
(c) all applicable laws relating to equal employment opportunity; and
(d) all zoning, building and other laws, ordinances, rules, regulations,
plans and directives of governmental authorities, Boards of Fire Underwriters
and other entities having jurisdiction, as well as all private restrictions and
covenants (whether or not registered or of record), in each case without
reliance on non-conforming use or similar rule.
Except as set forth in Schedule 5.26 hereto, the Company has not received
any notice or citation for noncompliance with any of the foregoing, and to the
best of the Company's and the Stockholder's knowledge, there exists no
condition, situation or circumstance, nor has there existed such a condition,
situation or circumstance, which, after notice or lapse of time, or both, would
constitute noncompliance with or give rise to future liability with regard to
any of the foregoing.
Section 5.27. Environmental Matters. Except as set forth on Schedule 5.27
hereto, the Company has not stored, nor is storing, any hazardous wastes, as
defined by RCRA, for ninety (90) days or more, and:
(a) the Company has not generated, stored, transported, recycled, disposed
of or otherwise handled in any way any waste material or hazardous substance for
itself or for any other person or entity, nor has any other person or entity
sorted, transported, recycled, disposed of or otherwise handled in any way any
waste material or hazardous substances;
(b) there are no locations where any waste material or hazardous substances
from the operation of the Company have been stored, treated, recycled or
disposed of;
(c) to the best of the Company's knowledge, there are no Contaminants (as
defined hereinbelow) located on or within the Premises;
(d) there is no ongoing release and there has been no past release of
Contaminants into the environment from the operation of the business of the
Company;
(e) there are no PCBs or any asbestos contained in or otherwise parts of
the Premises or the Facilities and no product compositions used in the business
of the Company contain more than five percent (5%) of the element beryllium;
(f) the Company has not been required by any governmental authority to make
any expenditure to achieve or maintain compliance with any environmental
standard;
(g) the Company has no knowledge of any information indicating that any
person, including any employee, may have impaired health or that the environment
may have been damaged as the result of the operation of the business of the
Company or as the result of the release of Contaminants from the Premises or the
Facilities; and
For the purpose of Section 5.27(c), (d) and (g), the term "Contaminants"
includes any pollutant, waste materials, petroleum and petroleum products and
hazardous substances, as defined by CERCLA.
Section 5.28. Insurance. The Company has in full force and effect (with no
overdue premiums) the policies of insurance, or renewals thereof, in the amounts
and for the periods set forth in Schedule 5.28 hereto which Schedule constitutes
a true and complete list of all policies of insurance to which the Company is a
party that relate to its assets or operations. To the best of the Company's and
the Stockholder's knowledge, such policies adequately cover all risks reasonably
foreseeable in the operation and conduct of the Company's business. The Company
has not received any notices of, or been threatened with, cancellation with
regard to any of such policies. The policies listed on Schedule 5.28 will remain
in full force and effect through the Effective Date and the consummation of the
transactions contemplated herein.
Section 5.29. Licenses, Permits and Approvals. To the best of the Company's
and the Stockholder's knowledge, the Company has all licenses, permits,
approvals, qualifications or the like, issued or to be issued to the Company by
any government or any governmental unit, agency, body or instrumentality,
whether Federal, state, provincial, municipal or local (within the U.S. or
otherwise) or any third party necessary for the conduct of its trade or business
and all such items are in full force and effect. Except as set forth on Schedule
5.29 hereto, no registration with, approval by, consent or clearance or other
action from or pre-notification to any governmental agency or any third party is
required in connection with the execution and performance of this Agreement by
the Company.
Section 5.30. Labor Relations. In general, the Company has good and
amicable relations with its employees and does not have any reason to believe
that this situation will change or that any collective representation of the
employees has been or is being considered by such employees.
Section 5.31. Full Disclosure. No representation or warranty made by the
Company or the Stockholder in this Agreement, any Schedule, any Exhibit or any
certificate delivered, or to be delivered, by or on behalf of the Company or the
Stockholder pursuant hereto contains or will contain any untrue statement of a
material fact or omits or will omit 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 or the Stockholder has not disclosed to the Parent
in writing that the Company or the Stockholder presently believes has resulted
in a Material Adverse Effect or could reasonably be expected to have a Material
Adverse Effect.
Section 5.32. True Copies. All documents furnished or caused to be
furnished to the Parent or Acquisition by the Company are true and correct
copies, and there are no amendments or modifications thereto except as set forth
in such documents.
Section 5.33. Access to Data. The Company and the Stockholder or their
representative(s), if any, have been afforded the opportunity to obtain all
information they have requested in connection with any representations or
information supplied to the Company and have had all of his/her/its inquiries to
Acquisition answered in full, and have been furnished all requested materials
relating to the business and affairs of the Parent and Acquisition and the
transactions contemplated hereby. Each of the Company and the Stockholder
acknowledges receipt of the Parent's report on Form 10-KSB for the year ended
June 30, 1996, reports on Form 10-QSB (in each case, as the same may be amended
on or prior to the date of this Agreement) for the quarters ended September 30,
1995, December 31, 1995, March 31, 1996 and September 30, 1996, and the proxy
statement dated January 29, 1996, respecting the special meeting held on
February 9, 1996 (collectively, the "SEC Reports").
Section 5.34. Capacity; Authorization. The Stockholder has the authority
and the capacity to execute and deliver this Agreement and to perform his
obligations hereunder. The Stockholder is under no impairment or other
disability, legal, physical, mental or otherwise, that would preclude or limit
the ability of the Stockholder to perform his obligations hereunder. This
Agreement as been duly authorized, executed and delivered by the Stockholder and
constitutes a valid and binding agreement of the Stockholder, enforceable
against the Stockholder in accordance with its terms.
Section 5.35. Non-contravention. Neither the execution and delivery of this
Agreement by the Stockholder nor the performance by the Stockholder of his
obligations hereunder will (i) 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 Stockholder is a party or by
which he or the shares of Tech Common Stock held by him (the "Tech Shares") are
bound or to which such Tech Shares are subject, or (iii) result in the creation
or imposition of any Encumbrance on the Tech Shares.
Section 5.36. 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
consummation of the transactions contemplated hereby by the Stockholder.
Section 5.37. Ownership of the Tech Shares. The Stockholder owns the Tech
Shares beneficially and of record, free and clear of any Encumbrances. There are
no voting trust arrangements, shareholder agreements or other agreements (i)
granting any option, warrant or right of first refusal with respect to the Tech
Shares to any person, (ii) restricting the right of the Stockholder to sell the
Tech Shares to the Parent pursuant to this Agreement, or (iii) restricting any
other right of the Stockholder with respect to the Tech Shares. The Stockholder
has the absolute and unrestricted right, power and capacity to sell, assign and
transfer the Tech Shares to the Parent pursuant to the terms of this Agreement,
free and clear of any Encumbrances. No other person owns or has the right to
acquire (whether now or at some time in the future) any shares of Tech Common
Stock.
Section 5.38. Survival of Representations and Warranties of the Company and
the Stockholder. The representations and warranties made in this Article V are
correct, true and complete as of the date hereof and will be correct, true and
complete as at the Effective Time with the same force and effect as though such
representations and warranties had been made at the Effective Time, and shall
survive the Effective Time until thirty days following the issuance of the first
independent audit report (following the completion of the Merger) on the
combined results of Acquisition and the Parent.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND ACQUISITION
The following representations and warranties are made by Acquisition and
the Parent to the Company:
Section 6.01. Organization. Each of the Parent and Acquisition is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation.
Section 6.01A Power and Authority. Each of the Parent and Acquisition has
all requisite corporate power and authority to own, lease and operate its
properties and assets and to conduct its business as presently conducted and as
proposed to be conducted and is duly qualified or licensed to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
character of its properties or assets or the nature of its business activities
requires such qualification. All such jurisdictions are listed on Schedule
6.01A.
Section 6.02. Authority for Agreement. The Board of Directors of each of
the Parent and Acquisition has approved this Agreement and has authorized the
execution and delivery hereof. Each of the Parent and Acquisition has full
power, authority and legal right to enter into this Agreement and to consummate
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of the Parent and Acquisition and is a legal, valid and
binding obligation of each of the Parent and Acquisition, enforceable against
each of them in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights in general. The
Parent, as the sole stockholder of Acquisition, has approved the Merger, this
Agreement and the transactions contemplated hereby, and such approval has not
been amended, modified or rescinded and remains in full force and effect.
Section 6.03. No Violation to Result. The execution and delivery by the
Parent and Acquisition of this Agreement and the consummation of the
transactions contemplated hereby:
(a) are not in violation or breach of, do not conflict with or constitute a
default under, and will no accelerate or permit the acceleration of the
performance required by, any of the terms of the certificate of incorporation or
By-laws of Acquisition or the Parent or any note, debt instrument, security
agreement or mortgage, or any other contract or agreement, written or oral, to
which Acquisition or the Parent is a party or by which Acquisition or the Parent
or any of their respective properties or assets is bound;
(b) will not be an event which, after notice or lapse of time or both, will
result in any such violation, breach, conflict, default, or acceleration;
(c) will not result in violation under any law, judgment, decree, order,
rule, regulation or other legal requirement of any governmental authority, court
or arbitration tribunal whether Federal, state, provincial, municipal or local
(within the U.S. or otherwise) at law or in equity, and applicable to either
Acquisition or the Parent; and
(d) will not result in the creation or imposition of any Encumbrance in
favor of any third person upon any of the properties or assets of the Parent or
Acquisition.
Section 6.04. SEC Filings. As amended on or prior to the date hereof, the
SEC Reports did not contain, as of their respective dates, any untrue statement
of a material fact, or omit to state any material fact necessary to make the
statements or facts contained thereon, in light of the circumstances under which
they were made, not misleading. The Parent is in material compliance with all
applicable rules and regulations of the Securities and Exchange Commission.
Section 6.05. No Existing Defaults. Except as set forth in Schedule 6.05,
the Parent is not in default:
(a) under any of the material terms of any Contract, note, debt instrument,
security agreement or mortgage or under any other commitment, contract,
agreement, license, lease or other instrument, whether written or oral, to which
it is a party or by which any of its properties or assets is bound;
(b) under any material law, judgment, decree, order, rule regulation or
other legal requirement or any governmental authority, court or arbitration
tribunal whether federal, state, provincial, municipal or local (within the U.S.
or otherwise), at law or in equity, and applicable to it or to any of its
properties or assets; or
(c) in the payment of any material monetary obligations or debts.
There exists no condition or event which, after notice or lapse of time or both,
would constitute a default in connection with any of the foregoing.
Section 6.06. Financial Statements. (a) The audited consolidated financial
statements of the Parent and its Subsidiary as of and for the fiscal years ended
June 30, 1996 and 1995, respectively (which financial statements, including,
without limitation, any notes thereto and reports thereon are hereinafter
collectively called the "LogiMetrics Financial Statements"), and the unaudited
consolidated financial statements of the Parent and its Subsidiary as of and for
the three months ended September 30, 1996 (the "LogiMetrics Interim Financial
Statements"), all of which are attached hereto as Schedule 6.06, are complete
and correct in all material respects, fairly present the financial position of
the Parent and its Subsidiary and the results of operations as of the respective
dates and for the periods indicated thereon in all material respects and have
been prepared in accordance with GAAP. The Parent has no material liability or
obligation, fixed, contingent, known, unknown or otherwise, not reflected in the
September 30, 1996 balance sheet included in the LogiMetrics Interim Financial
Statements, and all provisions, reserves and allowances provided for therein are
adequate, except for liabilities or obligations incurred between September 30,
1996 and the date of this Agreement in the ordinary and usual course of business
consistent with past practices and with the representations and warranties set
forth herein, except for expenses incurred in connection with the transactions
contemplated by this Agreement.
Section 6.07. No Adverse Changes. Since September 30, 1996, except as
disclosed in Schedule 6.07 hereto there has not been any:
(a) action which has resulted in or, to the best of the Parent's knowledge,
may result in a Material Adverse Effect on the assets, liabilities, business,
condition (financial or otherwise), operations or results of the Parent and its
Subsidiaries taken as a whole;
(b) failure to operate the business of the Parent or its Subsidiaries in
the ordinary course consistent with past practice;
(c) revaluation by the Parent of any material assets of the Parent or its
Subsidiaries including, without limitation, writing off notes or accounts
receivable other than in the ordinary course of business consistent with past
practice; or
(d) issuance by the Parent of any shares of stock or other equity
securities (other than pursuant to any stock option plans, employee benefit
plans, or obligations to employees or directors).
Section 6.08. Capitalization: LogiMetrics Common Stock.
(a) The authorized capital stock of Acquisition will consist of 100 shares
of Common Stock, no par value; all of the outstanding shares of Acquisition's
common stock will be owned by the Parent.
(b) The authorized capital stock of the Parent consists of: (i) 200 shares
of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), 30 shares
of which are issued and outstanding and designated as Series A 12% Cumulative
Convertible Redeemable Preferred Stock; and (ii) 35,000,000 shares of Common
Stock, par value $0.01 per share, of which 2,954,954 shares were issued and
outstanding as of June 30, 1996 and 16,292,860 shares were reserved for issuance
upon conversion of the outstanding shares of Preferred Stock, 12% Convertible
Senior Subordinated Debentures due December 31, 1998, and Amended and Restated
12% Convertible Subordinated Debentures and upon exercise of Amended and
Restated Series A Warrants, Amended and Restated Series B Warrants, Series C
Warrants, Series D Warrants, Series E Warrants, Series F Warrants and various
options to purchase LogiMetrics Common Stock. The shares of LogiMetrics Common
Stock to be issued in accordance with this Agreement will have been duly
authorized and, upon issuance to the Stockholder in accordance herewith, will be
validly issued, fully paid and nonassessable.
Section 6.09. Ownership of Acquisition. All of the outstanding shares of
capital stock of, and all other ownership interest in, Acquisition (i) are
validly issued, fully paid and non-assessable and free of any pre-emptive
rights, and (ii) are owned by the Parent, free and clear of all liens, claims,
pledges, agreements or encumbrances, such that the Parent directly owns the
entire equity interest in Acquisition.
Section 6.10. Employee Plans and Agreements. Schedule 6.10 lists all bonus,
deferred compensation, pension, retirement, profit-sharing, thrift, savings,
employee stock ownership, stock bonus, stock purchase, restricted stock and
stock option plans, all employment or severance contracts, health and medical
insurance plans, life insurance and disability insurance plans, other material
employee benefit plans, contracts or arrangements which cover employees of the
Parent including, but not limited to, "employee benefit plans" within the
meaning of Section 3(3) of ERISA. The Parent has complied, in all material
respects, with all laws rules and regulations relating to such plans. Except as
set forth on Schedule 6.10, neither the Parent nor any of its affiliates
sponsors, contributes to, or is otherwise obligated to, any multi-employer plan
as defined in ERISA.
Section 6.11. Tax Matters. (a) Except as set forth on Schedule 6.11. the
Parent has prepared (or caused to be prepared) and timely and properly filed (or
caused to be timely and properly filed) with the appropriate Federal, state,
provincial, municipal or local authorities (within the U.S. or otherwise) all
material tax returns, information returns and other reports required to be filed
and has paid or accrued (or caused to be so paid or accrued) in full all
material taxes, interest, penalties, assessments or deficiencies, if any, due
to, or claimed to be due by, any taxing authority. The balance sheets included
in the LogiMetrics Financial Statements and the LogiMetrics Interim Financial
Statements include appropriate provisions for all taxes, interest, penalties,
assessments or deficiencies, if any, for the periods indicated thereon to the
extent not theretofore paid. The Parent has not executed or filed with any
taxing authority any agreement extending the period for assessment or collection
of any taxes. The Parent is not a party to any pending action or proceeding, nor
is any such action or proceeding threatened, by any governmental authority for
the assessment or collection of taxes, and no claim for assessment or collection
of taxes has been asserted against the Parent, and during the course of any
audit currently in process or not completed, no issues have been suggested by
any representative of any such governmental authority that, if asserted, would
result in a proposed assessment of taxes, interest or penalties, against the
Parent.
(b) Neither the Parent nor Acquisition has taken or agreed to take any
action or has any knowledge of any fact or circumstance that would prevent the
Merger from qualifying as a tax-free reorganization within the meaning of
Section 368 of the Code.
Section 6.12. Litigation. Except as set forth on Schedule 6.12 hereto,
there is no litigation, suit, proceeding, action, claim or investigation, at law
or in equity, pending or, to the best of the Parent's knowledge, threatened
against or affecting the Parent or its Subsidiaries or involving any of their
respective property or assets.
Section 6.13. Condition of Assets. The September 30, 1996 balance sheet of
the Parent included in the LogiMetrics Interim Financial Statements reflects all
of the properties and assets of the Parent except for (i) property and assets
disposed of or acquired by the Parent since September 30, 1996 in the ordinary
and usual course of business and consistent with the representations and
warranties of the Parent contained herein, and (ii) leased properties and
assets. All of the properties and assets of the Parent are in good operating
condition, free from any defect, ordinary wear and tear excepted.
Section 6.14. Title to Assets. Except as otherwise set forth on Schedule
6.14 hereto, the Parent has good and marketable title to the assets that are
material to the operation or conduct of its business, free and clear of any and
all Encumbrances and defects in title. As of the Effective Time, the Parent will
have good and marketable title to such properties and assets, free and clear of
any and all liens, encumbrances, security agreements, equities, options, claims,
charges, pledges, restrictions, encroachments, defects in title and easements
except as otherwise set forth on Schedule 6.14 hereto.
Section 6.15. Inventory. The Inventory of the Parent as reported on the
LogiMetrics Financial Statements and LogiMetrics Interim Financial Statements
will consist solely of items of a quality and quantity usable or saleable in the
normal course of business, subject to normal obsolescence in accordance with the
Parent's historical operations.
Section 6.16. Prepaid Items, etc. The prepaid items recorded on the
Parent's balance sheet included in the LogiMetrics Financial Statements and
LogiMetrics Interim Financial Statements constitute a full and complete
presentation of each and every prepaid item which the Parent is entitled to
list, in accordance with GAAP on the asset side of its balance sheet.
Section 6.17. Intellectual Property. Schedule 6.17 hereto constitutes a
true and complete list of all trademarks, certification marks, trade names,
service marks, copyrights, patents, patent applications and product composition
formulae owned or used by the Parent (collectively, "LogiMetrics Intellectual
Property"). The Parent owns or possesses adequate licenses or other rights to
use all trademarks, certification marks, trade names, service marks, copyrights,
patents, patent applications, trade secrets, product composition formulae,
computer programs, product development records and other proprietary processes
and information used in its business, and the same are sufficient in all
respects to conduct the business as currently conducted. Except as described in
Schedule 6.17 hereto, the Parent is not required to pay any royalty, license fee
or similar type of compensation in connection with the conduct of its business
as it is now or heretofore has been conducted or as proposed to be conducted.
All patents, patent applications and rights to inventions or discoveries
(whether or not patentable) owned or held by any officer, director, stockholder,
employee, consultant or agent of the Parent relating to the business of the
Parent have been duly and effectively transferred to the Parent and, except as
described on Schedule 6.17 to the best of the Parent's knowledge, none of the
operations of the Parent infringe, and no one has asserted to the Parent that
such operations infringe, the patents, patent applications, trademarks, trade
names, certification marks, service names, trade secrets or other intellectual
property rights of anyone.
Section 6.18. Real Property. Schedule 6.18 constitutes a true and complete
list of all leaseholds of real property leased by the Parent or to which the
Parent may have any leaseholds rights (the "LogiMetrics Premises"). With respect
to each and every parcel of land described in Schedule 6.18 hereto and the
portion of the buildings, structures and improvements thereon leased by the
Parent (collectively, the "LogiMetrics Facilities"):
(a) except as otherwise disclosed on Schedule 6.18 there are no outstanding
written or oral leases or tenancies of any kind (including tenancies by
sufferance and/or holdover tenancies arising under expired written or oral
leases) covering or in any way affecting the LogiMetrics Facilities or any part
or parts thereof;
(b) except as a matter of record, no person, firm or corporation other than
the Parent has any rights (including rights arising under an installment
contract, option to purchase, easement, right-of-way, or otherwise) with respect
to the LogiMetrics Facilities or any part or parts thereof;
(c) except as otherwise disclosed on Schedule 6.18 the Parent is not in
violation of or in default under the terms of any oral or written lease or other
agreement covering or in any way affecting the LogiMetrics Facilities;
(d) the LogiMetrics Facilities are subject to a valid certificate of
occupancy and are sufficient and adequate for the conduct and the operation of
the business of the Parent;
(e) the Parent has not granted to any person, firm or corporation any right
or rights in and to the LogiMetrics Facilities or any part or parts thereof
which would prevent or interfere with its or Acquisition's occupancy and
possession of the LogiMetrics Facilities; and
(f) to the best of the Parent's knowledge, the Parent has performed all
obligations imposed by any governmental authority in connection with the
improvement of the LogiMetrics Facilities.
Section 6.19. Buildings. Each of the LogiMetrics Facilities constituting
part of the LogiMetrics Premises is of sound structural integrity, ordinary wear
and tear excepted and is usable and adequate for its intended purpose and to
conduct the business of the Parent as such business is now being conducted.
Section 6.20. Utilities. To the Parent's best knowledge, there are no
restraints respecting availability of public utilities, including, but not
limited to, adequate amounts of water, sewer, gas and electricity and the
LogiMetrics Facilities are adequately serviced by all such utilities; all
payments, assessments, deposits and other charges relating to such utilities and
any other existing on-site improvements or off-site improvements (including
public or quasi-public utilities or services) have been paid in full to the
extent that they are due.
Section 6.21. Machinery and Equipment. The Parent owns or has adequate
rights to all machinery and equipment (including, without limitation, machinery
and equipment under development or construction) used or necessary for use in
its trade or business, and all such machinery and equipment is in operating
condition and free from any defect, ordinary wear and tear is excepted.
Section 6.22. Vehicles. The Parent owns all cars, trucks, and other motor
vehicles used or necessary for use in its trade or business and each such car,
truck, aircraft or motor vehicle is in good operating condition and free from
any defect and is identified and listed on Schedule 6.21 hereto.
Section 6.23. Brokers. Neither the Parent nor any of its affiliates,
officers, directors, employees or agents has engaged nor incurred any liability
to any broker, finder or agent with respect to this Agreement or any transaction
contemplated hereby.
Section 6.24. Contracts. Schedule 6.24 hereto constitutes a true and
complete list of each Contract or agreement requiring aggregate payments or
receipt by the Parent, of amounts in excess of $10,000 and to which the Parent
is a party, or by which the Parent or its assets is bound, in any respect,
including, but not limited to, each such contract which is:
(a) a license or a lease;
(b) a contract, agreement or commitment for the purchase, sale or lease of
materials, equipment, real or personal property, capital assets or supplies;
(c) a contract, agreement or commitment for the sale by the Parent of
products or the performance of any services;
(d) a management, advisory or collective bargaining agreement or a
non-competition or nondisclosure agreement;
(e) a pension, profit sharing, bonus, retirement, deferred compensation,
stock option, employee stock purchase, insurance or other employee benefit plan
or arrangement;
(f) a contract or agreement with an agent, dealer or sales representative
or franchisee;
(g) a contract or agreement with employees, consultants, stockholders,
directors or officers, or any agreement relating to a power of attorney;
(h) a loan or guaranty agreement, credit agreement, note or other evidence
of indebtedness, forward contract, consignment agreement, custody agreement, or
indenture or instrument evidencing liens or secured transactions (exclusive of
the contracts, agreements and the like referred to in subsection (k) below);
(i) a contract, license or other agreement relating to a patent, invention
or discovery (whether or not patentable), trade secret, trademark, service xxxx,
certification xxxx, trade name or copyright or application for any of the
foregoing;
(j) a contract of insurance; or
(k) notwithstanding the foregoing $10,000 threshold, Schedule 6.24 includes
a copy of each form of agreement between the Parent and its customers and an
accounts receivable listing relating to the rendering of services or products to
customers and/or to the receipt of payment by the Parent for such services or
products.
Section 6.25. Compliance with Laws. To the best of the Parent's knowledge,
the Parent has complied with all laws, municipal by-laws, regulations, rules,
orders, judgments, decrees and other requirements and policies imposed by any
governmental authority applicable to it, its properties or the operation of its
business. Without limiting the generality of the foregoing, the Parent is in
compliance in all material respects with:
(a) all applicable laws relating to the protection of human health and
safety, including, without limitation, the Occupational Safety and Health Act of
1970, as amended, and all regulations and standards issued thereunder by the
Secretary of Labor or the Occupational Safety and Health Administrator or other
governmental agency or authority acting at any time thereunder;
(b) all applicable laws relating to protection of the environment,
including, without limitation, RCRA and CERCLA;
(c) all applicable laws relating to equal employment opportunity; and
(d) all zoning, building other laws, ordinances, rules, regulations, plans
and directives of governmental authorities, Boards of Fire Underwriters and
other entities having jurisdiction, as well as all private restrictions and
covenants (whether or not registered or of record), in each case without
reliance on non-conforming use or similar rules.
Except as set forth in Schedule 6.25 hereto, the Parent has not received
any notice or citation for noncompliance with any of the foregoing, and to the
best of the Parent's knowledge, there exists no condition, situation or
circumstance, nor has there existed such a condition, situation or circumstance,
which, after notice or lapse of time, or both, would constitute noncompliance
with or give rise to future liability with regard to any of the foregoing.
Section 6.26. Environmental Matters. Except as set forth on Schedule 6.26
hereto, the Parent has not stored, nor is storing, any hazardous wastes, as
defined by RCRA, for ninety (90) days or more; and:
(a) the Parent has not generated, stored, transported, recycled, disposed
of or otherwise handled in any way any waste material or hazardous substance for
itself or for any other person or entity, nor has any other person or entity
stored, transported, recycled, disposed of or otherwise handled in any way any
waste material or hazardous substances;
(b) there are no locations where any waste material or hazardous substances
from the operation of the Parent have been stored, treated, recycled or disposed
of;
(c) to the best of the Parent's knowledge, there are no Contaminants (as
defined hereinbelow) located on or within the LogiMetrics Premises;
(d) there is no ongoing release and there has been no past release of
Contaminants into the environment from the operation of the business of the
Parent;
(e) there are no PCBs or any asbestos contained in or otherwise parts of
the LogiMetrics Premises or the Facilities and no product compositions used in
the business of the Parent contain more than five percent (5%) of the element
beryllium;
(f) the Parent has not been required by any governmental authority to make
any expenditure to achieve or maintain compliance with any environmental
standard;
(g) the Parent has no knowledge or any information indicating that any
person, including any employee, may have impaired health or that the environment
may have been damaged as the result of the operation of the business of the
Parent or as the result of the release of Contaminants from the LogiMetrics
Premises or the LogiMetrics Facilities; and
For the purposes of this Section 6.26(c), (d) and (g), the term
"Contaminants" includes any pollutant, waste materials, petroleum and petroleum
products and hazardous substances, as defined by CERCLA.
Section 6.27. Insurance. The Parent has in full force and effect (with no
overdue premiums except as set forth in Schedule 6.05) the policies of
insurance, or renewals thereof, in the amounts and for the periods set forth in
Schedule 6.27 hereto, which Schedule constitutes a true and complete list of all
policies of insurance to which the Parent is a party that relate to its assets
or operations. To the best of the Parent's knowledge, such policies adequately
cover all risks reasonably foreseeable in the operation and conduct of the
Parent's business. The Parent has not received any notices of, or been
threatened with, cancellation with regard to its policies of insurance. The
policies listed on Schedule 6.27 will remain in full force and effect through
the Closing Date and the consummation of the transactions contemplated herein.
Section 6.28. Licenses, Permits and Approvals. To the best of the Parent's
and Acquisition's knowledge, each of the Parent and Acquisition has all
licenses, permits, approvals, qualifications or the like, issued or to be issued
to the Parent or Acquisition by any government or any governmental unit, agency,
body or instrumentality, whether Federal, state, provincial, municipal or local
(within the U.S. or otherwise) or any third party necessary for the conduct of
its trade or business and all such items are in full force and effect. Except as
set forth on Schedule 6.28 hereto, no registration with, approval by, consent or
clearance or other action from or pre-notification to any governmental agency or
any third party is required in connection with the execution and performance of
this Agreement by the Parent and Acquisition.
Section 6.29. Labor Relations. In general, the Parent has good and amicable
relations with its employees, and does not have any reason to believe that this
situation will change or that any collective representation of the employees has
been or is being considered by such employees.
Section 6.30. Full Disclosure. No representation or warranty made by the
Parent or Acquisition in this Agreement, any Schedule, any Exhibit or any
certificate delivered, or to be delivered, by or on behalf of the Company or
Acquisition pursuant hereto contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading. There is no fact or
circumstance that the Parent or Acquisition has not disclosed to the Company in
writing that the Parent or Acquisition presently believes has resulted in a
Material Adverse Effect or could reasonably be expected to have a Material
Adverse Effect.
Section 6.31. Access to Data. The Parent, Acquisition and their
representatives, if any, have been afforded the opportunity to ask questions of
representatives of the Company in connection with the representations and
information supplied by the Company and have been furnished all requested
materials relating to the Company.
Section 6.32. True Copies. All documents furnished or caused to be
furnished to the Parent by Acquisition or the Parent are true and correct
copies, and there are no amendments or modifications thereto except as set forth
in such documents.
Section 6.33. Accounts Receivable. All of the accounts receivable of the
Parent as reported on the LogiMetrics Financial Statements and the LogiMetrics
Interim Financial Statements represent bona fide claims against debtors for
sales made or services performed in the ordinary and usual course of business
and in accordance with applicable orders, contracts, standards or requirements.
Such receivables are, and shall be, subject to no defenses, counter-claims or
rights of setoff and, other than collected amounts of such receivables as of the
date of this Agreement, will be fully collectible in the ordinary and usual
course of business without unreasonable cost to the Parent in collection
efforts, except to the extent of any reserve with respect thereto expressly set
forth in said financial statements.
Section 6.34. Survival of Representations and Warranties of the Parent and
Acquisition. The representations and warranties of Acquisition and the Parent
made in this Agreement are correct, true and complete as of the date hereof and
will be correct, true and complete as at the Effective Time with the same force
and effect as though such representations and warranties had been made at the
Closing Date, and shall survive the Effective Time until thirty days following
the issuance of the first independent audit report (following the completion of
the Merger) on the combined results of the Parent and the Company.
ARTICLE VII
CONDUCT OF PARTIES PRIOR TO
CLOSING; CERTAIN COVENANTS
Section 7.01. Access to Properties and Records. The Company, on the one
hand, and the Parent and Acquisition, on the other hand, shall each afford to
the officers, employees, attorneys, accountants and other authorized
representatives of the other free and full access to inspect all of its assets,
properties, Books and Records, and interview its employees in order to afford
the other party as full an opportunity of review, examination and investigation
as such other party shall reasonably desire to make of its affairs. Each party
shall be permitted to make extracts from, or take copies of, such Books and
Records (including the stock record and minute books) or other documentation or
to obtain temporary possession of any thereof as may be reasonably necessary;
and the other party shall furnish or cause to be furnished to it such reasonable
financial and operating data and such other information about such other party's
business, properties and assets which any of the officers, employees, attorneys,
accountants or other authorized representatives of the examining party may
request, provided that the examining party and its agents shall give advance
notice to the other of any intended visit to any facility of such other party or
meeting with such other party's employees and shall not unreasonably interfere
with the operations of such other party's business. All information provided
pursuant to this Section 7.01 shall be held subject to the terms of the
Confidentiality Agreement between the Parent and the Company.
Section 7.02. Interim Covenants of the Company. From the date of this
Agreement until the Closing Date, except to the extent expressly permitted by
this Agreement or otherwise consented to by an instrument in writing signed by
the Parent and/or Acquisition, the Company shall take, and the Stockholder shall
cause the Company to take, all necessary action so that:
(a) The Company shall keep its business and organization intact and shall
not take or permit to be taken or do or suffer to be done anything other than in
the ordinary course of its business as the same is presently being conducted,
and shall use its good faith efforts to keep available the services of its
directors, officers, employees and agents and to maintain the goodwill and
reputation associated with its business;
(b) The Company shall not make any change in its Certificate of
Incorporation or By-laws;
(c) The Company shall exercise its good faith efforts to maintain all of
its properties and assets that are material to the operation or conduct of its
business, tangible or intangible, in good operating condition and repair, and
take all reasonable steps necessary to keep its operations functioning properly,
ordinary wear and tear excepted;
(d) The Company shall not purchase, sell, lease or dispose of or make any
contract for the purchase, sale, lease or disposition of, or subject to any lien
or security interest or any other encumbrance, any of its properties or assets
other than in the ordinary and usual course of its business consistent with past
practices and with the representations and warranties contained herein and not
in breach of any of the provisions of this Article VII; and in the case of
assets having a replacement value of $1,000 or more, for a consideration at
least equal to the fair value of such property or asset;
(e) The Company shall not, other than in the ordinary and usual course of
its business consistent with past practices, grant any salary increase to, or
increase the draw of, any of its officers or directors, or enter into any new,
or amend or alter any existing, bonus, incentive compensation, deferred
compensation, profit sharing, retirement, pension, stock option, group
insurance, death benefit or other fringe benefit plan, trust agreement or other
similar or dissimilar arrangement, any employment agreement with any officer or
any consulting agreement;
(f) The Company shall not incur any bank indebtedness or make any
borrowings, or issue any commercial paper other than in the ordinary and usual
course of its business consistent with past practices; provided, that the
Company shall give prior written notice thereof to the Parent;
(g) The Company shall not pay any obligation or liability (fixed or
contingent) or discharge or satisfy any lien or encumbrance, or settle any
claim, liability or suit pending or threatened against it or any of its
properties, except for current liabilities included in the Financial Statements
and current liabilities incurred between the date of this Agreement and the
Effective Date in the ordinary and usual course of its business consistent with
past practices and with its representations and warranties contained herein and
not in breach of any of the provisions of this Article VII; provided, however,
that the Company may repay all outstanding indebtedness owed to the Stockholder;
(h) The Company shall not enter into any leases of real property or
equipment and machinery other than in the ordinary and usual course of its
business consistent with past practices;
(i) Except in connection with improvements to approximately 5,000 square
feet of expansion space leased by the Company, the Company shall not, without
first obtaining the written consent of the Parent, enter into any contract,
agreement or commitment, including without limiting the generality of the
foregoing, any contract, agreement or commitment for the purchase of any
materials or supplies, if such contract, agreement or commitment exceeds $10,000
individually or $50,000 in the aggregate, and is outside the ordinary course of
the Company's business;
(j) The Company shall not, other than in the ordinary course of its
business consistent with past practices, further encumber or permit to be
further encumbered any of its properties or assets;
(k) The Company shall not form any subsidiary and it shall not issue,
grant, sell, redeem, combine, change or purchase any shares, notes or other
securities or make any commitments to do so;
(l) The Company shall not effect any subdivision of its outstanding capital
stock, purchase or redeem any capital stock, or declare, make or pay any
dividend, distribution or payment in respect of its capital stock;
(m) The Company shall not grant or issue any options, warrants or other
rights to acquire or subscribe for any of its capital stock or issue any
securities giving the holders thereof the right to convert, exchange or exercise
such securities for shares of the Company's capital stock;
(n) The Company shall not effect, and shall not permit any transfer agent
to effect, any transfer of any shares of the Company's capital stock;
(o) The Company shall not, other than in the ordinary and usual course of
its business consistent with past practices, curtail purchases or accelerate
shipments beyond customer requirements, or modify, amend, cancel or terminate
any existing contracts or agreements;
(p) The Company shall maintain in full force and effect each of the
policies of insurance listed on Schedule 5.28 hereto; and
(q) The Company shall not enter into any agreement or commitment to do or
perform any act or refrain which is prohibited pursuant to this Section 7.02 or
from performing any act which the Company is required to perform pursuant to
this Section 7.02.
Section 7.02A. Interim Covenants of the Stockholder. From the date of this
Agreement until the Closing Date, except to the extent expressly permitted by
this Agreement or otherwise consented to by an instrument in writing signed by
the Parent and/or Acquisition, the Stockholder shall:
(a) Use his best efforts to take, or cause to be taken, all action, and to
do, or cause to be done, all things reasonably necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including but not limited to,
obtaining consents, approvals of all governmental entities and third parties
necessary to the consummation of the transactions contemplated by this
Agreement;
(b) Promptly inform the Parent in writing of any material breach of or
change in the representations and warranties contained in Article V hereof;
(c) Not enter into any Contract or take any other action which, if entered
into or taken prior to the date of this Agreement, would cause any
representation or warranty of the Stockholder to be untrue;
(d) Not sell, assign, hypothecate, pledge, transfer or otherwise transfer
any of the Tech Shares or any interest therein;
(e) Not incur, create or suffer to exist any Encumbrance on the Tech
Shares;
(f) Not take or omit to be taken any action which could reasonably be
expected to delay, hinder or make impossible or illegal the transactions
contemplated by this Agreement;
(g) Not, directly or indirectly, and shall instruct and otherwise use his
best efforts to cause the Company and their respective agents, advisors and
other representatives not to, directly or indirectly, (i) encourage, solicit or
initiate any proposals or offers from any person relating to any acquisition or
purchase of all or a material amount of the assets of, or any securities of, or
any merger, consolidation or business combination with, the Company (such
transactions are referred to herein as "Acquisition Transactions") or (ii)
participate in any discussions or negotiations regarding, or furnish to any
other person any information with respect to, an Acquisition Transaction. The
Stockholder shall promptly notify the Parent orally and in writing of any
proposal or offer regarding an Acquisition Transaction, any inquiries with
respect thereto and any request for information relating thereto. Such written
notification shall include the identity of the entity making such inquiry or
Acquisition Transaction proposal or offer or request and such other information
with respect thereto as is reasonably necessary to apprise the Parent of the
material terms of such Acquisition Transaction proposal or offer or request and
all other material information relating thereto; and
(h) Not enter into any agreement or commitment to do or perform any act or
refrain which is prohibited pursuant to this Section 7.02A or from performing
any act which the Stockholder is required to perform pursuant to this Section
7.02A.
Section 7.03. Interim Covenants of the Parent and Acquisition. From the
date of this Agreement until the Effective Time, except to the extent expressly
permitted by this Agreement or otherwise consented to by an instrument in
writing signed by the Company or as otherwise set forth in Schedule 7.03 hereto,
the Parent and Acquisition shall take all necessary action so that:
(a) The Parent shall keep its business and organization intact and shall
not take or permit to be taken or do or suffer to be done anything other than in
the ordinary course of its business as the same is presently being conducted,
and shall use its good faith efforts to keep available the services of its
directors, officers, employees and agents and to maintain the goodwill and
reputation associated with its business;
(b) The Parent and Acquisition shall not make any change in their
respective Certificates of Incorporation or By-laws;
(c) The Parent shall exercise its good faith efforts to maintain all of its
properties and assets that are material to the operation or conduct of its
business, tangible or intangible, in good operating condition and repair, and
take all reasonable steps necessary to keep its operations functioning properly,
ordinary wear and tear expected;
(d) Except in connection with the amendment of the Facility contemplated by
Section 9.1, the Parent shall not purchase, sell, lease or dispose of or make
any contract for the purchase, sale, lease or disposition of, or subject to any
lien or security interest or any other encumbrance, any of its properties or
assets other than in the ordinary and usual course of its business consistent
with past practices and with the representations and warranties contained herein
and not in breach of any of the provisions of this Article VII; and in the case
of assets having a replacement value of $1,000 or more, for a consideration at
least equal to the fair value of such property or asset;
(e) The Parent shall not, other than in the ordinary and usual course of
its business consistent with past practices, grant any salary increase to, or
increase the draw of, any of its officers or directors, or enter into any new,
or amend or alter any existing, bonus, incentive compensation, deferred
compensation, profit sharing, retirement, pension, stock option, group
insurance, death benefit or other fringe benefit plan, trust agreement or other
arrangement or, except as otherwise provided in this Agreement, amend, alter or
enter into any new employment or consulting agreement; provided, that the Parent
may adopt a Stock Compensation Program (the "Plan") and may grant options or
other awards under the Plan covering up to 500,000 shares of LogiMetrics Common
Stock;
(f) Except in connection with the amendment of the Facility contemplated by
Section 9.1, the Parent and Acquisition shall not incur any bank indebtedness or
make any borrowings, or issue any commercial paper other than in the ordinary
and usual course of their respective businesses consistent with past practices;
provided, that the Parent or Acquisition, as the case may be, shall give prior
written notice thereof to the Stockholder;
(g) Except in connection with the amendment of the Facility contemplated by
Section 9.1, the Parent shall not pay any obligation or liability (fixed or
contingent) or discharge or satisfy any lien or encumbrance, or settle any
claim, liability or suit pending or threatened against it or any of its
properties, except for current liabilities included in the LogiMetrics Financial
Statements or LogiMetrics Interim Financial Statements and current liabilities
incurred between the date of this Agreement and the Effective Time in the
ordinary and usual course of business consistent with past practices and with
its representations and warranties contained herein and not in breach of any of
the provisions of this Article VII;
(h) The Parent and Acquisition shall not enter into any leases of real
property or equipment and machinery other than in the ordinary and usual course
of their respective businesses;
(i) The Parent and Acquisition shall not, without first obtaining the
written consent of the Company, enter into any contract, agreement or
commitment, including without limiting the generality of the foregoing, any
contract, agreement or commitment for the purchase of any materials or supplies,
if such contract, agreement or commitment exceeds $10,000 individually or
$50,000 in the aggregate and is outside the ordinary course of their respective
businesses;
(j) Except in connection with the amendment of the Facility contemplated by
Section 9.01, the Parent shall not, other than in the ordinary course of its
business consistent with past practices, further encumber or permit to be
further encumbered any of its properties or assets;
(k) The Parent and Acquisition shall not form any subsidiary and shall not
issue, grant, sell, redeem, combine, change or purchase any shares, notes or
other securities or make any commitment to do so;
(l) The Parent shall not effect any transfer or subdivision of its or
Acquisition's outstanding capital stock, purchase or redeem any capital stock,
or declare, make or pay any dividend, distribution or payment in respect of its
capital stock;
(m) Except as contemplated by clause (e) above, the Parent shall not, other
than in the ordinary course of its business consistent with past practices,
grant or issue any options, warrants or other rights to acquire any of its or
Acquisition's equity securities, whether by conversion or otherwise, or make any
commitment to do so;
(n) The Parent shall not, other than in the ordinary and usual course of
its business consistent with past practices, curtail purchases or accelerate
shipments beyond customer requirements, or modify, amend, cancel or terminate
any existing contracts or agreements;
(o) The Parent shall maintain in full force and effect each of the policies
of insurance listed on Schedule 6.28 hereto;
(p) Neither the Parent or Acquisition shall, directly or indirectly, and
each of the Parent and Acquisition shall instruct and otherwise use their best
efforts to cause their respective agents, advisors and other representatives not
to, directly or indirectly, (i) encourage, solicit or initiate any proposals or
offers from any person relating to any acquisition or purchase of all or a
material amount of the assets of, or any securities of, or any merger,
consolidation or business combination with, the Parent (such transactions are
referred to herein as "LogiMetrics Acquisition Transactions") or (ii)
participate in any discussions or negotiations regarding, or furnish to any
other person any information with respect to, a LogiMetrics Acquisition
Transaction. The Parent shall promptly notify the Stockholder orally and in
writing of any proposal or offer regarding a LogiMetrics Acquisition
Transaction, any inquiries with respect thereto and any request for information
relating thereto. Such written notification shall include the identity of the
entity making such inquiry or LogiMetrics Acquisition Transaction proposal or
offer or request and such other information with respect thereto as is
reasonably necessary to apprise the Stockholder of the material terms of such
LogiMetrics Acquisition Transaction proposal or offer or request and all other
material information relating thereto; and
(q) Neither the Parent nor Acquisition shall enter into any agreement or
commitment to do or perform any act or refrain which is prohibited pursuant to
this Section 7.03 or from performing any act which the Parent or Acquisition is
required to perform pursuant to this Section 7.02.
Section 7.04. Information. The Company shall furnish the Parent and
Acquisition, upon request, with all information concerning the Company
reasonably required for inclusion in any report, filing or application made by
the Parent or Acquisition (as the case may be) with the Securities and Exchange
Commission or any other governmental or regulatory body in connection with the
transactions contemplated by the Merger; including, without limitation, the
consolidated financial statements of the Company, with the required accountant's
reports and consents, necessary for the preparation of any such report, filing
or application.
Section 7.05. Interim Financial Statements. As soon as practicable but in
any event within 45 days after the end of each month after the date of this
Agreement, each of the Parent and the Company will deliver to the other
unaudited balance sheets as at the end of such month, together with the related
unaudited statements of income for the month then ended (including changes in
stockholders' equity and cash flows on a quarterly basis). All such financial
statements shall fairly present the financial position, results of operations
and cash flows of the Parent or the Company (as the case may be) as at or for
the periods indicated, in accordance with GAAP except as otherwise indicated in
such statements, and such financial statements shall be accompanied by an
opinion of the chief financial officer of the Parent or the Company (as the case
may be) to such effect.
Section 7.06. Public Announcements. The Parent, Acquisition and the Company
will consult with each other with respect to any announcement to the public or
any statement to their employees generally concerning or relating to the Merger.
Prior to the Effective Time, neither the Parent or Acquisition, on the one hand,
nor the Company or the Stockholder, on the other hand, will make any
announcement to the public without the prior written consent of the other,
except for announcements which the Parent believes on the written advice of its
counsel to be required by applicable securities laws or stock exchange rules.
The Company shall be provided with a copy of such announcement.
Section 7.07. Notice of Breach.
(a) The Parent and Acquisition will promptly give notice to the Company of
the occurrence of any event or the failure of any event to occur that results in
a breach of any representation or warranty by the Parent or Acquisition or a
failure by the Parent or Acquisition comply with any covenant, condition or
agreement contained herein.
(b) The Company will promptly give notice to Acquisition of the occurrence
of any event or the failure of any event to occur that results in a breach of
any representation or warranty by the Company or a failure by the Company to
comply with any covenant, condition or agreement contained herein.
(c) The Company shall promptly notify the Parent and Acquisition of (i) any
material change in its condition, (ii) any complaints, investigations or
hearings (or communications indicating that the same may be contemplated) of any
governmental entity, (iii) the institution or the threat of material litigation
involving the Company or any Subsidiary or (iv) any event or condition that
might reasonably be expected to cause any of its representations, warranties or
covenants set forth herein not to be true and correct in all material respects
as of the Effective Time. As used in the preceding sentence, "material
litigation" means any case, arbitration or other adversary proceeding or other
matter which would have been required to be disclosed pursuant to Section 5.25
if in existence on the date hereof. The Company shall also promptly notify the
Parent and Acquisition of any adverse development involving any matter disclosed
on any Schedule hereto which shall occur after the date hereof and, in any
event, shall regularly advise the Parent and Acquisition of significant changes
in the status of any such matters.
(d) The Parent and Acquisition shall promptly notify the Company of (i) any
material change in their condition, (ii) any complaints, investigations or
hearings (or communications indicating that the same may be contemplated) of any
governmental entity, (iii) the institution of the threat of material litigation
involving the Parent or any Subsidiary or (iv) any event or condition that might
reasonably be expected to cause any of their representations, warranties or
covenants set forth herein not to be true and correct in all material respects
as of the Effective Time. As used in the preceding sentence, "material
litigation" means any case, arbitration or other adversary proceeding or other
matter which would have been required to be disclosed pursuant to Section 6.12
if in existence on the date hereof. The Parent and Acquisition shall also
promptly notify the Company of any adverse development involving any matter
disclosed on any Schedule hereto which shall occur after the date hereof and, in
any event, shall regularly advise the Company of significant changes in the
status of any such matters.
Section 7.08. Representations. The Parent, Acquisition and the Company (a)
will take all reasonable action necessary to render accurate as of the Effective
Time their respective representations and warranties contained herein, (b) will
refrain from taking any action which would render any such representation or
warranty inaccurate in any material respect as of such time, and (c) will use
their good faith efforts to perform or cause to be satisfied each covenant or
condition to be performed or satisfied by them.
Section 7.09. [Reserved]
Section 7.10. Mutual Cooperation. The Parent, Acquisition and the Company
shall each cooperate and use their respective best efforts (i) to prepare all
documentation, to effect all filings and to obtain the requisite regulatory
approvals and (ii) to cause the Merger to be consummated as expeditiously as
reasonably practicable following the date hereof.
Section 7.11. Miscellaneous Agreements and Consents. Subject to the terms
and conditions of this Agreement, each of the parties hereto agrees to use its
best efforts to take, or cause to be taken, all action, and to do, or cause to
be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement as expeditiously as reasonably practicable, including, without
limitation, using their respective best efforts to lift or rescind any
injunction or restraining order or other order adversely affecting the ability
of the parties to consummate the transactions contemplated hereby and to cause
any of the conditions to the Merger hereunder which are to be satisfied by such
party to be satisfied. The Parent shall, and shall cause its Subsidiaries, as it
relates to their contracts, agreements, regulations, rules, etc., to use their
best efforts to obtain consents of all third parties and governmental entities
necessary or, in the reasonable opinion of the Company, desirable for the
consummation of the transactions contemplated by this Agreement. The Company
shall, and shall cause its Subsidiaries, as it relates their contracts,
agreements, regulations, rules, etc., to use their best efforts to obtain
consents of all third parties and governmental entities necessary or, in the
reasonable opinion of the Parent, desirable for the consummation of the
transactions contemplated by this Agreement. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of Acquisition and
the Parent shall be deemed to have been granted authority in the name of the
Company to take all such necessary or desirable action. Acquisition, the Parent
and the Company, as the case may be, upon request, shall deliver to the other
parties hereto such appropriate certifications or opinions by such party's
officers or counsel as such other party shall reasonably request under the
circumstances.
Section 7.12. Securities Act Compliance. The Stockholder hereby agrees to
deliver to the Parent prior to the Effective Time a written agreement in
substantially the form of Exhibit A hereto (the "Pooling Letter").
Section 7.13. Further Reports. Commencing upon the date of execution of
this Agreement and continuing to the earlier to occur of (i) the Effective Time
and (ii) the termination of this Agreement, the Parent shall provide to the
Company a copy of any annual, quarterly or current report filed with the
Securities and Exchange Commission promptly upon the filing of such reports with
the Commission.
ARTICLE VIII
ADDITIONAL COVENANTS AND AGREEMENTS
Section 8.1 Litigation, Indemnification.
(a) If any litigation or proceeding is or has been commenced, whether
before or after the Effective Time, to restrain or prohibit the consummation of
the transactions contemplated by this Agreement or the operation by the
Surviving Corporation after the Effective Date of all or a substantial portion
of the assets and business of the Company and its subsidiaries taken as a whole,
the Parent and the Company each agrees to cooperate with the other and use its
best efforts to defend against and respond thereto but only to the extent
consistent with the best interests of their respective shareholders. It is
understood and agreed that the Surviving Corporation, to the extent permitted by
law, will indemnify and hold harmless each director and officer of the Company
and the Company's subsidiaries (the "Indemnified Parties") against any losses,
claims, damages, liabilities, costs, expenses, judgments and amounts paid in
settlement in connection with any threatened, pending or completed claim,
action, suit, proceeding or investigation arising out of or pertaining to any of
the transactions contemplated by this Agreement, and in the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Date), the Surviving Corporation will use its best efforts
to assist in the vigorous defense of any such matter; provided, however, that
the Surviving Corporation shall have no obligation hereunder to any Indemnified
Party when and if a court of competent jurisdiction shall ultimately determine,
after exhaustion of all avenues of appeal, that such Indemnified Party did not
act in good faith and in a manner the Indemnified Party reasonably believed to
be in, or not opposed to, the best interests of the Company.
(b) Any Indemnified Party wishing to claim indemnification under this
Section 8.1, upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the Surviving Corporation thereof. Any
Indemnified Party shall be entitled, to the extent permitted by law and by the
Articles of Incorporation and By-Laws of the Company as such Article and By-Laws
are in effect immediately prior to the Effective Time, to the advancement of
funds necessary to pay for any reasonable expenses incurred by such Indemnified
Party in connection with the defense of an action, suit, proceeding or
investigation which is the subject of indemnification under this Section 8.1;
provided, however, that such Indemnified Party shall first deliver to the
Surviving Corporation an undertaking to repay any amounts advanced pursuant
hereto when and if a court of competent jurisdiction shall ultimately determine,
after exhaustion of all avenues of appeal, that he did not act in good faith and
in a manner the Indemnified Party reasonably believed to be in, or not opposed
to, the best interests of the Company.
(c) The Indemnified Parties as a group may retain one law firm to represent
them with respect to any such matter unless there is, under applicable standards
of processional conduct, a conflict on any significant issue between the
positions of any of the Indemnified Parties, in which case each party which has
such a conflict may be represented by a separate law firm. This covenant shall
survive the Effective Time, shall continue without time limit, and is intended
to benefit the Company and each of the Indemnified Parties. Nothing herein
contained is intended or shall be construed to limit or otherwise restrict the
indemnity provisions of the Certificate of Incorporation or By-Laws of the
Company for acts occurring up to and including the Effective Time.
Section 8.2 Non-Competition; Confidentiality and Non-Solicitation. During
the two-year period immediately following the Effective Time, without the prior
written consent of the Parent, neither (i) the Stockholder, (ii) the
Stockholder's spouse, (iii) any minor children of the Stockholder, (iv) any
other children of the Stockholder sharing the same residence with the
Stockholder, nor (v) any other person or entity directly or indirectly
controlled by, controlling or under control with any of the foregoing
(collectively, the "Covered Entities") shall invest in, own, manage, operate,
finance, control or participate in the ownership, management, operation,
financing or control of, be employed by, associated with, or in any manner
connected with, lend their name or any similar name to, lend their credit to or
render services or advice to, any person or entity which designs, manufactures,
assembles, sells or services products which compete with products designed,
manufactured, assembled, sold or serviced by the Parent, Acquisition or the
Company anywhere in world (a "Competing Business"); provided, however, that the
Covered Entities may purchase or otherwise acquire up to one percent of any
class of securities of any Competing Business (but without otherwise
participating in the activities or affairs of such Competing Business) if such
securities are listed on any national securities exchange or have been
registered under Section 12(g) of the Securities Exchange Act of 1934, as
amended. The Parent acknowledges that the other business activities of the
Stockholder described in Schedule 8.2 are not Competing Businesses as presently
conducted. From and after the Effective Time, without the prior written consent
of the Parent, neither the Stockholder nor any of his representatives shall (i)
at any time directly or indirectly disclose, discharge or communicate to any
person or entity, other than the Parent, Acquisition and the Company and their
respective authorized representatives, or use or otherwise exploit, directly or
indirectly, for the benefit of any person or entity other than the Parent,
Acquisition and the Company, any material information relating to the business
of the Parent, Acquisition or the Company other than information that is or
becomes publicly available through no wrongful act of the Stockholder or any of
his representatives; provided, that the Stockholder and his representatives
shall have no obligation hereunder to keep confidential any information to the
extent disclosure thereof is required by law, regulation, court or regulatory
order; provided that in such event, the Stockholder shall provide the Parent
with prompt prior notice thereof so that the Parent may seek, at its sole
discretion, an appropriate protective order preventing or limiting such
disclosure, (ii) for a period of two years from the Effective Time induce or
attempt to induce any current employee, consultant, representative or agent of
the Parent, Acquisition or the Company to terminate or otherwise materially and
adversely modify such relationship, violate the terms of any existing oral or
written agreement by and between such person and any of the Parent, Acquisition
or the Company, or otherwise interfere with such person's existing relationship
with any of them, or (iii) for a period of two years from the Effective Time
induce or attempt to induce any person or entity which is an existing or
prospective customer of any of the Parent, Acquisition or the Company, or which
is otherwise a party to any written or oral agreement with any of them, to
terminate or otherwise materially and adversely modify its existing business or
contractual relationship with any of them or otherwise interfere with such
business or contractual relationships. The Stockholder, on behalf of himself,
the other Covered Entities and their respective heirs, assigns and
representatives, acknowledges that (i) the restrictions contained in this
Section 8.2 are fair and reasonable and necessary to protect the legitimate
interests of the Parent, Acquisition and the Company and that any breach by the
Stockholder or the other covered Entities of any provision hereof will result in
irreparable injury to the Parent, and (ii) that, in addition to all remedies
available at law, the Parent shall be entitled to equitable relief, including
injunctive relief, and an equitable accounting of all earnings, profits or other
benefits arising from such breach and shall be entitled to receive such other
damages, direct or consequential, as may be appropriate. The Parent shall not be
required to post any bond or other security in connection with any proceeding to
enforce this Section 8.2.
Section 8.3 Certain Undertakings. As promptly as practicable following the
Effective Time, the Stockholder shall use his commercially reasonable efforts to
transfer into the name of the Surviving Corporation the lease for the premises
currently occupied by the Company and all items of machinery and equipment held
in the Stockholder's name and currently used by the Company. The Parent shall
indemnify and hold harmless the Stockholder from and against any and all claims,
losses and damages the Stockholder may after the Effective Time as a result of
such lease and said assets being held in the Stockholder's name.
Section 8.4. ISRA Compliance. To the extent not accomplished prior to the
date hereof, the Company shall promptly seek from the New Jersey Department of
Environmental Protection and Energy ("NJDEP") a written determination that the
provisions of the Industrial Site Recovery Act ("ISRA") do not apply to the
transactions contemplated by the Agreement and shall take all action necessary
or advisable in connection therewith. To the extent applicable to the
transactions contemplated hereby, promptly following the execution and delivery
of this Agreement, if required the Company shall, at its sole cost and expense,
comply with the provisions of ISRA, including without limitation, the
requirements to provide notice to the NJDEP, to investigate its premises in
accordance with applicable NJDEP regulations and guidelines and to remediate the
premises, if required to do so, in accordance with the applicable provisions of
ISRA, applicable regulations promulgated by NJDEP and NJDEP's criteria for the
remediation of soil and groundwater.
Section 8.5. Repayment of Stockholder Debt. As promptly as practicable
following the Effective Time, subject to the terms of any existing indebtedness
of either the Parent or the Company, the Parent shall cause the Company to repay
to the Stockholder all indebtedness owed by the Company to the Stockholder,
which as of the date hereof totals approximately $500,000.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF THE PARTIES
Section 9.01. Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each of the Parent, Acquisition and the Company to
effect the Merger shall be subject to the fulfillment or waiver at or prior to
the Effective Time of the conditions that (a) the Parent shall have entered into
an amendment of its existing facility with North Fork Bank (the "Facility") on
terms and conditions reasonably satisfactory to the Stockholder and (b) none of
the Parent, Acquisition or the Company shall be subject to any order, decree or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the Merger and no proceeding shall have been
initiated by the Governmental Entity and be continuing seeking such an
injunction. There shall not be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Merger which makes the consummation thereof illegal.
Section 9.02. Conditions to the Parent's and Acquisition's Obligations. All
obligations of the Parent and Acquisition under this Agreement are subject to
the fulfillment and satisfaction, prior to or at the time at which the Effective
Time is scheduled to occur, of each of the following conditions, any one or more
of which may be waived by the Parent or Acquisition in writing:
(a) At the Effective Time, the representations and warranties of the
Company and the Stockholder contained in this Agreement will be true and correct
in all material respects at and as of such time, except to the extent affected
by the transactions contemplated hereby and by the operations of the Company as
permitted by the provisions of subsection (b) hereinbelow after the date hereof
to the Effective Time, and at the Effective Time the Company shall have
delivered to Acquisition a certificate to such effect signed by its President
and its Chief Financial Officer.
(b) Each of the obligations of the Company and the Stockholder to be
performed by them on or before the Effective Time pursuant to the terms of this
Agreement shall have been duly performed in all material respects at the
Effective Time, and at the Effective Time the Company shall have delivered to
Acquisition a certificate to such effect signed by its President and its Chief
Financial Officer.
(c) There shall have been, between the date hereof and the Effective Time,
no material adverse change in the condition, financial or otherwise, of the
Company, and the Company shall have delivered to Acquisition a certificate to
such effect signed by its President and its Chief Financial Officer.
(d) The Company shall have obtained and delivered to Acquisition all
consents and approvals required to be obtained at or prior to the Effective Time
from third parties or governmental and regulatory authorities in connection with
the execution, delivery and performance by the Company of this Agreement and the
consummation of the transactions contemplated hereby.
(e) The Company shall have furnished Acquisition with such certificates of
its officers to evidence compliance with the conditions set forth in this
Article IX as may be reasonably requested by Acquisition, which shall include,
but not be limited to:
(i) A certificate executed by the Secretary or an Assistant
Secretary of the Company certifying, as of the Effective Time: a true and
complete copy of its By-laws; a true and complete copy of the resolutions
of the Board of Directors of the Company authorizing the execution, delivery
and performance of this Agreement by the Company and the consummation of
the transactions contemplated hereby; incumbency matters; and approval and
adoption of this Agreement and Plan of Merger by the written consent of the
Stockholder.
(ii) A certificate executed by the President and the Chief
Financial Officer of the Company certifying that, as of the Effective Time, the
conditions set forth in this Article IX with respect to the Company have been
satisfied;
(iii) A copy of the Certificate of Incorporation of the
Company and all amendments thereto, certified as of a recent date by the
Secretary of State of New Jersey;
(iv) Certificates of the appropriate Secretaries of State
certifying the good standing of the Company in all states where the Company is
qualified to do business;
(v) Any and all forms, certificates and/or other instruments
required to pay the transfer and recording taxes and charges arising from the
transactions contemplated by this Agreement, together with evidence reasonably
satisfactory to Acquisition that such transfer taxes and charges have been paid
or provided for; and
(f) The Stockholder shall have executed and delivered to the Parent the
Pooling Letter.
(g) There shall not have come to the attention of Acquisition or the
Parent, as a result of the review described in Section 7.01 hereof or otherwise,
any material information not previously disclosed to Acquisition despite inquiry
of the Company by Acquisition indicating the occurrence of an event since the
date of the execution of this Agreement that is likely to have a Material
Adverse Effect.
(h) The Stockholder shall have executed and delivered to the Parent the Tax
Representation Letter substantially in the form attached hereto as Exhibit B.
(i) The Stockholder shall have executed and delivered to the Parent the
Employment Agreement substantially in the form attached hereto as Exhibit C (the
"Employment Agreement").
(j) The Stockholder shall have delivered to the Parent the Tech Shares,
duly endorsed or otherwise in proper form for transfer.
(k) Prior to or at the Closing, the Company shall have delivered to the
Parent a true and complete copy of a written determination by NJDEP that the
transactions contemplated hereby are not subject to ISRA or, in lieu thereof,
evidence satisfactory to the Parent that the Company has complied with the
requirements of ISRA.
Section 9.03. Conditions to Obligations of the Company. All obligations of
the Company and the Stockholder under this Agreement are subject to the
fulfillment and satisfaction, prior to or at the time at which the Effective
Time is scheduled to occur, of each of the following conditions, any one or more
of which may be waived in writing by the Company and the Stockholder.
(a) At the Effective Time, the representations and warranties of the Parent
and Acquisition contained in this Agreement will be true and correct in all
material respects at and as of such time, except to the extent affected by the
transactions contemplated hereby, and at the Effective Time each of the Parent
and Acquisition shall have delivered to the Company a certificate to such effect
signed by its President and its Chief Financial Officer.
(b) Each of the obligations of the Parent and Acquisition to be performed
by it at or before the Effective Time pursuant to the terms of this Agreement
shall have been duly performed in all material respects at the Effective Time,
and at the Effective Time each of the Parent and Acquisition shall have
delivered to the Company a certificate to such effect signed by its President
and the Chief Financial Officer.
(c) There shall have been, between the date hereof and the Effective Time
no material adverse change in the condition, financial or otherwise, of the
Parent or Acquisition and, at the Closing, Acquisition and the Parent shall each
have delivered to the Company a certificate to such effect signed by its
President and its Chief Financial Officer.
(d) The Parent shall have executed and delivered to the Stockholder the
Employment Agreement.
(e) The Parent shall have delivered to the Stockholder the shares of
LogiMetrics Common Stock issuable to the Stockholder upon consummation of the
Merger.
(f) Acquisition and the Parent shall each have furnished the Company with
such certificates of the officers of Acquisition and the Parent and others to
evidence compliance with the conditions set forth in this Article IX as may be
reasonably requested by the Company, which shall include, but not be limited to:
(i) Certificates executed by the Secretary or an Assistant Secretary
of each of Acquisition and the Parent certifying as of the Effective time: true
and complete copies of the resolutions of the Boards of Directors of Acquisition
and the Parent authorizing the execution, delivery and performance of this
Agreement by Acquisition and the Parent and the consummation of the
transactions contemplated hereby; incumbency matters; and if applicable,
approval and adoption of this Agreement and the Merger by the shareholders of
the Parent and Acquisition;
(ii) Certificates executed by the President and the Chief
Financial Officer of Acquisition and the Parent certifying that, as of the
Effective Time, the conditions set forth in this Article IX with respect to
Acquisition have been satisfied;
(iii) Any and all forms, certificates and/or instruments required
to pay the transfer and recording taxes and charges arising from the
transactions contemplated by this Agreement, together with evidence reasonably
satisfactory to the Company that such transfer taxes and charges have been paid;
and
(iv) A certificate executed by each of Acquisition and the Parent
certifying as of the date of the Effective Time that the certificates delivered
by it to the Company pursuant to this Section 9.07 are true and correct in
all material respects.
(g) There shall not have come to the attention of the Company, any material
information (i) not previously disclosed to the Company despite the inquiry of
Acquisition or the Parent by the Company; or (ii) indicating the occurrence of
events since the date of execution of this Agreement that is likely to have a
Material Adverse Effect.
(h) Prior to or at the Closing, the Company shall have obtained a written
determination by NJDEP that the transactions contemplated hereby are not subject
to ISRA or, in lieu thereof, shall have complied with the requirements of ISRA.
ARTICLE X
TERMINATION
Section 10.01. Termination by Any Party. Notwithstanding anything herein or
elsewhere to the contrary, this Agreement may be terminated and the Merger
abandoned by the Board of Directors of any party hereto if the Effective Time
shall not have taken place on or prior to March 31, 1997;
Section 10.02. Termination by Acquisition or the Parent. This Agreement may
be terminated by the Board of Directors of Acquisition or the Parent at any time
prior to the Effective Time if:
(a) a material condition to the Parent's or Acquisition's
obligation to consummate the transactions contemplated hereby or a
covenant of the Company or the Stockholder contained herein shall not
be fulfilled on or before the date of the Effective Time or on such
other date specified for the fulfillment of such covenant or condition,
other than as a result of a breach by the Parent or Acquisition of
their obligations under this Agreement; or
(b) a material default or breach of this Agreement shall
be made by the Company or the Stockholder; or
(c) since October 31, 1996 there shall be a material adverse
change in the results of operations of the Company or any adverse
change in the business, income before income taxes (as compared with
the same period in the preceding year), Prospects, manner of conducting
the business, financial condition or any asset of the Company.
Section 10.03. Termination by the Company. This Agreement may be terminated
by the Board of Directors of the Company at any time prior to the Effective Time
if:
(a) a material condition to the Company's and the
Stockholder's obligation to consummate the transactions contemplated
hereby under this Agreement shall not be fulfilled on or before the
date of the Effective Time or on such other date specified for the
fulfillment of such condition, other than as a result of a breach by
the Company or the Stockholder of their obligations under this
Agreement; or
(b) a material default or breach of this Agreement
shall be made by the Parent or Acquisition; or
(c) since September 30, 1996, there shall be a material
adverse change in the results of operations of Acquisition or the
Parent, or any material adverse change in the business, results of
operations (as compared with the same period in the preceding year),
prospects, manner of conducting the business, financial condition or
any asset of Acquisition or the Parent, except as disclosed to the
Company in writing on or prior to the date hereof.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Indemnification for Brokers. The Parent and Acquisition, on
the one hand, and the Company and the Stockholder, on the other hand, shall each
indemnify and hold harmless the other against any losses, claims, expenses
(including court costs and attorneys' fees), costs or liabilities to which the
indemnified party may become subject relating to any brokerage or finders' fees
or agents' or banker's commissions or other similar charges incurred by the
indemnifying party in connection with this Agreement or any transaction
contemplated hereby.
Section 11.02. Successors, Assigns and Third Parties. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns; provided, however, that, none of the parties
hereto may make any assignment of this Agreement or any interest herein without
the prior written consent of the other parties hereto. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give to any
person, firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
Section 11.03. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New Jersey
without regard to the choice of law principles thereof.
Section 11.04. Severability. Each section, subsection and lesser section of
this Agreement constitutes a separate and distinct undertaking, covenant and/or
provision hereof. In the event that any provision of this Agreement shall
finally be determined to be unlawful, such provision shall be deemed severed
from this Agreement, but every other provision of this Agreement shall remain in
full force and effect; provided, however, that if such unlawful clause is so
material to the party for whose benefit the clause was originally included so
that such party would not have entered into this Agreement without such unlawful
clause, the severability of such clause shall be arbitrated pursuant to Section
11.09 hereof.
Section 11.05. Certain Words. Words such as "herein," "hereof," "hereby,"
"hereunder" and words of similar import refer to this Agreement as a whole and
not to any particular Section or subsection of this Agreement.
Section 11.06. Notices. Except as otherwise expressly provided herein, any
notice, consent, or other communication required or permitted to be given
hereunder shall be in writing, delivered by certified mail or a national
overnight delivery service and shall be deemed to have been given when received,
and shall be addressed as follows:
(a) If to Acquisition or the Parent: LogiMetrics, Inc.
000-00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Acting President
Tel: (000) 000-0000
Fax: (000) 000-0000
(b) If to the Company: mm-Tech, Inc.
00 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: President
Tel: (000) 000-0000
Fax: (000) 000-0000
(c) If to Stockholder: Xxxxxxx X. Brand
000 Xxxxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
or at such other address or addresses as the party addressed may from time to
time designate in writing. Any communication dispatched by telegram or telex
shall be confirmed by letter.
Section 11.07. Expenses. All legal and other costs and expenses incurred in
connection herewith and the transactions contemplated hereby shall be paid by
the party incurring such expenses. Without limiting the generality of the
foregoing, any and all fees and expenses of any attorneys, accountants or
investment bankers of the parties hereto incurred in connection with this
Agreement or the transactions contemplated hereby shall be borne by the party
incurring such expense and shall not be assumed by any other party.
Section 11.08. Headings. The headings in this Agreement are intended solely
for convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
Section 11.09. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute the same agreement.
Section 11.10. Entire Agreement; Amendment. This Agreement, together with
the Exhibits and Schedules hereto, constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings, discussions and negotiations, whether oral or
written, between the parties hereto. This Agreement may not be modified or
amended except by a writing signed by all parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused their signatures to be
affixed to this as of the date first above written.
ATTEST: LogiMetrics, Inc.
By:/s/ Xxxx X. Xxxxxxxx By:/s/ Xxxxxx X. Xxxxxx
_______________________ ________________________
Name: Xxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxx
Title: An Attorney at Law of NJ Title: Acting President
ATTEST: mm-Tech Acquisition Corp.
(a wholly-owned subsidiary
of LogiMetrics, Inc.)
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
_______________________ _______________________
Name: Xxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxx
Title: An Attorney at Law of NJ Title: President
ATTEST: mm-Tech, Inc.
By:/s/ Xxxxx X. Xxxxxx By:/s/ Xxxxxxx X. Brand
________________________ ____________________________
Name: Xxxxx X. Xxxxxx Name: Xxxxxxx X. Brand
Title: An Attorney at Law of NJ Title: President
WITNESS:
/s/ Xxxxx X. Xxxxxx /s/Xxxxxx X. Brand
____________________ ___________________________
Xxxxx X. Xxxxxx Xxxxxxx X. Brand
EXHIBIT A
December __, 1996
LogiMetrics, Inc.
000-00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Gentlemen:
I have been advised that I might be considered to be an "affiliate" of
mm-Tech, Inc. ("mm-Tech") for purposes of generally accepted accounting
principles as such term relates to pooling of interests accounting treatment for
certain business combinations of the Securities and Exchange Commission's Staff
Accounting Bulletin No. 65.
LogiMetrics, Inc. (the "Company"), mm-Tech, mm-Tech Acquisition Corp. and I
have entered into an Agreement and Plan of Merger, dated as of December 18, 1996
(the "Agreement"). Upon consummation of the transactions contemplated by the
Agreement (the "Merger"), I will receive shares of Common Stock, par value $.01
per share, of the Company (the "Exchange Stock") for all of the shares of Common
Stock, no par value, of mm-Tech (the "Pre-Merger Stock") owned by me or as to
which I may be deemed a beneficial owner. This agreement is hereinafter referred
to as the "Letter Agreement".
I represent and warrant to, and agree with, the Company that:
A. I have read this Letter Agreement and the Agreement and have discussed
their requirements and other applicable limitations upon my ability to sell,
transfer or otherwise dispose of the Pre-Merger Stock and the Exchange Stock, to
the extent I felt necessary, with my counsel or counsel for the Company.
B. I understand that stop transfer instructions will be given to mm-Tech's
and the Company's transfer agent, as the case may be, with respect to the shares
of Pre-Merger Stock and the Exchange Stock in connection with the restrictions
set forth herein.
C. Notwithstanding the foregoing and any other agreements on my part in
connection with the Pre-Merger Stock and the Exchange Stock, I hereby agree (i)
that I will not sell or otherwise reduce my risk relative to any shares of
Pre-Merger Stock during the period of thirty days prior to the effective date of
the Merger and (ii) that I will not sell or otherwise reduce my risk relative to
any shares of Exchange Stock until financial results covering at least thirty
days of combined operations have been published following the effective date of
the Merger or such later time as I shall be notified of by the Company so as to
ensure that the Merger qualifies as a pooling of interests for accounting
purposes.
It is understood and agreed that this Letter Agreement shall terminate and
be of no further force and effect if the Merger Agreement is terminated pursuant
to the terms thereof. It is also understood and agreed that this Letter
Agreement shall terminate and be of no further force and effect and the stop
transfer instructions set forth in Paragraph B above shall be lifted forthwith
at the later of (i) such time as financial results covering at least thirty days
of combined operations following the effective date of the Merger have been
published and (ii) the date included in the notification by the Company as set
forth above.
This Letter Agreement shall be binding on my heirs, legal representatives
and successors.
Very truly yours,
____________________________
Xxxxxxx X. Brand
Accepted this day
of , 1996
LOGIMETRICS, INC.
By___________________________
EXHIBIT B
December __, 1996
LogiMetrics, Inc.
000-00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Acting President
Dear Sir or Madam:
The undersigned, being the sole record and beneficial owner of all of the
issued and outstanding shares of capital stock of mm-Tech, Inc., a New Jersey
corporation (the "Company"), hereby represents that the undersigned has no plan
or intention to sell, exchange, or otherwise dispose of a number of shares of
stock of LogiMetrics, Inc., a Delaware corporation (the "Parent") received in
connection with the merger of mm-Tech Acquisition Corp., a New Jersey
corporation into the Company (the "Merger"), the effect of which sale, exchange
or other disposition would be to reduce the undersigned's ownership of Parent
stock to a number of shares having a value, as of the date of the Merger, of
less than 50% of the value of all of the formerly outstanding stock of the
Company on the same date. For purposes of this representation, shares of Company
stock and shares of Parent stock held by the undersigned and otherwise sold,
redeemed or disposed of before or after the Merger are taken into account.
Very truly yours,
Xxxxxxx X. Brand
EXHIBIT C
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated December ___, 1996, by and
between LogiMetrics, Inc. (the "Company") and Xxxxxxx X. Brand (the
"Executive"), residing at 000 Xxxxxxxx Xxxx, Xxxxx Xxxx, Xxx Xxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Company, the Executive, mm-Tech, Inc. ("mm-Tech") and mm-Tech
Acquisition Corp. ("Merger Sub") have entered into an Agreement and Plan of
Merger, dated December 18, 1996 (the "Merger Agreement"), pursuant to which,
among other things, Merger Sub will merge with and into mm-Tech and all of the
issued and outstanding capital stock of mm-Tech will be converted into shares of
Common Stock of the Company (the "Merger"); and
WHEREAS, the Executive is willing to serve as the Chairman of the Board of
Directors and the Chief Executive Officer of the Company commencing upon the
consummation of the Merger (the "Commencement Date") and the Company desires to
retain the Executive in that capacity on the terms and conditions herein set
forth; and
WHEREAS, it is a condition to the obligations of the parties under the
Merger Agreement that the Company and the Executive enter into an employment
agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
Section 1. Term of Employment. The Executive's employment shall commence on
the Commencement Date and, subject to earlier termination pursuant to Section 5
hereof, shall continue until the fifth anniversary of the Commencement Date (the
"Term"). In the event that the Commencement Date does not occur prior to March
31, 1997, this Agreement shall become null and void and shall be of no further
force and effect. The Executive hereby represents and warrants that (i) he has
the legal capacity to execute and perform this Agreement; (ii) this Agreement is
a valid and binding agreement enforceable against him according to its terms;
(iii) the execution and performance of this Agreement by him does not violate
the terms of any existing agreement or understanding to which the Executive is a
party or by which he may be bound; and (iv) the Executive knows no reason why he
would not be insurable at regular non-smoker rates.
Section 2. Position and Duties. During the Term, the Executive shall serve
as the Chairman of the Board of Directors and the Chief Executive Officer of the
Company and shall have such powers and duties as are commensurate with such
position and as may be conferred upon him from time to time by the Board of
Directors of the Company (the "Board"). During the Term, the Executive shall
also hold such other positions with one or more of the Company's subsidiaries
and shall perform such duties in connection therewith as may be directed by the
Board. During the Term, and except for illness or incapacity and reasonable
vacation periods of no more than four weeks in any calendar year (or such other,
longer period as shall be consistent with the Company's policies for other
senior executives), the Executive shall devote all of his business time,
attention, skill and efforts exclusively to the business and affairs of the
Company and its subsidiaries and affiliates; provided, however, that (i) the
Executive may engage in other personal business activities not constituting
Competing Businesses under the Merger Agreement up to three days in any calendar
month and (ii) the Executive may engage in charitable, educational, religious,
civic and similar types of activities (all of which shall be deemed to benefit
the Company), speaking engagements, membership on the board of directors of
other organizations, and similar activities to the extent that such activities
do not inhibit or prohibit the performance of his duties hereunder or inhibit or
conflict with the business of the Company, its subsidiaries and affiliates.
Section 3. Compensation. For all services rendered by the Executive in any
capacity required hereunder during the Term, including, without limitation,
services as an executive officer, director, or member of any committee of the
Company, or any subsidiary, affiliate or division thereof, the Executive shall
be compensated as follows:
(a) The Company shall pay the Executive a fixed salary at the rate of
$200,000 per annum or such higher annual amount as is being paid from time to
time pursuant to the terms hereof ("Base Salary"). The Base Salary shall be
subject to such periodic review and such periodic increases as the Board (or the
Compensation Committee of the Board) shall deem appropriate in accordance with
the Company's customary procedures and practices regarding the salaries of
senior executives. Base Salary shall be payable in accordance with the customary
payroll practices of the Company, but in no event less frequently than
bi-weekly.
(b) Subject to the approval of the Board (or the Compensation Committee of
the Board), the Executive shall be entitled to participate in all compensation
and employee benefit plans or programs, and to receive all benefits, perquisites
and emoluments, for which any salaried employees of the Company are eligible
under any employee benefit plan or program now or hereafter established and
maintained by the Company. Notwithstanding the foregoing, nothing in this
Agreement shall require the Company to establish or maintain any such plans or
programs or shall preclude the amendment or termination of any such plan or
program established by the Company from time to time, provided that such
amendment or termination is applicable generally to the senior officers of the
Company or any subsidiary or affiliate.
(c) The Company shall provide and maintain a term life insurance policy on
the Executive in the face amount of at least $1 million.
Section 4. Business Expenses. The Company shall pay or reimburse the
Executive for all reasonable travel or other expenses incurred by the Executive
in connection with the performance of his duties and obligations under this
Agreement, subject to the Executive's presentation of appropriate vouchers in
accordance with such procedures as the Company may from time to time establish
for senior officers and to preserve any deductions for Federal income taxation
purposes to which the Company may be entitled.
Section 5. Effect of Termination of Employment. (a) In the event the
Executive's employment terminates, whether during the Term or following the
expiration of the Term, due to a Without Cause Termination, the Company shall,
as liquidated damages or severance pay, or both, continue, subject to the
provisions of Section 6 below, to pay the Executive's Base Salary as in effect
at the time of such termination for the greater of (i) the remainder of the
then-current Term, or (ii) a period of twelve months from the effective date of
such termination. During the period that the Company is making payments pursuant
to this Section 5(a), the Company shall continue to provide the Executive with
continued group hospitalization, health and related insurance in lieu of any
rights the Executive would otherwise have under the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA"). For purposes hereof, no Without Cause
Termination shall be effective until 30 days after the Company has given notice
of termination to the Executive.
(b) In the event the Executive's employment terminates, whether during the
Term or following the expiration of the Term, due to a Permanent Disability, the
Company shall continue to pay the Executive's Base Salary as in effect at the
time of such termination for a period of six months from the date of such
termination; provided, that such amounts shall be offset by any amounts
otherwise paid to the Executive under the Company's then-existing disability
program. In addition, earned but unpaid Base Salary as of the date of
termination of employment shall be payable in full. The Executive shall be
entitled to continued group hospitalization, health and related insurance for
the periods specified under COBRA and the Company shall pay any related premiums
for a period of up to twelve months following such termination.
(c) In the event that the Executive dies or the Executive's employment
hereunder terminates due to a Termination for Cause or the Executive terminates
employment with the Company for reasons other than Permanent Disability or
retirement pursuant to any retirement plan then maintained by the Company,
earned but unpaid Base Salary as of the date of termination of employment shall
be payable in full to the Executive or his legal representative. However, no
other payments shall be made, or benefits provided, by the Company under this
Agreement except for benefits that have already become vested under the terms of
employee benefit programs maintained by the Company or its affiliates for its
employees and except as otherwise required by law.
(d) For purposes of this Agreement, the following terms have the following
meanings:
(i) The term "Termination for Cause" means, to the maximum
extent permitted by applicable law, a termination of the Executive's
employment by the Company because the Executive has (a) breached
or failed to perform his duties under applicable law and such breach
or failure to perform constitutes self-dealing, willful misconduct
or recklessness, (b) committed an act of dishonesty in the performance
of his duties hereunder or engaged in any conduct detrimental to the
business or reputation of the Company, (c) been convicted of a felony
or misdemeanor involving moral turpitude, (d) breached or failed
to perform his obligations and duties hereunder, which breach or
failure the Executive shall fail to remedy within 30 days after
written demand from the Company, or (e)violated the representations
made in Section 1 above or the provisions of Section 6 below.
(ii) The term "Without Cause Termination" means a termination
of the Executive's employment by the Company other than due to
Permanent Disability, retirement or expiration of the Term and
other than a Termination for Cause.
(iii) The term "Permanent Disability" means permanently
disabled so as to qualify for full benefits under the Company's
then-existing disability insurance policy; provided, however, that
if the Company does not maintain any such policy on the date of
determination, "Permanent Disability" shall mean the inability of
the Executive to work for a period of six full calendar months during
any eight consecutive calendar months due to illness or injury of a
physical or mental nature, supported by the completion by the
Executive's attending physician of a medical certification form
outlining the disability and treatment.
Section 6. Other Obligations and Duties of Executive During and After Term.
(a) The Executive recognizes and acknowledges that all information
pertaining to the affairs, business, clients, or customers of the Company or any
of its subsidiaries or affiliates (any or all of such entities being hereinafter
referred to as the "Business"), as such information may exist from time to time,
other than information that is in the public domain, other than as a result of a
breach by the Executive of his obligations hereunder, is confidential
information and is a unique and valuable asset of the Business, access to and
knowledge of which are essential to the performance of the Executive's duties
under this Agreement. In consideration of the payments made to him hereunder,
the Executive shall not, except to the extent reasonably necessary in the
performance of his duties under this Agreement, divulge to any person, firm,
association, corporation, or governmental agency, any information concerning the
affairs, businesses, clients, or customers of the Business (except such
information as is required by law to be divulged to a government agency or
pursuant to lawful process), or make use of any such information for his own
purposes or for the benefit of any person, firm, association or corporation
(except the Business) and shall use his reasonable best efforts to prevent the
disclosure of any such information by others. All records, memoranda, letters,
books, papers, reports, accountings, experience or other data, and other records
and documents relating to the Business, whether made by the Executive or
otherwise coming into his possession, are confidential information and are,
shall be, and shall remain the property of the Business. No copies thereof shall
be made which are not retained by the Business, and the Executive agrees, on
termination of his employment or on demand of the Company, to deliver the same
to the Company.
(b) The Executive recognizes and acknowledges that the Company shall own
all Work Product created by the Executive during the Term. As used herein, "Work
Product" includes, but is not limited to, all intellectual property rights, U.S.
and international copyrights, patentable inventions, creations, discoveries and
improvements, works of authorship and ideas, whether or not patentable or
copyrightable and regardless of their form or state of development. All Work
Product shall be considered work made for hire by the Executive and shall be
owned by the Company.
If any of the Work Product may not, by operation of law, be considered a
work made for hire by the Executive for the Company, or if ownership of all
right, title and interest of the intellectual property rights therein shall not
otherwise vest exclusively in the Company, the Executive shall assign, and upon
creation thereof shall be deemed to have automatically assigned, without further
consideration, the ownership of all such Work Product to the Company and its
successors and assigns. The Company, its successors and assigns shall have the
right to obtain and hold in its or their own name copyrights, patents,
registrations and other protections available to the Work Product. The Executive
shall assist the Company in obtaining and maintaining patent, copyright,
trademark and other appropriate protection for all Work Product in all
countries, at the Company's expense. The Executive hereby irrevocably
relinquishes for the benefit of the Company, its successors and assigns any
moral rights in the Work Product recognized under applicable law.
The Executive shall disclose all Work Product promptly to the Company and
shall not disclose the Work Product to anyone other than authorized Company
personnel without the Company's prior written consent. The Executive shall not
disclose to the Company or induce the Company to use any secret or confidential
information or material belonging to others.
The provisions of this Section 6(b) cover Work Product of any kind that is
conceived or made by the Executive that (i) relates to the business of the
Company, its subsidiaries and affiliates, (ii) results from tasks assigned to
the Executive by the Company, its subsidiaries and affiliates, or (iii) are
conceived or made with the use of facilities or materials provided by the
Company, its subsidiaries and affiliates.
(c) In consideration of the payments made to him hereunder, during the
two-year period commencing on the effective date of the termination of his
employment, the Executive shall not, without express prior written approval of
the Board, directly or indirectly, own or hold any proprietary interest in, or
be employed by or receive remuneration from, any Competing Business (as defined
in the Merger Agreement), other than severance-type or retirement-type benefits
from entities constituting prior employers of the Executive. The Executive also
shall not, during such two-year period, solicit for the account of any Competing
Business, any customer or client of the Company or its affiliates, or, in the
event of the Executive's termination of his employment, any entity or individual
that was such a customer or client during the twelve-month period immediately
preceding the Executive's termination of employment. The Executive also shall
not, during such two-year period, act on behalf of any Competing Business to
interfere with the relationship between the Company or its subsidiaries and
affiliates and their respective employees.
For purposes of the preceding paragraph, the term "proprietary interest"
means legal or equitable ownership, whether through stockholding or otherwise,
of an equity interest in a business, firm or entity other than ownership of less
than 2 percent of any class of equity interest in a publicly held business, firm
or entity.
(d) The Company's obligation to make payments, or provide for any benefits
under this Agreement (except to the extent vested or exercisable) shall cease
upon a violation of the preceding provisions of this section. The Executive
acknowledges that the restrictions contained in this Section 6 are reasonable
and necessary to protect the legitimate interests of the Company and that any
breach by the Executive of any provision hereof will result in irreparable
injury to the Company. The Executive acknowledges that, in addition to all
remedies available at law, the Company shall be entitled to equitable relief,
including injunctive relief, and an equitable accounting of all earnings,
profits or other benefits arising from such breach and shall be entitled to
receive such other damages, direct or consequential, as may be appropriate. The
Company shall not be required to post any bond or other security in connection
with any proceeding to enforce this Section 6. The provisions of this Section 6
shall survive the Executive's termination of his employment with the Company.
Section 7. Withholdings. The Company may directly or indirectly withhold
from any payments made under this Agreement all Federal, state, city or other
taxes and all other deductions as shall be required pursuant to any law or
governmental regulation or ruling or pursuant to any contributory benefit plan
maintained by or on behalf of the Company.
Section 8. Consolidation, Merger, or Sale of Assets. Nothing in this
Agreement shall preclude the Company from consolidating or merging into or with,
or transferring all or substantially all of its assets to, or engaging in any
other business combination with, any other person or entity which assumes this
Agreement and all obligations and undertakings of the Company hereunder. Upon
such a consolidation, merger, transfer of assets or other business combination
and assumption, the term "Company" as used herein shall mean such other person
or entity and this Agreement shall continue in full force and effect.
Section 9. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be given in writing and shall be deemed to
have been duly given if delivered or mailed, postage prepaid, by same day or
overnight mail (i) if to the Executive, at the address set forth above, or (ii)
if to the Company, as follows:
LogiMetrics, Inc.
000-00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Secretary
Facsimile: (000) 000-0000
or to such other address as either party shall have previously specified in
writing to the other.
Section 10. No Attachment. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect; provided, however, that nothing in this Section
10 shall preclude the assumption of such rights by executors, administrators or
other legal representatives of the Executive or his estate and their assigning
any rights hereunder to the person or persons entitled thereto.
Section 11. Source of Payment. All payments provided for under this
Agreement shall be paid in cash from the general funds of the Company. The
Company shall not be required to establish a special or separate fund or other
segregation of assets to assure such payments, and, if the Company shall make
any investments to aid it in meeting its obligations hereunder, the Executive
shall have no right, title or interest whatever in or to any such investments
except as may otherwise be expressly provided in a separate written instrument
relating to such investments. Nothing contained in this Agreement, and no action
taken pursuant to its provisions, shall create or be construed to create a trust
of any kind, or a fiduciary relationship, between the Company and the Executive
or any other person. To the extent that any person acquires a right to receive
payments from the Company hereunder, such right, without prejudice to rights
which employees may have, shall be no greater than the right of an unsecured
creditor of the Company.
Section 12. Binding Agreement; No Assignment. This Agreement shall be
binding upon, and shall inure to the benefit of, the Executive and the Company
and their respective permitted successors, assigns, heirs, beneficiaries and
representatives. This Agreement is personal to the Executive and may not be
assigned by him without the prior written consent of the Company. Any attempted
assignment in violation of this Section 12 shall be null and void.
Section 13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New Jersey,
without reference to the choice of law principles thereof.
Section 14. Entire Agreement. This Agreement shall constitute the entire
agreement among the parties with respect to the matters covered hereby and shall
supersede all previous written, oral or implied understandings among them with
respect to such matters.
Section 15. Amendments. This Agreement may only be amended or otherwise
modified, and compliance with any provision hereof may only be waived, by a
writing executed by all of the parties hereto. The provisions of this Section 15
may only be amended or otherwise modified by such a writing.
Section 16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
shall together be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by the undersigned, thereunto duly authorized, and the Executive has
signed this Agreement, all as of the date first written above.
LOGIMETRICS, INC.
By:________________________________
Xxxxxx X. Xxxxxx, President
___________________________________
Xxxxxxx X. Brand
