SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported) March 7, 1996
LogiMetrics, Inc.
(Exact name of registrant as specified in its charter)
Delaware 2-41959 11-2171701
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
121-03 Dupont Street, Plainview, New York 11803
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 349-1700
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Item 1. Changes in Control of Registrant
On March 7, 1996 the following events took place, one material effect
of which was to change control of Registrant from Messrs. Feigenbaum
and Deutsch to Phipps Teman and SFM as described herein.
A. Pursuant to a Unit Purchase Agreement dated as of March 7, 1996
between Registrant and Cerberus Partners, L.P. ("Cerberus"),
Cerberus purchased from Registrant 30 units, each unit composed
of one $50,000 12% Convertible Senior Subordinated Debenture,
due December 31, 1998 (the "Debentures"). Each Debenture is
convertible into 84,746 shares of Common Stock of the Registrant
and was accompanied by a Common Stock Purchase Warrant,
Series C (the "Series C Warrant") entitling the holder thereof to
purchase 84,746 shares of Common Stock of the Registrant at a
price of $.01 per share at any time prior to the seventh anniversary
of the issuance thereof. Assuming conversion of all Debentures
and exercise of all Series C Warrants, the Registrant will have
issued 5,084,760 shares of its Common Stock for an aggregate
consideration of $1,525,424. In addition, under the terms of the
Unit Purchase Agreement, Cerberus has the right to require the
Company to increase its Board of Directors by one person and to
designate the person to fill the vacancy created by such increase in
number.
Forms of the Debentures and Series C Warrants are annexed hereto
as Exhibits 1 and 2, respectively.
B. Pursuant to a private offering made to accredited investors only,
Registrant sold 30 shares of its Series A 12% Cumulative
Convertible Redeemable Preferred Stock ("Preferred Stock") at a
price of $50,000 per share. Each share of Preferred Stock is
convertible on or after May 5, 1996, into 94,340 shares of
Common Stock of the Registrant and was accompanied by a
Common Stock Purchase Warrant, Series D (the "Series D
Warrant"), entitling the holder thereof purchase 94,340 shares of
Common Stock of the Registrant at a price of $.01 per share at any
time prior to the seventh anniversary of the issuance thereof.
Assuming conversion of all shares of Preferred Stock and exercise
of all Series D Warrants, the Registrant will have issued an
aggregate of 5,660,400 shares of Common Stock for an aggregate
consideration of $1,528,302.
Forms of the Preferred Stock and Series D Warrants are annexed
hereto as Exhibits 3 and 4, respectively.
C. Pursuant to an agreement dated December 20, 1995 (the
"Consulting Agreement") between the Registrant, Phipps, Teman &
Company, L.L.C. ("Phipps Teman") and SFM Group, Ltd.
("SFM"), Registrant issued to Phipps Teman and persons
designated by SFM Common Stock Purchase Warrants, Series E
(the "Series E Warrant") to purchase an aggregate of 1,000,000
shares of Registrant's Common Stock at a price of $.40 per share
at any time prior to the seventh anniversary of the issuance thereof.
Assuming exercise of all of the Series E Warrants, the Registrant
will have issued 1,000,000 shares of its Common Stock for an
aggregate consideration of $400,000.
The form of the Series E Warrants is annexed hereto as Exhibit 5.
Pursuant to the Consulting Agreement, Messrs. Murray H.
Feigenbaum, who owns 839,319 shares of the 2,860,602 issued and
outstanding shares of Common Stock of the Registrant and Jerome
Deutsch, who owns 614,694 shares of the 2,860,602 issued and
outstanding shares of Common Stock of the Registrant, gave
irrevocable proxies expiring no later than December 31, 1998, to
Phipps Teman and SFM to vote such shares in respect of the
election of five members of the Board of Directors of the
Registrant and certain other matters (the "MHF and JD Proxies").
Pursuant to the MHF and JD Proxies, Phipps Teman has the right
to elect three directors and SFM the right to elect two directors.
Since Messrs. Feigenbaum and Deutsch together own more than
50% of the issued and outstanding shares of Common Stock of the
Registrant, the execution and delivery of the MHF and JD Proxies
effectively transfers control of the Registrant from Messrs.
Feigenbaum and Deutsch to Phipps Teman and SFM.
Holders of all of the Registrant's previously outstanding $300,000
12% Convertible Subordinated Debentures and Common Stock
Purchase Warrants, Series A, and Series B exchanged such
Debentures and Warrants for Amended and Restated 12%
Convertible Subordinated Debentures (the "Subordinated
Debentures") and Amended and Restated Series A and Series B
Warrants of like tenor (the "Series A" and "Series B Warrants",
respectively). The Subordinated Debentures are convertible in the
aggregate into 1,200,000 shares of Common Stock of the
Registrant. The Series A Warrants may be exercised at a price of
$.25 per share to purchase an aggregate of 600,000 shares of
Common Stock of the Company. The Series B Warrants may be
exercised at a price of $.25 per share to purchase an aggregate of
1,500,000 shares of Common Stock of the Registrant.
Assuming conversion of all Subordinated Debentures and exercise
of the Series A and Series B Warrants, the Registrant will have
issued an aggregate of 3,300,000 shares of its Common Stock for
an aggregate consideration of $867,000.
Forms of the Amended and Restated 12% Convertible Subordinated
Debentures and Series A and Series B Warrants are annexed hereto
as Exhibits 6, 7 and 8, respectively.
D. At a Board Meeting held on March 7, 1996, the following events
occurred:
i. The Registrant and Richard K. Laird entered into an
employment contract pursuant to which Mr. Laird became President
of the Registrant and Chairman of its Board of Directors.
Murray H. Feigenbaum resigned as President of the Registrant and
was elected Executive Vice President of the Registrant. The
number of directors of the Registrant was increased to six and
Mr. Laird, a designee of Phipps Teman, was elected a director and
Chairman of the Board.
A copy of the Employment Contract with Richard K. Laird is
annexed hereto as Exhibit 8.
ii. Jerome Deutsch resigned from the Board of Directors and as
Executive Vice President of the Registrant and was elected Senior
Vice President of the Registrant. The vacancy on the Board of
Directors created by the resignation of Mr. Deutsch was filled by
Lawrence I. Schneider, a designee of Phipps Teman.
iii. Mark Fisher resigned as a member of the Board of Directors
of the Registrant. The vacancy created by Mr. Fisher's resignation
was filled by Henry N. Schneider, a designee of SFM.
iv. Steven D. Feigenbaum resigned as a member of the Board of
Directors of the Registrant. The vacancy created by
Mr. Feigenbaum's resignation was filled by Norman M. Phipps, a
designee of Phipps Teman.
v. Pursuant to authorization received at a Special Meeting of the
Stockholders of the Registrant held on February 9, 1996, the
Certificate of Incorporation of the Registrant was amended to
increase authorized capital to 35,000,000 shares of Common Stock,
$.01 par value per share and 200 shares of Preferred Stock, par
value $.01 per share. In addition, pursuant to the Certificate of
Amendment, the appellation "Class A" was deleted from the
Common Stock which, hereafter, will be known as "Common
Stock", and the par value of share of Common Stock was reduced
from $.10 per share to $.01 per share. As a result, stated capital
of the Registrant was reduced by $257,454 and capital surplus of
the Registrant increased by a like amount.
Set forth below is a table indicating each class of equity securities
beneficially owned by all directors, executive officers and directors
and executive officers as a group, the total number of shares
beneficially owned by such person and persons and the percent of
such class so owned.
Amount and
Nature of
Title of Name and Address of Beneficial Percent of
Class Beneficial Owner Ownership (1) Class (1)
- -------- ------------------- ------------- ----------
common stock Richard K. Laird 219,340(2) 7.12%
President and CEO and Director
LogiMetrics, Inc.
121-03 Dupont Street
Plainview, NY 11803
common stock Murray H. Feigenbaum 939,319(3) 31.73%
Executive Vice President
and Director
LogiMetrics, Inc.
121-03 Dupont Street
Plainview, NY 11803
common stock Jerome Deutsch 714,694(3) 24.14%
Senior Vice President
LogiMetrics, Inc.
121-03 Dupont Street
Plainview, NY 11803
common stock Steven D. Feigenbaum 100,950 3.53%
Vice President
LogiMetrics, Inc.
121-03 Dupont Street
Plainview, NY 11803
common stock Barbara Divack 80,000 2.80%
Vice President and Secretary
LogiMetrics, Inc.
121-03 Dupont Street
Plainview, NY 11803
Amount and
Nature of
Title of Name and Address of Beneficial Percent of
Class Beneficial Owner Ownership (1) Class (1)
- -------- ------------------- ------------ ----------
common stock Alfred Mendelsohn 291,250(4) 9.20%
Director
823 Park Avenue
New York, NY 10021
common stock Norman M. Phipps 588,837(5) 17.07%
Director
575 Madison Avenue
New York, NY 10022
common stock Lawrence I. Schneider 1,074,183(6) 27.30%
Director
450 Park Avenue
New York, NY 10022
common stock Henry N. Schneider 1,074,183(7) 27.30%
Director
450 Park Avenue
New York, NY 10022
common stock All Officers and Directors 4,007,323 76.58%
as a group
preferred
stock Richard K. Laird 1.0 0.033%
preferred
stock Lawrence I. Schneider 2.5(8) 0.083%
preferred
stock Henry N. Schneider 2.5(8) 0.083%
preferred
stock Norman Phipps 0.5(9) 0.17%
- -----------
(1) Determinations as to shares owned and percent of class in each case
assumes exercise of options, warrants and conversion rights only by the
person in respect of whom the determination is made.
(2) Assumes exercise of options to purchase 125,000 shares of Common Stock
and Series D Warrants to purchase 94,340 shares of Common Stock.
(3) Assumes exercise of options to purchase 100,000 shares of Common Stock
but is subject to the MHF and JD Proxies referred to in Item 1.C.
(4) Assumes exercise of Series B Warrants to purchase 290,000 shares of
Common Stock.
(5) Assumes exercise by Phipps Teman, of which Norman Phipps is a
principal, of Series D Warrants to purchase 47,170 shares of Common
Stock and Series E Warrants to purchase 541,667 shares of Common Stock
but does not include the MHF and JD Proxies held by Phipps Teman and
referred to in Item 1.C.
(6) Assumes (i) exercise by SFM, of which Lawrence Schneider is a principal,
of Series E Warrants to purchase 291,667 shares of Common Stock, (ii)
exercise by RILAR Family Associates, L.P., a limited partnership
controlled by Lawrence Schneider, of Series B Warrants to purchase
380,000 shares of Common Stock and (iii) exercise by Rita Schneider,
Henry Schneider and Scott Schneider, the wife and children of Lawrence
Schneider, respectively, of Series D Warrants to purchase an aggregate of
235,850 shares of Common Stock and of Series E Warrants to purchase
166,666 shares of Common Stock, but does not include the MHF and JD
Proxies held by SFM and referred to in Item 1.C. Notwithstanding the
foregoing, each of the above individuals and entities disclaims any
beneficial ownership in securities held in the name of the others.
(7) Assumes (i) exercise by Henry Schneider of Series D Warrants to purchase
94,340 shares of Common Stock and of Series E Warrants to purchase
166,666 shares of Common Stock, (ii) exercise by SFM of Series E
Warrants to purchase 291,667 shares of Common Stock; (iii) exercise by
RILAR Family Associates, L.P., of which Henry Schneider is a limited
partner, of Series B Warrants to purchase 380,000 shares of Common
Stock and (iv) exercise by Rita Schneider and Scott Schneider, the mother
and brother of Henry Schneider, respectively, of Series D Warrants to
purchase 141,510 shares of Common Stock but does not include the MHF
and JD Proxies held by SFM and referred to in Item 1.C. Notwithstanding
the foregoing, each of the above individuals and entities disclaims any
beneficial ownership in securities held in the name of the others.
(8) Includes one (1) share of Preferred Stock held by Henry Schneider, one (1)
share of Preferred Stock held by Rita Schneider and one-half (0.5) share
of Preferred Stock held by Scott Schneider. Notwithstanding the
foregoing, Lawrence Schneider and each of the other above individuals
disclaim any beneficial interest in the Preferred Stock held in the name
of the others.
(9) Includes one-half (0.5) share of Preferred Stock held by Phipps Teman.
Item 2. Acquisition or Disposition of Assets
Not applicable.
Item 3. Bankruptcy or Receivership
Not applicable.
Item 4. Changes in Registrant's Certifying Accountant
Not applicable.
Item 5. Other Materially Important Events
The Registrant entered into a Fifth Amended and Restated Revolving
Credit Note, a Further Restated, Increased and Amended Term Loan
Note and a Further Amended and Restated General Security Agreement
with North Fork Bank, pursuant to which the aggregate credit line of
the Registrant with North Fork Bank was increased to $3,000,000.
Copies of the Fifth Amended and Restated Revolving Credit Note, a
Further Restated, Increased and Amended Term Loan Note and a
Further Amended and Restated General Security Agreement are annexed
hereto as Exhibits 9, 10 and 11, respectively.
Item 6. Resignations of Registrant's Directors
Not applicable.
Item 7. Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
Exhibit 1 -Form of the 12% Convertible Senior
Subordinated Debentures
Exhibit 2 -Form of the Series C Warrants
Exhibit 3 -Form of the Preferred Stock
Exhibit 4 -Form of the Series D Warrants
Exhibit 5 -Form of the Series E Warrants
Exhibit 6 -Form of the Amended and Restated 12%
Convertible Subordinated Debentures
Exhibit 7 -Form of the Amended and Restated Series A
Warrants
Exhibit 8 -Form of the Amended and Restated Series B
Warrants
Exhibit 9 -Employment Contract with Richard K. Laird
Exhibit 10 -Fifth Amended and Restated Revolving Credit
Note
Exhibit 11 -Further Restated, Increased and Amended
Term Loan Note
Exhibit 12 -Further Amended and Restated General
Security Agreement
Item 8. Change in Fiscal Year.
Not Applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LogiMetrics, Inc.
Dated: March 21, 1996 By: /s/ Richard K. Laird
--------------------------------------
Richard K. Laird,
President
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND CANNOT
BE SOLD OR TRANSFERRED UNLESS AND UNTIL THEY ARE SO REGISTERED OR
UNLESS AN EXEMPTION UNDER SUCH ACT OR LAWS IS AVAILABLE. THE
TRANSFERABILITY OF THESE SECURITIES IS FURTHER SUBJECT TO THE
PROVISIONS OF A UNIT PURCHASE AGREEMENT DATED AS OF MARCH 7, 1996
BY AND BETWEEN THE COMPANY AND CERBERUS PARTNERS, L.P.
12% CONVERTIBLE SENIOR SUBORDINATED DEBENTURE
March 7, 1996
LOGIMETRICS, INC., a Delaware corporation (the "Company"),
hereby promises to pay to the order of Cerberus Partners, L.P.
(together with its, his or her successors and assigns, the
"Holder") the principal amount of fifty thousand dollars
($50,000) together with interest thereon calculated from the date
hereof in accordance with the provisions of this debenture
("Debenture").
This Debenture is one of a series of 12% Convertible Senior
Subordinated Debentures ("Debentures") the principal of which
aggregates one million five hundred thousand dollars
($1,500,000). All Debentures rank pari passu.
By accepting this Debenture, the Holder agrees that the
obligations of the Company to the Holder under this Debenture
shall be subordinated only to the Senior Debt (as hereinafter
defined) of the Company, all upon the terms set forth in
paragraph 4 hereof.
1. Payment of Interest. Subject to subparagraph
6(c)(xviii)(C) hereof, interest will accrue from the date hereof
at the rate of twelve percent (12%) per annum on the unpaid
principal amount of this Debenture outstanding from time to time
on the basis of a 360-day year for the actual number of days
elapsed. Subject to paragraph 4 hereof, the Company will pay to
the Holder all accrued and unpaid interest on this Debenture on
June 15, 1996 and quarterly thereafter, in arrears, on the 15th
day of September, the 15th day of December, the 15th day of March
and the 15th day of June to and including the earlier to occur of
the Conversion Date (hereinafter defined) or the Due Date
(hereinafter defined). Interest will accrue at the greater of
the Default Rate (hereinafter defined) and the rate of fifteen
percent (15%) per annum on any principal payment past due under
this Debenture and, unless prohibited under applicable law (and
if so prohibited then only to the extent not so prohibited), on
any interest which has not been paid on the date on which it is
due and payable (without giving effect to any applicable grace
periods or paragraph 4 hereof) until such time as payment
therefor is actually delivered to the Holder.
2. Payment of Principal on Debenture.
(a) Scheduled Payments. The Company will repay the
principal amount of this Debenture on December 31, 1998 ("Due
Date").
(b) Optional Prepayment. At any time after nine
months from the date hereof, provided that the Registration
Statement (hereinafter defined) is effective and available for
sales of Registrable Securities (hereinafter defined) thereunder,
the Company may at any time hereafter prepay, without premium or
penalty, all (but not less than all) of the outstanding principal
amount of the Debentures, together with interest accrued on such
prepaid amount to the date of payment; provided (i) the average
closing price of the Company's Common Stock on days the Common
Stock traded during the 120-day period immediately preceding the
date of the notice provided for in paragraph (c) hereinbelow
shall have been not less than $5.00, and (ii) the closing price
of the Common Stock for each of the 30 trading days immediately
preceding the date of such notice shall have been not less than
$5.00, adjusted in each case for stock splits, stock dividends or
other similar transactions effecting the price of the Common
Stock. No Debenture may be prepaid unless all Debentures are
prepaid.
(c) Notice of Prepayment. The Company will give
written notice of its election to prepay this Debenture to the
Holder in person or by registered or certified mail, return
receipt requested, at least thirty (30) and not more than forty-
five (45) days prior to the date of prepayment. On the date of
prepayment specified in the Company's notice, the Company will
deliver to the Holder of this Debenture in person or by
registered or certified mail, return receipt requested, a
cashier's or certified check for the entire outstanding principal
amount being prepaid, together with all accrued interest thereon
through the date of prepayment.
3. Intentionally Omitted.
4. Subordination. The Company's payment, whether
voluntary or involuntary, whether in cash, property, securities
or otherwise and whether by application of offset or otherwise
(hereinafter "Payment") of any of its obligations under this
Debenture shall be subject to the following restrictions:
(a) Subordination to Senior Debt. Anything in this
Debenture to the contrary notwithstanding, the obligations of the
Company in respect of the principal of and interest (including
any premium or penalty) on this Debenture and any other amounts
due under this Debenture (the "Subordinated Debt") shall be
subordinate and junior in right of payment, to the extent and in
the manner hereinafter set forth, to the Senior Debt. "Senior
Debt", when used with respect to the Company, means (i) the
Company's indebtedness to North Fork Bank ("Bank") under (A) that
certain $800,000 Further Restated, Increased and Amended Term
Loan Note, dated March 7, 1996, and (B) that certain $2,200,000
Fifth Restated and Amended Revolving Credit Note, dated March 7,
1996, in each case, together with interest thereon and (ii)
renewals, extensions, refinancings, deferrals, restructurings,
amendments, modifications and waivers of the indebtedness
described in clause (i) above.
(b) Default on Senior Debt. So long as the Senior
Debt has not been paid in full, if there shall occur a default in
the payment when due of any amount due and owing on account of
Senior Debt (any of the foregoing being a "Senior Debt Default")
then, from and after the receipt of written notice thereof from
the holder of Senior Debt unless and until such Senior Debt
Default shall have been remedied or waived the Company will not
make any Payment on any Subordinated Debt, and the Holders of
Subordinated Debt will not receive or accept any direct or
indirect Payment in respect thereof, and the Company may not
redeem or otherwise acquire any Subordinated Debt.
(c) Changes in Senior Debt. Any holder of Senior Debt
may, at any time and from time to time, without the consent of,
or notice to, the Holder and without incurring responsibility to
the Holder, and without impairing or releasing the obligations of
the Holder hereunder:
(i) Change the manner, place or terms of
payment or change or extend the time of payment of or renew
or alter the Senior Debt or any portion thereof; provided,
however, that without the written consent of the Majority
Holders (hereinafter defined) the principal amount of and
interest rate applicable from time to time to Senior Debt
may not be increased (other than pursuant to the terms of
the Senior Debt as such terms existed on the date of
issuance hereof);
(ii) Sell, exchange, release or otherwise deal
with any collateral securing the Senior Debt or any other
property by whomsoever at any time pledged or mortgaged to
secure, or however securing, the Senior Debt or any portion
thereof; and
(iii) Apply any sums by whomsoever paid or
however released to the Senior Debt or any portion thereof.
(d) Consent to Senior Debt. By acceptance of this
Debenture, the Holder hereby consents to the making of Senior
Debt and hereby acknowledges that each current and future holder
of Senior Debt has relied, and in the future will rely, upon the
terms of this Debenture. The holders of Senior Debt shall have
no liability to the Holder and the Holder hereby waives any claim
which it may have now or hereafter against any holder of Senior
Debt arising from any and all actions which any holder of Senior
Debt may take or omit to take in good faith with regard to the
Senior Debt or its rights or obligations hereunder.
(e) Payments in Trust. Until the Senior Debt has been
repaid in full, in the event the Holder shall receive any Payment
in contravention of the provisions of this paragraph 4 including,
Payments arising under the subordination provisions of any other
indebtedness of the company, the Holder shall hold all such
Payments so received in trust for the holders of Senior Debt and
shall forthwith turn over all such Payments to the holders of
Senior Debt in the form received (except for the endorsement or
assignment of the Holder as necessary, without recourse or
warranty) to be applied to payment of the Senior Debt whether or
not then due and payable. Any Payment so received in trust and
turned over to the holders of Senior Debt shall not be deemed a
Payment in satisfaction of the Subordinated Debt by the Company.
(f) Payment in full of Senior Debt; Subrogation. If
any payment or distribution to which a Holder of Subordinated
Debt would otherwise have been entitled but for the provisions of
this paragraph 4 shall have been applied, pursuant to the
provisions of this paragraph 4, to the payment of Senior Debt,
then and in such case, the Holder of the Subordinated Debt (i)
shall be entitled to receive from the holders of Senior Debt at
the time outstanding any payments or distributions received by
such holders of Senior Debt in excess of the amount sufficient to
pay all Senior Debt in cash in full (whether or not then due),
and (ii) following payment of the Senior Debt in full, shall be
subrogated to any right of the holders of Senior Debt to receive
any and all further payments or distributions applicable to
Senior Debt, until all the Subordinated Debt shall have been paid
in full. If the Holder of the Subordinated Debt shall have been
subrogated to the rights of the holders of Senior Debt due to the
operation of this paragraph 4(f), the Company agrees to take all
such reasonable actions as are requested by such Holders of the
Subordinated Debt in order to cause such Holders to be able to
obtain payments from the Company with respect to such subrogation
rights as soon as possible.
(g) No Impairment of the Company's Obligations.
Nothing contained in this paragraph 4, as between the Company and
the Holder of the Subordinated Debt, shall impair the obligation
of the Company, which is absolute and unconditional, to pay to
the Holder the principal of and interest on the Subordinated Debt
as and when the same shall become due and payable in accordance
with the terms hereof.
(h) Advances in Reliance. The Holder of the
Subordinated Debt, by its acceptance thereof, agrees that each
holder of Senior Debt has advanced funds or may in the future
advance funds in reliance upon the terms and conditions hereof.
(i) Non-Waiver of Rights. No right of any holder of
Senior Debt to enforce its right of subordination as herein
provided shall at any time in any way be prejudiced or impaired
by any act or failure to act on the part of the Company, or by
any act or failure to act by any such holder, or by any
non-compliance by the Company with the terms, provisions and
covenants of the Subordinated Debt, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(j) Recaptured Payments. Any Payments received by a
holder of Senior Debt from the Company or the Holder which, in
connection with an Insolvency Event or Proceeding (hereinafter
defined), is required to be remitted to the payor or the bankrupt
estate shall not be deemed a Payment to such holder of Senior
Debt for all purposes hereunder.
5. Security. The obligations of the Company to Holders of
the Debentures are secured pursuant to a Security Agreement of
even date ("Security Agreement") made by the Company in favor of
Holders of the Debentures. In addition to all rights and
remedies provided herein, Holders of the Debentures are entitled
to the benefits provided in the Security Agreement. By accepting
this Debenture, the Holder hereof agrees to be bound by the terms
of the Security Agreement.
6. Conversion Rights.
(a) The Holder of this Debenture has the right (the
"Conversion Right"), exercisable at his, her or its option at any
time during which the principal amount of this Debenture is
outstanding, to convert this Debenture, but only in whole, into
eighty four thousand seven hundred forty-six (84,746) shares of
the Company's Common Stock, par value $.01 per share ("Common
Stock"), subject to adjustment in certain circumstances as
provided herein.
(b) The Conversion Right is exercisable upon surrender
of this Debenture, together with a conversion notice, in the form
attached hereto as Exhibit A, duly executed and completed,
evidencing the election of the Holder to exercise the Conversion
Right, to the Company's principal office at 121-03 Dupont Street,
Plainview, New York 11803. The registered owner of this
Debenture shall become the record Holder of the shares of Common
Stock issuable upon conversion as of the date of exercise of the
Conversion Right (the "Conversion Date"). The shares issued in
connection with the Conversion Right shall be registered
initially in the name of the Holder, and delivered to the Holder
no later than two (2) business days after receipt of a properly
completed conversion notice. Upon conversion, the Company shall
pay to the Holder accrued but unpaid interest on this Debenture
up to, but excluding, the Conversion Date.
(c) In case, at any time or from time to time after
the date of issuance of this Debenture ("Issuance Date"), the
Company shall issue or sell shares of its Common Stock (other
than any Common Stock issuable upon (i) conversion of the
Debentures, (ii) exercise of those certain Amended and Restated
Series A Warrants dated March 7, 1996 to purchase 600,000 shares
of Common Stock ("Series A Warrants"), (iii) exercise by each of
Murray H. Feigenbaum and Jerome Deutsch (the "Principals") of his
option to purchase 100,000 shares of Common Stock at a price of
$.10 per share ("Principals' Options"), (iv) exercise of those
certain Amended and Restated Series B Warrants dated March 7,
1996 to purchase 1,500,000 shares of Common Stock ("Series B
Warrants"), (v) conversion of the Company's $300,000 Amended and
Restated 12% Convertible Subordinated Debentures ("1995
Debentures"), (vi) exercise of those certain Series C Warrants
dated March 7, 1996 to purchase an aggregate of 2,542,380 shares
of Common Stock ("Series C Warrants"), (vii) exercise of those
certain Series D Warrants dated March 7, 1996 to purchase an
aggregate of 2,830,200 shares of Common Stock ("Series D
Warrants"), (viii) exercise of those certain Series E Warrants
dated March 7, 1996 to purchase 1,000,000 shares of the Company's
Common Stock ("Series E Warrants" and together with the Series A,
B, C and D Warrants, "Warrants"), (ix) exercise of those certain
Stock Options, dated March 7, 1996 to purchase 1,000,000 shares
of Common Stock issued to Richard K. Laird ("Laird Options") and
(x) conversion of the Company's up to 30 shares of Series A 12%
Cumulative Convertible Redeemable Preferred Stock ("Preferred
Stock" and together with the 1995 Debentures, the Senior
Subordinated Debentures, the Warrants, the Laird Options, the
Principals' Options and any shares of Common Stock issuable upon
conversion or exercise thereof, the "Subject Securities")) for a
consideration per share less than $.30 per share ("Trigger
Price"), or, if a Pro Forma Adjusted Trigger Price (hereinafter
defined) shall be in effect as provided below in this
paragraph (c), then less than such Pro Forma Adjusted Trigger
Price per share, then and in each such case the Holder of this
Debenture, upon the conversion hereof as provided in
paragraph (a) hereof, shall be entitled to receive, in lieu of
the shares of Common Stock theretofore receivable upon the
conversion of this Debenture, a number of shares of Common Stock
determined by (a) dividing the Trigger Price by a Pro Forma
Adjusted Trigger Price per share to be computed as provided below
in this paragraph (c), and (b) multiplying the resulting quotient
by the number of shares of Common Stock into which this Debenture
is then convertible. A Pro Forma Adjusted Trigger Price per
share shall be the price computed (to the nearest cent, a
fraction of half cent or more being considered a full cent):
by dividing (i) the sum of (x) the result
obtained by multiplying the number of shares
of Common Stock of the Company outstanding
immediately prior to such issue or sale by
the Trigger Price (or, if a Pro Forma
Adjusted Trigger Price shall be in effect, by
such Price), and (y) the consideration, if
any, received by the Company upon such issue
or sale, by (ii) the number of shares of
Common Stock of the Company outstanding
immediately after such issue or sale.
For the purpose of this paragraph (c):
(i) In case the Company splits its Common
Stock or shall declare any dividend, or make any other
distribution, upon any stock of the Company of any class
payable in Common Stock, or in any stock or other securities
directly or indirectly convertible into or exchangeable for
Common Stock (any such stock or other securities being
hereinafter called "Convertible Securities"), such split,
declaration or distribution shall be deemed to be an issue
or sale (as of the record date for such split, dividend or
other distribution), without consideration, of such Common
Stock or such Convertible Securities, as the case may be.
(ii) In case the Company shall issue or sell
any Convertible Securities other than the Subject
Securities, there shall be determined the price per share
for which Common Stock is issuable upon the conversion or
exchange thereof, such determination to be made by dividing
(a) the total amount received or receivable by the Company
as consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (b) the maximum number of
shares of Common Stock of the Company issuable upon the
conversion or exchange of all such Convertible Securities.
If the price per share so determined shall be
less than the Trigger Price (or, if a Pro Forma Adjusted
Trigger Price shall be in effect, less than such Price) as
of the date of such issue or sale, then such issue or sale
shall be deemed to be an issue or sale for cash (as of the
date of issue or sale of such Convertible Securities) of
such maximum number of shares of Common Stock at the price
per share so determined, provided that, if such Convertible
Securities shall by their terms provide for an increase or
increases, with the passage of time, in the amount of
additional consideration, if any, payable to the Company, or
in the rate of exchange, upon the conversion or exchange
thereof, the Pro Forma Adjusted Trigger Price per share
shall, forthwith upon any such increase becoming effective,
be readjusted to reflect the same, and provided, further,
that upon the expiration of such rights of conversion or
exchange of such Convertible Securities, if any thereof
shall not have been exercised, the Pro Forma Adjusted
Trigger Price per share shall forthwith be readjusted and
thereafter be the price which it would have been had an
adjustment been made on the basis that the only shares of
Common Stock so issued or sold were those issued or sold
upon the conversion or exchange of such Convertible
Securities, and that they were issued or sold for the
consideration actually received by the Company upon such
conversion or exchange, plus the consideration, if any,
actually received by the Company for the issue or sale of
all such Convertible Securities which shall have been
converted or exchanged.
(iii) In case the Company shall grant any rights
or options to subscribe for, purchase or otherwise acquire
Common Stock of any class other than the Subject Securities,
there shall be determined the price per share for which
Common Stock is issuable upon the exercise of such rights or
options, such determination to be made by dividing (a) the
total amount, if any, received or receivable by the Company
as consideration for the granting of such rights or options,
plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the
exercise of such rights or options, by (b) the maximum
number of shares of Common Stock issuable upon the exercise
of such rights or options.
If the price per share so determined shall be
less than the Trigger Price (or, if a Pro Forma Adjusted
Trigger Price shall be in effect, less than such Price) as
of the date of such issue or sale, then the granting of such
rights or options shall be deemed to be an issue or sale for
cash (as of the date of the granting of such rights or
options) of such maximum number of shares of Common Stock at
the price per share so determined, provided that, if such
rights or options shall by their terms provide for an
increase or increases, with the passage of time, in the
amount of additional consideration, if any, payable to the
Company upon the exercise thereof, the Pro Forma Adjusted
Trigger Price per share shall, forthwith upon any such
increase becoming effective, be readjusted to reflect the
same, and provided, further, that upon the expiration of
such rights or options, if any thereof shall not have been
exercised, the Pro Forma Adjusted Trigger Price per share
shall forthwith be readjusted and thereafter be the price
which it would have been had an adjustment been made on the
basis that the only shares of Common Stock so issued or sold
were those issued or sold upon the exercise of such rights
or options and that they were issued or sold for the
consideration actually received by the Company upon such
exercise, plus the consideration, if any, actually received
by the Company for the granting of all such rights or
options, whether or not exercised.
(iv) In case the Company shall grant any rights
or options to subscribe for, purchase or otherwise acquire
Convertible Securities, such Convertible Securities shall be
deemed, for the purposes of subparagraph (iii) above, to
have been issued or sold for the total amount received or
receivable by the Company as consideration for the granting
of such rights or options plus the minimum aggregate amount
of additional consideration, if any, payable to the Company
upon the exercise of such rights or options, provided that,
upon the expiration of such rights or options, if any
thereof shall not have been exercised, the Pro Forma
Adjusted Trigger Price per share shall forthwith be
readjusted and thereafter be the price which it would have
been had an adjustment been made upon the basis that the
only Convertible Securities so issued or sold were those
issued or sold upon the exercise of such rights or options
and that they were issued or sold for the consideration
actually received by the Company upon such exercise, plus
the consideration, if any, actually received by the Company
for the granting of all such rights or options, whether or
not exercised.
(v) In case any shares of stock or other
securities, other than Common Stock of the Company, shall at
any time be receivable upon the conversion of this
Debenture, and in case any additional shares of such stock
or any additional such securities (or any stock or other
securities convertible into or exchangeable for any such
stock or securities) shall be issued or sold for a
consideration per share such as to dilute the purchase
rights evidenced by this Debenture, then and in each such
case the Pro Forma Adjusted Trigger Price per share shall
forthwith be adjusted, substantially in the manner provided
for above in this paragraph (c), so as to protect the holder
of this Debenture against the effect of such dilution.
(vi) In case any shares of Common Stock or
Convertible Securities or any rights or options to subscribe
for, purchase or otherwise acquire any Common Stock or
Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the
amount received by the Company therefor, after deducting any
expenses incurred and any underwriting or similar
commissions, compensation or concessions paid or allowed by
the Company in connection with such issue or sale.
(vii) In case any shares of Common Stock or
Convertible Securities or any rights or options to subscribe
for, purchase or otherwise acquire any Common Stock or
Convertible Securities shall be issued or sold for a
consideration other than cash (or a consideration which
includes cash, if any cash constitutes a part of the assets
of a corporation or business substantially all of the assets
of which are being received a such consideration) then, for
the purpose of this paragraph (c), the Board of Directors of
the Company shall promptly determine the fair value of such
consideration, and such Common Stock, Convertible
Securities, rights or options shall be deemed to have been
issued or sold on the date of such determination in good
faith. Such value shall not be more than the amount at
which such consideration is recorded in the books of the
Company for accounting purposes except in the case of an
acquisition accounted for on a pooling of interest basis.
In case any Common Stock or Convertible Securities or any
rights or options to subscribe for, purchase or otherwise
acquire any Common Stock or Convertible Securities shall be
issued or sold together with other stock or securities or
other assets of the Company for a consideration which covers
both, the Board of Directors of the Company shall promptly
determine what part of the consideration so received is to
be deemed to be the consideration for the issue or sale of
such Common Stock or Convertible Securities or such rights
or options.
The Company covenants and agrees that, should
any determination of fair value of consideration or of
allocation of consideration be made by the Board of
Directors of the Company, pursuant to this subparagraph
(vii), it will, not less than seven (7) days after any and
each such determination, deliver to the holder of this
Debenture a certificate signed by the President or a Vice
President and the Treasurer or an Assistant Treasurer of the
Company reciting such value as thus determined and setting
forth the nature of the transaction for which such
determination was required to be made, the nature of any
consideration, other than cash, for which Common Stock,
Convertible Securities, rights or options have been or are
to be issued, the basis for its valuation, the number of
shares of Common Stock which have been or are to be issued,
and a description of any Convertible Securities, rights or
options which have been or are to be issued, including their
number, amount and terms.
(viii) In case the Company shall take a record of
the holders of shares of its stock of any class for the
purpose of entitling them (a) to receive a dividend or a
distribution payable in Common Stock or in Convertible
Securities, or (b) to subscribe for, purchase or otherwise
acquire Common Stock or Convertible Securities, then such
record date shall be deemed to be the date of the issue or
sale of the Common Stock issued or sold or deemed to have
been issued or sold upon the declaration of such dividend or
the making of such other distribution, or the date of the
granting of such rights of subscription, purchase or other
acquisition, as the case may be.
(ix) The number of shares of Common Stock
outstanding at any given time shall include shares issuable
in respect of scrip certificates issued in lieu of fractions
of shares of Common Stock, but shall exclude shares in the
treasury of the Company.
(x) Following each computation or readjustment
of a Pro Forma Adjusted Trigger Price as provided in this
paragraph (c), the newly computed or adjusted Pro Forma
Adjusted Trigger Price shall remain in effect until a
further computation or readjustment thereof is required by
this paragraph (c).
(xi) In case at any time or from time to time
after the Issuance Date the holders of the Common Stock of
the Company of any class (or any other shares of stock or
other securities at the time receivable upon the exercise of
this Debenture) shall have received, or, on or after the
record date fixed for the determination of eligible
stockholders, shall have become entitled to receive:
(A) other or additional stock or other
securities or property (other than cash) by way of
dividend;
(B) any cash paid or payable out of capital
or paid-in surplus or surplus created as a result of a
revaluation of property by way of dividend; or
(C) other or additional (or less) stock or
other securities or property (including cash) by way of
stock-split, spin-off, split-off, split-up,
reclassification, combination of shares or similar
corporate rearrangement;
(other than additional shares of Common Stock issued to holders
of Common Stock as a stock dividend or stock-split, adjustments
in respect of which shall be covered by the provisions of this
paragraph (c)), then in each case the holder of this Debenture,
upon the conversion hereof as provided in paragraph (a) hereof,
shall be entitled to receive, in lieu of, or in addition to, as
the case may be, the shares theretofore receivable upon the
conversion of this Debenture, the amount of stock or other
securities or property (including cash in the cases referred to
in clauses (B) and (C) above) which such holder would hold on the
date of such exercise if, on the Issuance Date, he, she or it had
been the holder of record of the number of shares of Common Stock
of the Company into which this Debenture is convertible and had
thereafter, during the period from the Issuance Date to and
including the date of such conversion, retained such shares
and/or all other or additional (or less) stock or other
securities or property (including cash in the cases referred to
in clauses (B) and (C) above) receivable by him, her or it as
aforesaid during such period, giving effect to all adjustments
called for during such period by paragraph (c) and subparagraph
(xii) hereof.
(xii) In case of any reorganization of the
Company (or any other corporation the stock or other
securities of which are at the time deliverable on the
conversion of this Debenture) after the date hereof, or in
case, after such date, the Company (or any such other
corporation) shall consolidate with or merge into another
corporation or convey all or substantially all its assets to
another corporation, then and in each such case the holder
of this Debenture, upon the conversion hereof as provided in
paragraph (a) hereof, at any time after the consummation of
such reorganization, consolidation, merger or conveyance,
shall be entitled to receive the stock or other securities
or property to which such holder would have been entitled
upon such consummation if such holder had converted this
Debenture immediately prior thereto, all subject to further
adjustments as provided for herein; in each such case, the
terms of this Debenture shall be applicable to the shares of
stock or other securities or property receivable upon the
conversion of this Debenture after such consummation.
(xiii) The Company will not, by amendment of its
charter or through reorganization, consolidation, merger,
dissolution, sale of assets or any other voluntary action,
avoid or seek to avoid the observance or performance of any
of the terms of this Debenture, but will at all times in
good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder
hereof against dilution or other impairment. Without
limiting the generality of the foregoing, the Company will
not increase the par value of any shares of stock receivable
upon the conversion of this Debenture above the amount
payable therefor upon such exercise, and at all times will
take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully
paid and non-assessable stock upon the conversion of this
Debenture.
(xiv) In each case of an adjustment in the
number of shares of Common Stock or other stock, securities
or property receivable on the conversion of this Debenture,
at the request of the holder of this Debenture the Company
at its expense shall promptly cause independent public
accountants of recognized standing, selected by the Company,
to compute such adjustment in accordance with the terms of
this Debenture and prepare a certificate setting forth such
adjustment and showing in detail the facts upon which such
adjustment is based, including a statement of (A) the
consideration received or to be received by the Company for
any additional shares issued or sold or deemed to have been
issued or sold, (B) the number of shares of Common Stock
outstanding or deemed to be outstanding and (C) the Pro
Forma Adjusted Trigger Price. The Company will forthwith
mail a copy of each such certificate to the holder of this
Debenture.
(xv) In case:
(A) the Company shall take a record of the
holders of its Common Stock (or other stock or
securities at the time deliverable upon the conversion
of this Debenture) for the purpose of entitling or
enabling them to receive any dividend (other than a
cash or stock dividend at the same rate as the rate of
the last cash or stock dividend theretofore paid) or
other distribution, or to exercise any preemptive right
pursuant to the Company's charter, or to receive any
right to subscribe for or purchase any shares of stock
of any class or any other securities, or to receive any
other right; or
(B) of any capital reorganization of the
Company, any reclassification of the capital stock of
the Company, any consolidation or merger of the Company
with or into another corporation, or any conveyance of
all or substantially all of the assets of the Company
to another corporation; or
(C) of the voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then, and in each such case, the Company will mail or
cause to be mailed to the holder of this Debenture a
notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right,
or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up is to take
place, and the times, if any is to be fixed, as of
which the holders of record of Common Stock (or such
other stock or securities at the time deliverable upon
the exercise of this Debenture) shall be entitled to
exchange their shares of Common Stock of any class (or
such other stock or securities) for reclassification,
consolidation, merger, conveyance, dissolution,
liquidation or winding up or (iii) the amount and
character of the stock or other securities proposed to
be issued or granted, the date of such proposed
issuance or grant and the persons or class of persons
to whom such stock or other securities ar to be
offered, issued or granted. Such notice shall be
mailed at least thirty (30) days prior to the date
therein specified.
(xvi) The Company will at all times reserve and
keep available, solely for insurance and delivery upon the
conversion of this Debenture and other similar Debentures,
such shares of Common Stock and other stock, securities and
property as from time to time shall be issuable upon the
exercise of this Debenture and all other similar Debentures
at the time outstanding.
(xvii) Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction
or mutilation of this Debenture and (in the case of loss,
theft or destruction) upon delivery of an indemnity
agreement in an amount reasonably satisfactory to it, or (in
the case of mutilation) upon surrender and cancellation
thereof, the Company will issue, in lieu thereof, a new
Debenture of like tenor.
(xviii) (A) Within 90 days after the date hereof,
the Company will file a registration statement
("Registration Statement") with the Securities and
Exchange Commission ("SEC") covering the Subject
Securities (other than the Debentures, the 1995
Debentures and the Preferred Stock) and the shares of
Common Stock issuable upon conversion of the Debentures
and the Subject Securities (collectively "Registrable
Securities"), and will use its best efforts to cause
the Registration Statement to become effective on or
prior to the ninetieth day after such filing and to
keep the Registration Statement effective for a period
of seven years from the date it is declared effective
by the SEC.
(B) The following provisions shall be
applicable to the Registration Statement:
(aa) The Company will use its best
efforts to cause the Registration Statement to
become effective as promptly as possible, and if
any stop order shall be issued by the SEC in
connection therewith to use its reasonable efforts
to obtain the removal of such order. Following
the effective date of the Registration Statement,
the Company shall, upon the request of the holder,
forthwith supply such reasonable number of copies
of the Registration Statement, preliminary
prospectus and prospectus meeting the requirements
of the Act, and other documents necessary or
incidental to a public offering of the Registrable
Securities, as shall be reasonably requested by
the holder to permit the holder to make a public
distribution of its, his or her Registrable
Securities. The Company will use its reasonable
efforts to qualify the Registrable Securities for
sale in such states as the holder of Registrable
Securities shall reasonably request, provided that
no such qualification will be required in any
jurisdiction where, solely as a result thereof,
the Company would be subject to service of general
process or to taxation or qualification as a
foreign corporation doing business in such
jurisdiction. The obligations of the Company
hereunder with respect to the holder's Registrable
Securities are expressly conditioned on the
holder's furnishing to the Company such
appropriate information concerning the holder, the
holder's Registrable Securities and the terms of
the holder's offering of such Registrable
Securities as the Company may reasonably request.
(bb) The Company shall pay all expenses
incurred in complying with the provisions of this
subparagraph (xviii), including, without
limitation, all registration and filing fees
(including all expenses incident to filing with
the National Association of Securities Dealers,
Inc.), printing expenses, fees and disbursements
of counsel to the Company, securities law and blue
sky fees and expenses and the expenses of any
regular and special audits incident to or required
by any such registration. All underwriting
discounts and selling commissions applicable to
the sales of the Registrable Securities, and any
state or federal transfer taxes payable with
respect to the sales of the Registrable Securities
and all fees and disbursements of counsel for the
Holder, if any, in each case arising in connection
with registration of the Registrable Securities
shall be payable by the Holder.
(cc) In connection with the registration
of the Registrable Securities pursuant to this
subparagraph (xviii), the Company shall indemnify
and hold harmless the Holder, its affiliates,
officers, directors, partners, employees, agents
and representatives, each person, if any, who
controls the Holder within the meaning of the
Securities Act of 1933, as amended (the
"Securities Act"), or the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and any
person claiming by or through any of them
(collectively, the "Indemnified Persons") from and
against all losses, claims, damages, expenses or
liabilities (or actions in respect thereof)
arising out of or are based upon any untrue
statement of any material fact contained in the
Registration Statement or alleged untrue
statement, under which such securities were
registered under the Securities Act, any
preliminary prospectus or final prospectus
contained therein, or any amendment or supplement
thereto, or arise out of or are based upon the
omission to state therein a material fact required
to be stated therein or necessary to make the
statements made therein, in light of the
circumstances under which they are made, not
misleading, or any violation by the Company of the
Securities Act, the Exchange Act or state
securities or blue sky laws applicable to the
Company and relating to action or inaction
required of the Company in connection with such
registration or qualification under such state
securities or blue sky laws; and will reimburse
the Indemnified Persons for any legal or any other
expenses reasonably incurred by them in connection
with investigating or defending any such loss,
claim, damage, liability or action; provided,
however, that the Company will not be liable in
any such case to any Indemnified Person to the
extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue
statement or omission made in the Registration
Statement, said preliminary prospectus or said
final prospectus or said amendment or supplement
or any document incident thereto in reliance upon
and in conformity with written information
furnished to the Company by or on behalf of the
Holder.
(dd) The Holder will indemnify and hold
harmless the Company and each person, if any, who
controls the Company within the meaning of the
Securities Act or the Exchange Act, each officer
of the Company who signs the Registration
Statement and each director of the Company from
and against any and all such losses, claims,
damages or liabilities arising from any untrue
statement in, or omission from, the Registration
Statement, any such preliminary or final
prospectus, amendment, or supplement or document
incident thereto if the statement or omission in
respect of which such loss, claim, damage or
liability is asserted was made in reliance upon
and in conformity with information furnished in
writing to the Company by or on behalf of the
Holder for use in connection with the preparation
of the Registration Statement or such prospectus
or amendment or supplement thereof.
(ee) The reimbursements required by
clauses (cc) and (dd) shall be made by periodic
payments during the course of the investigation or
defense as and when bills are received or expenses
incurred; provided, however, that to the extent
that an indemnified party receives periodic
payments for legal or other expenses during the
course of an investigation or defense, and such
party subsequently received payments for such
expenses from any other parties to the proceeding,
such payments shall be used by the indemnified
party to reimburse the indemnifying party for such
periodic payments. Any party which proposes to
assert the right to be indemnified under clause
(cc) or (dd) will, promptly after receipt of
notice of commencement of any action, suit or
proceeding against such party in respect of which
a claim is to be made against any indemnified
party hereunder, notify each such indemnifying
party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served,
but the failure to so notify such indemnifying
party of any such action, suit or proceeding shall
not relieve the indemnifying party from any
obligation which it may have to any indemnified
party hereunder unless and only to the extent that
the indemnifying party is prejudiced by said lack
of notice. In case any such action, suit or
proceeding shall be brought against any
indemnified party and it shall notify the
indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to
participate in and, to the extent that it shall
wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified
party, and after notice from the indemnifying
party to such indemnified party of its election so
to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified
party for any legal or other expense, other than
reasonable costs of investigation subsequently
incurred by such indemnified party in connection
with the defense thereof. The indemnified party
shall have the right to employ its own counsel in
any such action, but the reasonable fees and
expenses of such counsel shall be at the expense
of such indemnified party, when and as incurred,
unless (A) the employment of counsel by such
indemnified party has been authorized by the
indemnifying party, (B) the indemnified party has
reasonably concluded (based on advice of counsel),
that there may be legal defenses available to it
that are different from or in addition to those
available to the indemnifying party, (C) the
indemnified party shall have reasonably concluded
(based on advice of counsel) that there may be a
conflict of interest between the indemnifying
party and the indemnified party in the conduct of
defense of such action (in which case the
indemnifying party shall not have the right to
direct the defense of such action on behalf of the
indemnified party), or (D) the indemnifying party
shall not in fact have employed counsel to assume
the defense of such action within 15 days after
receipt of notice of such action. An indemnifying
party shall not be liable for any settlement or
any action or claim effected without its consent.
(ff) If the indemnification provided for
in this subparagraph (xviii) is unavailable to any
indemnified party hereunder in respect of any
losses, claims, damages, liabilities or expenses
referred to therein, then the indemnifying party,
in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by
such indemnified party as a result of such losses,
claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the
relative fault of the indemnifying party and
indemnified parties in connection with the actions
that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other
relevant equitable considerations. The relative
fault of such indemnifying party and indemnified
parties shall be determined by reference to, among
other things, whether any action in question,
including any untrue or alleged untrue statement
of a material fact or omission or alleged omission
to state a material fact, has been made by, or
relates to information supplied by, such
indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to
information and opportunity to correct or prevent
such action. The amount paid or payable by a
party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall
be deemed to include, subject to the limitations
set forth herein, any legal or other fees or
expenses reasonably incurred by such party in
connection with any investigation or proceeding.
(gg) The Company and the Holder agree
that it would not be just and equitable if
contribution pursuant to clause (ff) were
determined by pro rata allocation or by any other
method of allocation that does not take account of
the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding
any other provision hereof, in no event shall the
contribution obligation of the Holder be greater
in amount than the excess of (A) the dollar amount
of net proceeds received by the Holder upon the
sale of the securities giving rise to such
contribution obligation over (B) the dollar amount
of any damages that the Holder has otherwise been
required to pay by reason of the untrue or alleged
untrue statement or omission or alleged omission
giving rise to such obligation. No person guilty
of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person
who was not guilty of such fraudulent
misrepresentation.
(hh) Neither the filing of the
Registration Statement by the Company pursuant to
this Agreement nor the making of any request for
prospectuses by the holder shall impose upon the
holder any obligation to sell his, her or its
Registrable Securities.
(ii) The holder, upon receipt of notice
from the Company that an event has occurred which
requires a post-effective amendment to the
Registration Statement or a supplement to the
prospectus included therein, shall promptly
discontinue the sale of his, her or its
Registrable Securities until the holder receives a
copy of a supplemented or amended prospectus from
the Company, which the Company shall provide as
soon as practicable after such notice.
(C) In the event (a) the Registration
Statement is not filed by the Company with the SEC on
or prior to the ninetieth (90th) day after the date
hereof, or (b) the Registration Statement has not been
declared effective by the SEC on or prior to the one
hundred eightieth (180th) day after the date hereof,
the annual interest rate on the Debentures shall be the
rate per annum ("Default Rate") which is 12% increased
by one and one-half percent (1-1/2%) per annum for the
first three (3) months immediately following the
expiration of such ninety (90) day period or one
hundred eighty (180) day period, as the case may be,
and by an additional one-half of one percent (1/2%) per
annum at the beginning of each subsequent thirty (30)
day period thereafter, until such time as the
requirements of clause (a) or (b) above, as the case
may be, have been satisfied, at which time all
increases in the interest rate borne by the Debentures
resulting from the operation of this sentence shall
terminate and the interest rate borne by the Debentures
shall revert to the rate that otherwise would be in
effect but for the operation of this sentence;
provided, however, that in no event shall the interest
rate borne by the Debentures exceed seventh percent
(17%) per annum pursuant to this sentence.
7. Covenants.
(a) Affirmative Covenants: The Company will, and with
respect to the agreements set forth in subsections (i) through
(viii) hereof, will cause each subsidiary to:
(i) with respect to its properties, assets and
business, maintain insurance against loss or damage, to the
extent that property, assets and businesses of similar
character are usually so insured by companies similarly
situated and operating like properties, assets or businesses
with responsible insurance companies satisfactory to the
Majority Holders said insurance to indicate the Agent (as
defined in the Security Agreement) as an additional insured;
(ii) duly pay and discharge all taxes or other
claims which might become a lien upon any of its properties
except to the extent that such items are being in good faith
appropriately contested;
(iii) maintain, preserve and keep its properties
in good repair, working order and condition, and make all
reasonable repairs, replacements, additions, betterments and
improvements thereto;
(iv) conduct its business in substantially the
same manner and in substantially the same fields as such
business is now carried on and conducted;
(v) comply with all statutes, rules and
regulations and maintain its corporate existence;
(vi) provide the Holders with the following
financial information:
(A) annually, as soon as available, but in
any event within one hundred twenty (120) days after
the last day of each fiscal year, audited financial
statements, including balance sheets as of the last day
of the fiscal year and statements of income and
retained earnings and changes in financial condition
for such fiscal year each prepared in accordance with
generally accepted accounting principles ("GAAP"),
consistently applied for the period and prior periods
by independent Certified Public Accountants
satisfactory to the Majority Holders;
(B) as soon as available, but in any event
within forty-five (45) days after the end of each
fiscal quarter, internally prepared financial
statements of the Company each prepared in accordance
with GAAP and jobs-in-progress reports for said period
and prior periods;
(C) within a reasonable time after a
written request therefor, such other financial data or
information as such Holders may reasonably request from
time to time;
(D) at the same time as it delivers the
financial statements required under the provisions of
subsections (A) and (B) hereof, a certificate signed by
the president or the chief financial, or accounting,
officer of the Company, to the effect that no Event of
Default hereunder or material default under any other
agreement to which the Company is a party or by which
it is bound, or by which any of its properties or
assets may be affected, and no event which, with the
giving of notice or the lapse of time, or both, would
constitute such an Event of Default, has occurred;
(E) on a monthly basis, no later than the
tenth (10th) day after each such month, backlog reports
and accounts receivable agings of the Company;
(vii) permit each Holder to make or cause to be
made, inspections and audits of any books, records and
papers of the Company and of any parent or subsidiary
thereof and to make extracts therefrom at all such
reasonable times and as often as such Holders may reasonably
require;
(viii) immediately give notice to the Holders
that an Event of Default has occurred or that an event
which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default, has occurred and
specifying the action which the Company has taken and
proposes to take with respect thereto.
(b) Financial Covenants:
(1) at June 30, 1996, the Company shall maintain
a Tangible Net Worth equal to the greater of (a) $4,500,000,
or (b) the sum of $4,500,000 and any net profit after taxes
for the fiscal year ending June 30, 1996 (as calculated in
accordance with GAAP) less any preferred dividends (as such
shall have been declared during such fiscal year). At each
fiscal year end thereafter, the Company shall maintain a
Tangible Net Worth equal to the greater of (a) the required
Tangible Net Worth required hereunder for the immediately
preceding fiscal year, or (b) the sum of said required
Tangible Net Worth and any net profit after taxes for the
fiscal year then ending (as calculated in accordance with
GAAP) less any preferred dividends (as such shall have been
declared during such fiscal year). For purposes hereof
"Tangible Net Worth" shall mean, at any date, (i) the net
book value of assets (other than patents, patent rights,
trademarks, trade names, franchises, copyrights, licenses,
permits, goodwill and other intangible assets classified as
such in accordance with GAAP) after all appropriate
adjustments in accordance with GAAP (including, without
limitation, reserves for doubtful receivables, obsolescence,
depreciation and amortization) plus (ii) subordinated
indebtedness, in each case computed in accordance with GAAP;
(2) As of each June 30 and December 31 of each
fiscal year, commencing with June 30, 1996, the Company
shall maintain an excess of Current Assets to Current
Liabilities of not less than 2.75 to 1.0. For purposes
hereof, "Current Assets" shall be defined as the aggregate
amount of all current assets of the Company and its
subsidiaries, including prepaid items such as insurance,
taxes, interest, commissions and rents as may be properly
classified as such in accordance with GAAP, other than
goodwill and such other assets as are properly classified as
"intangible assets" or deferred assets. In determining the
value of assets hereunder, investments in Persons other than
subsidiaries shall be taken at cost or fair market value,
whichever is less. For purposes hereof, "Current
Liabilities" shall be defined as the aggregate amount of all
current liabilities of the Company and its subsidiaries
determined in accordance with GAAP;
(3) As of each June 30 and December 31 of each
fiscal year, commencing June 30, 1996, the Company shall
maintain Working Capital of not less than $5,500,000. For
purposes hereof, Working Capital shall be defined as Current
Assets less Current Liabilities;
(4) As of each June 30 and December 31 of each
fiscal year, commencing June 30, 1996, the Company shall
maintain a ratio of Total Liabilities (calculated in
accordance with GAAP excluding debt pursuant to the
Debentures as hereinafter defined) to Tangible Net Worth of
not more than 1.25 to 1.0;
(5) the Company shall maintain a Debt Service
Coverage ratio of not less than 1.05 : 1 at fiscal year end
June 30, 1996 and 1.20 : 1 at fiscal year end June 30, 1997.
For purposes hereof "Debt Service Coverage" shall be defined
as earnings before interest taxes, depreciation and
amortization for the fiscal year ending on the date of
determination divided by the sum of current maturities of
long term debt plus interest expense whether paid or accrued
plus preferred dividends declared during such fiscal year
(as all of the aforementioned are calculated in accordance
with GAAP).
(c) Negative Covenants: The Company will not, and
will not permit any subsidiary to:
(i) create, incur, assume or suffer to exist
any liability for borrowed money, except (A) indebtedness to
the Bank or any other financial institution constituting
"Senior Debt" hereunder; (B) indebtedness contemplated by
the Debentures and the 1995 Debentures; (C) other
indebtedness for borrowed money (whether or not constituting
a refinancing of existing indebtedness) so long as (x) such
indebtedness is not secured by collateral securing repayment
of this loan, (y) such indebtedness contains provisions
reasonably satisfactory to the Majority Holders
subordinating the payment of principal and interest thereon
to the prior payment of principal and interest on the
Debentures, and (z) the incurrence of which will not cause
an Event of Default, or an event which with notice or the
lapse of time or both would constitute an Event of Default,
hereunder;
(ii) create, incur, assume or suffer to exist,
any mortgage, pledge, lien or encumbrance of or upon or
security interest in, any of its property or assets now
owned or hereafter acquired except (A) mortgages, liens,
pledges and security interests securing Senior Debt and the
Debentures; (B) other liens, charges and encumbrances
incidental to the conduct of its business or the ownership
of its property and assets which are not incurred in
connection with the borrowing of money or the obtaining of
advances or credit and which do not materially impair the
use thereof in the operation of its business; (C) liens for
taxes or other governmental charges which are not delinquent
or which are being contested in good faith and for which a
reserve shall have been established in accordance with GAAP;
(D) liens granted to secure purchase money financing of
equipment, provided such liens are limited to the equipment
financed; and (E) liens granted to refinance unencumbered
equipment provided such liens are limited to the equipment
refinanced and the incurrence of which will not cause a
default hereunder or in any other Senior Debt;
(iii) assume, endorse, be or become liable for
or guarantee the obligations of any other person except by
the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business;
(iv) (A) terminate any pension plan so as to
result in any material liability to The Pension Benefit
Guaranty Corporation established pursuant to Subtitle A of
Title IV of ERISA (the "PBGC"), (B) engage in or permit any
person to engage in any "prohibited transaction" (as defined
in Section 406 of ERISA or Section 4975 of the Internal
Revenue Code of 1954, as amended) involving any pension plan
which would subject the Company to any material tax, penalty
or other liability, (C) incur or suffer to exist any
material "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, involving any
pension plan, or (D) allow or suffer to exist any event or
condition, which presents a material risk of incurring a
material liability to the PBGC by reason of termination of
any pension plan;
(v) amend, supplement or modify the terms of
the Subject Securities or increase the outstanding amount of
any Subject Securities without the prior consent of the
Majority Holders;
(vi) enter into any merger or consolidation
unless the Company shall be the surviving entity in any such
merger or consolidation, and after giving effect to the
transaction no Event of Default and no event which with the
giving of notice or passage of time or both would constitute
an Event of Default shall have occurred and be continuing,
or liquidate, wind-up or dissolve itself or sell, transfer
or lease or otherwise dispose of all or any substantial part
of its assets;
(vii) lend or advance money, credit or property
to or invest in (by capital contribution, loan, purchase or
otherwise) any firm, corporation, or other person except (A)
investments in United States Government obligations and
certificates of deposit of any bank institution with
combined capital and surplus of at least $200,000,000, (B)
trade credit, (C) security deposits, or acquire or otherwise
cause any other entity to become a subsidiary of the Company
(as used herein the term "subsidiary" means any corporation
or other organization, whether incorporated or
unincorporated, of which the Company or any other subsidiary
of the Company beneficially owns a majority of the voting or
economic interests) and (D) indebtedness to Murray H.
Feigenbaum and Jerome Deutsch in the aggregate amount of
$60,000 existing on the date hereof;
(viii) declare or pay any dividends or
distributions on account of its capital stock or purchase,
redeem, retire or otherwise acquire any of its capital stock
or any securities convertible into, exchangeable for, or
giving any person the right to acquire or otherwise
subscribe for, any shares of the Company's capital stock;
provided, however, that so long as no Event of Default or
event which, with the giving of notice, the lapse of time,
or both would constitute an Event of Default hereunder has
occurred and is continuing, the Company may pay regular
quarterly dividends on the Preferred Stock in accordance
with the terms thereof; or
(ix) engage in any transaction with any person
or entity who directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under
common control with, the Company (an "Affiliate"), other
than ordinary director and compensation arrangements with
Affiliates serving as officers and/or directors of the
Company and other than transactions with Affiliates entered
into in the ordinary course of business on terms which are
at least as favorable to the Company as those available from
unrelated third parties. As used herein, the term "control"
means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and
policies of the Company, whether through the ownership of
voting securities, by contract or otherwise, and the terms
"controlled" and "controlling" have meanings correlative
thereto.
8 Events of Default.
(a) Definition. For the purposes of this Debenture,
an Event of Default hereunder will be deemed to have occurred if:
(i) the Company fails to pay the principal
amount of this Debenture when due (whether upon the Due
Date, upon acceleration or otherwise), whether or not such
payment is prohibited by paragraph 4 hereof;
(ii) the Company fails to pay any interest,
premium or penalty on the Debenture when due and such
failure has continued for a period of ten (10) days;
(iii) the Company fails to perform or observe
the provisions set forth in Paragraphs 7(b) or 7(c) hereof;
(iv) the Company fails to perform or observe
any provision contained in the Debenture or the Security
Agreement (other than those specifically covered by the
other provisions of this paragraph 8(a)) and, if such
failure is capable of being cured, such failure continues
for a period of 30 days after the Company's receipt of
written notice thereof;
(v) the Company shall have failed to pay when
due any amount due and owing under any indebtedness of the
Company for borrowed money or any other default or event of
default shall have occurred (and shall have continued beyond
the expiration of any applicable grace period) under any
indebtedness of the Company for borrowed money which would
permit the holder thereof to accelerate the maturity thereof
or there shall have been an acceleration of the stated
maturity of any indebtedness of the Company for borrowed
money;
(vi) the Security Agreement shall at any time
after its execution and delivery and for any reason cease to
be effective to constitute a valid and perfected lien and
security interest in and to the Collateral (as defined
therein) or if any of the provisions of the Security
Agreement that permit the Secured Party (as defined therein)
to exercise its remedies in accordance with the Uniform
Commercial Code of the State of New York cease to be in full
force and effect;
(vii) the Company makes an assignment for the
benefit of creditors or admits in writing its inability to
pay its debts generally as they become due; or an order,
judgment or decree is entered adjudicating the Company as
bankrupt or insolvent; or any order for relief with respect
to the Company is entered under the Federal Bankruptcy Code;
or the Company petitions or applies to any tribunal for the
appointment of a custodian, trustee, receiver or liquidator
of the Company or of any substantial part of the assets of
the Company, or commences any proceeding relating to the
Company under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation
law of any jurisdiction ("Insolvency Event or Proceeding");
or any such petition or application is filed, or any such
proceeding is commenced, against the Company and either (y)
the Company by any act indicates its approval thereof,
consents thereto or acquiescence therein or (z) such
petition application or proceeding is not dismissed within
60 days;
(viii) a final judgment which in the aggregate
with other outstanding final judgments against the Company
exceeds $250,000 shall be rendered against the Company and
within 90 days after entry thereof, such judgment is not
discharged or execution thereof stayed pending appeal, or
within 90 days after the expiration of such stay, such
judgment is not discharged;
(ix) any person or "group" (as defined in Rule
13d-5 promulgated under the Exchange Act), other than SFM
Group, Ltd. or Phipps, Teman & Company, L.L.C., acquires or
otherwise obtains the right (whether by contract, through
the ownership of securities or pursuant to any proxy or
consent arrangement, voting trust or otherwise) to appoint,
elect or cause the election of a majority of the Board of
Directors of the Company;
(x) any representation or warranty made by the
Company in the Unit Purchase Agreement, dated March 7, 1996
between the Company and the original Holder of this
Debenture, the Security Documents (as defined in such Unit
Purchase Agreement), or any other certificate or instrument
delivered in connection therewith shall have been untrue in
any material respect when made; or
(xi) the Registration Statement shall not have
become effective within 270 days after the date hereof.
(b) Consequences of Events of Default.
(i) If any Event of Default (other than the
type described in subparagraph 8(a)(vii) above) has
occurred, the Holder or Holders of Debentures representing a
majority of the aggregate principal amount of Debentures
then outstanding (the "Majority Holders") may demand (by
written notice delivered to the Company) immediate payment
of all or any portion of the outstanding principal amount of
the Debentures owed by such Holder or Holders. If such
Majority Holders demand immediate payment of all or any
portion of such Holder's or Holders' Debentures, the Company
will, to the extent permitted under the provisions of
paragraph 4 hereof, immediately pay to such Holder or
Holders the principal amount of the Debentures requested to
be paid (plus accrued interest hereon). If an Event of
Default of the type described in subparagraph 8(a)(vii)
above has occurred, then all of the outstanding principal
amount of the Debentures shall automatically be immediately
due and payable without any action on the part of any
Holders of the Debenture.
(ii) If an Event of Default has occurred, each
Holder of the Debentures will also have any other rights
which such Holder may have pursuant to applicable law, in
each case provided such rights are consistent with the
provisions of paragraph 4 hereof.
9. Amendment and Waiver. Except as otherwise expressly
provided herein, the provisions of this Debenture may be amended
and the Company may take any action herein prohibited and
exercise all remedies available to them under the Security
Agreement, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written
consent of the Majority Holders, provided, however, neither the
interest rate or principal amounts payable under the Debentures,
the dates on which interest or principal under the Debentures is
due nor the obligations to make payments on the Debentures on a
pro rata basis shall be amended without the prior written consent
of each Holder affected thereby, and of each holder of Senior
Debt, and further provided, however, that any amendment or waiver
which might in any way adversely affect the holders of Senior
Debt, including, but not limited to, any amendment or waiver
affecting the provisions of paragraph 4 or this paragraph 9 shall
require the prior written consent of each holder of Senior Debt.
Any amendment or waiver effected in accordance with this
paragraph 9 shall be binding upon each Holder of this Debenture
and each future Holder of this Debenture.
10. Cancellation. After all principal and accrued interest
at any time owed on this Debenture has been paid in full, this
Debenture will be surrendered to the Company for cancellation and
will not be reissued.
11. Place of Payment. Payments of principal and interest
are to be delivered to the Holder at the office of the Company,
121-03 Dupont Street, Plainview, New York 11803, or to such other
address or to the attention of such other Person as specified by
prior written notice to the Company.
12. Waiver of Presentment, Demand and Dishonor. The
Company hereby waives presentment for payment, protest, demand,
notice of protest, notice of non-payment and diligence with
respect to this Debenture, and waives and renounces all rights to
the benefit of any statute of limitations or any moratorium,
appraisement, exemption or homestead now provided or that
hereafter may be provided by any federal or applicable state
statute, including but not limited to exemptions provided by or
allowed under the Federal Bankruptcy Code, both as to itself and
as to all of its property, whether real or personal, against the
enforcement and collection of the obligations evidenced by this
Debenture and any and all extensions, renewals and modifications
hereof.
No failure on the part of the Holder hereof or of any
other Debentures to exercise any right or remedy hereunder with
respect to the Company, whether before or after the happening of
an Event of Default, shall constitute a waiver of any future
Event of Default or of any other Event of Default. No failure to
accelerate the debt of the Company evidenced hereby by reason of
an Event of Default or indulgence granted from time to time shall
be construed to be a waiver of the right to insist upon prompt
payment thereafter; or shall be deemed to be a novation of this
Debenture or a reinstatement of such debt evidenced hereby or a
waiver of such right of acceleration or any other right, or be
construed so as to preclude the exercise of any right Holder may
have, whether by the laws of the state governing this Debenture,
by agreement or otherwise; and the Company hereby expressly
waives the benefit of any statute or rule of law or equity that
would produce a result contrary to or in conflict with the
foregoing.
13. Usury. The Holder and the Company intend that the
obligations evidenced by this Debenture conform strictly to the
applicable usury laws from time to time in force. All agreements
between the Company and Holder, whether now existing or hereafter
arising and whether oral or written, hereby are expressly limited
so that in no contingency or event whatsoever, whether by
acceleration of maturity hereof or otherwise, shall the amount
paid or agreed to be paid to Holder, or collected by Holder, by
or on behalf of the Company for the use, forbearance or detention
of the money to be loaned to the Company hereunder or otherwise,
or for the payment or performance of any covenant or obligation
contained herein of the Company to Holder, or in any other
document evidencing, securing or pertaining to such indebtedness
evidenced hereby, exceed the maximum amount permissible under
applicable usury law. If under any circumstances whatsoever
fulfillment of any provision hereof or any other document, at the
time performance of such provisions shall be due, shall involve
transcending the limit of validity prescribed by law, then, ipso
facto, the obligation to be fulfilled shall be reduced to the
limit of such validity; and if under any circumstances Holder
ever shall receive from or on behalf of the Company an amount
deemed interest, by applicable law, which would exceed the
highest lawful rate, such amount that would be excessive interest
under applicable usury laws shall be applied to the reduction of
the Company's principal amount owing hereunder and not to the
payment of interest, or if such excessive interest exceeds the
unpaid balance of principal and such other indebtedness, the
excess shall be deemed to have been a payment made by mistake and
shall be refunded to the Company or to any other person making
such payment on the Company's behalf.
14. Governing Law. The validity, construction and
interpretation of this Debenture will be governed by the internal
laws, but not the law of conflicts and choices of law, of the
State of New York.
IN WITNESS WHEREOF, the Company has executed and delivered
this 12% Convertible Senior Subordinated Debenture this 7th day
of March, 1996.
LOGIMETRICS, INC.
By: /s/ Murray H. Feigenbaum
-------------------------------
Name:
Title: President
EXHIBIT A
ELECTION TO CONVERT
(All capitalized terms used and not otherwise
defined herein shall have the meanings
assigned to them in the 12% Convertible Senior
Subordinated Debenture)
LogiMetrics, Inc.
121-03 Dupont Street
Plainview, NY 11803
TO WHOM IT MAY CONCERN:
The undersigned registered owner of the attached 12%
Convertible Senior Subordinated Debenture hereby irrevocably
exercises the option to convert such Debenture into Common Stock
of LogiMetrics, Inc. in accordance with the terms thereof, and
directs that any shares issuable and deliverable upon the
conversion be issued in the name of and delivered to the
undersigned.
-------------------------------------------
[Name of Debentureholder]
Dated:_________________, 199_
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
CANNOT BE SOLD OR TRANSFERRED UNLESS AND UNTIL THEY ARE SO
REGISTERED OR UNLESS AN EXEMPTION UNDER SUCH ACT OR LAWS IS
AVAILABLE. THE TRANSFERABILITY OF THESE SECURITIES IS FURTHER
SUBJECT TO THE PROVISIONS OF A UNIT PURCHASE AGREEMENT DATED AS
OF MARCH 7, 1996 BY AND BETWEEN THE COMPANY AND CERBERUS
PARTNERS, L.P.
LOGIMETRICS, INC.
Common Stock Purchase Warrant
Series C
LOGIMETRICS, INC. (the "Company"), a Delaware corporation,
hereby certifies that, for value received, Cerberus Partners,
L.P., or assigns, is entitled, subject to the terms set forth
below, to purchase from the Company Eighty Four Thousand Seven
Hundred Forty Six (84,746) fully paid and non-assessable shares
of Common Stock of the Company, at a purchase price, subject to
the provisions of Paragraph 3 hereof, of one cent ($.01) per
share (the "Purchase Price") at any time prior to the seventh
anniversary of the original date of issuance hereof. The number
and character of such shares are subject to adjustment as
provided below, and the term "Common Stock" shall mean, unless
the context otherwise requires, the stock or other securities or
property at the time deliverable upon the exercise of this
Warrant. This Warrant is herein called the "Warrant". This
Warrant is one of a series of warrants to purchase 2,542,080
shares of Common Stock ("Series C Warrants").
1. EXERCISE OF WARRANT. The purchase rights evidenced by
this Warrant shall be exercised by the holder hereof ("Holder")
surrendering this Warrant, with the form of subscription at the
end hereof duly executed by such Holder, to the Company at its
office in Plainview, New York, accompanied by payment (in cash or
by certified or official bank check). This Warrant may be
exercised for less than the full number of shares of Common Stock
at the time called for hereby, in which case the number of shares
receivable upon the exercise of this Warrant as a whole, and the
sum payable upon the exercise of this Warrant as a whole, shall
be proportionately reduced. Upon any such partial exercise, the
Company at its expense will forthwith issue to the Holder hereof
a new Warrant or Warrants of like tenor calling for the number of
shares of Common Stock as to which rights have not been
exercised, such Warrant or Warrants to be issued in the name of
the Holder hereof or his nominee.
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as
practicable after the exercise of this Warrant and payment of the
Purchase Price, and in any event within five (5) days thereafter,
the Company, at its expense, will cause to be issued in the name
of and delivered to the Holder hereof a certificate or
certificates for the number of fully paid and non-assessable
shares or other securities or property to which such Holder shall
be entitled upon such exercise, plus, in lieu of any fractional
share to which such Holder would otherwise be entitled, cash
equal to such fraction multiplied by the then current market
value of one full share.
3. ADJUSTMENT FOR ISSUE OR SALE OF COMMON STOCK AT LESS
THAN PURCHASE PRICE. In case, at any time or from time to time
after the date of issuance of this Warrant ("Issuance Date"), the
Company shall issue or sell shares of its Common Stock (other
than any Common Stock issuable upon (i) conversion of the
Company's Amended and Restated 12% Convertible Subordinated
Debentures dated as of July 14, 1995 ("1995 Debentures"), (ii)
exercise of those certain Amended and Restated Series A Warrants
dated March 7, 1996 to purchase 600,000 shares of Common Stock
("Series A Warrants"), (iii) exercise by each of Murray H.
Feigenbaum and Jerome Deutsch (the "Principals") of their right
to purchase 100,000 shares of Common Stock at a price of $.10 per
share ("Principals' Options"), (iv) exercise of those certain
Amended and Restated Series B Warrants dated March 7, 1996 to
purchase 1,500,000 shares of Common Stock ("Series B Warrants"),
(v) conversion of the Company's 12% Convertible Senior
Subordinated Debentures dated March 7, 1996 ("Senior Subordinated
Debentures"), (vi) exercise of those certain Series D Warrants
dated March 7, 1996 to purchase an aggregate of 2,830,200 shares
of Common Stock ("Series D Warrants"), (vii) exercise of those
certain Series E Warrants dated March 7, 1996 to purchase
1,000,000 shares of the Company's Common Stock ("Series E
Warrants" and together with the Series A, B, C and D Warrants,
"Warrants"), (viii) exercise of those certain Stock Options,
dated March 7, 1996 to purchase 1,000,000 shares of Common Stock
issued to Richard K. Laird ("Laird Options") and (ix) conversion
of the Company's 30 shares of Series A 12% Cumulative Convertible
Redeemable Preferred Stock ("Preferred Stock" and together with
the 1995 Debentures, the Senior Subordinated Debentures, the
Warrants, the Laird Options, the Principals' Options and any
shares of Common Stock issuable upon conversion or exercise
thereof, the "Subject Securities")), for a consideration per
share less than thirty cents ($.30) per share (the "Trigger
Price") (or, if a Pro Forma Adjusted Trigger Price shall be in
effect as provided below in this Paragraph 3, then less than such
Pro Forma Adjusted Trigger Price per share), then and in each
such case the Holder of this Warrant, upon the exercise hereof as
provided in Paragraph 1 hereof, shall be entitled to receive, in
lieu of the shares of Common Stock theretofore receivable upon
the exercise of this Warrant, a number of shares of Common Stock
determined by (a) dividing the Trigger Price by a Pro Forma
Adjusted Trigger Price per share to be computed as provided below
in this Paragraph 3, and (b) multiplying the resulting quotient
by the number of shares of Common Stock called for on the face of
this Warrant. A Pro Forma Adjusted Trigger Price per share shall
be the price computed (to the nearest cent, a fraction of half
cent or more being considered a full cent):
by dividing (i) the sum of (x) the result
obtained by multiplying the number of shares
of Common Stock of the Company outstanding
immediately prior to such issue or sale by
the Trigger Price (or, if a Pro Forma
Adjusted Trigger Price shall be in effect, by
such Price), and (y) the consideration, if
any, received by the Company upon such issue
or sale, by (ii) the number of shares of
Common Stock of the Company outstanding
immediately after such issue or sale.
For the purpose of this Paragraph 3:
3.1. Stock Splits, Dividends, etc., in Common Stock or
Convertible Securities. In case the Company splits its Common
Stock or shall declare any dividend, or make any other
distribution, upon any stock of the Company of any class payable
in Common Stock, or in any stock or other securities directly or
indirectly convertible into or exchangeable for Common Stock (any
such stock or other securities being hereinafter called
"Convertible Securities"), such split, declaration or
distribution shall be deemed to be an issue or sale (as of the
record date for such split, dividend or other distribution),
without consideration, of such Common Stock or such Convertible
Securities, as the case may be.
3.2. Issuance or Sale of Convertible Securities. In case
the Company shall issue or sell any Convertible Securities other
than the Subject Securities, there shall be determined the price
per share for which Common Stock is issuable upon the conversion
or exchange thereof, such determination to be made by dividing
(a) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion
or exchange thereof, by (b) the maximum number of shares of
Common Stock of the Company issuable upon the conversion or
exchange of all such Convertible Securities.
If the price per share so determined shall be less than
the Trigger Price (or, if a Pro Forma Adjusted Trigger Price
shall be in effect, less than such Price) as of the date of such
issue or sale, then such issue or sale shall be deemed to be an
issue or sale for cash (as of the date of issue or sale of such
Convertible Securities) of such maximum number of shares of
Common Stock at the price per share so determined, provided that,
if such Convertible Securities shall by their terms provide for
an increase or increases, with the passage of time, in the amount
of additional consideration, if any, payable to the Company, or
in the rate of exchange, upon the conversion or exchange thereof,
the Pro Forma Adjusted Trigger Price per share shall, forthwith
upon any such increase becoming effective, be readjusted to
reflect the same, and provided, further, that upon the expiration
of such rights of conversion or exchange of such Convertible
Securities, if any thereof shall not have been exercised, the Pro
Forma Adjusted Trigger Price per share shall forthwith be
readjusted and thereafter be the price which it would have been
had an adjustment been made on the basis that the only shares of
Common Stock so issued or sold were those issued or sold upon the
conversion or exchange of such Convertible Securities, and that
they were issued or sold for the consideration actually received
by the Company upon such conversion or exchange, plus the
consideration, if any, actually received by the Company for the
issue or sale of all such Convertible Securities which shall have
been converted or exchanged.
3.3. Grant of Rights or Options for Common Stock. In case
the Company shall grant any rights or options to subscribe for,
purchase or otherwise acquire Common Stock of any class other
than the Subject Securities, there shall be determined the price
per share for which Common Stock is issuable upon the exercise of
such rights or options, such determination to be made by dividing
(a) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or
options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise
of such rights or options, by (b) the maximum number of shares of
Common Stock issuable upon the exercise of such rights or
options.
If the price per share so determined shall be less than
the Trigger Price (or, if a Pro Forma Adjusted Trigger Price
shall be in effect, less than such Price) as of the date of such
issue or sale, then the granting of such rights or options shall
be deemed to be an issue or sale for cash (as of the date of the
granting of such rights or options) of such maximum number of
shares of Common Stock at the price per share so determined,
provided that, if such rights or options shall by their terms
provide for an increase or increases, with the passage of time,
in the amount of additional consideration, if any, payable to the
Company upon the exercise thereof, the Pro Forma Adjusted Trigger
Price per share shall, forthwith upon any such increase becoming
effective, be readjusted to reflect the same, and provided,
further, that upon the expiration of such rights or options, if
any thereof shall not have been exercised, the Pro Forma Adjusted
Trigger Price per share shall forthwith be readjusted and
thereafter be the price which it would have been had an
adjustment been made on the basis that the only shares of Common
Stock so issued or sold were those issued or sold upon the
exercise of such rights or options and that they were issued or
sold for the consideration actually received by the Company upon
such exercise, plus the consideration, if any, actually received
by the Company for the granting of all such rights or options,
whether or not exercised.
3.4. Grant of Rights or Options for Convertible Securities.
In case the Company shall grant any rights or options to
subscribe for, purchase or otherwise acquire Convertible
Securities, such Convertible Securities shall be deemed, for the
purposes of subparagraph 3.2. above, to have been issued or sold
for the total amount received or receivable by the Company as
consideration for the granting of such rights or options plus the
minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of such rights or
options, provided that, upon the expiration of such rights or
options, if any thereof shall not have been exercised, the Pro
Forma Adjusted Trigger Price per share shall forthwith be
readjusted and thereafter be the price which it would have been
had an adjustment been made upon the basis that the only
Convertible Securities so issued or sold were those issued or
sold upon the exercise of such rights or options and that they
were issued or sold for the consideration actually received by
the Company upon such exercise, plus the consideration, if any,
actually received by the Company for the granting of all such
rights or options, whether or not exercised.
3.5. Dilution in Case of Other Stock or Securities. In
case any shares of stock or other securities, other than Common
Stock of the Company, shall at any time be receivable upon the
exercise of this Warrant, and in case any additional shares of
such stock or any additional such securities (or any stock or
other securities convertible into or exchangeable for any such
stock or securities) shall be issued or sold for a consideration
per share such as to dilute the purchase rights evidenced by this
Warrant, then and in each such case the Pro Forma Adjusted
Trigger Price per share shall forthwith be adjusted,
substantially in the manner provided for above in this
Paragraph 3, so as to protect the Holder of this Warrant against
the effect of such dilution.
3.6. Expenses, etc., Deducted. In case any shares of
Common Stock or Convertible Securities or any rights or options
to subscribe for, purchase or otherwise acquire any Common Stock
or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount
received by the Company therefor, after deducting any expenses
incurred and any underwriting or similar commissions,
compensation or concessions paid or allowed by the Company in
connection with such issue or sale.
3.7. Determination of Consideration. In case any shares of
Common Stock or Convertible Securities or any rights or options
to subscribe for, purchase or otherwise acquire any Common Stock
or Convertible Securities shall be issued or sold for a
consideration other than cash (or a consideration which includes
cash, if any cash constitutes a part of the assets of a
corporation or business substantially all of the assets of which
are being received a such consideration) then, for the purpose of
this Paragraph 3, the Board of Directors of the Company shall
promptly determine the fair value of such consideration, and such
Common Stock, Convertible Securities, rights or options shall be
deemed to have been issued or sold on the date of such
determination in good faith. Such value shall not be more than
the amount at which such consideration is recorded in the books
of the Company for accounting purposes except in the case of an
acquisition accounted for on a pooling of interest basis. In
case any Common Stock or Convertible Securities or any rights or
options to subscribe for, purchase or otherwise acquire any
Common Stock or Convertible Securities shall be issued or sold
together with other stock or securities or other assets of the
Company for a consideration which covers both, the Board of
Directors of the Company shall promptly determine what part of
the consideration so received is to be deemed to be the
consideration for the issue or sale of such Common Stock or
Convertible Securities or such rights or options.
The Company covenants and agrees that, should any
determination of fair value of consideration or of allocation of
consideration be made by the Board of Directors of the Company,
pursuant to this subparagraph 3.7, it will, not less than seven
(7) days after any and each such determination, deliver to the
Holder of this Warrant a certificate signed by the President or a
Vice President and the Treasurer or an Assistant Treasurer of the
Company reciting such value as thus determined and setting forth
the nature of the transaction for which such determination was
required to be made, the nature of any consideration, other than
cash, for which Common Stock, Convertible Securities, rights or
options have been or are to be issued, the basis for its
valuation, the number of shares of Common Stock which have been
or are to be issued, and a description of any Convertible
Securities, rights or options which have been or are to be
issued, including their number, amount and terms.
3.8. Record Date Deemed Issue Date. In case the Company
shall take a record of the Holders of shares of its stock of any
class for the purpose of entitling them (a) to receive a dividend
or a distribution payable in Common Stock or in Convertible
Securities, or (b) to subscribe for, purchase or otherwise
acquire Common Stock or Convertible Securities, then such record
date shall be deemed to be the date of the issue or sale of the
Common Stock issued or sold or deemed to have been issued or sold
upon the declaration of such dividend or the making of such other
distribution, or the date of the granting of such rights of
subscription, purchase or other acquisition, as the case may be.
3.9. Shares Considered Outstanding. The number of shares
of Common Stock outstanding at any given time shall include
shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock, but shall exclude shares
in the treasury of the Company.
3.10. Duration of Pro Forma Adjusted Trigger Price.
Following each computation or readjustment of a Pro Forma
Adjusted Trigger Price as provided in this Paragraph 3, the newly
computed or adjusted Pro Forma Adjusted Trigger Price shall
remain in effect until a further computation or readjustment
thereof is required by this Paragraph 3.
4. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY,
ETC.; RECLASSIFICATIONS, ETC. In case at any time or from time
to time after the Issuance Date the Holders of the Common Stock
of the Company of any class (or any other shares of stock or
other securities at the time receivable upon the exercise of this
Warrant) shall have received, or, on or after the record date
fixed for the determination of eligible stockHolders, shall have
become entitled to receive:
(a) other or additional stock or other securities or
property (other than cash) by way of dividend;
(b) any cash paid or payable out of capital or paid-in
surplus or surplus created as a result of a
revaluation of property by way of dividend; or
(c) other or additional (or less) stock or other
securities or property (including cash) by way of
stock-split, spin-off, split-off, split-up,
reclassification, combination of shares or similar
corporate rearrangement;
(other than additional shares of Common Stock issued to Holders
of Common Stock as a stock dividend or stock-split, adjustments
in respect of which shall be covered by the provisions of
Paragraph 3 hereof), then in each case the Holder of this
Warrant, upon the exercise hereof as provided in Paragraph 1
hereof, shall be entitled to receive, in lieu of, or in addition
to, as the case may be, the shares theretofore receivable upon
the exercise of this Warrant, the amount of stock or other
securities or property (including cash in the cases referred to
in clauses (b) and (c) above) which such Holder would hold on the
date of such exercise if, on the Issuance Date, he had been the
Holder of record of the number of shares of Common Stock of the
Company called for on the face of this Warrant and had
thereafter, during the period from the Issuance Date to and
including the date of such exercise, retained such shares and/or
all other or additional (or less) stock or other securities or
property (including cash in the cases referred to in clauses (b)
and (c) above) receivable by him as aforesaid during such period,
giving effect to all adjustments called for during such period by
Paragraphs 3 and 5 hereof.
5. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER,
ETC. In case of any reorganization of the Company (or any other
corporation the stock or other securities of which are at the
time deliverable on the exercise of this Warrant) after the date
hereof, or in case, after such date, the Company (or any such
other corporation) shall consolidate with or merge into another
corporation or convey all or substantially all its assets to
another corporation, then and in each such case the Holder of
this Warrant, upon the exercise hereof as provided in Paragraph 1
hereof, at any time after the consummation of such
reorganization, consolidation, merger or conveyance, shall be
entitled to receive the stock or other securities or property to
which such Holder would have been entitled upon such consummation
if such Holder had exercised this Warrant immediately prior
thereto, all subject to further adjustments as provided in
Paragraphs 3 and 4 hereof; in each such case, the terms of this
Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this
Warrant after such consummation.
6. NO DILUTION OR IMPAIRMENT. The Company will not, by
amendment of its charter or through reorganization,
consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder hereof
against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the
par value of any shares of stock receivable upon the exercise of
this Warrant above the amount payable therefor upon such
exercise, and at all times will take all such action as may be
necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable stock upon the
exercise of this Warrant.
7. ACCOUNTANTS' CERTIFICATE AS TO ADJUSTMENTS. In each
case of an adjustment in the number of shares of Common Stock or
other stock, securities or property receivable on the exercise of
this Warrant, at the request of the Holder of this Warrant the
Company at its expense shall promptly cause independent public
accountants of recognized standing, selected by the Company, to
compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment
and showing in detail the facts upon which such adjustment is
based, including a statement of (a) the consideration received or
to be received by the Company for any additional shares issued or
sold or deemed to have been issued or sold, (b) the number of
shares of Common Stock outstanding or deemed to be outstanding
and (c) the Pro Forma Adjusted Trigger Price. The Company will
forthwith mail a copy of each such certificate to the Holder of
this Warrant.
8. NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the Holders of
its Common Stock (or other stock or securities at
the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling
them to receive any dividend (other than a cash or
stock dividend at the same rate as the rate of the
last cash or stock dividend theretofore paid) or
other distribution, or to exercise any preemptive
right pursuant to the Company's charter, or to
receive any right to subscribe for or purchase any
shares of stock of any class or any other
securities, or to receive any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the
Company, any consolidation or merger of the
Company with or into another corporation, or any
conveyance of all or substantially all of the
assets of the Company to another corporation; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, and in each such case, the Company will mail or cause to be
mailed to the Holder of this Warrant a notice specifying, as the
case may be, (i) the date on which a record is to be taken for
the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right,
or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or
winding up is to take place, and the times, if any is to be
fixed, as of which the Holders of record of Common Stock (or such
other stock or securities at the time deliverable upon the
exercise of this Warrant) shall be entitled to exchange their
shares of Common Stock of any class (or such other stock or
securities) for reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding up or (iii) the
amount and character of the stock or other securities proposed to
be issued or granted, the date of such proposed issuance or grant
and the persons or class of persons to whom such stock or other
securities ar to be offered, issued or granted. Such notice
shall be mailed at least thirty (30) days prior to the date
therein specified.
9. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF
WARRANTS. The Company will at all times reserve and keep
available, solely for insurance and delivery upon the exercise of
this Warrant and other similar Warrants, such shares of Common
Stock and other stock, securities and property as from time to
time shall be issuable upon the exercise of this Warrant and all
other similar Warrants at the time outstanding.
10. REPLACEMENT OF WARRANT. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and (in the case of
loss, theft or destruction) upon delivery of an indemnity
agreement in an amount reasonably satisfactory to it, or (in the
case of mutilation) upon surrender and cancellation thereof, the
Company will issue, in lieu thereof, a new Warrant of like tenor.
11. REMEDIES. The Company stipulates that the remedies at
law of the Holder of this Warrant in the event of any default by
the Company in its performance of or compliance with any of the
terms of this Warrant are not and will not be adequate, and that
the same may be specifically enforced.
12. NEGOTIABILITY, ETC. This Warrant is issued upon the
following terms, to all of which each taker or owner hereof
consents and agrees:
(a) Title to this warrant may be transferred by
endorsement (by the Holder hereof executing the
form of assignment at the end hereof including
guaranty of signature) and delivery in the same
manner as in the case of a negotiable instrument
transferable by endorsement and delivery.
(b) Any person in possession of this Warrant properly
endorsed is authorized to represent himself as
absolute owner hereof and is granted power to
transfer absolute title hereto by endorsement and
delivery hereof to a bona fide purchaser hereof
for value; each prior taker or owner waives and
renounces all of his equities or rights in this
Warrant in favor of every such bona fide
purchaser, and every such bona fide purchaser
shall acquire title hereto and to all rights
represented hereby.
(c) Until this Warrant is transferred on the books of
the Company, the Company may treat the registered
Holder of this Warrant as the absolute owner
hereof for all purposes without being affected by
any notice to the contrary.
13. SUBDIVISION OF RIGHTS. This Warrant (as well as any
new warrants issued pursuant to the provisions of this paragraph)
is exchangeable, upon the surrender hereof by the Holder hereof,
at the principal office of the Company for any number of new
warrants of like tenor and date representing in the aggregate the
right to subscribe for and purchase the number of shares of
Common Stock of the Company which may be subscribed for and
purchased hereunder.
14. REGISTRATION RIGHTS.
a. Registration. Within 90 days after the date
hereof, the Company will file a registration statement
("Registration Statement") with the Securities and Exchange
Commission ("SEC") covering the Warrants and shares of Common
Stock issuable upon conversion of the 1995 Debentures, the Senior
Subordinated Debentures and the Preferred Stock, and upon
exercise of the Warrants and the Laird Options as well as Common
Stock owned by the Principals and issuable upon exercise of the
Principals' Options (collectively "Registrable Securities"), and
will use its best efforts to cause the Registration Statement to
become effective on or prior to the ninetieth day after such
filing and to keep the Registration Statement effective for a
period of seven years from the date it is declared effective by
the SEC.
b. Additional Terms. Except as otherwise expressly
stated herein, the following provisions shall be applicable to
the Registration Statement:
(i) The Company will use its best efforts to cause
the Registration Statement to become effective as promptly
as possible, and if any stop order shall be issued by the
SEC in connection therewith to use its reasonable efforts to
obtain the removal of such order. Following the effective
date of the Registration Statement, the Company shall, upon
the request of the Holder, forthwith supply such reasonable
number of copies of the Registration Statement, preliminary
prospectus and prospectus meeting the requirements of the
Act, and other documents necessary or incidental to a public
offering of the Registrable Securities, as shall be
reasonably requested by the Holder to permit the Holder to
make a public distribution of its, his or her Registrable
Securities. The Company will use its reasonable efforts to
qualify the Registrable Securities for sale in such states
as the Holder of Registrable Securities shall reasonably
request, provided that no such qualification will be
required in any jurisdiction where, solely as a result
thereof, the Company would be subject to service of general
process or to taxation or qualification as a foreign
corporation doing business in such jurisdiction. The
obligations of the Company hereunder with respect to the
Holder's Registrable Securities are expressly conditioned on
the Holder's furnishing to the Company such appropriate
information concerning the Holder, the Holder's Registrable
Securities and the terms of the Holder's offering of such
Registrable Securities as the Company may reasonably
request.
(ii) The Company shall pay all expenses incurred in
complying with the provisions of this Paragraph 14,
including, without limitation, all registration and filing
fees (including all expenses incident to filing with the
National Association of Securities Dealers, Inc.), printing
expenses, fees and disbursements of counsel to the Company,
securities law and blue sky fees and expenses and the
expenses of any regular and special audits incident to or
required by any such registration. All underwriting
discounts and selling commissions applicable to the sales of
the Registrable Securities, and any state or federal
transfer taxes payable with respect to the sales of the
Registrable Securities and all fees and disbursements of
counsel for the Holder, if any, in each case arising in
connection with registration of the Registrable Securities
shall be payable by the Holder.
(iii) In connection with the registration of the
Registrable Securities pursuant to this Paragraph 14, the
Company shall indemnify and hold harmless the Holder, its
affiliates, officers, directors, partners, employees, agents
and representatives, each person, if any, who controls the
Holder within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and any person
claiming by or through any of them (collectively, the
"Indemnified Persons") from and against all losses, claims,
damages, expenses or liabilities (or actions in respect
thereof) arising out of or are based upon any untrue
statement of any material fact contained in the Registration
Statement or alleged untrue statement, under which such
securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise
out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to
make the statements made therein, in light of the
circumstances under which they are made, not misleading, or
any violation by the Company of the Securities Act, the
Exchange Act or state securities or blue sky laws applicable
to the Company and relating to action or inaction required
of the Company in connection with such registration or
qualification under such state securities or blue sky laws;
and will reimburse the Indemnified Persons for any legal or
any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the
Company will not be liable in any such case to any
Indemnified Person to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or omission made in the Registration Statement,
said preliminary prospectus or said final prospectus or said
amendment or supplement or any document incident thereto in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Holder.
(iv) The Holder will indemnify and hold harmless the
Company and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange
Act, each officer of the Company who signs the Registration
Statement and each director of the Company from and against
any and all such losses, claims, damages or liabilities
arising from any untrue statement in, or omission from, the
Registration Statement, any such preliminary or final
prospectus, amendment, or supplement or document incident
thereto if the statement or omission in respect of which
such loss, claim, damage or liability is asserted was made
in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the
Holder for use in connection with the preparation of the
Registration Statement or such prospectus or amendment or
supplement thereof.
(v) The reimbursements required by clauses (iii)
and (iv) shall be made by periodic payments during the
course of the investigation or defense as and when bills are
received or expenses incurred; provided, however, that to
the extent that an indemnified party receives periodic
payments for legal or other expenses during the course of an
investigation or defense, and such party subsequently
received payments for such expenses from any other parties
to the proceeding, such payments shall be used by the
indemnified party to reimburse the indemnifying party for
such periodic payments. Any party which proposes to assert
the right to be indemnified under clause (iii) or (iv) will,
promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of
which a claim is to be made against any indemnified party
hereunder, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a
copy of all papers served, but the failure to so notify such
indemnifying party of any such action, suit or proceeding
shall not relieve the indemnifying party from any obligation
which it may have to any indemnified party hereunder unless
and only to the extent that the indemnifying party is
prejudiced by said lack of notice. In case any such action,
suit or proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party for any
legal or other expense, other than reasonable costs of
investigation subsequently incurred by such indemnified
party in connection with the defense thereof. The
indemnified party shall have the right to employ its own
counsel in any such action, but the reasonable fees and
expenses of such counsel shall be at the expense of such
indemnified party, when and as incurred, unless (A) the
employment of counsel by such indemnified party has been
authorized by the indemnifying party, (B) the indemnified
party has reasonably concluded (based on advice of counsel),
that there may be legal defenses available to it that are
different from or in addition to those available to the
indemnifying party, (C) the indemnified party shall have
reasonably concluded (based on advice of counsel) that there
may be a conflict of interest between the indemnifying party
and the indemnified party in the conduct of defense of such
action (in which case the indemnifying party shall not have
the right to direct the defense of such action on behalf of
the indemnified party), or (D) the indemnifying party shall
not in fact have employed counsel to assume the defense of
such action within 15 days after receipt of notice of such
action. An indemnifying party shall not be liable for any
settlement or any action or claim effected without its
consent.
(vi) If the indemnification provided for in this
Paragraph 14 is unavailable to any indemnified party
hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the
indemnifying party and indemnified parties in connection
with the actions that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct
or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed
to include, subject to the limitations set forth herein, any
legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
(vii) The Company and the Holder agree that it would
not be just and equitable if contribution pursuant to clause
(vi) were determined by pro rata allocation or by any other
method of allocation that does not take account of the
equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding any other provision
hereof, in no event shall the contribution obligation of the
Holder be greater in amount than the excess of (A) the
dollar amount of proceeds received by the Holder upon the
sale of the securities giving rise to such contribution
obligation over (B) the dollar amount of any damages that
the Holder has otherwise been required to pay by reason of
the untrue or alleged untrue statement or omission or
alleged omission giving rise to such obligation. No person
guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
(viii) Neither the filing of the Registration
Statement by the Company pursuant to this Agreement nor the
making of any request for prospectuses by the Holder shall
impose upon the Holder any obligation to sell his, her or
its Registrable Securities.
(ix) The Holder, upon receipt of notice from the
Company that an event has occurred which requires a post-
effective amendment to the Registration Statement or a
supplement to the prospectus included therein, shall
promptly discontinue the sale of his, her or its Registrable
Securities until the Holder receives a copy of a
supplemented or amended prospectus from the Company, which
the Company shall provide as soon as practicable after such
notice.
15. MAILING OF NOTICES, ETC. All notices and other
communications from the Company to the Holder of this Warrant
shall be mailed by first-class certified mail, postage prepaid,
to the address furnished to the Company in writing by the last
Holder of this Warrant who shall have furnished an address to the
Company in writing.
16. HEADINGS, ETC. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise
affect the meaning hereof.
17. CHANGE, WAIVER, ETC. Neither this Warrant nor any term
hereof may be changed, waived, discharged or terminated orally
but only by an instrument in writing signed by the party against
which enforcement of the change, waiver, discharge or termination
is sought.
17. GOVERNING LAW. This Series C Warrant shall be
construed and enforced in accordance with the laws of the State
of New York.
LOGIMETRICS, INC.
By:
Dated: March 7, 1996
Attest:
[To be signed only upon exercise of Warrant]
To LOGIMETRICS, INC.:
The undersigned, the Holder of the within Series C Warrant,
hereby irrevocably elects to exercise the purchase right
represented by such Warrant for, and to purchase thereunder,
shares of Common Stock of LOGIMETRICS, INC. and
herewith makes payment of $ therefor, and requests
that the certificates for such shares be issued in the name of,
and be delivered to, , whose address is
.
Dated:
- -------------------------------
----------------------------------------
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
Address:
----------------------------------------
----------------------------------------
[To be signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto the right represented
by the within Series C Warrant to purchase the
shares of the Common Stock of LOGIMETRICS, INC. to which the
within Series C Warrant relates, and appoints
attorney to transfer said right on the
books of LOGIMETRICS, INC. with full power of substitution in the
premises.
Dated:
- ----------------------------------------
----------------------------------------
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
Address:
----------------------------------------
----------------------------------------
In the presence of
- --------------------
Exhibit 3
Form of Preferred Stock
NUMBER INCORPORATED UNDER THE LAWS OF SHARES
THE STATE OF DELAWARE
LOGIMETRICS, INC.
SERIES A 12% CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED STOCK, PAR VALUE $.01
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE TRANSFERRED UNLESS REGISTERED
UNDER THE ACT, EXCEPT IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL
REASONABLY SATISFACTORY TO LOGIMETRICS, INC., QUALIFIES AS AN EXEMPT TRANSACTION
UNDER THE ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
SEE REVERSE SIDE FOR TERMS AND CONDITIONS
This Certifies that is the owner of
fully paid
and non-assessable Shares of the Capital Stock of the above named Corporation
transferable only on the books of the Corporation by the holder hereof in person
or by duly authorized Attorney upon surrender of this Certificate properly
endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to
be signed by its duly authorized officers and its Corporate Seal to be
hereunto affixed this ________ day of _________, A.D. 19___
- ------------------------------------ ------------------------------
SECRETARY/TREASURER PRESIDENT
TERMS AND CONDITIONS
The Corporation will furnish free of charge to each stockholder who so
requests the powers, designations, preferences and relative, participating,
optional, or other special rights of each class of stock or series thereof
and the qualifications, limitations or restrictions of such preferences
and/or rights.
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE
TRANSFERRED UNLESS REGISTERED UNDER THE ACT, EXCEPT IN A
TRANSACTION WHICH, IN THE OPINION OF COUNSEL REASONABLY
SATISFACTORY TO LOGIMETRICS, INC., QUALIFIES AS AN EXEMPT
TRANSACTION UNDER THE ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.
LOGIMETRICS, INC.
Common Stock Purchase Warrant
Series D
LOGIMETRICS, INC. (the "Company"), a Delaware corporation,
hereby certifies that, for value received, , or
assigns, is entitled, subject to the terms set forth below, to
purchase from the Company Ninety Four Thousand Three Hundred
Forty (94,340) fully paid and non-assessable shares of Common
Stock of the Company, at a purchase price, subject to the
provisions of Paragraph 3 hereof, of one cent ($.01) per share
(the "Purchase Price") at any time prior to the seventh
anniversary of the original date of issuance hereof. The number
and character of such shares are subject to adjustment as
provided below, and the term "Common Stock" shall mean, unless
the context otherwise requires, the stock or other securities or
property at the time deliverable upon the exercise of this
Warrant. This Warrant is herein called the "Warrant". This
Warrant is one of a series of warrants to purchase up to
2,830,200 shares of Common Stock ("Series D Warrants").
1. EXERCISE OF WARRANT. The purchase rights evidenced by
this Warrant shall be exercised by the holder hereof ("Holder")
surrendering this Warrant, with the form of subscription at the
end hereof duly executed by such Holder, to the Company at its
office in Plainview, New York, accompanied by payment (in cash or
by certified or official bank check). This Warrant may be
exercised for less than the full number of shares of Common Stock
at the time called for hereby, in which case the number of shares
receivable upon the exercise of this Warrant as a whole, and the
sum payable upon the exercise of this Warrant as a whole, shall
be proportionately reduced. Upon any such partial exercise, the
Company at its expense will forthwith issue to the Holder hereof
a new Warrant or Warrants of like tenor calling for the number of
shares of Common Stock as to which rights have not been
exercised, such Warrant or Warrants to be issued in the name of
the Holder hereof or his nominee.
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as
practicable after the exercise of this Warrant and payment of the
Purchase Price, and in any event within five (5) days thereafter,
the Company, at its expense, will cause to be issued in the name
of and delivered to the Holder hereof a certificate or
certificates for the number of fully paid and non-assessable
shares or other securities or property to which such Holder shall
be entitled upon such exercise, plus, in lieu of any fractional
share to which such Holder would otherwise be entitled, cash
equal to such fraction multiplied by the then current market
value of one full share.
3. ADJUSTMENT FOR ISSUE OR SALE OF COMMON STOCK AT LESS
THAN PURCHASE PRICE. In case, at any time or from time to time
after the date of issuance of this Warrant ("Issuance Date"), the
Company shall issue or sell shares of its Common Stock (other
than any Common Stock issuable upon (i) conversion of the
Company's Amended and Restated 12% Convertible Subordinated
Debentures dated as of July 14, 1995 ("1995 Debentures"), (ii)
exercise of those certain Amended and Restated Series A Warrants
dated March 7, 1996 to purchase 600,000 shares of Common Stock
("Series A Warrants"), (iii) exercise by each of Murray H.
Feigenbaum and Jerome Deutsch (the "Principals") of their right
to purchase 100,000 shares of Common Stock at a price of $.10 per
share ("Principals' Options"), (iv) exercise of those certain
Amended and Restated Series B Warrants dated March 7, 1996 to
purchase 1,500,000 shares of Common Stock ("Series B Warrants"),
(v) conversion of the Company's 12% Convertible Senior
Subordinated Debentures dated March 7, 1996 ("Senior Subordinated
Debentures"), (vi) exercise of those certain Series C Warrants
dated March 7, 1996 to purchase an aggregate of 2,542,380 shares
of Common Stock ("Series C Warrants"), (vii) exercise of those
certain Series E Warrants dated March 7, 1996 to purchase
1,000,000 shares of the Company's Common Stock ("Series E
Warrants" and together with the Series A, B, C and D Warrants,
"Warrants"), (viii) exercise of those certain Stock Options,
dated March 7, 1996 to purchase 1,000,000 shares of Common Stock
issued to Richard K. Laird ("Laird Options") and (ix) conversion
of the Company's 30 shares of Series A 12% Cumulative Convertible
Redeemable Preferred Stock ("Preferred Stock" and together with
the 1995 Debentures, the Senior Subordinated Debentures, the
Warrants, the Laird Options, the Principals' Options and any
shares of Common Stock issuable upon conversion or exercise
thereof, the "Subject Securities")), for a consideration per
share less than twenty-seven cents ($.27) per share (the "Trigger
Price") (or, if a Pro Forma Adjusted Purchase Price shall be in
effect as provided below in this Paragraph 3, then less than such
Pro Forma Adjusted Purchase Price per share), then and in each
such case the Holder of this Warrant, upon the exercise hereof as
provided in Paragraph 1 hereof, shall be entitled to receive, in
lieu of the shares of Common Stock theretofore receivable upon
the exercise of this Warrant, a number of shares of Common Stock
determined by (a) dividing the Trigger Price by a Pro Forma
Adjusted Purchase Price per share to be computed as provided
below in this Paragraph 3, and (b) multiplying the resulting
quotient by the number of shares of Common Stock called for on
the face of this Warrant. A Pro Forma Adjusted Purchase Price
per share shall be the price computed (to the nearest cent, a
fraction of half cent or more being considered a full cent):
by dividing (i) the sum of (x) the result
obtained by multiplying the number of shares
of Common Stock of the Company outstanding
immediately prior to such issue or sale by
the Trigger Price (or, if a Pro Forma
Adjusted Purchase Price shall be in effect,
by such Price), and (y) the consideration, if
any, received by the Company upon such issue
or sale, by (ii) the number of shares of
Common Stock of the Company outstanding
immediately after such issue or sale.
For the purpose of this Paragraph 3:
3.1. Stock Splits, Dividends, etc., in Common Stock or
Convertible Securities. In case the Company splits its Common
Stock or shall declare any dividend, or make any other
distribution, upon any stock of the Company of any class payable
in Common Stock, or in any stock or other securities directly or
indirectly convertible into or exchangeable for Common Stock (any
such stock or other securities being hereinafter called
"Convertible Securities"), such split, declaration or
distribution shall be deemed to be an issue or sale (as of the
record date for such split, dividend or other distribution),
without consideration, of such Common Stock or such Convertible
Securities, as the case may be.
3.2. Issuance or Sale of Convertible Securities. In case
the Company shall issue or sell any Convertible Securities other
than the Subject Securities, there shall be determined the price
per share for which Common Stock is issuable upon the conversion
or exchange thereof, such determination to be made by dividing
(a) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion
or exchange thereof, by (b) the maximum number of shares of
Common Stock of the Company issuable upon the conversion or
exchange of all such Convertible Securities.
If the price per share so determined shall be less than
the Trigger Price (or, if a Pro Forma Adjusted Purchase Price
shall be in effect, less than such Price) as of the date of such
issue or sale, then such issue or sale shall be deemed to be an
issue or sale for cash (as of the date of issue or sale of such
Convertible Securities) of such maximum number of shares of
Common Stock at the price per share so determined, provided that,
if such Convertible Securities shall by their terms provide for
an increase or increases, with the passage of time, in the amount
of additional consideration, if any, payable to the Company, or
in the rate of exchange, upon the conversion or exchange thereof,
the Pro Forma Adjusted Purchase Price per share shall, forthwith
upon any such increase becoming effective, be readjusted to
reflect the same, and provided, further, that upon the expiration
of such rights of conversion or exchange of such Convertible
Securities, if any thereof shall not have been exercised, the Pro
Forma Adjusted Purchase Price per share shall forthwith be
readjusted and thereafter be the price which it would have been
had an adjustment been made on the basis that the only shares of
Common Stock so issued or sold were those issued or sold upon the
conversion or exchange of such Convertible Securities, and that
they were issued or sold for the consideration actually received
by the Company upon such conversion or exchange, plus the
consideration, if any, actually received by the Company for the
issue or sale of all such Convertible Securities which shall have
been converted or exchanged.
3.3. Grant of Rights or Options for Common Stock. In case
the Company shall grant any rights or options to subscribe for,
purchase or otherwise acquire Common Stock of any class other
than the Subject Securities, there shall be determined the price
per share for which Common Stock is issuable upon the exercise of
such rights or options, such determination to be made by dividing
(a) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or
options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise
of such rights or options, by (b) the maximum number of shares of
Common Stock issuable upon the exercise of such rights or
options.
If the price per share so determined shall be less than
the Trigger Price (or, if a Pro Forma Adjusted Purchase Price
shall be in effect, less than such Price) as of the date of such
issue or sale, then the granting of such rights or options shall
be deemed to be an issue or sale for cash (as of the date of the
granting of such rights or options) of such maximum number of
shares of Common Stock at the price per share so determined,
provided that, if such rights or options shall by their terms
provide for an increase or increases, with the passage of time,
in the amount of additional consideration, if any, payable to the
Company upon the exercise thereof, the Pro Forma Adjusted
Purchase Price per share shall, forthwith upon any such increase
becoming effective, be readjusted to reflect the same, and
provided, further, that upon the expiration of such rights or
options, if any thereof shall not have been exercised, the Pro
Forma Adjusted Purchase Price per share shall forthwith be
readjusted and thereafter be the price which it would have been
had an adjustment been made on the basis that the only shares of
Common Stock so issued or sold were those issued or sold upon the
exercise of such rights or options and that they were issued or
sold for the consideration actually received by the Company upon
such exercise, plus the consideration, if any, actually received
by the Company for the granting of all such rights or options,
whether or not exercised.
3.4. Grant of Rights or Options for Convertible Securities.
In case the Company shall grant any rights or options to
subscribe for, purchase or otherwise acquire Convertible
Securities, such Convertible Securities shall be deemed, for the
purposes of subparagraph 3.2. above, to have been issued or sold
for the total amount received or receivable by the Company as
consideration for the granting of such rights or options plus the
minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of such rights or
options, provided that, upon the expiration of such rights or
options, if any thereof shall not have been exercised, the Pro
Forma Adjusted Purchase Price per share shall forthwith be
readjusted and thereafter be the price which it would have been
had an adjustment been made upon the basis that the only
Convertible Securities so issued or sold were those issued or
sold upon the exercise of such rights or options and that they
were issued or sold for the consideration actually received by
the Company upon such exercise, plus the consideration, if any,
actually received by the Company for the granting of all such
rights or options, whether or not exercised.
3.5. Dilution in Case of Other Stock or Securities. In
case any shares of stock or other securities, other than Common
Stock of the Company, shall at any time be receivable upon the
exercise of this Warrant, and in case any additional shares of
such stock or any additional such securities (or any stock or
other securities convertible into or exchangeable for any such
stock or securities) shall be issued or sold for a consideration
per share such as to dilute the purchase rights evidenced by this
Warrant, then and in each such case the Pro Forma Adjusted
Purchase Price per share shall forthwith be adjusted,
substantially in the manner provided for above in this
Paragraph 3, so as to protect the Holder of this Warrant against
the effect of such dilution.
3.6. Expenses, etc., Deducted. In case any shares of
Common Stock or Convertible Securities or any rights or options
to subscribe for, purchase or otherwise acquire any Common Stock
or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount
received by the Company therefor, after deducting any expenses
incurred and any underwriting or similar commissions,
compensation or concessions paid or allowed by the Company in
connection with such issue or sale.
3.7. Determination of Consideration. In case any shares of
Common Stock or Convertible Securities or any rights or options
to subscribe for, purchase or otherwise acquire any Common Stock
or Convertible Securities shall be issued or sold for a
consideration other than cash (or a consideration which includes
cash, if any cash constitutes a part of the assets of a
corporation or business substantially all of the assets of which
are being received a such consideration) then, for the purpose of
this Paragraph 3, the Board of Directors of the Company shall
promptly determine the fair value of such consideration, and such
Common Stock, Convertible Securities, rights or options shall be
deemed to have been issued or sold on the date of such
determination in good faith. Such value shall not be more than
the amount at which such consideration is recorded in the books
of the Company for accounting purposes except in the case of an
acquisition accounted for on a pooling of interest basis. In
case any Common Stock or Convertible Securities or any rights or
options to subscribe for, purchase or otherwise acquire any
Common Stock or Convertible Securities shall be issued or sold
together with other stock or securities or other assets of the
Company for a consideration which covers both, the Board of
Directors of the Company shall promptly determine what part of
the consideration so received is to be deemed to be the
consideration for the issue or sale of such Common Stock or
Convertible Securities or such rights or options.
The Company covenants and agrees that, should any
determination of fair value of consideration or of allocation of
consideration be made by the Board of Directors of the Company,
pursuant to this subparagraph 3.7, it will, not less than seven
(7) days after any and each such determination, deliver to the
Holder of this Warrant a certificate signed by the President or a
Vice President and the Treasurer or an Assistant Treasurer of the
Company reciting such value as thus determined and setting forth
the nature of the transaction for which such determination was
required to be made, the nature of any consideration, other than
cash, for which Common Stock, Convertible Securities, rights or
options have been or are to be issued, the basis for its
valuation, the number of shares of Common Stock which have been
or are to be issued, and a description of any Convertible
Securities, rights or options which have been or are to be
issued, including their number, amount and terms.
3.8. Record Date Deemed Issue Date. In case the Company
shall take a record of the Holders of shares of its stock of any
class for the purpose of entitling them (a) to receive a dividend
or a distribution payable in Common Stock or in Convertible
Securities, or (b) to subscribe for, purchase or otherwise
acquire Common Stock or Convertible Securities, then such record
date shall be deemed to be the date of the issue or sale of the
Common Stock issued or sold or deemed to have been issued or sold
upon the declaration of such dividend or the making of such other
distribution, or the date of the granting of such rights of
subscription, purchase or other acquisition, as the case may be.
3.9. Shares Considered Outstanding. The number of shares
of Common Stock outstanding at any given time shall include
shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock, but shall exclude shares
in the treasury of the Company.
3.10. Duration of Pro Forma Adjusted Purchase Price.
Following each computation or readjustment of a Pro Forma
Adjusted Purchase Price as provided in this Paragraph 3, the
newly computed or adjusted Pro Forma Adjusted Purchase Price
shall remain in effect until a further computation or
readjustment thereof is required by this Paragraph 3.
4. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY,
ETC.; RECLASSIFICATIONS, ETC. In case at any time or from time
to time after the Issuance Date the Holders of the Common Stock
of the Company of any class (or any other shares of stock or
other securities at the time receivable upon the exercise of this
Warrant) shall have received, or, on or after the record date
fixed for the determination of eligible stockHolders, shall have
become entitled to receive:
(a) other or additional stock or other securities or
property (other than cash) by way of dividend;
(b) any cash paid or payable out of capital or paid-in
surplus or surplus created as a result of a
revaluation of property by way of dividend; or
(c) other or additional (or less) stock or other
securities or property (including cash) by way of
stock-split, spin-off, split-off, split-up,
reclassification, combination of shares or similar
corporate rearrangement;
(other than additional shares of Common Stock issued to Holders
of Common Stock as a stock dividend or stock-split, adjustments
in respect of which shall be covered by the provisions of
Paragraph 3 hereof), then in each case the Holder of this
Warrant, upon the exercise hereof as provided in Paragraph 1
hereof, shall be entitled to receive, in lieu of, or in addition
to, as the case may be, the shares theretofore receivable upon
the exercise of this Warrant, the amount of stock or other
securities or property (including cash in the cases referred to
in clauses (b) and (c) above) which such Holder would hold on the
date of such exercise if, on the Issuance Date, he had been the
Holder of record of the number of shares of Common Stock of the
Company called for on the face of this Warrant and had
thereafter, during the period from the Issuance Date to and
including the date of such exercise, retained such shares and/or
all other or additional (or less) stock or other securities or
property (including cash in the cases referred to in clauses (b)
and (c) above) receivable by him as aforesaid during such period,
giving effect to all adjustments called for during such period by
Paragraphs 3 and 5 hereof.
5. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER,
ETC. In case of any reorganization of the Company (or any other
corporation the stock or other securities of which are at the
time deliverable on the exercise of this Warrant) after the date
hereof, or in case, after such date, the Company (or any such
other corporation) shall consolidate with or merge into another
corporation or convey all or substantially all its assets to
another corporation, then and in each such case the Holder of
this Warrant, upon the exercise hereof as provided in Paragraph 1
hereof, at any time after the consummation of such
reorganization, consolidation, merger or conveyance, shall be
entitled to receive the stock or other securities or property to
which such Holder would have been entitled upon such consummation
if such Holder had exercised this Warrant immediately prior
thereto, all subject to further adjustments as provided in
Paragraphs 3 and 4 hereof; in each such case, the terms of this
Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this
Warrant after such consummation.
6. NO DILUTION OR IMPAIRMENT. The Company will not, by
amendment of its charter or through reorganization,
consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder hereof
against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the
par value of any shares of stock receivable upon the exercise of
this Warrant above the amount payable therefor upon such
exercise, and at all times will take all such action as may be
necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable stock upon the
exercise of this Warrant.
7. ACCOUNTANTS' CERTIFICATE AS TO ADJUSTMENTS. In each
case of an adjustment in the number of shares of Common Stock or
other stock, securities or property receivable on the exercise of
this Warrant, at the request of the Holder of this Warrant the
Company at its expense shall promptly cause independent public
accountants of recognized standing, selected by the Company, to
compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment
and showing in detail the facts upon which such adjustment is
based, including a statement of (a) the consideration received or
to be received by the Company for any additional shares issued or
sold or deemed to have been issued or sold, (b) the number of
shares of Common Stock outstanding or deemed to be outstanding
and (c) the Pro Forma Adjusted Purchase Price. The Company will
forthwith mail a copy of each such certificate to the Holder of
this Warrant.
8. NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the Holders of
its Common Stock (or other stock or securities at
the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling
them to receive any dividend (other than a cash or
stock dividend at the same rate as the rate of the
last cash or stock dividend theretofore paid) or
other distribution, or to exercise any preemptive
right pursuant to the Company's charter, or to
receive any right to subscribe for or purchase any
shares of stock of any class or any other
securities, or to receive any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the
Company, any consolidation or merger of the
Company with or into another corporation, or any
conveyance of all or substantially all of the
assets of the Company to another corporation; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, and in each such case, the Company will mail or cause to be
mailed to the Holder of this Warrant a notice specifying, as the
case may be, (i) the date on which a record is to be taken for
the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right,
or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or
winding up is to take place, and the times, if any is to be
fixed, as of which the Holders of record of Common Stock (or such
other stock or securities at the time deliverable upon the
exercise of this Warrant) shall be entitled to exchange their
shares of Common Stock of any class (or such other stock or
securities) for reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding up or (iii) the
amount and character of the stock or other securities proposed to
be issued or granted, the date of such proposed issuance or grant
and the persons or class of persons to whom such stock or other
securities ar to be offered, issued or granted. Such notice
shall be mailed at least thirty (30) days prior to the date
therein specified.
9. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF
WARRANTS. The Company will at all times reserve and keep
available, solely for insurance and delivery upon the exercise of
this Warrant and other similar Warrants, such shares of Common
Stock and other stock, securities and property as from time to
time shall be issuable upon the exercise of this Warrant and all
other similar Warrants at the time outstanding.
10. REPLACEMENT OF WARRANT. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and (in the case of
loss, theft or destruction) upon delivery of an indemnity
agreement in an amount reasonably satisfactory to it, or (in the
case of mutilation) upon surrender and cancellation thereof, the
Company will issue, in lieu thereof, a new Warrant of like tenor.
11. REMEDIES. The Company stipulates that the remedies at
law of the Holder of this Warrant in the event of any default by
the Company in its performance of or compliance with any of the
terms of this Warrant are not and will not be adequate, and that
the same may be specifically enforced.
12. NEGOTIABILITY, ETC. This Warrant is issued upon the
following terms, to all of which each taker or owner hereof
consents and agrees:
(a) Title to this warrant may be transferred by
endorsement (by the Holder hereof executing the
form of assignment at the end hereof including
guaranty of signature) and delivery in the same
manner as in the case of a negotiable instrument
transferable by endorsement and delivery.
(b) Any person in possession of this Warrant properly
endorsed is authorized to represent himself as
absolute owner hereof and is granted power to
transfer absolute title hereto by endorsement and
delivery hereof to a bona fide purchaser hereof
for value; each prior taker or owner waives and
renounces all of his equities or rights in this
Warrant in favor of every such bona fide
purchaser, and every such bona fide purchaser
shall acquire title hereto and to all rights
represented hereby.
(c) Until this Warrant is transferred on the books of
the Company, the Company may treat the registered
Holder of this Warrant as the absolute owner
hereof for all purposes without being affected by
any notice to the contrary.
13. SUBDIVISION OF RIGHTS. This Warrant (as well as any
new warrants issued pursuant to the provisions of this paragraph)
is exchangeable, upon the surrender hereof by the Holder hereof,
at the principal office of the Company for any number of new
warrants of like tenor and date representing in the aggregate the
right to subscribe for and purchase the number of shares of
Common Stock of the Company which may be subscribed for and
purchased hereunder.
14. REGISTRATION RIGHTS.
a. Registration. Within 90 days after the date
hereof, the Company will file a registration statement
("Registration Statement") with the Securities and Exchange
Commission ("SEC") covering the Warrants and shares of Common
Stock issuable upon conversion of the 1995 Debentures, the Senior
Subordinated Debentures and the Preferred Stock, and upon
exercise of the Warrants and the Laird Options as well as Common
Stock owned by the Principals and issuable upon exercise of the
Principals' Options (collectively "Registrable Securities"), and
will use its best efforts to cause the Registration Statement to
become effective on or prior to the ninetieth day after such
filing and to keep the Registration Statement effective for a
period of seven years from the date it is declared effective by
the SEC.
b. Additional Terms. Except as otherwise expressly
stated herein, the following provisions shall be applicable to
the Registration Statement:
(i) The Company will use its best efforts to cause
the Registration Statement to become effective as promptly
as possible, and if any stop order shall be issued by the
SEC in connection therewith to use its reasonable efforts to
obtain the removal of such order. Following the effective
date of the Registration Statement, the Company shall, upon
the request of the Holder, forthwith supply such reasonable
number of copies of the Registration Statement, preliminary
prospectus and prospectus meeting the requirements of the
Act, and other documents necessary or incidental to a public
offering of the Registrable Securities, as shall be
reasonably requested by the Holder to permit the Holder to
make a public distribution of its, his or her Registrable
Securities. The Company will use its reasonable efforts to
qualify the Registrable Securities for sale in such states
as the Holder of Registrable Securities shall reasonably
request, provided that no such qualification will be
required in any jurisdiction where, solely as a result
thereof, the Company would be subject to service of general
process or to taxation or qualification as a foreign
corporation doing business in such jurisdiction. The
obligations of the Company hereunder with respect to the
Holder's Registrable Securities are expressly conditioned on
the Holder's furnishing to the Company such appropriate
information concerning the Holder, the Holder's Registrable
Securities and the terms of the Holder's offering of such
Registrable Securities as the Company may reasonably
request.
(ii) The Company shall pay all expenses incurred in
complying with the provisions of this Paragraph 14,
including, without limitation, all registration and filing
fees (including all expenses incident to filing with the
National Association of Securities Dealers, Inc.), printing
expenses, fees and disbursements of counsel to the Company,
securities law and blue sky fees and expenses and the
expenses of any regular and special audits incident to or
required by any such registration. All underwriting
discounts and selling commissions applicable to the sales of
the Registrable Securities, and any state or federal
transfer taxes payable with respect to the sales of the
Registrable Securities and all fees and disbursements of
counsel for the Holder, if any, in each case arising in
connection with registration of the Registrable Securities
shall be payable by the Holder.
(iii) In connection with the registration of the
Registrable Securities pursuant to this Paragraph 14, the
Company shall indemnify and hold harmless the Holder, its
affiliates, officers, directors, partners, employees, agents
and representatives, each person, if any, who controls the
Holder within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and any person
claiming by or through any of them (collectively, the
"Indemnified Persons") from and against all losses, claims,
damages, expenses or liabilities (or actions in respect
thereof) arising out of or are based upon any untrue
statement of any material fact contained in the Registration
Statement or alleged untrue statement, under which such
securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise
out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to
make the statements made therein, in light of the
circumstances under which they are made, not misleading, or
any violation by the Company of the Securities Act, the
Exchange Act or state securities or blue sky laws applicable
to the Company and relating to action or inaction required
of the Company in connection with such registration or
qualification under such state securities or blue sky laws;
and will reimburse the Indemnified Persons for any legal or
any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the
Company will not be liable in any such case to any
Indemnified Person to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or omission made in the Registration Statement,
said preliminary prospectus or said final prospectus or said
amendment or supplement or any document incident thereto in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Holder.
(iv) The Holder will indemnify and hold harmless the
Company and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange
Act, each officer of the Company who signs the Registration
Statement and each director of the Company from and against
any and all such losses, claims, damages or liabilities
arising from any untrue statement in, or omission from, the
Registration Statement, any such preliminary or final
prospectus, amendment, or supplement or document incident
thereto if the statement or omission in respect of which
such loss, claim, damage or liability is asserted was made
in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the
Holder for use in connection with the preparation of the
Registration Statement or such prospectus or amendment or
supplement thereof.
(v) The reimbursements required by clauses (iii)
and (iv) shall be made by periodic payments during the
course of the investigation or defense as and when bills are
received or expenses incurred; provided, however, that to
the extent that an indemnified party receives periodic
payments for legal or other expenses during the course of an
investigation or defense, and such party subsequently
received payments for such expenses from any other parties
to the proceeding, such payments shall be used by the
indemnified party to reimburse the indemnifying party for
such periodic payments. Any party which proposes to assert
the right to be indemnified under clause (iii) or (iv) will,
promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of
which a claim is to be made against any indemnified party
hereunder, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a
copy of all papers served, but the failure to so notify such
indemnifying party of any such action, suit or proceeding
shall not relieve the indemnifying party from any obligation
which it may have to any indemnified party hereunder unless
and only to the extent that the indemnifying party is
prejudiced by said lack of notice. In case any such action,
suit or proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party for any
legal or other expense, other than reasonable costs of
investigation subsequently incurred by such indemnified
party in connection with the defense thereof. The
indemnified party shall have the right to employ its own
counsel in any such action, but the reasonable fees and
expenses of such counsel shall be at the expense of such
indemnified party, when and as incurred, unless (A) the
employment of counsel by such indemnified party has been
authorized by the indemnifying party, (B) the indemnified
party has reasonably concluded (based on advice of counsel),
that there may be legal defenses available to it that are
different from or in addition to those available to the
indemnifying party, (C) the indemnified party shall have
reasonably concluded (based on advice of counsel) that there
may be a conflict of interest between the indemnifying party
and the indemnified party in the conduct of defense of such
action (in which case the indemnifying party shall not have
the right to direct the defense of such action on behalf of
the indemnified party), or (D) the indemnifying party shall
not in fact have employed counsel to assume the defense of
such action within 15 days after receipt of notice of such
action. An indemnifying party shall not be liable for any
settlement or any action or claim effected without its
consent.
(vi) If the indemnification provided for in this
Paragraph 14 is unavailable to any indemnified party
hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the
indemnifying party and indemnified parties in connection
with the actions that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct
or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed
to include, subject to the limitations set forth herein, any
legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
(vii) The Company and the Holder agree that it would
not be just and equitable if contribution pursuant to clause
(vi) were determined by pro rata allocation or by any other
method of allocation that does not take account of the
equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding any other provision
hereof, in no event shall the contribution obligation of the
Holder be greater in amount than the excess of (A) the
dollar amount of proceeds received by the Holder upon the
sale of the securities giving rise to such contribution
obligation over (B) the dollar amount of any damages that
the Holder has otherwise been required to pay by reason of
the untrue or alleged untrue statement or omission or
alleged omission giving rise to such obligation. No person
guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
(viii) Neither the filing of the Registration
Statement by the Company pursuant to this Agreement nor the
making of any request for prospectuses by the Holder shall
impose upon the Holder any obligation to sell his, her or
its Registrable Securities.
(ix) The Holder, upon receipt of notice from the
Company that an event has occurred which requires a post-
effective amendment to the Registration Statement or a
supplement to the prospectus included therein, shall
promptly discontinue the sale of his, her or its Registrable
Securities until the Holder receives a copy of a
supplemented or amended prospectus from the Company, which
the Company shall provide as soon as practicable after such
notice.
15. MAILING OF NOTICES, ETC. All notices and other
communications from the Company to the Holder of this Warrant
shall be mailed by first-class certified mail, postage prepaid,
to the address furnished to the Company in writing by the last
Holder of this Warrant who shall have furnished an address to the
Company in writing.
16. HEADINGS, ETC. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise
affect the meaning hereof.
17. CHANGE, WAIVER, ETC. Neither this Warrant nor any term
hereof may be changed, waived, discharged or terminated orally
but only by an instrument in writing signed by the party against
which enforcement of the change, waiver, discharge or termination
is sought.
17. GOVERNING LAW. This Series D Warrant shall be
construed and enforced in accordance with the laws of the State
of New York.
LOGIMETRICS, INC.
By:
Dated: March 7, 1996
Attest:
[To be signed only upon exercise of Warrant]
To LOGIMETRICS, INC.:
The undersigned, the Holder of the within Series D Warrant,
hereby irrevocably elects to exercise the purchase right
represented by such Warrant for, and to purchase thereunder,
shares of Common Stock of LOGIMETRICS, INC. and
herewith makes payment of $ therefor, and requests
that the certificates for such shares be issued in the name of,
and be delivered to, , whose address is
.
Dated:
- -------------------------------
-------------------------------
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
Address:
-------------------------------
-------------------------------
[To be signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto the right represented
by the within Series D Warrant to purchase the
shares of the Common Stock of LOGIMETRICS, INC. to which the
within Series D Warrant relates, and appoints
attorney to transfer said right on the
books of LOGIMETRICS, INC. with full power of substitution in the
premises.
Dated:
- -------------------------------
-------------------------------
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
Address:
-------------------------------
-------------------------------
In the presence of
- -------------------------------
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE
TRANSFERRED UNLESS REGISTERED UNDER THE ACT, EXCEPT IN A
TRANSACTION WHICH, IN THE OPINION OF COUNSEL REASONABLY
SATISFACTORY TO LOGIMETRICS, INC., QUALIFIES AS AN EXEMPT
TRANSACTION UNDER THE ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.
LOGIMETRICS, INC.
Common Stock Purchase Warrant
Series E
LOGIMETRICS, INC. (the "Company"), a Delaware corporation,
hereby certifies that, for value received, , or
assigns, is entitled, subject to the terms set forth below, to
purchase from the Company
( ) fully paid and non-assessable shares of Common Stock
of the Company, at a purchase price, subject to the provisions of
Paragraph 3 hereof, of forty cents ($.40) per share (the
"Purchase Price") at any time prior to the seventh anniversary of
the original date of issuance hereof. The number and character
of such shares are subject to adjustment as provided below, and
the term "Common Stock" shall mean, unless the context otherwise
requires, the stock or other securities or property at the time
deliverable upon the exercise of this Warrant. This Warrant is
herein called the "Warrant". This Warrant is one of a series of
warrants to purchase 1,000,000 shares of Common Stock ("Series E
Warrants").
1. EXERCISE OF WARRANT. The purchase rights evidenced by
this Warrant shall be exercised by the holder hereof ("Holder")
surrendering this Warrant, with the form of subscription at the
end hereof duly executed by such Holder, to the Company at its
office in Plainview, New York, accompanied by payment (in cash or
by certified or official bank check). This Warrant may be
exercised for less than the full number of shares of Common Stock
at the time called for hereby, in which case the number of shares
receivable upon the exercise of this Warrant as a whole, and the
sum payable upon the exercise of this Warrant as a whole, shall
be proportionately reduced. Upon any such partial exercise, the
Company at its expense will forthwith issue to the Holder hereof
a new Warrant or Warrants of like tenor calling for the number of
shares of Common Stock as to which rights have not been
exercised, such Warrant or Warrants to be issued in the name of
the Holder hereof or his nominee.
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as
practicable after the exercise of this Warrant and payment of the
Purchase Price, and in any event within five (5) days thereafter,
the Company, at its expense, will cause to be issued in the name
of and delivered to the Holder hereof a certificate or
certificates for the number of fully paid and non-assessable
shares or other securities or property to which such Holder shall
be entitled upon such exercise, plus, in lieu of any fractional
share to which such Holder would otherwise be entitled, cash
equal to such fraction multiplied by the then current market
value of one full share.
3. ADJUSTMENT FOR ISSUE OR SALE OF COMMON STOCK AT LESS
THAN PURCHASE PRICE. In case, at any time or from time to time
after the date of issuance of this Warrant ("Issuance Date"), the
Company shall issue or sell shares of its Common Stock (other
than any Common Stock issuable upon (i) conversion of the
Company's Amended and Restated 12% Convertible Subordinated
Debentures dated as of July 14, 1995 ("1995 Debentures"), (ii)
exercise of those certain Amended and Restated Series A Warrants
dated March 7, 1996 to purchase 600,000 shares of Common Stock
("Series A Warrants"), (iii) exercise by each of Murray H.
Feigenbaum and Jerome Deutsch (the "Principals") of their right
to purchase 100,000 shares of Common Stock at a price of $.10 per
share ("Principals' Options"), (iv) exercise of those certain
Amended and Restated Series B Warrants dated March 7, 1996 to
purchase 1,500,000 shares of Common Stock ("Series B Warrants"),
(v) conversion of the Company's 12% Convertible Senior
Subordinated Debentures dated March 7, 1996 ("Senior Subordinated
Debentures"), (vi) exercise of those certain Series C Warrants
dated March 7, 1996 to purchase an aggregate of 2,542,380 shares
of Common Stock ("Series C Warrants"), (vii) exercise of those
certain Series D Warrants dated March 7, 1996 to purchase an
aggregate of 2,830,200 shares of Common Stock ("Series D
Warrants"), (viii) exercise of those certain Stock Options, dated
March 7, 1996 to purchase 1,000,000 shares of Common Stock issued
to Richard K. Laird ("Laird Options") and (ix) conversion of the
Company's 30 shares of Series A 12% Cumulative Convertible
Redeemable Preferred Stock ("Preferred Stock" and together with
the 1995 Debentures, the Senior Subordinated Debentures, the
Warrants, the Laird Options, the Principals' Options and any
shares of Common Stock issuable upon conversion or exercise
thereof, the "Subject Securities")), for a consideration per
share less than thirty cents ($.30) per share (the "Trigger
Price") (or, if a Pro Forma Trigger Price shall be in effect as
provided below in this Paragraph 3, then less than such Pro Forma
Trigger Price per share), then and in each such case the Holder
of this Warrant, upon the exercise hereof as provided in
Paragraph 1 hereof, shall be entitled to receive, in lieu of the
shares of Common Stock theretofore receivable upon the exercise
of this Warrant, a number of shares of Common Stock determined by
(a) dividing the Trigger Price by a Pro Forma Trigger Price per
share to be computed as provided below in this Paragraph 3, and
(b) multiplying the resulting quotient by the number of shares of
Common Stock called for on the face of this Warrant. A Pro Forma
Trigger Price per share shall be the price computed (to the
nearest cent, a fraction of half cent or more being considered a
full cent):
by dividing (i) the sum of (x) the result
obtained by multiplying the number of shares
of Common Stock of the Company outstanding
immediately prior to such issue or sale by
the Trigger Price (or, if a Pro Forma Trigger
Price shall be in effect, by such Price), and
(y) the consideration, if any, received by
the Company upon such issue or sale, by (ii)
the number of shares of Common Stock of the
Company outstanding immediately after such
issue or sale.
For the purpose of this Paragraph 3:
3.1. Stock Splits, Dividends, etc., in Common Stock or
Convertible Securities. In case the Company splits its Common
Stock or shall declare any dividend, or make any other
distribution, upon any stock of the Company of any class payable
in Common Stock, or in any stock or other securities directly or
indirectly convertible into or exchangeable for Common Stock (any
such stock or other securities being hereinafter called
"Convertible Securities"), such split, declaration or
distribution shall be deemed to be an issue or sale (as of the
record date for such split, dividend or other distribution),
without consideration, of such Common Stock or such Convertible
Securities, as the case may be.
3.2. Issuance or Sale of Convertible Securities. In case
the Company shall issue or sell any Convertible Securities other
than the Subject Securities, there shall be determined the price
per share for which Common Stock is issuable upon the conversion
or exchange thereof, such determination to be made by dividing
(a) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion
or exchange thereof, by (b) the maximum number of shares of
Common Stock of the Company issuable upon the conversion or
exchange of all such Convertible Securities.
If the price per share so determined shall be less than
the Trigger Price (or, if a Pro Forma Trigger Price shall be in
effect, less than such Price) as of the date of such issue or
sale, then such issue or sale shall be deemed to be an issue or
sale for cash (as of the date of issue or sale of such
Convertible Securities) of such maximum number of shares of
Common Stock at the price per share so determined, provided that,
if such Convertible Securities shall by their terms provide for
an increase or increases, with the passage of time, in the amount
of additional consideration, if any, payable to the Company, or
in the rate of exchange, upon the conversion or exchange thereof,
the Pro Forma Trigger Price per share shall, forthwith upon any
such increase becoming effective, be readjusted to reflect the
same, and provided, further, that upon the expiration of such
rights of conversion or exchange of such Convertible Securities,
if any thereof shall not have been exercised, the Pro Forma
Trigger Price per share shall forthwith be readjusted and
thereafter be the price which it would have been had an
adjustment been made on the basis that the only shares of Common
Stock so issued or sold were those issued or sold upon the
conversion or exchange of such Convertible Securities, and that
they were issued or sold for the consideration actually received
by the Company upon such conversion or exchange, plus the
consideration, if any, actually received by the Company for the
issue or sale of all such Convertible Securities which shall have
been converted or exchanged.
3.3. Grant of Rights or Options for Common Stock. In case
the Company shall grant any rights or options to subscribe for,
purchase or otherwise acquire Common Stock of any class other
than the Subject Securities, there shall be determined the price
per share for which Common Stock is issuable upon the exercise of
such rights or options, such determination to be made by dividing
(a) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or
options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise
of such rights or options, by (b) the maximum number of shares of
Common Stock issuable upon the exercise of such rights or
options.
If the price per share so determined shall be less than
the Trigger Price (or, if a Pro Forma Trigger Price shall be in
effect, less than such Price) as of the date of such issue or
sale, then the granting of such rights or options shall be deemed
to be an issue or sale for cash (as of the date of the granting
of such rights or options) of such maximum number of shares of
Common Stock at the price per share so determined, provided that,
if such rights or options shall by their terms provide for an
increase or increases, with the passage of time, in the amount of
additional consideration, if any, payable to the Company upon the
exercise thereof, the Pro Forma Trigger Price per share shall,
forthwith upon any such increase becoming effective, be
readjusted to reflect the same, and provided, further, that upon
the expiration of such rights or options, if any thereof shall
not have been exercised, the Pro Forma Trigger Price per share
shall forthwith be readjusted and thereafter be the price which
it would have been had an adjustment been made on the basis that
the only shares of Common Stock so issued or sold were those
issued or sold upon the exercise of such rights or options and
that they were issued or sold for the consideration actually
received by the Company upon such exercise, plus the
consideration, if any, actually received by the Company for the
granting of all such rights or options, whether or not exercised.
3.4. Grant of Rights or Options for Convertible Securities.
In case the Company shall grant any rights or options to
subscribe for, purchase or otherwise acquire Convertible
Securities, such Convertible Securities shall be deemed, for the
purposes of subparagraph 3.2. above, to have been issued or sold
for the total amount received or receivable by the Company as
consideration for the granting of such rights or options plus the
minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of such rights or
options, provided that, upon the expiration of such rights or
options, if any thereof shall not have been exercised, the Pro
Forma Trigger Price per share shall forthwith be readjusted and
thereafter be the price which it would have been had an
adjustment been made upon the basis that the only Convertible
Securities so issued or sold were those issued or sold upon the
exercise of such rights or options and that they were issued or
sold for the consideration actually received by the Company upon
such exercise, plus the consideration, if any, actually received
by the Company for the granting of all such rights or options,
whether or not exercised.
3.5. Dilution in Case of Other Stock or Securities. In
case any shares of stock or other securities, other than Common
Stock of the Company, shall at any time be receivable upon the
exercise of this Warrant, and in case any additional shares of
such stock or any additional such securities (or any stock or
other securities convertible into or exchangeable for any such
stock or securities) shall be issued or sold for a consideration
per share such as to dilute the purchase rights evidenced by this
Warrant, then and in each such case the Pro Forma Trigger Price
per share shall forthwith be adjusted, substantially in the
manner provided for above in this Paragraph 3, so as to protect
the Holder of this Warrant against the effect of such dilution.
3.6. Expenses, etc., Deducted. In case any shares of
Common Stock or Convertible Securities or any rights or options
to subscribe for, purchase or otherwise acquire any Common Stock
or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount
received by the Company therefor, after deducting any expenses
incurred and any underwriting or similar commissions,
compensation or concessions paid or allowed by the Company in
connection with such issue or sale.
3.7. Determination of Consideration. In case any shares of
Common Stock or Convertible Securities or any rights or options
to subscribe for, purchase or otherwise acquire any Common Stock
or Convertible Securities shall be issued or sold for a
consideration other than cash (or a consideration which includes
cash, if any cash constitutes a part of the assets of a
corporation or business substantially all of the assets of which
are being received a such consideration) then, for the purpose of
this Paragraph 3, the Board of Directors of the Company shall
promptly determine the fair value of such consideration, and such
Common Stock, Convertible Securities, rights or options shall be
deemed to have been issued or sold on the date of such
determination in good faith. Such value shall not be more than
the amount at which such consideration is recorded in the books
of the Company for accounting purposes except in the case of an
acquisition accounted for on a pooling of interest basis. In
case any Common Stock or Convertible Securities or any rights or
options to subscribe for, purchase or otherwise acquire any
Common Stock or Convertible Securities shall be issued or sold
together with other stock or securities or other assets of the
Company for a consideration which covers both, the Board of
Directors of the Company shall promptly determine what part of
the consideration so received is to be deemed to be the
consideration for the issue or sale of such Common Stock or
Convertible Securities or such rights or options.
The Company covenants and agrees that, should any
determination of fair value of consideration or of allocation of
consideration be made by the Board of Directors of the Company,
pursuant to this subparagraph 3.7, it will, not less than seven
(7) days after any and each such determination, deliver to the
Holder of this Warrant a certificate signed by the President or a
Vice President and the Treasurer or an Assistant Treasurer of the
Company reciting such value as thus determined and setting forth
the nature of the transaction for which such determination was
required to be made, the nature of any consideration, other than
cash, for which Common Stock, Convertible Securities, rights or
options have been or are to be issued, the basis for its
valuation, the number of shares of Common Stock which have been
or are to be issued, and a description of any Convertible
Securities, rights or options which have been or are to be
issued, including their number, amount and terms.
3.8. Record Date Deemed Issue Date. In case the Company
shall take a record of the Holders of shares of its stock of any
class for the purpose of entitling them (a) to receive a dividend
or a distribution payable in Common Stock or in Convertible
Securities, or (b) to subscribe for, purchase or otherwise
acquire Common Stock or Convertible Securities, then such record
date shall be deemed to be the date of the issue or sale of the
Common Stock issued or sold or deemed to have been issued or sold
upon the declaration of such dividend or the making of such other
distribution, or the date of the granting of such rights of
subscription, purchase or other acquisition, as the case may be.
3.9. Shares Considered Outstanding. The number of shares
of Common Stock outstanding at any given time shall include
shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock, but shall exclude shares
in the treasury of the Company.
3.10. Duration of Pro Forma Trigger Price. Following each
computation or readjustment of a Pro Forma Trigger Price as
provided in this Paragraph 3, the newly computed or adjusted Pro
Forma Trigger Price shall remain in effect until a further
computation or readjustment thereof is required by this
Paragraph 3.
4. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY,
ETC.; RECLASSIFICATIONS, ETC. In case at any time or from time
to time after the Issuance Date the Holders of the Common Stock
of the Company of any class (or any other shares of stock or
other securities at the time receivable upon the exercise of this
Warrant) shall have received, or, on or after the record date
fixed for the determination of eligible stockHolders, shall have
become entitled to receive:
(a) other or additional stock or other securities or
property (other than cash) by way of dividend;
(b) any cash paid or payable out of capital or paid-in
surplus or surplus created as a result of a
revaluation of property by way of dividend; or
(c) other or additional (or less) stock or other
securities or property (including cash) by way of
stock-split, spin-off, split-off, split-up,
reclassification, combination of shares or similar
corporate rearrangement;
(other than additional shares of Common Stock issued to Holders
of Common Stock as a stock dividend or stock-split, adjustments
in respect of which shall be covered by the provisions of
Paragraph 3 hereof), then in each case the Holder of this
Warrant, upon the exercise hereof as provided in Paragraph 1
hereof, shall be entitled to receive, in lieu of, or in addition
to, as the case may be, the shares theretofore receivable upon
the exercise of this Warrant, the amount of stock or other
securities or property (including cash in the cases referred to
in clauses (b) and (c) above) which such Holder would hold on the
date of such exercise if, on the Issuance Date, he had been the
Holder of record of the number of shares of Common Stock of the
Company called for on the face of this Warrant and had
thereafter, during the period from the Issuance Date to and
including the date of such exercise, retained such shares and/or
all other or additional (or less) stock or other securities or
property (including cash in the cases referred to in clauses (b)
and (c) above) receivable by him as aforesaid during such period,
giving effect to all adjustments called for during such period by
Paragraphs 3 and 5 hereof.
5. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER,
ETC. In case of any reorganization of the Company (or any other
corporation the stock or other securities of which are at the
time deliverable on the exercise of this Warrant) after the date
hereof, or in case, after such date, the Company (or any such
other corporation) shall consolidate with or merge into another
corporation or convey all or substantially all its assets to
another corporation, then and in each such case the Holder of
this Warrant, upon the exercise hereof as provided in Paragraph 1
hereof, at any time after the consummation of such
reorganization, consolidation, merger or conveyance, shall be
entitled to receive the stock or other securities or property to
which such Holder would have been entitled upon such consummation
if such Holder had exercised this Warrant immediately prior
thereto, all subject to further adjustments as provided in
Paragraphs 3 and 4 hereof; in each such case, the terms of this
Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this
Warrant after such consummation.
6. NO DILUTION OR IMPAIRMENT. The Company will not, by
amendment of its charter or through reorganization,
consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder hereof
against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the
par value of any shares of stock receivable upon the exercise of
this Warrant above the amount payable therefor upon such
exercise, and at all times will take all such action as may be
necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable stock upon the
exercise of this Warrant.
7. ACCOUNTANTS' CERTIFICATE AS TO ADJUSTMENTS. In each
case of an adjustment in the number of shares of Common Stock or
other stock, securities or property receivable on the exercise of
this Warrant, at the request of the Holder of this Warrant the
Company at its expense shall promptly cause independent public
accountants of recognized standing, selected by the Company, to
compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment
and showing in detail the facts upon which such adjustment is
based, including a statement of (a) the consideration received or
to be received by the Company for any additional shares issued or
sold or deemed to have been issued or sold, (b) the number of
shares of Common Stock outstanding or deemed to be outstanding
and (c) the Pro Forma Trigger Price. The Company will forthwith
mail a copy of each such certificate to the Holder of this
Warrant.
8. NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the Holders of
its Common Stock (or other stock or securities at
the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling
them to receive any dividend (other than a cash or
stock dividend at the same rate as the rate of the
last cash or stock dividend theretofore paid) or
other distribution, or to exercise any preemptive
right pursuant to the Company's charter, or to
receive any right to subscribe for or purchase any
shares of stock of any class or any other
securities, or to receive any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the
Company, any consolidation or merger of the
Company with or into another corporation, or any
conveyance of all or substantially all of the
assets of the Company to another corporation; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, and in each such case, the Company will mail or cause to be
mailed to the Holder of this Warrant a notice specifying, as the
case may be, (i) the date on which a record is to be taken for
the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right,
or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or
winding up is to take place, and the times, if any is to be
fixed, as of which the Holders of record of Common Stock (or such
other stock or securities at the time deliverable upon the
exercise of this Warrant) shall be entitled to exchange their
shares of Common Stock of any class (or such other stock or
securities) for reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding up or (iii) the
amount and character of the stock or other securities proposed to
be issued or granted, the date of such proposed issuance or grant
and the persons or class of persons to whom such stock or other
securities ar to be offered, issued or granted. Such notice
shall be mailed at least thirty (30) days prior to the date
therein specified.
9. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF
WARRANTS. The Company will at all times reserve and keep
available, solely for insurance and delivery upon the exercise of
this Warrant and other similar Warrants, such shares of Common
Stock and other stock, securities and property as from time to
time shall be issuable upon the exercise of this Warrant and all
other similar Warrants at the time outstanding.
10. REPLACEMENT OF WARRANT. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and (in the case of
loss, theft or destruction) upon delivery of an indemnity
agreement in an amount reasonably satisfactory to it, or (in the
case of mutilation) upon surrender and cancellation thereof, the
Company will issue, in lieu thereof, a new Warrant of like tenor.
11. REMEDIES. The Company stipulates that the remedies at
law of the Holder of this Warrant in the event of any default by
the Company in its performance of or compliance with any of the
terms of this Warrant are not and will not be adequate, and that
the same may be specifically enforced.
12. NEGOTIABILITY, ETC. This Warrant is issued upon the
following terms, to all of which each taker or owner hereof
consents and agrees:
(a) Title to this warrant may be transferred by
endorsement (by the Holder hereof executing the
form of assignment at the end hereof including
guaranty of signature) and delivery in the same
manner as in the case of a negotiable instrument
transferable by endorsement and delivery.
(b) Any person in possession of this Warrant properly
endorsed is authorized to represent himself as
absolute owner hereof and is granted power to
transfer absolute title hereto by endorsement and
delivery hereof to a bona fide purchaser hereof
for value; each prior taker or owner waives and
renounces all of his equities or rights in this
Warrant in favor of every such bona fide
purchaser, and every such bona fide purchaser
shall acquire title hereto and to all rights
represented hereby.
(c) Until this Warrant is transferred on the books of
the Company, the Company may treat the registered
Holder of this Warrant as the absolute owner
hereof for all purposes without being affected by
any notice to the contrary.
13. SUBDIVISION OF RIGHTS. This Warrant (as well as any
new warrants issued pursuant to the provisions of this paragraph)
is exchangeable, upon the surrender hereof by the Holder hereof,
at the principal office of the Company for any number of new
warrants of like tenor and date representing in the aggregate the
right to subscribe for and purchase the number of shares of
Common Stock of the Company which may be subscribed for and
purchased hereunder.
14. REGISTRATION RIGHTS.
a. Registration. Within 90 days after the date
hereof, the Company will file a registration statement
("Registration Statement") with the Securities and Exchange
Commission ("SEC") covering the Warrants and shares of Common
Stock issuable upon conversion of the 1995 Debentures, the Senior
Subordinated Debentures and the Preferred Stock, and upon
exercise of the Warrants and the Laird Options as well as Common
Stock owned by the Principals and issuable upon exercise of the
Principals' Options (collectively "Registrable Securities"), and
will use its best efforts to cause the Registration Statement to
become effective on or prior to the ninetieth day after such
filing and to keep the Registration Statement effective for a
period of seven years from the date it is declared effective by
the SEC.
b. Additional Terms. Except as otherwise expressly
stated herein, the following provisions shall be applicable to
the Registration Statement:
(i) The Company will use its best efforts to cause
the Registration Statement to become effective as promptly
as possible, and if any stop order shall be issued by the
SEC in connection therewith to use its reasonable efforts to
obtain the removal of such order. Following the effective
date of the Registration Statement, the Company shall, upon
the request of the Holder, forthwith supply such reasonable
number of copies of the Registration Statement, preliminary
prospectus and prospectus meeting the requirements of the
Act, and other documents necessary or incidental to a public
offering of the Registrable Securities, as shall be
reasonably requested by the Holder to permit the Holder to
make a public distribution of its, his or her Registrable
Securities. The Company will use its reasonable efforts to
qualify the Registrable Securities for sale in such states
as the Holder of Registrable Securities shall reasonably
request, provided that no such qualification will be
required in any jurisdiction where, solely as a result
thereof, the Company would be subject to service of general
process or to taxation or qualification as a foreign
corporation doing business in such jurisdiction. The
obligations of the Company hereunder with respect to the
Holder's Registrable Securities are expressly conditioned on
the Holder's furnishing to the Company such appropriate
information concerning the Holder, the Holder's Registrable
Securities and the terms of the Holder's offering of such
Registrable Securities as the Company may reasonably
request.
(ii) The Company shall pay all expenses incurred in
complying with the provisions of this Paragraph 14,
including, without limitation, all registration and filing
fees (including all expenses incident to filing with the
National Association of Securities Dealers, Inc.), printing
expenses, fees and disbursements of counsel to the Company,
securities law and blue sky fees and expenses and the
expenses of any regular and special audits incident to or
required by any such registration. All underwriting
discounts and selling commissions applicable to the sales of
the Registrable Securities, and any state or federal
transfer taxes payable with respect to the sales of the
Registrable Securities and all fees and disbursements of
counsel for the Holder, if any, in each case arising in
connection with registration of the Registrable Securities
shall be payable by the Holder.
(iii) In connection with the registration of the
Registrable Securities pursuant to this Paragraph 14, the
Company shall indemnify and hold harmless the Holder, its
affiliates, officers, directors, partners, employees, agents
and representatives, each person, if any, who controls the
Holder within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and any person
claiming by or through any of them (collectively, the
"Indemnified Persons") from and against all losses, claims,
damages, expenses or liabilities (or actions in respect
thereof) arising out of or are based upon any untrue
statement of any material fact contained in the Registration
Statement or alleged untrue statement, under which such
securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise
out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to
make the statements made therein, in light of the
circumstances under which they are made, not misleading, or
any violation by the Company of the Securities Act, the
Exchange Act or state securities or blue sky laws applicable
to the Company and relating to action or inaction required
of the Company in connection with such registration or
qualification under such state securities or blue sky laws;
and will reimburse the Indemnified Persons for any legal or
any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the
Company will not be liable in any such case to any
Indemnified Person to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or omission made in the Registration Statement,
said preliminary prospectus or said final prospectus or said
amendment or supplement or any document incident thereto in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Holder.
(iv) The Holder will indemnify and hold harmless the
Company and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange
Act, each officer of the Company who signs the Registration
Statement and each director of the Company from and against
any and all such losses, claims, damages or liabilities
arising from any untrue statement in, or omission from, the
Registration Statement, any such preliminary or final
prospectus, amendment, or supplement or document incident
thereto if the statement or omission in respect of which
such loss, claim, damage or liability is asserted was made
in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the
Holder for use in connection with the preparation of the
Registration Statement or such prospectus or amendment or
supplement thereof.
(v) The reimbursements required by clauses (iii)
and (iv) shall be made by periodic payments during the
course of the investigation or defense as and when bills are
received or expenses incurred; provided, however, that to
the extent that an indemnified party receives periodic
payments for legal or other expenses during the course of an
investigation or defense, and such party subsequently
received payments for such expenses from any other parties
to the proceeding, such payments shall be used by the
indemnified party to reimburse the indemnifying party for
such periodic payments. Any party which proposes to assert
the right to be indemnified under clause (iii) or (iv) will,
promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of
which a claim is to be made against any indemnified party
hereunder, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a
copy of all papers served, but the failure to so notify such
indemnifying party of any such action, suit or proceeding
shall not relieve the indemnifying party from any obligation
which it may have to any indemnified party hereunder unless
and only to the extent that the indemnifying party is
prejudiced by said lack of notice. In case any such action,
suit or proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party for any
legal or other expense, other than reasonable costs of
investigation subsequently incurred by such indemnified
party in connection with the defense thereof. The
indemnified party shall have the right to employ its own
counsel in any such action, but the reasonable fees and
expenses of such counsel shall be at the expense of such
indemnified party, when and as incurred, unless (A) the
employment of counsel by such indemnified party has been
authorized by the indemnifying party, (B) the indemnified
party has reasonably concluded (based on advice of counsel),
that there may be legal defenses available to it that are
different from or in addition to those available to the
indemnifying party, (C) the indemnified party shall have
reasonably concluded (based on advice of counsel) that there
may be a conflict of interest between the indemnifying party
and the indemnified party in the conduct of defense of such
action (in which case the indemnifying party shall not have
the right to direct the defense of such action on behalf of
the indemnified party), or (D) the indemnifying party shall
not in fact have employed counsel to assume the defense of
such action within 15 days after receipt of notice of such
action. An indemnifying party shall not be liable for any
settlement or any action or claim effected without its
consent.
(vi) If the indemnification provided for in this
Paragraph 14 is unavailable to any indemnified party
hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the
indemnifying party and indemnified parties in connection
with the actions that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct
or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed
to include, subject to the limitations set forth herein, any
legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
(vii) The Company and the Holder agree that it would
not be just and equitable if contribution pursuant to clause
(vi) were determined by pro rata allocation or by any other
method of allocation that does not take account of the
equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding any other provision
hereof, in no event shall the contribution obligation of the
Holder be greater in amount than the excess of (A) the
dollar amount of proceeds received by the Holder upon the
sale of the securities giving rise to such contribution
obligation over (B) the dollar amount of any damages that
the Holder has otherwise been required to pay by reason of
the untrue or alleged untrue statement or omission or
alleged omission giving rise to such obligation. No person
guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
(viii) Neither the filing of the Registration
Statement by the Company pursuant to this Agreement nor the
making of any request for prospectuses by the Holder shall
impose upon the Holder any obligation to sell his, her or
its Registrable Securities.
(ix) The Holder, upon receipt of notice from the
Company that an event has occurred which requires a post-
effective amendment to the Registration Statement or a
supplement to the prospectus included therein, shall
promptly discontinue the sale of his, her or its Registrable
Securities until the Holder receives a copy of a
supplemented or amended prospectus from the Company, which
the Company shall provide as soon as practicable after such
notice.
15. MAILING OF NOTICES, ETC. All notices and other
communications from the Company to the Holder of this Warrant
shall be mailed by first-class certified mail, postage prepaid,
to the address furnished to the Company in writing by the last
Holder of this Warrant who shall have furnished an address to the
Company in writing.
16. HEADINGS, ETC. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise
affect the meaning hereof.
17. CHANGE, WAIVER, ETC. Neither this Warrant nor any term
hereof may be changed, waived, discharged or terminated orally
but only by an instrument in writing signed by the party against
which enforcement of the change, waiver, discharge or termination
is sought.
17. GOVERNING LAW. This Series E Warrant shall be
construed and enforced in accordance with the laws of the State
of New York.
LOGIMETRICS, INC.
By:
-------------------------------
Dated: March 7, 1996
Attest:
- -------------------------------
[To be signed only upon exercise of Warrant]
To LOGIMETRICS, INC.:
The undersigned, the Holder of the within Series E Warrant,
hereby irrevocably elects to exercise the purchase right
represented by such Warrant for, and to purchase thereunder,
shares of Common Stock of LOGIMETRICS, INC. and
herewith makes payment of $ therefor, and requests
that the certificates for such shares be issued in the name of,
and be delivered to, , whose address is
.
Dated:
- -------------------------------
-------------------------------
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
Address:
-------------------------------
-------------------------------
[To be signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto the right represented
by the within Series E Warrant to purchase the
shares of the Common Stock of LOGIMETRICS, INC. to which the
within Series E Warrant relates, and appoints
attorney to transfer said right on the
books of LOGIMETRICS, INC. with full power of substitution in the
premises.
Dated:
- -------------------------------
-------------------------------
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
Address:
-------------------------------
-------------------------------
In the presence of
- -------------------------------
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN
REGISTERED UNDER FEDERAL OR ANY STATE SECURITIES
LAWS AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR COMPLIANCE
WITH THE TERMS OF AN APPLICABLE EXEMPTION FROM
SUCH REGISTRATION AND THE FURNISHING TO THE
COMPANY OF AN ACCEPTABLE OPINION OF COUNSEL THAT
SUCH EXEMPTION IS AVAILABLE.
AMENDED AND RESTATED
12% CONVERTIBLE SUBORDINATED DEBENTURE
as of July 14, 1995
LOGIMETRICS, INC., a Delaware corporation (the "Company"),
hereby promises to pay to the order of (together
with its, his or her successors and assigns, the "Holder") the
principal amount of twenty thousand dollars ($20,000) together
with interest thereon calculated from the date hereof in
accordance with the provisions of this debenture ("Debenture").
This Debenture is one of a series of Amended and Restated
12% Convertible Subordinated Debentures ("Debentures") the
principal of which aggregates three hundred thousand dollars
($300,000). All Debentures rank pari passu.
By accepting this Debenture, the Holder agrees that the
obligations of the Company to Holder under this Debenture shall
be subordinated to the Senior Debt (as hereinafter defined) of
the Company upon the terms set forth in paragraph 4 hereof.
Subject to the foregoing, this Debenture shall in all respects
rank pari passu with all existing and future indebtedness of the
Company which is not Senior Debt.
1. Payment of Interest. Interest will accrue from the
date hereof at the rate of twelve percent (12%) per annum on the
unpaid principal amount of this Debenture outstanding from time
to time. Subject to paragraph 4 hereof, the Company will pay to
the Holder all accrued and unpaid interest on this Debenture on
June 15, 1996 and quarterly thereafter, in arrears, on the 15th
day of September, the 15th day of December, the 15th day of March
and the 15th day of June to and including the earlier to occur of
the Conversion Date (hereinafter defined) or the Due Date
(hereinafter defined). Interest will accrue at the rate of
fifteen percent (15%) per annum on any principal payment past due
under this Debenture and, unless prohibited under applicable law
(and if so prohibited then only to the extent not so prohibited),
on any interest which has not been paid on the date on which it
is due and payable (without giving effect to any applicable grace
periods or paragraph 4 hereof) until such time as payment
therefor is actually delivered to the Holder.
2. Payment of Principal on Debenture.
(a) Scheduled Payments. Subject to paragraph 4 hereof
the Company will repay the principal amount of this Debenture on
July 14, 1997 ("Due Date").
(b) Optional Prepayment. Subject to paragraph 4
hereof and the prior repayment in full of the Senior Debt, the
Company may at any time hereafter prepay, without premium or
penalty, all (but not less than all) of the outstanding principal
amount of the Debentures, together with interest accrued on such
prepaid amount to the date of payment. No Debenture may be
prepaid unless all Debentures are prepaid.
(c) Notice of Prepayment. The Company will give
written notice of its election to prepay this Debenture to the
Holder in person or by registered or certified mail, return
receipt requested, at least twenty (20) business days prior to
the date of prepayment. On the date of prepayment specified in
the Company's notice, the Company will deliver to the Holder of
this Debenture in person or by registered or certified mail,
return receipt requested, a cashier's or certified check for the
entire outstanding principal amount being prepaid, together with
all accrued interest thereon through the date of prepayment.
3. Pro Rata Payment. The Company agrees that any payments
to the Holders of the Debentures (whether for principal, interest
or otherwise) will be made pro rata among such Holders based upon
the unpaid principal amount of each Debenture held by each such
Holder. If any Holder of a Debenture obtains any payment
(whether voluntary, involuntary, by application of offset or
otherwise) of principal on any Debenture in excess of such
Holder's pro rata share of payments obtained by all Holders of
the Debentures, such Holder will purchase from the other Holders
of the Debentures such participation in the Debentures held by
them as is necessary to cause such Holders to share the excess
payment ratably among each of them as provided in this
paragraph 3.
4. Subordination. The Company's payment, whether
voluntary or involuntary, whether in cash, property, securities
or otherwise and whether by application of offset or otherwise
(hereinafter "Payment") of any of its obligations under this
Debenture shall be subject to the following restrictions:
(a) Subordination to Senior Debt. Anything in this
Debenture to the contrary notwithstanding, the obligations of the
Company in respect of the principal of and interest (including
any premium or penalty) on this Debenture and any other amounts
due under this Debenture (the "Subordinated Debt") shall be
subordinate and junior in right of payment, to the extent and in
the manner hereinafter set forth, to the Senior Debt. "Senior
Debt", when used with respect to the Company, means (i) all
institutional indebtedness or institutional capitalized lease
obligations of the Company, (ii) indebtedness evidenced by the
Company's 12% Convertible Senior Subordinated Debentures, dated
March 7, 1996 ("Senior Subordinated Debentures"), (iii) all
guarantees by the Company of any type of indebtedness described
in clause (i) above and (iv) renewals, extensions, refinancings,
deferrals, restructurings, amendments, modifications and waivers
of the indebtedness described in clauses (i) and (ii) above.
(b) Default on Senior Debt. So long as the Senior
Debt has not been paid in full, if there shall occur an event of
default or there shall occur any event which with the passage of
time or giving of notice, or both, would constitute an event of
default under the terms of any instrument or agreement relating
to Senior Debt (any of the foregoing being a "Senior Debt
Default") then, unless and until such Senior Debt Default shall
have been remedied or waived the Company will not make any
Payment on any Subordinated Debt, and the Holders of Subordinated
Debt will not receive or accept any direct or indirect Payment in
respect thereof, and the Company may not redeem or otherwise
acquire any Subordinated Debt.
(c) Changes in Senior Debt. Any holder of Senior Debt
may, at any time and from time to time, without the consent of,
or notice to, the Holder and without incurring responsibility to
the Holder, and without impairing or releasing the obligations of
the Holder hereunder:
(i) Change the manner, place or terms of
payment or change or extend the time of payment of or renew
or alter the Senior Debt or any portion thereof;
(ii) Sell, exchange, release or otherwise deal
with any collateral securing the Senior Debt or any other
property by whomsoever at any time pledged or mortgaged to
secure, or however securing, the Senior Debt or any portion
thereof; and
(iii) Apply any sums by whomsoever paid or
however released to the Senior Debt or any portion thereof.
(d) Consent to Senior Debt. By acceptance of this
Debenture, the Holder hereby consents to the making of Senior
Debt and hereby acknowledges that each current and future holder
of Senior Debt has relied, and in the future will rely, upon the
terms of this Debenture. The holders of Senior Debt shall have
no liability to the Holder and the Holder hereby waives any claim
which it may have now or hereafter against any holder of Senior
Debt arising from any and all actions which any holder of Senior
Debt may take or omit to take in good faith with regard to the
Senior Debt or its rights or obligations hereunder.
(e) Payments in Trust. Until the Senior Debt has been
repaid in full, in the event the Holder shall receive any Payment
in contravention of the provisions of this Section 4, including
Payments arising under the subordination provisions of any other
indebtedness of the company, the Holder shall hold all such
Payments so received in trust for the holders of Senior Debt and
shall forthwith turn over all such Payments to the holders of
Senior Debt in the form received (except for the endorsement or
assignment of the Holder as necessary, without recourse or
warranty) to be applied to payment of the senior Debt whether or
not then due and payable. Any Payment so received in trust and
turned over to the holders of Senior Debt shall not be deemed a
Payment in satisfaction of the Subordinated Debt or the Company.
(f) Payment in full of Senior Debt; Subrogation. If
any payment or distribution to which a Holder of Subordinated
Debt would otherwise have been entitled but for the provisions of
this paragraph 4 shall have been applied, pursuant to the
provisions of this paragraph 4, to the payment of Senior Debt,
then and in such case, the Holder of the Subordinated Debt (i)
shall be entitled to receive from the holders of Senior Debt at
the time outstanding any payments or distributions received by
such holders of Senior Debt in excess of the amount sufficient to
pay all Senior Debt in cash in full (whether or not then due),
and (ii) following payment of the Senior Debt in full, shall be
subrogated to any right of the holders of Senior Debt to receive
any and all further payments or distributions applicable to
Senior Debt, until all the Subordinated Debt shall have been paid
in full. If the Holder of the Subordinated Debt shall have been
subrogated to the rights of the holders of Senior Debt due to the
operation of this paragraph 4(g), the Company agrees to take all
such reasonable actions as are requested by such Holders of the
Subordinated Debt in order to cause such Holders to be able to
obtain payments from the Company with respect to such subrogation
rights as soon as possible.
(g) No Impairment of the Company's Obligations.
Except as expressly provided herein, nothing contained in this
Section 4, as between the Company and the Holder of the
Subordinated Debt, shall impair the obligation of the Company,
which is absolute and unconditional, to pay to the Holder the
amount of the Subordinated Debt as and when the same shall become
due and payable in accordance with the terms hereof.
(h) Advances in Reliance. The Holder of the
Subordinated Debt, by its acceptance thereof, agrees that each
holder of Senior Debt has advanced funds or may in the future
advance funds in reliance upon the terms and conditions hereof.
(i) Non-Waiver of Rights. No right of any holder of
Senior Debt to enforce its right of subordination as herein
provided shall at any time in any way be prejudiced or impaired
by any act or failure to act on the part of the Company, or by
any act or failure to act by any such holder, or by any
non-compliance by the Company with the terms, provisions and
covenants of the Subordinated Debt, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(j) Recaptured Payments. Any Payments received by a
holder of Senior Debt from the Company or the Holder which, in
connection with an Insolvency Event or Proceeding (hereinafter
defined), is required to be remitted to the payor or the bankrupt
estate shall not be deemed a Payment to such holder of Senior
Debt for all purposes hereunder.
5. Conversion Rights.
(a) The Holder of this Debenture has the right (the
"Conversion Right"), exercisable at his, her or its option at any
time during which the principal amount of this Debenture is
outstanding, to convert this Debenture, but only in whole, into
eighty thousand (80,000) shares of the Company's Common Stock,
par value $.01 per share ("Common Stock") subject to adjustment
in certain circumstances described herein.
(b) The Conversion Right is exercisable upon surrender
of this Debenture, together with a conversion notice, in the form
attached hereto as Exhibit A, duly executed and completed,
evidencing the election of the Holder to exercise the Conversion
Right, to the Company's principal office at 121-03 Dupont Street,
Plainview, New York 11803. The registered owner of this
Debenture shall become the record Holder of the Common Stock
issuable upon conversion as of the date of exercise of the
Conversion Right (the "Conversion Date"). The shares issued in
connection with the Conversion Right shall be registered
initially in the name of the Holder, and delivered to the Holder
no later than two (2) business days after receipt of a properly
completed conversion notice. Upon conversion, the Company shall
pay to the Holder accrued but unpaid interest on this Debenture
up to, but excluding, the Conversion Date.
(c) In case, at any time or from time to time after
the date of issuance of this Debenture ("Issuance Date"), the
Company shall issue or sell shares of its Common Stock (other
than any Common Stock issuable upon (i) conversion of the
Debentures, (ii) exercise of those certain Amended and Restated
Series A Warrants dated March 7, 1996 to purchase 600,000 shares
of Common Stock ("Series A Warrants"), (iii) exercise by each of
Murray H. Feigenbaum and Jerome Deutsch (the "Principals") of
their right to purchase 100,000 shares of Common Stock at a price
of $.10 per share ("Principals' Options"), (iv) exercise of those
certain Amended and Restated Series B Warrants dated March 7,
1996 to purchase 1,500,000 shares of Common Stock ("Series B
Warrants"), (v) conversion of the Senior Subordinated Debentures,
(vi) exercise of those certain Series C Warrants dated March 7,
1996 to purchase an aggregate of 2,542,380 shares of Common Stock
("Series C Warrants"), (vii) exercise of those certain Series D
Warrants dated March 7, 1996 to purchase an aggregate of
2,830,200 shares of Common Stock ("Series D Warrants"), (viii)
exercise of those certain Series E Warrants dated March 7, 1996
to purchase 1,000,000 shares of the Company's Common Stock
("Series E Warrants" and together with the Series A, B, C and D
Warrants, "Warrants"), (ix) exercise of those certain Stock
Options, dated March 7, 1996 to purchase 1,000,000 shares of
Common Stock issued to Richard K. Laird ("Laird Options") and (x)
conversion of the Company's 30 shares of Series A 12% Cumulative
Convertible Redeemable Preferred Stock ("Preferred Stock" and
together with the 1995 Debentures, the Senior Subordinated
Debentures, the Warrants, the Laird Options, the Principals'
Options and any shares of Common Stock issuable upon conversion
or exercise thereof, the "Subject Securities")) for a
consideration per share less than $.25 per share ("Purchase
Price"), or, if a Pro Forma Adjusted Purchase Price (hereinafter
defined) shall be in effect as provided below in this
paragraph (c), then less than such Pro Forma Adjusted Purchase
Price per share, then and in each such case the holder of this
Debenture, upon the conversion hereof as provided in
paragraph (a) hereof, shall be entitled to receive, in lieu of
the shares of Common Stock theretofore receivable upon the
conversion of this Debenture, a number of shares of Common Stock
determined by (a) dividing the Purchase Price by a Pro Forma
Adjusted Purchase Price per share to be computed as provided
below in this paragraph (c), and (b) multiplying the resulting
quotient by the number of shares of Common Stock into which this
Debenture is then convertible. A Pro Forma Adjusted Purchase
Price per share shall be the price computed (to the nearest cent,
a fraction of half cent or more being considered a full cent):
by dividing (i) the sum of (x) the result
obtained by multiplying the number of shares
of Common Stock of the Company outstanding
immediately prior to such issue or sale by
the Purchase Price (or, if a Pro Forma
Adjusted Purchase Price shall be in effect,
by such Price), and (y) the consideration, if
any, received by the Company upon such issue
or sale, by (ii) the number of shares of
Common Stock of the Company outstanding
immediately after such issue or sale.
For the purpose of this paragraph (c):
(i) In case the Company splits its Common
Stock or shall declare any dividend, or make any other
distribution, upon any stock of the Company of any class
payable in Common Stock, or in any stock or other securities
directly or indirectly convertible into or exchangeable for
Common Stock (any such stock or other securities being
hereinafter called "Convertible Securities"), such split,
declaration or distribution shall be deemed to be an issue
or sale (as of the record date for such split, dividend or
other distribution), without consideration, of such Common
Stock or such Convertible Securities, as the case may be.
(ii) In case the Company shall issue or sell
any Convertible Securities other than the Subject
Securities, such determination to be made by dividing (a)
the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (b) the maximum number of
shares of Common Stock of the Company issuable upon the
conversion or exchange of all such Convertible Securities.
If the price per share so determined shall be
less than the Purchase Price (or, if a Pro Forma Adjusted
Purchase Price shall be in effect, less than such Price) as
of the date of such issue or sale, then such issue or sale
shall be deemed to be an issue or sale for cash (as of the
date of issue or sale of such Convertible Securities) of
such maximum number of shares of Common Stock at the price
per share so determined, provided that, if such Convertible
Securities shall by their terms provide for an increase or
increases, with the passage of time, in the amount of
additional consideration, if any, payable to the Company, or
in the rate of exchange, upon the conversion or exchange
thereof, the Pro Forma Adjusted Purchase Price per share
shall, forthwith upon any such increase becoming effective,
be readjusted to reflect the same, and provided, further,
that upon the expiration of such rights of conversion or
exchange of such Convertible Securities, if any thereof
shall not have been exercised, the Pro Forma Adjusted
Purchase Price per share shall forthwith be readjusted and
thereafter be the price which it would have been had an
adjustment been made on the basis that the only shares of
Common Stock so issued or sold were those issued or sold
upon the conversion or exchange of such Convertible
Securities, and that they were issued or sold for the
consideration actually received by the Company upon such
conversion or exchange, plus the consideration, if any,
actually received by the Company for the issue or sale of
all such Convertible Securities which shall have been
converted or exchanged.
(iii) In case the Company shall grant any rights
or options to subscribe for, purchase or otherwise acquire
Common Stock of any class other than the Subject Securities,
there shall be determined the price per share for which
Common Stock is issuable upon the exercise of such rights or
options, such determination to be made by dividing (a) the
total amount, if any, received or receivable by the Company
as consideration for the granting of such rights or options,
plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the
exercise of such rights or options, by (b) the maximum
number of shares of Common Stock issuable upon the exercise
of such rights or options.
If the price per share so determined shall be
less than the Purchase Price (or, if a Pro Forma Adjusted
Purchase Price shall be in effect, less than such Price) as
of the date of such issue or sale, then the granting of such
rights or options shall be deemed to be an issue or sale for
cash (as of the date of the granting of such rights or
options) of such maximum number of shares of Common Stock at
the price per share so determined, provided that, if such
rights or options shall by their terms provide for an
increase or increases, with the passage of time, in the
amount of additional consideration, if any, payable to the
Company upon the exercise thereof, the Pro Forma Adjusted
Purchase Price per share shall, forthwith upon any such
increase becoming effective, be readjusted to reflect the
same, and provided, further, that upon the expiration of
such rights or options, if any thereof shall not have been
exercised, the Pro Forma Adjusted Purchase Price per share
shall forthwith be readjusted and thereafter be the price
which it would have been had an adjustment been made on the
basis that the only shares of Common Stock so issued or sold
were those issued or sold upon the exercise of such rights
or options and that they were issued or sold for the
consideration actually received by the Company upon such
exercise, plus the consideration, if any, actually received
by the Company for the granting of all such rights or
options, whether or not exercised.
(iv) In case the Company shall grant any rights
or options to subscribe for, purchase or otherwise acquire
Convertible Securities, such Convertible Securities shall be
deemed, for the purposes of subparagraph (iii) above, to
have been issued or sold for the total amount received or
receivable by the Company as consideration for the granting
of such rights or options plus the minimum aggregate amount
of additional consideration, if any, payable to the Company
upon the exercise of such rights or options, provided that,
upon the expiration of such rights or options, if any
thereof shall not have been exercised, the Pro Forma
Adjusted Purchase Price per share shall forthwith be
readjusted and thereafter be the price which it would have
been had an adjustment been made upon the basis that the
only Convertible Securities so issued or sold were those
issued or sold upon the exercise of such rights or options
and that they were issued or sold for the consideration
actually received by the Company upon such exercise, plus
the consideration, if any, actually received by the Company
for the granting of all such rights or options, whether or
not exercised.
(v) In case any shares of stock or other
securities, other than Common Stock of the Company, shall at
any time be receivable upon the conversion of this
Debenture, and in case any additional shares of such stock
or any additional such securities (or any stock or other
securities convertible into or exchangeable for any such
stock or securities) shall be issued or sold for a
consideration per share such as to dilute the purchase
rights evidenced by this Debenture, then and in each such
case the Pro Forma Adjusted Purchase Price per share shall
forthwith be adjusted, substantially in the manner provided
for above in this paragraph (c), so as to protect the holder
of this Debenture against the effect of such dilution.
(vi) In case any shares of Common Stock or
Convertible Securities or any rights or options to subscribe
for, purchase or otherwise acquire any Common Stock or
Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the
amount received by the Company therefor, after deducting any
expenses incurred and any underwriting or similar
commissions, compensation or concessions paid or allowed by
the Company in connection with such issue or sale.
(vii) In case any shares of Common Stock or
Convertible Securities or any rights or options to subscribe
for, purchase or otherwise acquire any Common Stock or
Convertible Securities shall be issued or sold for a
consideration other than cash (or a consideration which
includes cash, if any cash constitutes a part of the assets
of a corporation or business substantially all of the assets
of which are being received a such consideration) then, for
the purpose of this paragraph (c), the Board of Directors of
the Company shall promptly determine the fair value of such
consideration, and such Common Stock, Convertible
Securities, rights or options shall be deemed to have been
issued or sold on the date of such determination in good
faith. Such value shall not be more than the amount at
which such consideration is recorded in the books of the
Company for accounting purposes except in the case of an
acquisition accounted for on a pooling of interest basis.
In case any Common Stock or Convertible Securities or any
rights or options to subscribe for, purchase or otherwise
acquire any Common Stock or Convertible Securities shall be
issued or sold together with other stock or securities or
other assets of the Company for a consideration which covers
both, the Board of Directors of the Company shall promptly
determine what part of the consideration so received is to
be deemed to be the consideration for the issue or sale of
such Common Stock or Convertible Securities or such rights
or options.
The Company covenants and agrees that, should
any determination of fair value of consideration or of
allocation of consideration be made by the Board of
Directors of the Company, pursuant to this subparagraph
(vii), it will, not less than seven (7) days after any and
each such determination, deliver to the holder of this
Debenture a certificate signed by the President or a Vice
President and the Treasurer or an Assistant Treasurer of the
Company reciting such value as thus determined and setting
forth the nature of the transaction for which such
determination was required to be made, the nature of any
consideration, other than cash, for which Common Stock,
Convertible Securities, rights or options have been or are
to be issued, the basis for its valuation, the number of
shares of Common Stock which have been or are to be issued,
and a description of any Convertible Securities, rights or
options which have been or are to be issued, including their
number, amount and terms.
(viii) In case the Company shall take a record of
the holders of shares of its stock of any class for the
purpose of entitling them (a) to receive a dividend or a
distribution payable in Common Stock or in Convertible
Securities, or (b) to subscribe for, purchase or otherwise
acquire Common Stock or Convertible Securities, then such
record date shall be deemed to be the date of the issue or
sale of the Common Stock issued or sold or deemed to have
been issued or sold upon the declaration of such dividend or
the making of such other distribution, or the date of the
granting of such rights of subscription, purchase or other
acquisition, as the case may be.
(ix) The number of shares of Common Stock
outstanding at any given time shall include shares issuable
in respect of scrip certificates issued in lieu of fractions
of shares of Common Stock, but shall exclude shares in the
treasury of the Company.
(x) Following each computation or readjustment
of a Pro Forma Adjusted Purchase Price as provided in this
paragraph (c), the newly computed or adjusted Pro Forma
Adjusted Purchase Price shall remain in effect until a
further computation or readjustment thereof is required by
this paragraph (c).
(xi) In case at any time or from time to time
after the Issuance Date the holders of the Common Stock of
the Company of any class (or any other shares of stock or
other securities at the time receivable upon the exercise of
this Debenture) shall have received, or, on or after the
record date fixed for the determination of eligible
stockholders, shall have become entitled to receive:
(A) other or additional stock or other
securities or property (other than cash) by way of
dividend;
(B) any cash paid or payable out of capital
or paid-in surplus or surplus created as a result of a
revaluation of property by way of dividend; or
(C) other or additional (or less) stock or
other securities or property (including cash) by way of
stock-split, spin-off, split-off, split-up,
reclassification, combination of shares or similar
corporate rearrangement;
(other than additional shares of Common Stock issued to holders
of Common Stock as a stock dividend or stock-split, adjustments
in respect of which shall be covered by the provisions of this
paragraph (c)), then in each case the holder of this Debenture,
upon the conversion hereof as provided in paragraph (a) hereof,
shall be entitled to receive, in lieu of, or in addition to, as
the case may be, the shares theretofore receivable upon the
conversion of this Debenture, the amount of stock or other
securities or property (including cash in the cases referred to
in clauses (B) and (C) above) which such holder would hold on the
date of such exercise if, on the Issuance Date, he, she or it had
been the holder of record of the number of shares of Common Stock
of the Company into which this Debenture is convertible and had
thereafter, during the period from the Issuance Date to and
including the date of such conversion, retained such shares
and/or all other or additional (or less) stock or other
securities or property (including cash in the cases referred to
in clauses (B) and (C) above) receivable by him, her or it as
aforesaid during such period, giving effect to all adjustments
called for during such period by paragraph (c) and subparagraph
(xii) hereof.
(xii) In case of any reorganization of the
Company (or any other corporation the stock or other
securities of which are at the time deliverable on the
conversion of this Debenture) after the date hereof, or in
case, after such date, the Company (or any such other
corporation) shall consolidate with or merge into another
corporation or convey all or substantially all its assets to
another corporation, then and in each such case the holder
of this Debenture, upon the conversion hereof as provided in
paragraph (a) hereof, at any time after the consummation of
such reorganization, consolidation, merger or conveyance,
shall be entitled to receive the stock or other securities
or property to which such holder would have been entitled
upon such consummation if such holder had converted this
Debenture immediately prior thereto, all subject to further
adjustments as provided for herein; in each such case, the
terms of this Debenture shall be applicable to the shares of
stock or other securities or property receivable upon the
conversion of this Debenture after such consummation.
(xiii) The Company will not, by amendment of its
charter or through reorganization, consolidation, merger,
dissolution, sale of assets or any other voluntary action,
avoid or seek to avoid the observance or performance of any
of the terms of this Debenture, but will at all times in
good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder
hereof against dilution or other impairment. Without
limiting the generality of the foregoing, the Company will
not increase the par value of any shares of stock receivable
upon the conversion of this Debenture above the amount
payable therefor upon such exercise, and at all times will
take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully
paid and non-assessable stock upon the conversion of this
Debenture.
(xiv) In each case of an adjustment in the
number of shares of Common Stock or other stock, securities
or property receivable on the conversion of this Debenture,
at the request of the holder of this Debenture the Company
at its expense shall promptly cause independent public
accountants of recognized standing, selected by the Company,
to compute such adjustment in accordance with the terms of
this Debenture and prepare a certificate setting forth such
adjustment and showing in detail the facts upon which such
adjustment is based, including a statement of (A) the
consideration received or to be received by the Company for
any additional shares issued or sold or deemed to have been
issued or sold, (B) the number of shares of Common Stock
outstanding or deemed to be outstanding and (C) the Pro
Forma Adjusted Purchase Price. The Company will forthwith
mail a copy of each such certificate to the holder of this
Debenture.
(xv) In case:
(A) the Company shall take a record of the
holders of its Common Stock (or other stock or
securities at the time deliverable upon the conversion
of this Debenture) for the purpose of entitling or
enabling them to receive any dividend (other than a
cash or stock dividend at the same rate as the rate of
the last cash or stock dividend theretofore paid) or
other distribution, or to exercise any preemptive right
pursuant to the Company's charter, or to receive any
right to subscribe for or purchase any shares of stock
of any class or any other securities, or to receive any
other right; or
(B) of any capital reorganization of the
Company, any reclassification of the capital stock of
the Company, any consolidation or merger of the Company
with or into another corporation, or any conveyance of
all or substantially all of the assets of the Company
to another corporation; or
(C) of the voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then, and in each such case, the Company will mail or cause to be
mailed to the holder of this Debenture a notice specifying, as
the case may be, (i) the date on which a record is to be taken
for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution
or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution,
liquidation or winding up is to take place, and the times, if any
is to be fixed, as of which the holders of record of Common Stock
(or such other stock or securities at the time deliverable upon
the exercise of this Debenture) shall be entitled to exchange
their shares of Common Stock of any class (or such other stock or
securities) for reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding up or (iii) the
amount and character of the stock or other securities proposed to
be issued or granted, the date of such proposed issuance or grant
and the persons or class of persons to whom such stock or other
securities ar to be offered, issued or granted. Such notice
shall be mailed at least thirty (30) days prior to the date
therein specified.
(xvi) The Company will at all times reserve and
keep available, solely for insurance and delivery upon the
conversion of this Debenture and other similar Debentures,
such shares of Common Stock and other stock, securities and
property as from time to time shall be issuable upon the
exercise of this Debenture and all other similar Debentures
at the time outstanding.
(xvii) Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction
or mutilation of this Debenture and (in the case of loss,
theft or destruction) upon delivery of an indemnity
agreement (with surety if reasonably required) in an amount
reasonably satisfactory to it, or (in the case of
mutilation) upon surrender and cancellation thereof, the
Company will issue, in lieu thereof, a new Debenture of like
tenor.
(xviii) (A) Within 90 days after the date hereof,
the Company will file a registration statement
("Registration Statement") with the Securities and
Exchange Commission ("SEC") covering the Subject
Securities (other than the Debentures, the Senior
Subordinated Debentures and the Preferred Stock) and
the shares of Common Stock issuable upon conversion of
the Debentures and the Subject Securities (collectively
"Registrable Securities"), and will use its best
efforts to cause the Registration Statement to become
effective on or prior to the ninetieth day after such
filing and to keep the Registration Statement effective
for a period of seven years from the date it is
declared effective by the SEC.
(B) Except as otherwise expressly stated
herein, the following provisions shall be applicable to
the Registration Statement:
(aa) The Company will use its best
efforts to cause the Registration Statement to
become effective as promptly as possible, and if
any stop order shall be issued by the SEC in
connection therewith to use its reasonable efforts
to obtain the removal of such order. Following
the effective date of the Registration Statement,
the Company shall, upon the request of the holder,
forthwith supply such reasonable number of copies
of the Registration Statement, preliminary
prospectus and prospectus meeting the requirements
of the Act, and other documents necessary or
incidental to a public offering of the Registrable
Securities, as shall be reasonably requested by
the holder to permit the holder to make a public
distribution of its, his or her Registrable
Securities. The Company will use its reasonable
efforts to qualify the Registrable Securities for
sale in such states as the holder of Registrable
Securities shall reasonably request, provided that
no such qualification will be required in any
jurisdiction where, solely as a result thereof,
the Company would be subject to service of general
process or to taxation or qualification as a
foreign corporation doing business in such
jurisdiction. The obligations of the Company
hereunder with respect to the holder's Registrable
Securities are expressly conditioned on the
holder's furnishing to the Company such
appropriate information concerning the holder, the
holder's Registrable Securities and the terms of
the holder's offering of such Registrable
Securities as the Company may reasonably request.
(bb) The Company shall pay all expenses
incurred in complying with the provisions of this
subparagraph (xviii), including, without
limitation, all registration and filing fees
(including all expenses incident to filing with
the National Association of Securities Dealers,
Inc.), printing expenses, fees and disbursements
of counsel to the Company, securities law and blue
sky fees and expenses and the expenses of any
regular and special audits incident to or required
by any such registration. All underwriting
discounts and selling commissions applicable to
the sales of the Registrable Securities, and any
state or federal transfer taxes payable with
respect to the sales of the Registrable Securities
and all fees and disbursements of counsel for the
Holder, if any, in each case arising in connection
with registration of the Registrable Securities
shall be payable by the Holder.
(cc) In connection with the registration
of the Registrable Securities pursuant to this
subparagraph (xviii), the Company shall indemnify
and hold harmless the Holder, its affiliates,
officers, directors, partners, employees, agents
and representatives, each person, if any, who
controls the Holder within the meaning of the
Securities Act of 1933, as amended (the
"Securities Act"), or the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and any
person claiming by or through any of them
(collectively, the "Indemnified Persons") from and
against all losses, claims, damages, expenses or
liabilities (or actions in respect thereof)
arising out of or are based upon any untrue
statement of any material fact contained in the
Registration Statement or alleged untrue
statement, under which such securities were
registered under the Securities Act, any
preliminary prospectus or final prospectus
contained therein, or any amendment or supplement
thereto, or arise out of or are based upon the
omission to state therein a material fact required
to be stated therein or necessary to make the
statements made therein, in light of the
circumstances under which they are made, not
misleading, or any violation by the Company of the
Securities Act, the Exchange Act or state
securities or blue sky laws applicable to the
Company and relating to action or inaction
required of the Company in connection with such
registration or qualification under such state
securities or blue sky laws; and will reimburse
the Indemnified Persons for any legal or any other
expenses reasonably incurred by them in connection
with investigating or defending any such loss,
claim, damage, liability or action; provided,
however, that the Company will not be liable in
any such case to any Indemnified Person to the
extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue
statement or omission made in the Registration
Statement, said preliminary prospectus or said
final prospectus or said amendment or supplement
or any document incident thereto in reliance upon
and in conformity with written information
furnished to the Company by or on behalf of the
Holder.
(dd) The Holder will indemnify and hold
harmless the Company and each person, if any, who
controls the Company within the meaning of the
Securities Act or the Exchange Act, each officer
of the Company who signs the Registration
Statement and each director of the Company from
and against any and all such losses, claims,
damages or liabilities arising from any untrue
statement in, or omission from, the Registration
Statement, any such preliminary or final
prospectus, amendment, or supplement or document
incident thereto if the statement or omission in
respect of which such loss, claim, damage or
liability is asserted was made in reliance upon
and in conformity with information furnished in
writing to the Company by or on behalf of the
Holder for use in connection with the preparation
of the Registration Statement or such prospectus
or amendment or supplement thereof.
(ee) The reimbursements required by
clauses (cc) and (dd) shall be made by periodic
payments during the course of the investigation or
defense as and when bills are received or expenses
incurred; provided, however, that to the extent
that an indemnified party receives periodic
payments for legal or other expenses during the
course of an investigation or defense, and such
party subsequently received payments for such
expenses from any other parties to the proceeding,
such payments shall be used by the indemnified
party to reimburse the indemnifying party for such
periodic payments. Any party which proposes to
assert the right to be indemnified under clause
(cc) or (dd) will, promptly after receipt of
notice of commencement of any action, suit or
proceeding against such party in respect of which
a claim is to be made against any indemnified
party hereunder, notify each such indemnifying
party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served,
but the failure to so notify such indemnifying
party of any such action, suit or proceeding shall
not relieve the indemnifying party from any
obligation which it may have to any indemnified
party hereunder unless and only to the extent that
the indemnifying party is prejudiced by said lack
of notice. In case any such action, suit or
proceeding shall be brought against any
indemnified party and it shall notify the
indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to
participate in and, to the extent that it shall
wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified
party, and after notice from the indemnifying
party to such indemnified party of its election so
to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified
party for any legal or other expense, other than
reasonable costs of investigation subsequently
incurred by such indemnified party in connection
with the defense thereof. The indemnified party
shall have the right to employ its own counsel in
any such action, but the reasonable fees and
expenses of such counsel shall be at the expense
of such indemnified party, when and as incurred,
unless (A) the employment of counsel by such
indemnified party has been authorized by the
indemnifying party, (B) the indemnified party has
reasonably concluded (based on advice of counsel),
that there may be legal defenses available to it
that are different from or in addition to those
available to the indemnifying party, (C) the
indemnified party shall have reasonably concluded
(based on advice of counsel) that there may be a
conflict of interest between the indemnifying
party and the indemnified party in the conduct of
defense of such action (in which case the
indemnifying party shall not have the right to
direct the defense of such action on behalf of the
indemnified party), or (D) the indemnifying party
shall not in fact have employed counsel to assume
the defense of such action within 15 days after
receipt of notice of such action. An indemnifying
party shall not be liable for any settlement or
any action or claim effected without its consent.
(ff) If the indemnification provided for
in this subparagraph (xviii) is unavailable to any
indemnified party hereunder in respect of any
losses, claims, damages, liabilities or expenses
referred to therein, then the indemnifying party,
in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by
such indemnified party as a result of such losses,
claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the
relative fault of the indemnifying party and
indemnified parties in connection with the actions
that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other
relevant equitable considerations. The relative
fault of such indemnifying party and indemnified
parties shall be determined by reference to, among
other things, whether any action in question,
including any untrue or alleged untrue statement
of a material fact or omission or alleged omission
to state a material fact, has been made by, or
relates to information supplied by, such
indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to
information and opportunity to correct or prevent
such action. The amount paid or payable by a
party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall
be deemed to include, subject to the limitations
set forth herein, any legal or other fees or
expenses reasonably incurred by such party in
connection with any investigation or proceeding.
(gg) The Company and the Holder agree
that it would not be just and equitable if
contribution pursuant to clause (ff) were
determined by pro rata allocation or by any other
method of allocation that does not take account of
the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding
any other provision hereof, in no event shall the
contribution obligation of the Holder be greater
in amount than the excess of (A) the dollar amount
of proceeds received by the Holder upon the sale
of the securities giving rise to such contribution
obligation over (B) the dollar amount of any
damages that the Holder has otherwise been
required to pay by reason of the untrue or alleged
untrue statement or omission or alleged omission
giving rise to such obligation. No person guilty
of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person
who was not guilty of such fraudulent
misrepresentation.
(hh) Neither the filing of the
Registration Statement by the Company pursuant to
this Agreement nor the making of any request for
prospectuses by the holder shall impose upon the
holder any obligation to sell his, her or its
Registrable Securities.
(ii) The holder, upon receipt of notice
from the Company that an event has occurred which
requires a post-effective amendment to the
Registration Statement or a supplement to the
prospectus included therein, shall promptly
discontinue the sale of his, her or its
Registrable Securities until the holder receives a
copy of a supplemented or amended prospectus from
the Company, which the Company shall provide as
soon as practicable after such notice.
6. Events of Default.
(a) Definition. For the purposes of this Debenture,
an Event of Default hereunder will be deemed to have occurred if:
(i) the Company fails to pay when due the
interest and principal then due and payable on this
Debenture, whether or not such payment is prohibited by
paragraph 4 hereof, and such failure has continued for a
period of 15 days if such interest and principal is payable
by reason of conversion of this Debenture and 5 days if such
interest and principal is payable upon maturity of this
Debenture;
(ii) the Company fails to perform or observe
any other provision contained in the Debenture and, if such
failure is capable of being cured, such failure continues
for a period of 30 days after the Company's receipt of
written notice thereof;
(iii) the Company makes an assignment for the
benefit of creditors or admits in writing its inability to
pay its debts generally as they become due; or an order,
judgment or decree is entered adjudicating the Company as
bankrupt or insolvent; or any order for relief with respect
to the Company is entered under the Federal Bankruptcy Code;
or the Company petitions or applies to any tribunal for the
appointment of a custodian, trustee, receiver or liquidator
of the Company or of any substantial part of the assets of
the Company, or commences any proceeding relating to the
Company under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation
law of any jurisdiction ("Insolvency Event or Proceeding");
or any such petition or application is filed, or any such
proceeding is commenced, against the Company and either (y)
the Company by any act indicates its approval thereof,
consents thereto or acquiescence therein or (z) such
petition application or proceeding is not dismissed within
60 days; or
(iv) a final judgment which in the aggregate
with other outstanding final judgments against the Company
exceeds $250,000 shall be rendered against the Company and
within 90 days after entry thereof, such judgment is not
discharged or execution thereof stayed pending appeal, or
within 90 days after the expiration of such stay, such
judgment is not discharged.
(b) Consequences of Events of Default.
(i) If any Event of Default (other than the
type described in subparagraph 6(a)(iii) above) has
occurred, the Holder or Holders of Debentures representing a
majority of the aggregate principal amount of Debentures
then outstanding may, to the extent permitted under the
provisions of Section 4 hereof, demand (by written notice
delivered to the Company) immediate payment of all or any
portion of the outstanding principal amount of the
Debentures owed by such Holder or Holders. If such Holder
or Holders of the Debentures demand immediate payment of all
or any portion of such Holder's or Holders' Debentures, the
Company will, to the extent permitted under the provisions
of Section 4 hereof, immediately pay to such Holder or
Holders the principal amount of the Debentures requested to
be paid (plus accrued interest hereon). If an Event of
Default of the type described in subparagraph 6(a)(iii)
above has occurred, then all of the outstanding principal
amount of the Debentures shall automatically be immediately
due and payable without any action on the part of any
Holders of the Debenture.
(ii) If an Event of Default has occurred, each
Holder of the Debentures will also have any other rights
which such Holder may have pursuant to applicable law, in
each case provided such rights are consistent with the
provisions of Section 4 hereof.
7. Amendment and Waiver. Except as otherwise expressly
provided herein, the provisions of this Debenture may be amended
and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if
the Company has obtained the written consent of the Holders of a
majority of the outstanding principal amount of the Debentures,
provided, however, neither the interest rate or principal amounts
payable under the Debentures, the dates on which interest or
principal under the Debentures is due nor the obligations to make
payments on the Debentures on a pro rata basis shall be amended
without the prior written consent of each Holder affected
thereby, and of each holder of Senior Debt, and further provided,
however, that any amendment or waiver which might in any way
adversely affect the holders of Senior Debt, including, but not
limited to, any amendment or waiver affecting the provisions of
paragraph 4 or this paragraph 7 shall require the prior written
consent of each holder of Senior Debt. Any attempted amendment
or waiver of the provisions of the Shareholders and
Debentureholders Agreement which might in any way adversely
affect the holders of Senior Debt shall require the prior written
consent of each holder of the Senior Debt. Any attempted
amendment or waiver of the Shareholders and Debentureholders
Agreement or this Debenture without the consents required hereby
shall be null and void ab initio and of no legal effect. Any
amendment or waiver effected in accordance with this paragraph 7
shall be binding upon each Holder of this Debenture and each
holder of Senior Debt at the time and each future Holder of this
Debenture and holder of Senior Debt.
8. Cancellation. After all principal and accrued interest
at any time owed on this Debenture has been paid in full, this
Debenture will be surrendered to the Company for cancellation and
will not be reissued.
9. Place of Payment. Payments of principal and interest
are to be delivered to the Holder at the office of the Company,
121-03 Dupont Street, Plainview, New York 11803, or to such other
address or to the attention of such other Person as specified by
prior written notice to the Company.
10. Waiver of Presentment, Demand and Dishonor. The
Company hereby waives presentment for payment, protest, demand,
notice of protest, notice of non-payment and diligence with
respect to this Debenture, and waives and renounces all rights to
the benefit of any statute of limitations or any moratorium,
appraisement, exemption or homestead now provided or that
hereafter may be provided by any federal or applicable state
statute, including but not limited to exemptions provided by or
allowed under the Federal Bankruptcy Code, both as to itself and
as to all of its property, whether real or personal, against the
enforcement and collection of the obligations evidenced by this
Debenture and any and all extensions, renewals and modifications
hereof.
No failure on the part of the Holder hereof or of any
other Debentures to exercise any right or remedy hereunder with
respect to the Company, whether before or after the happening of
an Event of Default, shall constitute a waiver of any future
Event of Default or of any other Event of Default. No failure to
accelerate the debt of the Company evidenced hereby by reason of
an Event of Default or indulgence granted from time to time shall
be construed to be a waiver of the right to insist upon prompt
payment thereafter; or shall be deemed to be a novation of this
Debenture or a reinstatement of such debt evidenced hereby or a
waiver of such right of acceleration or any other right, or be
construed so as to preclude the exercise of any right Holder may
have, whether by the laws of the state governing this Debenture,
by agreement or otherwise; and the Company hereby expressly
waives the benefit of any statute or rule of law or equity that
would produce a result contrary to or in conflict with the
foregoing.
11. Usury. The Holder and the Company intend that the
obligations evidenced by this Debenture conform strictly to the
applicable usury laws from time to time in force. All agreements
between the Company and Holder, whether now existing or hereafter
arising and whether oral or written, hereby are expressly limited
so that in no contingency or event whatsoever, whether by
acceleration of maturity hereof or otherwise, shall the amount
paid or agreed to be paid to Holder, or collected by Holder, by
or on behalf of the Company for the use, forbearance or detention
of the money to be loaned to the Company hereunder or otherwise,
or for the payment or performance of any covenant or obligation
contained herein of the Company to Holder, or in any other
document evidencing, securing or pertaining to such indebtedness
evidenced hereby, exceed the maximum amount permissible under
applicable usury law. If under any circumstances whatsoever
fulfillment of any provision hereof or any other document, at the
time performance of such provisions shall be due, shall involve
transcending the limit of validity prescribed by law, then, ipso
facto, the obligation to be fulfilled shall be reduced to the
limit of such validity; and if under any circumstances Holder
ever shall receiver from or on behalf of the Company an amount
deemed interest, by applicable law, which would exceed the
highest lawful rate, such amount that would be excessive interest
under applicable usury laws shall be applied to the reduction of
the Company's principal amount owing hereunder and not to the
payment of interest, or if such excessive interest exceeds the
unpaid balance of principal and such other indebtedness, the
excess shall be deemed to have been a payment made by mistake and
shall be refunded to the Company or to any other person making
such payment on the Company's behalf.
12. Governing Law. The validity, construction and
interpretation of this Debenture will be governed by the internal
laws, but not the law of conflicts and choices of law, of the
State of New York.
IN WITNESS WHEREOF, the Company has executed and delivered
this Series A Amended and Restated Convertible Subordinated
Debenture this 7th day of March, 1996, as of the date first above
written.
LOGIMETRICS, INC.
By:
-------------------------------
Name: Murray H. Feigenbaum
Title: President
EXHIBIT A
ELECTION TO CONVERT
(All capitalized terms used and not otherwise
defined herein shall have the meanings
assigned to them in the Debenture)
LogiMetrics, Inc.
121-03 Dupont Street
Plainview, NY 11803
TO WHOM IT MAY CONCERN:
The undersigned registered owner of the attached Amended and
Restated 12% Series A Convertible Subordinated Debenture hereby
irrevocably exercises the option to convert such Debenture into
Common Stock of LogiMetrics, Inc. in accordance with the terms
thereof, and directs that any shares issuable and deliverable
upon the conversion be issued in the name of and delivered to the
undersigned.
-------------------------------
[Name of Debentureholder]
Dated: , 199_
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE
TRANSFERRED UNLESS REGISTERED UNDER THE ACT, EXCEPT IN A
TRANSACTION WHICH, IN THE OPINION OF COUNSEL REASONABLY
SATISFACTORY TO LOGIMETRICS, INC., QUALIFIES AS AN EXEMPT
TRANSACTION UNDER THE ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.
LOGIMETRICS, INC.
Amended and Restated
Common Stock Purchase Warrant
Series A
LOGIMETRICS, INC. (the "Company"), a Delaware corporation,
hereby certifies that, for value received, , or
assigns, is entitled, subject to the terms set forth below, to
purchase from the Company ( )
fully paid and non-assessable shares of Common Stock of the
Company, at a purchase price, subject to the provisions of
Paragraph 3 hereof, of twenty five cents ($.25) per share (the
"Purchase Price") at any time prior to the close of business on
July 15, 2002. The number and character of such shares are
subject to adjustment as provided below, and the term "Common
Stock" shall mean, unless the context otherwise requires, the
stock or other securities or property at the time deliverable
upon the exercise of this Warrant. This Warrant is herein called
the "Warrant". This Warrant is one of a series of warrants to
purchase 600,000 shares of Common Stock ("Series A Warrants").
1. EXERCISE OF WARRANT. The purchase rights evidenced by
this Warrant shall be exercised by the holder hereof ("Holder")
surrendering this Warrant, with the form of subscription at the
end hereof duly executed by such Holder, to the Company at its
office in Plainview, New York, accompanied by payment (in cash or
by certified or official bank check). This Warrant may be
exercised for less than the full number of shares of Common Stock
at the time called for hereby, in which case the number of shares
receivable upon the exercise of this Warrant as a whole, and the
sum payable upon the exercise of this Warrant as a whole, shall
be proportionately reduced. Upon any such partial exercise, the
Company at its expense will forthwith issue to the Holder hereof
a new Warrant or Warrants of like tenor calling for the number of
shares of Common Stock as to which rights have not been
exercised, such Warrant or Warrants to be issued in the name of
the Holder hereof or his nominee.
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as
practicable after the exercise of this Warrant and payment of the
Purchase Price, and in any event within five (5) days thereafter,
the Company, at its expense, will cause to be issued in the name
of and delivered to the Holder hereof a certificate or
certificates for the number of fully paid and non-assessable
shares or other securities or property to which such Holder shall
be entitled upon such exercise, plus, in lieu of any fractional
share to which such Holder would otherwise be entitled, cash
equal to such fraction multiplied by the then current market
value of one full share.
3. ADJUSTMENT FOR ISSUE OR SALE OF COMMON STOCK AT LESS
THAN PURCHASE PRICE. In case, at any time or from time to time
after the date of issuance of this Warrant ("Issuance Date"), the
Company shall issue or sell shares of its Common Stock (other
than any Common Stock issuable upon (i) conversion of the
Company's Amended and Restated 12% Convertible Subordinated
Debentures dated as of July 14, 1995 ("1995 Debentures"), (ii)
exercise by each of Murray H. Feigenbaum and Jerome Deutsch (the
"Principals") of their right to purchase 100,000 shares of Common
Stock at a price of $.10 per share ("Principals' Options"), (iii)
exercise of those certain Amended and Restated Series B Warrants
dated March 7, 1996 to purchase 1,500,000 shares of Common Stock
("Series B Warrants"), (iv) conversion of the Company's 12%
Convertible Senior Subordinated Debentures dated March 7, 1996
("Senior Subordinated Debentures"), (v) exercise of those certain
Series C Warrants dated March 7, 1996 to purchase an aggregate of
2,542,380 shares of Common Stock ("Series C Warrants"), (vi)
exercise of those certain Series D Warrants dated March 7, 1996
to purchase an aggregate of 2,830,200 shares of Common Stock
("Series D Warrants"), (vii) exercise of those certain Series E
Warrants dated March 7, 1996 to purchase 1,000,000 shares of the
Company's Common Stock ("Series E Warrants" and together with the
Series A, B, C and D Warrants, "Warrants"), (viii) exercise of
those certain Stock Options, dated March 7, 1996 to purchase
1,000,000 shares of Common Stock issued to Richard K. Laird
("Laird Options") and (ix) conversion of the Company's 30 shares
of Series A 12% Cumulative Convertible Redeemable Preferred Stock
("Preferred Stock" and together with the 1995 Debentures, the
Senior Subordinated Debentures, the Warrants, the Laird Options,
the Principals' Options and any shares of Common Stock issuable
upon conversion or exercise thereof, the "Subject Securities")),
for a consideration per share less than the Purchase Price (or,
if a Pro Forma Adjusted Purchase Price shall be in effect as
provided below in this Paragraph 3, then less than such Pro Forma
Adjusted Purchase Price per share), then and in each such case
the Holder of this Warrant, upon the exercise hereof as provided
in Paragraph 1 hereof, shall be entitled to receive, in lieu of
the shares of Common Stock theretofore receivable upon the
exercise of this Warrant, a number of shares of Common Stock
determined by (a) dividing the Purchase Price by a Pro Forma
Adjusted Purchase Price per share to be computed as provided
below in this Paragraph 3, and (b) multiplying the resulting
quotient by the number of shares of Common Stock called for on
the face of this Warrant. A Pro Forma Adjusted Purchase Price
per share shall be the price computed (to the nearest cent, a
fraction of half cent or more being considered a full cent):
by dividing (i) the sum of (x) the result
obtained by multiplying the number of shares
of Common Stock of the Company outstanding
immediately prior to such issue or sale by
the Purchase Price (or, if a Pro Forma
Adjusted Purchase Price shall be in effect,
by such Price), and (y) the consideration, if
any, received by the Company upon such issue
or sale, by (ii) the number of shares of
Common Stock of the Company outstanding
immediately after such issue or sale.
For the purpose of this Paragraph 3:
3.1. Stock Splits, Dividends, etc., in Common Stock or
Convertible Securities. In case the Company splits its Common
Stock or shall declare any dividend, or make any other
distribution, upon any stock of the Company of any class payable
in Common Stock, or in any stock or other securities directly or
indirectly convertible into or exchangeable for Common Stock (any
such stock or other securities being hereinafter called
"Convertible Securities"), such split, declaration or
distribution shall be deemed to be an issue or sale (as of the
record date for such split, dividend or other distribution),
without consideration, of such Common Stock or such Convertible
Securities, as the case may be.
3.2. Issuance or Sale of Convertible Securities. In case
the Company shall issue or sell any Convertible Securities other
than the Subject Securities, there shall be determined the price
per share for which Common Stock is issuable upon the conversion
or exchange thereof, such determination to be made by dividing
(a) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion
or exchange thereof, by (b) the maximum number of shares of
Common Stock of the Company issuable upon the conversion or
exchange of all such Convertible Securities.
If the price per share so determined shall be less than
the Purchase Price (or, if a Pro Forma Adjusted Purchase Price
shall be in effect, less than such Price) as of the date of such
issue or sale, then such issue or sale shall be deemed to be an
issue or sale for cash (as of the date of issue or sale of such
Convertible Securities) of such maximum number of shares of
Common Stock at the price per share so determined, provided that,
if such Convertible Securities shall by their terms provide for
an increase or increases, with the passage of time, in the amount
of additional consideration, if any, payable to the Company, or
in the rate of exchange, upon the conversion or exchange thereof,
the Pro Forma Adjusted Purchase Price per share shall, forthwith
upon any such increase becoming effective, be readjusted to
reflect the same, and provided, further, that upon the expiration
of such rights of conversion or exchange of such Convertible
Securities, if any thereof shall not have been exercised, the Pro
Forma Adjusted Purchase Price per share shall forthwith be
readjusted and thereafter be the price which it would have been
had an adjustment been made on the basis that the only shares of
Common Stock so issued or sold were those issued or sold upon the
conversion or exchange of such Convertible Securities, and that
they were issued or sold for the consideration actually received
by the Company upon such conversion or exchange, plus the
consideration, if any, actually received by the Company for the
issue or sale of all such Convertible Securities which shall have
been converted or exchanged.
3.3. Grant of Rights or Options for Common Stock. In case
the Company shall grant any rights or options to subscribe for,
purchase or otherwise acquire Common Stock of any class other
than the Subject Securities, there shall be determined the price
per share for which Common Stock is issuable upon the exercise of
such rights or options, such determination to be made by dividing
(a) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or
options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise
of such rights or options, by (b) the maximum number of shares of
Common Stock issuable upon the exercise of such rights or
options.
If the price per share so determined shall be less than
the Purchase Price (or, if a Pro Forma Adjusted Purchase Price
shall be in effect, less than such Price) as of the date of such
issue or sale, then the granting of such rights or options shall
be deemed to be an issue or sale for cash (as of the date of the
granting of such rights or options) of such maximum number of
shares of Common Stock at the price per share so determined,
provided that, if such rights or options shall by their terms
provide for an increase or increases, with the passage of time,
in the amount of additional consideration, if any, payable to the
Company upon the exercise thereof, the Pro Forma Adjusted
Purchase Price per share shall, forthwith upon any such increase
becoming effective, be readjusted to reflect the same, and
provided, further, that upon the expiration of such rights or
options, if any thereof shall not have been exercised, the Pro
Forma Adjusted Purchase Price per share shall forthwith be
readjusted and thereafter be the price which it would have been
had an adjustment been made on the basis that the only shares of
Common Stock so issued or sold were those issued or sold upon the
exercise of such rights or options and that they were issued or
sold for the consideration actually received by the Company upon
such exercise, plus the consideration, if any, actually received
by the Company for the granting of all such rights or options,
whether or not exercised.
3.4. Grant of Rights or Options for Convertible Securities.
In case the Company shall grant any rights or options to
subscribe for, purchase or otherwise acquire Convertible
Securities, such Convertible Securities shall be deemed, for the
purposes of subparagraph 3.2. above, to have been issued or sold
for the total amount received or receivable by the Company as
consideration for the granting of such rights or options plus the
minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of such rights or
options, provided that, upon the expiration of such rights or
options, if any thereof shall not have been exercised, the Pro
Forma Adjusted Purchase Price per share shall forthwith be
readjusted and thereafter be the price which it would have been
had an adjustment been made upon the basis that the only
Convertible Securities so issued or sold were those issued or
sold upon the exercise of such rights or options and that they
were issued or sold for the consideration actually received by
the Company upon such exercise, plus the consideration, if any,
actually received by the Company for the granting of all such
rights or options, whether or not exercised.
3.5. Dilution in Case of Other Stock or Securities. In
case any shares of stock or other securities, other than Common
Stock of the Company, shall at any time be receivable upon the
exercise of this Warrant, and in case any additional shares of
such stock or any additional such securities (or any stock or
other securities convertible into or exchangeable for any such
stock or securities) shall be issued or sold for a consideration
per share such as to dilute the purchase rights evidenced by this
Warrant, then and in each such case the Pro Forma Adjusted
Purchase Price per share shall forthwith be adjusted,
substantially in the manner provided for above in this
Paragraph 3, so as to protect the Holder of this Warrant against
the effect of such dilution.
3.6. Expenses, etc., Deducted. In case any shares of
Common Stock or Convertible Securities or any rights or options
to subscribe for, purchase or otherwise acquire any Common Stock
or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount
received by the Company therefor, after deducting any expenses
incurred and any underwriting or similar commissions,
compensation or concessions paid or allowed by the Company in
connection with such issue or sale.
3.7. Determination of Consideration. In case any shares of
Common Stock or Convertible Securities or any rights or options
to subscribe for, purchase or otherwise acquire any Common Stock
or Convertible Securities shall be issued or sold for a
consideration other than cash (or a consideration which includes
cash, if any cash constitutes a part of the assets of a
corporation or business substantially all of the assets of which
are being received a such consideration) then, for the purpose of
this Paragraph 3, the Board of Directors of the Company shall
promptly determine the fair value of such consideration, and such
Common Stock, Convertible Securities, rights or options shall be
deemed to have been issued or sold on the date of such
determination in good faith. Such value shall not be more than
the amount at which such consideration is recorded in the books
of the Company for accounting purposes except in the case of an
acquisition accounted for on a pooling of interest basis. In
case any Common Stock or Convertible Securities or any rights or
options to subscribe for, purchase or otherwise acquire any
Common Stock or Convertible Securities shall be issued or sold
together with other stock or securities or other assets of the
Company for a consideration which covers both, the Board of
Directors of the Company shall promptly determine what part of
the consideration so received is to be deemed to be the
consideration for the issue or sale of such Common Stock or
Convertible Securities or such rights or options.
The Company covenants and agrees that, should any
determination of fair value of consideration or of allocation of
consideration be made by the Board of Directors of the Company,
pursuant to this subparagraph 3.7, it will, not less than seven
(7) days after any and each such determination, deliver to the
Holder of this Warrant a certificate signed by the President or a
Vice President and the Treasurer or an Assistant Treasurer of the
Company reciting such value as thus determined and setting forth
the nature of the transaction for which such determination was
required to be made, the nature of any consideration, other than
cash, for which Common Stock, Convertible Securities, rights or
options have been or are to be issued, the basis for its
valuation, the number of shares of Common Stock which have been
or are to be issued, and a description of any Convertible
Securities, rights or options which have been or are to be
issued, including their number, amount and terms.
3.8. Record Date Deemed Issue Date. In case the Company
shall take a record of the Holders of shares of its stock of any
class for the purpose of entitling them (a) to receive a dividend
or a distribution payable in Common Stock or in Convertible
Securities, or (b) to subscribe for, purchase or otherwise
acquire Common Stock or Convertible Securities, then such record
date shall be deemed to be the date of the issue or sale of the
Common Stock issued or sold or deemed to have been issued or sold
upon the declaration of such dividend or the making of such other
distribution, or the date of the granting of such rights of
subscription, purchase or other acquisition, as the case may be.
3.9. Shares Considered Outstanding. The number of shares
of Common Stock outstanding at any given time shall include
shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock, but shall exclude shares
in the treasury of the Company.
3.10. Duration of Pro Forma Adjusted Purchase Price.
Following each computation or readjustment of a Pro Forma
Adjusted Purchase Price as provided in this Paragraph 3, the
newly computed or adjusted Pro Forma Adjusted Purchase Price
shall remain in effect until a further computation or
readjustment thereof is required by this Paragraph 3.
4. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY,
ETC.; RECLASSIFICATIONS, ETC. In case at any time or from time
to time after the Issuance Date the Holders of the Common Stock
of the Company of any class (or any other shares of stock or
other securities at the time receivable upon the exercise of this
Warrant) shall have received, or, on or after the record date
fixed for the determination of eligible stockHolders, shall have
become entitled to receive:
(a) other or additional stock or other securities or
property (other than cash) by way of dividend;
(b) any cash paid or payable out of capital or paid-in
surplus or surplus created as a result of a
revaluation of property by way of dividend; or
(c) other or additional (or less) stock or other
securities or property (including cash) by way of
stock-split, spin-off, split-off, split-up,
reclassification, combination of shares or similar
corporate rearrangement;
(other than additional shares of Common Stock issued to Holders
of Common Stock as a stock dividend or stock-split, adjustments
in respect of which shall be covered by the provisions of
Paragraph 3 hereof), then in each case the Holder of this
Warrant, upon the exercise hereof as provided in Paragraph 1
hereof, shall be entitled to receive, in lieu of, or in addition
to, as the case may be, the shares theretofore receivable upon
the exercise of this Warrant, the amount of stock or other
securities or property (including cash in the cases referred to
in clauses (b) and (c) above) which such Holder would hold on the
date of such exercise if, on the Issuance Date, he had been the
Holder of record of the number of shares of Common Stock of the
Company called for on the face of this Warrant and had
thereafter, during the period from the Issuance Date to and
including the date of such exercise, retained such shares and/or
all other or additional (or less) stock or other securities or
property (including cash in the cases referred to in clauses (b)
and (c) above) receivable by him as aforesaid during such period,
giving effect to all adjustments called for during such period by
Paragraphs 3 and 5 hereof.
5. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER,
ETC. In case of any reorganization of the Company (or any other
corporation the stock or other securities of which are at the
time deliverable on the exercise of this Warrant) after the date
hereof, or in case, after such date, the Company (or any such
other corporation) shall consolidate with or merge into another
corporation or convey all or substantially all its assets to
another corporation, then and in each such case the Holder of
this Warrant, upon the exercise hereof as provided in Paragraph 1
hereof, at any time after the consummation of such
reorganization, consolidation, merger or conveyance, shall be
entitled to receive the stock or other securities or property to
which such Holder would have been entitled upon such consummation
if such Holder had exercised this Warrant immediately prior
thereto, all subject to further adjustments as provided in
Paragraphs 3 and 4 hereof; in each such case, the terms of this
Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this
Warrant after such consummation.
6. NO DILUTION OR IMPAIRMENT. The Company will not, by
amendment of its charter or through reorganization,
consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder hereof
against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the
par value of any shares of stock receivable upon the exercise of
this Warrant above the amount payable therefor upon such
exercise, and at all times will take all such action as may be
necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable stock upon the
exercise of this Warrant.
7. ACCOUNTANTS' CERTIFICATE AS TO ADJUSTMENTS. In each
case of an adjustment in the number of shares of Common Stock or
other stock, securities or property receivable on the exercise of
this Warrant, at the request of the Holder of this Warrant the
Company at its expense shall promptly cause independent public
accountants of recognized standing, selected by the Company, to
compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment
and showing in detail the facts upon which such adjustment is
based, including a statement of (a) the consideration received or
to be received by the Company for any additional shares issued or
sold or deemed to have been issued or sold, (b) the number of
shares of Common Stock outstanding or deemed to be outstanding
and (c) the Pro Forma Adjusted Purchase Price. The Company will
forthwith mail a copy of each such certificate to the Holder of
this Warrant.
8. NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the Holders of
its Common Stock (or other stock or securities at
the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling
them to receive any dividend (other than a cash or
stock dividend at the same rate as the rate of the
last cash or stock dividend theretofore paid) or
other distribution, or to exercise any preemptive
right pursuant to the Company's charter, or to
receive any right to subscribe for or purchase any
shares of stock of any class or any other
securities, or to receive any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the
Company, any consolidation or merger of the
Company with or into another corporation, or any
conveyance of all or substantially all of the
assets of the Company to another corporation; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, and in each such case, the Company will mail or cause to be
mailed to the Holder of this Warrant a notice specifying, as the
case may be, (i) the date on which a record is to be taken for
the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right,
or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or
winding up is to take place, and the times, if any is to be
fixed, as of which the Holders of record of Common Stock (or such
other stock or securities at the time deliverable upon the
exercise of this Warrant) shall be entitled to exchange their
shares of Common Stock of any class (or such other stock or
securities) for reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding up or (iii) the
amount and character of the stock or other securities proposed to
be issued or granted, the date of such proposed issuance or grant
and the persons or class of persons to whom such stock or other
securities ar to be offered, issued or granted. Such notice
shall be mailed at least thirty (30) days prior to the date
therein specified.
9. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF
WARRANTS. The Company will at all times reserve and keep
available, solely for insurance and delivery upon the exercise of
this Warrant and other similar Warrants, such shares of Common
Stock and other stock, securities and property as from time to
time shall be issuable upon the exercise of this Warrant and all
other similar Warrants at the time outstanding.
10. REPLACEMENT OF WARRANT. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and (in the case of
loss, theft or destruction) upon delivery of an indemnity
agreement in an amount reasonably satisfactory to it, or (in the
case of mutilation) upon surrender and cancellation thereof, the
Company will issue, in lieu thereof, a new Warrant of like tenor.
11. REMEDIES. The Company stipulates that the remedies at
law of the Holder of this Warrant in the event of any default by
the Company in its performance of or compliance with any of the
terms of this Warrant are not and will not be adequate, and that
the same may be specifically enforced.
12. NEGOTIABILITY, ETC. This Warrant is issued upon the
following terms, to all of which each taker or owner hereof
consents and agrees:
(a) Title to this warrant may be transferred by
endorsement (by the Holder hereof executing the
form of assignment at the end hereof including
guaranty of signature) and delivery in the same
manner as in the case of a negotiable instrument
transferable by endorsement and delivery.
(b) Any person in possession of this Warrant properly
endorsed is authorized to represent himself as
absolute owner hereof and is granted power to
transfer absolute title hereto by endorsement and
delivery hereof to a bona fide purchaser hereof
for value; each prior taker or owner waives and
renounces all of his equities or rights in this
Warrant in favor of every such bona fide
purchaser, and every such bona fide purchaser
shall acquire title hereto and to all rights
represented hereby.
(c) Until this Warrant is transferred on the books of
the Company, the Company may treat the registered
Holder of this Warrant as the absolute owner
hereof for all purposes without being affected by
any notice to the contrary.
13. SUBDIVISION OF RIGHTS. This Warrant (as well as any
new warrants issued pursuant to the provisions of this paragraph)
is exchangeable, upon the surrender hereof by the Holder hereof,
at the principal office of the Company for any number of new
warrants of like tenor and date representing in the aggregate the
right to subscribe for and purchase the number of shares of
Common Stock of the Company which may be subscribed for and
purchased hereunder.
14. REGISTRATION RIGHTS.
a. Registration. Within 90 days after the date
hereof, the Company will file a registration statement
("Registration Statement") with the Securities and Exchange
Commission ("SEC") covering the Warrants and shares of Common
Stock issuable upon conversion of the 1995 Debentures, the Senior
Subordinated Debentures and the Preferred Stock, and upon
exercise of the Warrants and the Laird Options as well as Common
Stock owned by the Principals and issuable upon exercise of the
Principals' Options (collectively "Registrable Securities"), and
will use its best efforts to cause the Registration Statement to
become effective on or prior to the ninetieth day after such
filing and to keep the Registration Period effective for a period
of seven years from the date it is declared effective by the SEC.
b. Additional Terms. Except as otherwise expressly
stated herein, the following provisions shall be applicable to
the Registration Statement:
(i) The Company will use its best efforts to cause
the Registration Statement to become effective as promptly
as possible, and if any stop order shall be issued by the
SEC in connection therewith to use its reasonable efforts to
obtain the removal of such order. Following the effective
date of the Registration Statement, the Company shall, upon
the request of the Holder, forthwith supply such reasonable
number of copies of the Registration Statement, preliminary
prospectus and prospectus meeting the requirements of the
Act, and other documents necessary or incidental to a public
offering of the Registrable Securities, as shall be
reasonably requested by the Holder to permit the Holder to
make a public distribution of its, his or her Registrable
Securities. The Company will use its reasonable efforts to
qualify the Registrable Securities for sale in such states
as the Holder of Registrable Securities shall reasonably
request, provided that no such qualification will be
required in any jurisdiction where, solely as a result
thereof, the Company would be subject to service of general
process or to taxation or qualification as a foreign
corporation doing business in such jurisdiction. The
obligations of the Company hereunder with respect to the
Holder's Registrable Securities are expressly conditioned on
the Holder's furnishing to the Company such appropriate
information concerning the Holder, the Holder's Registrable
Securities and the terms of the Holder's offering of such
Registrable Securities as the Company may reasonably
request.
(ii) The Company shall pay all expenses incurred in
complying with the provisions of this Paragraph 14,
including, without limitation, all registration and filing
fees (including all expenses incident to filing with the
National Association of Securities Dealers, Inc.), printing
expenses, fees and disbursements of counsel to the Company,
securities law and blue sky fees and expenses and the
expenses of any regular and special audits incident to or
required by any such registration. All underwriting
discounts and selling commissions applicable to the sales of
the Registrable Securities, and any state or federal
transfer taxes payable with respect to the sales of the
Registrable Securities and all fees and disbursements of
counsel for the Holder, if any, in each case arising in
connection with registration of the Registrable Securities
shall be payable by the Holder.
(iii) In connection with the registration of the
Registrable Securities pursuant to this Paragraph 14, the
Company shall indemnify and hold harmless the Holder, its
affiliates, officers, directors, partners, employees, agents
and representatives, each person, if any, who controls the
Holder within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and any person
claiming by or through any of them (collectively, the
"Indemnified Persons") from and against all losses, claims,
damages, expenses or liabilities (or actions in respect
thereof) arising out of or are based upon any untrue
statement of any material fact contained in the Registration
Statement or alleged untrue statement, under which such
securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise
out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to
make the statements made therein, in light of the
circumstances under which they are made, not misleading, or
any violation by the Company of the Securities Act, the
Exchange Act or state securities or blue sky laws applicable
to the Company and relating to action or inaction required
of the Company in connection with such registration or
qualification under such state securities or blue sky laws;
and will reimburse the Indemnified Persons for any legal or
any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the
Company will not be liable in any such case to any
Indemnified Person to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or omission made in the Registration Statement,
said preliminary prospectus or said final prospectus or said
amendment or supplement or any document incident thereto in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Holder.
(iv) The Holder will indemnify and hold harmless the
Company and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange
Act, each officer of the Company who signs the Registration
Statement and each director of the Company from and against
any and all such losses, claims, damages or liabilities
arising from any untrue statement in, or omission from, the
Registration Statement, any such preliminary or final
prospectus, amendment, or supplement or document incident
thereto if the statement or omission in respect of which
such loss, claim, damage or liability is asserted was made
in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the
Holder for use in connection with the preparation of the
Registration Statement or such prospectus or amendment or
supplement thereof.
(v) The reimbursements required by clauses (iii)
and (iv) shall be made by periodic payments during the
course of the investigation or defense as and when bills are
received or expenses incurred; provided, however, that to
the extent that an indemnified party receives periodic
payments for legal or other expenses during the course of an
investigation or defense, and such party subsequently
received payments for such expenses from any other parties
to the proceeding, such payments shall be used by the
indemnified party to reimburse the indemnifying party for
such periodic payments. Any party which proposes to assert
the right to be indemnified under clause (iii) or (iv) will,
promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of
which a claim is to be made against any indemnified party
hereunder, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a
copy of all papers served, but the failure to so notify such
indemnifying party of any such action, suit or proceeding
shall not relieve the indemnifying party from any obligation
which it may have to any indemnified party hereunder unless
and only to the extent that the indemnifying party is
prejudiced by said lack of notice. In case any such action,
suit or proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party for any
legal or other expense, other than reasonable costs of
investigation subsequently incurred by such indemnified
party in connection with the defense thereof. The
indemnified party shall have the right to employ its own
counsel in any such action, but the reasonable fees and
expenses of such counsel shall be at the expense of such
indemnified party, when and as incurred, unless (A) the
employment of counsel by such indemnified party has been
authorized by the indemnifying party, (B) the indemnified
party has reasonably concluded (based on advice of counsel),
that there may be legal defenses available to it that are
different from or in addition to those available to the
indemnifying party, (C) the indemnified party shall have
reasonably concluded (based on advice of counsel) that there
may be a conflict of interest between the indemnifying party
and the indemnified party in the conduct of defense of such
action (in which case the indemnifying party shall not have
the right to direct the defense of such action on behalf of
the indemnified party), or (D) the indemnifying party shall
not in fact have employed counsel to assume the defense of
such action within 15 days after receipt of notice of such
action. An indemnifying party shall not be liable for any
settlement or any action or claim effected without its
consent.
(vi) If the indemnification provided for in this
Paragraph 14 is unavailable to any indemnified party
hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the
indemnifying party and indemnified parties in connection
with the actions that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct
or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed
to include, subject to the limitations set forth herein, any
legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
(vii) The Company and the Holder agree that it would
not be just and equitable if contribution pursuant to clause
(vi) were determined by pro rata allocation or by any other
method of allocation that does not take account of the
equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding any other provision
hereof, in no event shall the contribution obligation of the
Holder be greater in amount than the excess of (A) the
dollar amount of proceeds received by the Holder upon the
sale of the securities giving rise to such contribution
obligation over (B) the dollar amount of any damages that
the Holder has otherwise been required to pay by reason of
the untrue or alleged untrue statement or omission or
alleged omission giving rise to such obligation. No person
guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
(viii) Neither the filing of the Registration
Statement by the Company pursuant to this Agreement nor the
making of any request for prospectuses by the Holder shall
impose upon the Holder any obligation to sell his, her or
its Registrable Securities.
(ix) The Holder, upon receipt of notice from the
Company that an event has occurred which requires a post-
effective amendment to the Registration Statement or a
supplement to the prospectus included therein, shall
promptly discontinue the sale of his, her or its Registrable
Securities until the Holder receives a copy of a
supplemented or amended prospectus from the Company, which
the Company shall provide as soon as practicable after such
notice.
15. MAILING OF NOTICES, ETC. All notices and other
communications from the Company to the Holder of this Warrant
shall be mailed by first-class certified mail, postage prepaid,
to the address furnished to the Company in writing by the last
Holder of this Warrant who shall have furnished an address to the
Company in writing.
16. HEADINGS, ETC. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise
affect the meaning hereof.
17. CHANGE, WAIVER, ETC. Neither this Warrant nor any term
hereof may be changed, waived, discharged or terminated orally
but only by an instrument in writing signed by the party against
which enforcement of the change, waiver, discharge or termination
is sought.
17. GOVERNING LAW. This Amended and Restated Series A
Warrant shall be construed and enforced in accordance with the
laws of the State of New York.
LOGIMETRICS, INC.
By:
-------------------------------
Dated: March 7, 1996
Attest:
- -------------------------------
[To be signed only upon exercise of Warrant]
To LOGIMETRICS, INC.:
The undersigned, the Holder of the within Amended and
Restated Series A Warrant, hereby irrevocably elects to exercise
the purchase right represented by such Warrant for, and to
purchase thereunder, shares of Common Stock of
LOGIMETRICS, INC. and herewith makes payment of $
therefor, and requests that the certificates for such shares be
issued in the name of, and be delivered to, , whose
address is .
Dated:
- -------------------------------
-------------------------------
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
Address:
-------------------------------
-------------------------------
[To be signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto the right represented
by the within Amended and Restated Series A Warrant to purchase
the shares of the Common Stock of LOGIMETRICS, INC.
to which the within Amended and Restated Series A Warrant
relates, and appoints attorney to
transfer said right on the books of LOGIMETRICS, INC. with full
power of substitution in the premises.
Dated:
- -------------------------------
-------------------------------
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
Address:
-------------------------------
-------------------------------
In the presence of
- -------------------------------
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE
TRANSFERRED UNLESS REGISTERED UNDER THE ACT, EXCEPT IN A
TRANSACTION WHICH, IN THE OPINION OF COUNSEL REASONABLY
SATISFACTORY TO LOGIMETRICS, INC., QUALIFIES AS AN EXEMPT
TRANSACTION UNDER THE ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.
LOGIMETRICS, INC.
Amended and Restated
Common Stock Purchase Warrant
Series B
LOGIMETRICS, INC. (the "Company"), a Delaware corporation,
hereby certifies that, for value received, , or
assigns, is entitled, subject to the terms set forth below, to
purchase from the Company
( ) fully paid and non-assessable shares of Common
Stock of the Company, at a purchase price, subject to the
provisions of Paragraph 3 hereof, of twenty five cents ($.25) per
share (the "Purchase Price") at any time prior to the close of
business on July 15, 2002. The number and character of such
shares are subject to adjustment as provided below, and the term
"Common Stock" shall mean, unless the context otherwise requires,
the stock or other securities or property at the time deliverable
upon the exercise of this Warrant. This Warrant is herein called
the "Warrant". This Warrant is one of a series of warrants to
purchase 1,500,000 shares of Common Stock ("Series B Warrants").
1. EXERCISE OF WARRANT. The purchase rights evidenced by
this Warrant shall be exercised by the holder hereof ("Holder")
surrendering this Warrant, with the form of subscription at the
end hereof duly executed by such Holder, to the Company at its
office in Plainview, New York, accompanied by payment (in cash or
by certified or official bank check). This Warrant may be
exercised for less than the full number of shares of Common Stock
at the time called for hereby, in which case the number of shares
receivable upon the exercise of this Warrant as a whole, and the
sum payable upon the exercise of this Warrant as a whole, shall
be proportionately reduced. Upon any such partial exercise, the
Company at its expense will forthwith issue to the Holder hereof
a new Warrant or Warrants of like tenor calling for the number of
shares of Common Stock as to which rights have not been
exercised, such Warrant or Warrants to be issued in the name of
the Holder hereof or his nominee.
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as
practicable after the exercise of this Warrant and payment of the
Purchase Price, and in any event within five (5) days thereafter,
the Company, at its expense, will cause to be issued in the name
of and delivered to the Holder hereof a certificate or
certificates for the number of fully paid and non-assessable
shares or other securities or property to which such Holder shall
be entitled upon such exercise, plus, in lieu of any fractional
share to which such Holder would otherwise be entitled, cash
equal to such fraction multiplied by the then current market
value of one full share.
3. ADJUSTMENT FOR ISSUE OR SALE OF COMMON STOCK AT LESS
THAN PURCHASE PRICE. In case, at any time or from time to time
after the date of issuance of this Warrant ("Issuance Date"), the
Company shall issue or sell shares of its Common Stock (other
than any Common Stock issuable upon (i) conversion of the
Company's Amended and Restated 12% Convertible Subordinated
Debentures dated as of July 14, 1995 ("1995 Debentures"), (ii)
exercise of those certain Amended and Restated Series A Warrants
dated March 7, 1996 to purchase 600,000 shares of Common Stock
("Series A Warrants"), (iii) exercise by each of Murray H.
Feigenbaum and Jerome Deutsch (the "Principals") of their right
to purchase 100,000 shares of Common Stock at a price of $.10 per
share ("Principals' Options"), (iv) conversion of the Company's
12% Convertible Senior Subordinated Debentures dated March 7,
1996 ("Senior Subordinated Debentures"), (v) exercise of those
certain Series C Warrants dated March 7, 1996 to purchase an
aggregate of 2,542,380 shares of Common Stock ("Series C
Warrants"), (vi) exercise of those certain Series D Warrants
dated March 7, 1996 to purchase an aggregate of 2,830,200 shares
of Common Stock ("Series D Warrants"), (vii) exercise of those
certain Series E Warrants dated March 7, 1996 to purchase
1,000,000 shares of the Company's Common Stock ("Series E
Warrants" and together with the Series A, B, C and D Warrants,
"Warrants"), (viii) exercise of those certain Stock Options,
dated March 7, 1996 to purchase 1,000,000 shares of Common Stock
issued to Richard K. Laird ("Laird Options") and (ix) conversion
of the Company's 30 shares of Series A 12% Cumulative Convertible
Redeemable Preferred Stock ("Preferred Stock" and together with
the 1995 Debentures, the Senior Subordinated Debentures, the
Warrants, the Laird Options, the Principals' Options and any
shares of Common Stock issuable upon conversion or exercise
thereof, the "Subject Securities")), for a consideration per
share less than the Purchase Price (or, if a Pro Forma Adjusted
Purchase Price shall be in effect as provided below in this
Paragraph 3, then less than such Pro Forma Adjusted Purchase
Price per share), then and in each such case the Holder of this
Warrant, upon the exercise hereof as provided in Paragraph 1
hereof, shall be entitled to receive, in lieu of the shares of
Common Stock theretofore receivable upon the exercise of this
Warrant, a number of shares of Common Stock determined by (a)
dividing the Purchase Price by a Pro Forma Adjusted Purchase
Price per share to be computed as provided below in this
Paragraph 3, and (b) multiplying the resulting quotient by the
number of shares of Common Stock called for on the face of this
Warrant. A Pro Forma Adjusted Purchase Price per share shall be
the price computed (to the nearest cent, a fraction of half cent
or more being considered a full cent):
by dividing (i) the sum of (x) the result
obtained by multiplying the number of shares
of Common Stock of the Company outstanding
immediately prior to such issue or sale by
the Purchase Price (or, if a Pro Forma
Adjusted Purchase Price shall be in effect,
by such Price), and (y) the consideration, if
any, received by the Company upon such issue
or sale, by (ii) the number of shares of
Common Stock of the Company outstanding
immediately after such issue or sale.
For the purpose of this Paragraph 3:
3.1. Stock Splits, Dividends, etc., in Common Stock or
Convertible Securities. In case the Company splits its Common
Stock or shall declare any dividend, or make any other
distribution, upon any stock of the Company of any class payable
in Common Stock, or in any stock or other securities directly or
indirectly convertible into or exchangeable for Common Stock (any
such stock or other securities being hereinafter called
"Convertible Securities"), such split, declaration or
distribution shall be deemed to be an issue or sale (as of the
record date for such split, dividend or other distribution),
without consideration, of such Common Stock or such Convertible
Securities, as the case may be.
3.2. Issuance or Sale of Convertible Securities. In case
the Company shall issue or sell any Convertible Securities other
than the Subject Securities, there shall be determined the price
per share for which Common Stock is issuable upon the conversion
or exchange thereof, such determination to be made by dividing
(a) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion
or exchange thereof, by (b) the maximum number of shares of
Common Stock of the Company issuable upon the conversion or
exchange of all such Convertible Securities.
If the price per share so determined shall be less than
the Purchase Price (or, if a Pro Forma Adjusted Purchase Price
shall be in effect, less than such Price) as of the date of such
issue or sale, then such issue or sale shall be deemed to be an
issue or sale for cash (as of the date of issue or sale of such
Convertible Securities) of such maximum number of shares of
Common Stock at the price per share so determined, provided that,
if such Convertible Securities shall by their terms provide for
an increase or increases, with the passage of time, in the amount
of additional consideration, if any, payable to the Company, or
in the rate of exchange, upon the conversion or exchange thereof,
the Pro Forma Adjusted Purchase Price per share shall, forthwith
upon any such increase becoming effective, be readjusted to
reflect the same, and provided, further, that upon the expiration
of such rights of conversion or exchange of such Convertible
Securities, if any thereof shall not have been exercised, the Pro
Forma Adjusted Purchase Price per share shall forthwith be
readjusted and thereafter be the price which it would have been
had an adjustment been made on the basis that the only shares of
Common Stock so issued or sold were those issued or sold upon the
conversion or exchange of such Convertible Securities, and that
they were issued or sold for the consideration actually received
by the Company upon such conversion or exchange, plus the
consideration, if any, actually received by the Company for the
issue or sale of all such Convertible Securities which shall have
been converted or exchanged.
3.3. Grant of Rights or Options for Common Stock. In case
the Company shall grant any rights or options to subscribe for,
purchase or otherwise acquire Common Stock of any class other
than the Subject Securities, there shall be determined the price
per share for which Common Stock is issuable upon the exercise of
such rights or options, such determination to be made by dividing
(a) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or
options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise
of such rights or options, by (b) the maximum number of shares of
Common Stock issuable upon the exercise of such rights or
options.
If the price per share so determined shall be less than
the Purchase Price (or, if a Pro Forma Adjusted Purchase Price
shall be in effect, less than such Price) as of the date of such
issue or sale, then the granting of such rights or options shall
be deemed to be an issue or sale for cash (as of the date of the
granting of such rights or options) of such maximum number of
shares of Common Stock at the price per share so determined,
provided that, if such rights or options shall by their terms
provide for an increase or increases, with the passage of time,
in the amount of additional consideration, if any, payable to the
Company upon the exercise thereof, the Pro Forma Adjusted
Purchase Price per share shall, forthwith upon any such increase
becoming effective, be readjusted to reflect the same, and
provided, further, that upon the expiration of such rights or
options, if any thereof shall not have been exercised, the Pro
Forma Adjusted Purchase Price per share shall forthwith be
readjusted and thereafter be the price which it would have been
had an adjustment been made on the basis that the only shares of
Common Stock so issued or sold were those issued or sold upon the
exercise of such rights or options and that they were issued or
sold for the consideration actually received by the Company upon
such exercise, plus the consideration, if any, actually received
by the Company for the granting of all such rights or options,
whether or not exercised.
3.4. Grant of Rights or Options for Convertible Securities.
In case the Company shall grant any rights or options to
subscribe for, purchase or otherwise acquire Convertible
Securities, such Convertible Securities shall be deemed, for the
purposes of subparagraph 3.2. above, to have been issued or sold
for the total amount received or receivable by the Company as
consideration for the granting of such rights or options plus the
minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of such rights or
options, provided that, upon the expiration of such rights or
options, if any thereof shall not have been exercised, the Pro
Forma Adjusted Purchase Price per share shall forthwith be
readjusted and thereafter be the price which it would have been
had an adjustment been made upon the basis that the only
Convertible Securities so issued or sold were those issued or
sold upon the exercise of such rights or options and that they
were issued or sold for the consideration actually received by
the Company upon such exercise, plus the consideration, if any,
actually received by the Company for the granting of all such
rights or options, whether or not exercised.
3.5. Dilution in Case of Other Stock or Securities. In
case any shares of stock or other securities, other than Common
Stock of the Company, shall at any time be receivable upon the
exercise of this Warrant, and in case any additional shares of
such stock or any additional such securities (or any stock or
other securities convertible into or exchangeable for any such
stock or securities) shall be issued or sold for a consideration
per share such as to dilute the purchase rights evidenced by this
Warrant, then and in each such case the Pro Forma Adjusted
Purchase Price per share shall forthwith be adjusted,
substantially in the manner provided for above in this
Paragraph 3, so as to protect the Holder of this Warrant against
the effect of such dilution.
3.6. Expenses, etc., Deducted. In case any shares of
Common Stock or Convertible Securities or any rights or options
to subscribe for, purchase or otherwise acquire any Common Stock
or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount
received by the Company therefor, after deducting any expenses
incurred and any underwriting or similar commissions,
compensation or concessions paid or allowed by the Company in
connection with such issue or sale.
3.7. Determination of Consideration. In case any shares of
Common Stock or Convertible Securities or any rights or options
to subscribe for, purchase or otherwise acquire any Common Stock
or Convertible Securities shall be issued or sold for a
consideration other than cash (or a consideration which includes
cash, if any cash constitutes a part of the assets of a
corporation or business substantially all of the assets of which
are being received a such consideration) then, for the purpose of
this Paragraph 3, the Board of Directors of the Company shall
promptly determine the fair value of such consideration, and such
Common Stock, Convertible Securities, rights or options shall be
deemed to have been issued or sold on the date of such
determination in good faith. Such value shall not be more than
the amount at which such consideration is recorded in the books
of the Company for accounting purposes except in the case of an
acquisition accounted for on a pooling of interest basis. In
case any Common Stock or Convertible Securities or any rights or
options to subscribe for, purchase or otherwise acquire any
Common Stock or Convertible Securities shall be issued or sold
together with other stock or securities or other assets of the
Company for a consideration which covers both, the Board of
Directors of the Company shall promptly determine what part of
the consideration so received is to be deemed to be the
consideration for the issue or sale of such Common Stock or
Convertible Securities or such rights or options.
The Company covenants and agrees that, should any
determination of fair value of consideration or of allocation of
consideration be made by the Board of Directors of the Company,
pursuant to this subparagraph 3.7, it will, not less than seven
(7) days after any and each such determination, deliver to the
Holder of this Warrant a certificate signed by the President or a
Vice President and the Treasurer or an Assistant Treasurer of the
Company reciting such value as thus determined and setting forth
the nature of the transaction for which such determination was
required to be made, the nature of any consideration, other than
cash, for which Common Stock, Convertible Securities, rights or
options have been or are to be issued, the basis for its
valuation, the number of shares of Common Stock which have been
or are to be issued, and a description of any Convertible
Securities, rights or options which have been or are to be
issued, including their number, amount and terms.
3.8. Record Date Deemed Issue Date. In case the Company
shall take a record of the Holders of shares of its stock of any
class for the purpose of entitling them (a) to receive a dividend
or a distribution payable in Common Stock or in Convertible
Securities, or (b) to subscribe for, purchase or otherwise
acquire Common Stock or Convertible Securities, then such record
date shall be deemed to be the date of the issue or sale of the
Common Stock issued or sold or deemed to have been issued or sold
upon the declaration of such dividend or the making of such other
distribution, or the date of the granting of such rights of
subscription, purchase or other acquisition, as the case may be.
3.9. Shares Considered Outstanding. The number of shares
of Common Stock outstanding at any given time shall include
shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock, but shall exclude shares
in the treasury of the Company.
3.10. Duration of Pro Forma Adjusted Purchase Price.
Following each computation or readjustment of a Pro Forma
Adjusted Purchase Price as provided in this Paragraph 3, the
newly computed or adjusted Pro Forma Adjusted Purchase Price
shall remain in effect until a further computation or
readjustment thereof is required by this Paragraph 3.
4. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY,
ETC.; RECLASSIFICATIONS, ETC. In case at any time or from time
to time after the Issuance Date the Holders of the Common Stock
of the Company of any class (or any other shares of stock or
other securities at the time receivable upon the exercise of this
Warrant) shall have received, or, on or after the record date
fixed for the determination of eligible stockHolders, shall have
become entitled to receive:
(a) other or additional stock or other securities or
property (other than cash) by way of dividend;
(b) any cash paid or payable out of capital or paid-in
surplus or surplus created as a result of a
revaluation of property by way of dividend; or
(c) other or additional (or less) stock or other
securities or property (including cash) by way of
stock-split, spin-off, split-off, split-up,
reclassification, combination of shares or similar
corporate rearrangement;
(other than additional shares of Common Stock issued to Holders
of Common Stock as a stock dividend or stock-split, adjustments
in respect of which shall be covered by the provisions of
Paragraph 3), then in each case the Holder of this Warrant, upon
the exercise hereof as provided in Paragraph 1 hereof, shall be
entitled to receive, in lieu of, or in addition to, as the case
may be, the shares theretofore receivable upon the exercise of
this Warrant, the amount of stock or other securities or property
(including cash in the cases referred to in clauses (b) and (c)
above) which such Holder would hold on the date of such exercise
if, on the Issuance Date, he had been the Holder of record of the
number of shares of Common Stock of the Company called for on the
face of this Warrant and had thereafter, during the period from
the Issuance Date to and including the date of such exercise,
retained such shares and/or all other or additional (or less)
stock or other securities or property (including cash in the
cases referred to in clauses (b) and (c) above) receivable by him
as aforesaid during such period, giving effect to all adjustments
called for during such period by Paragraphs 3 and 5 hereof.
5. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER,
ETC. In case of any reorganization of the Company (or any other
corporation the stock or other securities of which are at the
time deliverable on the exercise of this Warrant) after the date
hereof, or in case, after such date, the Company (or any such
other corporation) shall consolidate with or merge into another
corporation or convey all or substantially all its assets to
another corporation, then and in each such case the Holder of
this Warrant, upon the exercise hereof as provided in Paragraph 1
hereof, at any time after the consummation of such
reorganization, consolidation, merger or conveyance, shall be
entitled to receive the stock or other securities or property to
which such Holder would have been entitled upon such consummation
if such Holder had exercised this Warrant immediately prior
thereto, all subject to further adjustments as provided in
Paragraphs 3 and 4 hereof; in each such case, the terms of this
Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this
Warrant after such consummation.
6. NO DILUTION OR IMPAIRMENT. The Company will not, by
amendment of its charter or through reorganization,
consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder hereof
against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the
par value of any shares of stock receivable upon the exercise of
this Warrant above the amount payable therefor upon such
exercise, and at all times will take all such action as may be
necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable stock upon the
exercise of this Warrant.
7. ACCOUNTANTS' CERTIFICATE AS TO ADJUSTMENTS. In each
case of an adjustment in the number of shares of Common Stock or
other stock, securities or property receivable on the exercise of
this Warrant, at the request of the Holder of this Warrant the
Company at its expense shall promptly cause independent public
accountants of recognized standing, selected by the Company, to
compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment
and showing in detail the facts upon which such adjustment is
based, including a statement of (a) the consideration received or
to be received by the Company for any additional shares issued or
sold or deemed to have been issued or sold, (b) the number of
shares of Common Stock outstanding or deemed to be outstanding
and (c) the Pro Forma Adjusted Purchase Price. The Company will
forthwith mail a copy of each such certificate to the Holder of
this Warrant.
8. NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the Holders of
its Common Stock (or other stock or securities at
the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling
them to receive any dividend (other than a cash or
stock dividend at the same rate as the rate of the
last cash or stock dividend theretofore paid) or
other distribution, or to exercise any preemptive
right pursuant to the Company's charter, or to
receive any right to subscribe for or purchase any
shares of stock of any class or any other
securities, or to receive any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the
Company, any consolidation or merger of the
Company with or into another corporation, or any
conveyance of all or substantially all of the
assets of the Company to another corporation; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, and in each such case, the Company will mail or cause to be
mailed to the Holder of this Warrant a notice specifying, as the
case may be, (i) the date on which a record is to be taken for
the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right,
or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or
winding up is to take place, and the times, if any is to be
fixed, as of which the Holders of record of Common Stock (or such
other stock or securities at the time deliverable upon the
exercise of this Warrant) shall be entitled to exchange their
shares of Common Stock of any class (or such other stock or
securities) for reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding up or (iii) the
amount and character of the stock or other securities proposed to
be issued or granted, the date of such proposed issuance or grant
and the persons or class of persons to whom such stock or other
securities ar to be offered, issued or granted. Such notice
shall be mailed at least thirty (30) days prior to the date
therein specified.
9. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF
WARRANTS. The Company will at all times reserve and keep
available, solely for insurance and delivery upon the exercise of
this Warrant and other similar Warrants, such shares of Common
Stock and other stock, securities and property as from time to
time shall be issuable upon the exercise of this Warrant and all
other similar Warrants at the time outstanding.
10. REPLACEMENT OF WARRANT. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and (in the case of
loss, theft or destruction) upon delivery of an indemnity
agreement in an amount reasonably satisfactory to it, or (in the
case of mutilation) upon surrender and cancellation thereof, the
Company will issue, in lieu thereof, a new Warrant of like tenor.
11. REMEDIES. The Company stipulates that the remedies at
law of the Holder of this Warrant in the event of any default by
the Company in its performance of or compliance with any of the
terms of this Warrant are not and will not be adequate, and that
the same may be specifically enforced.
12. NEGOTIABILITY, ETC. This Warrant is issued upon the
following terms, to all of which each taker or owner hereof
consents and agrees:
(a) Title to this warrant may be transferred by
endorsement (by the Holder hereof executing the
form of assignment at the end hereof including
guaranty of signature) and delivery in the same
manner as in the case of a negotiable instrument
transferable by endorsement and delivery.
(b) Any person in possession of this Warrant properly
endorsed is authorized to represent himself as
absolute owner hereof and is granted power to
transfer absolute title hereto by endorsement and
delivery hereof to a bona fide purchaser hereof
for value; each prior taker or owner waives and
renounces all of his equities or rights in this
Warrant in favor of every such bona fide
purchaser, and every such bona fide purchaser
shall acquire title hereto and to all rights
represented hereby.
(c) Until this Warrant is transferred on the books of
the Company, the Company may treat the registered
Holder of this Warrant as the absolute owner
hereof for all purposes without being affected by
any notice to the contrary.
13. SUBDIVISION OF RIGHTS. This Warrant (as well as any
new warrants issued pursuant to the provisions of this paragraph)
is exchangeable, upon the surrender hereof by the Holder hereof,
at the principal office of the Company for any number of new
warrants of like tenor and date representing in the aggregate the
right to subscribe for and purchase the number of shares of
Common Stock of the Company which may be subscribed for and
purchased hereunder.
14. REGISTRATION RIGHTS.
a. Registration. Within 90 days after the date
hereof, the Company will file a registration statement
("Registration Statement") with the Securities and Exchange
Commission ("SEC") covering the Warrants and shares of Common
Stock issuable upon conversion of the 1995 Debentures, the Senior
Subordinated Debentures and the Preferred Stock, and upon
exercise of the Warrants and the Laird Options as well as Common
Stock owned by the Principals and issuable upon exercise of the
Principals' Options (collectively "Registrable Securities"), and
will use its best efforts to cause the Registration Statement to
become effective on or prior to the ninetieth day after such
filing and to keep the Registration Statement effective for a
period of seven years from the date it is declared effective by
the SEC.
b. Additional Terms. Except as otherwise expressly
stated herein, the following provisions shall be applicable to
the Registration Statement:
(i) The Company will use its best efforts to cause
the Registration Statement to become effective as promptly
as possible, and if any stop order shall be issued by the
SEC in connection therewith to use its reasonable efforts to
obtain the removal of such order. Following the effective
date of the Registration Statement, the Company shall, upon
the request of the Holder, forthwith supply such reasonable
number of copies of the Registration Statement, preliminary
prospectus and prospectus meeting the requirements of the
Act, and other documents necessary or incidental to a public
offering of the Registrable Securities, as shall be
reasonably requested by the Holder to permit the Holder to
make a public distribution of its, his or her Registrable
Securities. The Company will use its reasonable efforts to
qualify the Registrable Securities for sale in such states
as the Holder of Registrable Securities shall reasonably
request, provided that no such qualification will be
required in any jurisdiction where, solely as a result
thereof, the Company would be subject to service of general
process or to taxation or qualification as a foreign
corporation doing business in such jurisdiction. The
obligations of the Company hereunder with respect to the
Holder's Registrable Securities are expressly conditioned on
the Holder's furnishing to the Company such appropriate
information concerning the Holder, the Holder's Registrable
Securities and the terms of the Holder's offering of such
Registrable Securities as the Company may reasonably
request.
(ii) The Company shall pay all expenses incurred in
complying with the provisions of this Paragraph 14,
including, without limitation, all registration and filing
fees (including all expenses incident to filing with the
National Association of Securities Dealers, Inc.), printing
expenses, fees and disbursements of counsel to the Company,
securities law and blue sky fees and expenses and the
expenses of any regular and special audits incident to or
required by any such registration. All underwriting
discounts and selling commissions applicable to the sales of
the Registrable Securities, and any state or federal
transfer taxes payable with respect to the sales of the
Registrable Securities and all fees and disbursements of
counsel for the Holder, if any, in each case arising in
connection with registration of the Registrable Securities
shall be payable by the Holder.
(iii) In connection with the registration of the
Registrable Securities pursuant to this Paragraph 14, the
Company shall indemnify and hold harmless the Holder, its
affiliates, officers, directors, partners, employees, agents
and representatives, each person, if any, who controls the
Holder within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and any person
claiming by or through any of them (collectively, the
"Indemnified Persons") from and against all losses, claims,
damages, expenses or liabilities (or actions in respect
thereof) arising out of or are based upon any untrue
statement of any material fact contained in the Registration
Statement or alleged untrue statement, under which such
securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise
out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to
make the statements made therein, in light of the
circumstances under which they are made, not misleading, or
any violation by the Company of the Securities Act, the
Exchange Act or state securities or blue sky laws applicable
to the Company and relating to action or inaction required
of the Company in connection with such registration or
qualification under such state securities or blue sky laws;
and will reimburse the Indemnified Persons for any legal or
any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the
Company will not be liable in any such case to any
Indemnified Person to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or omission made in the Registration Statement,
said preliminary prospectus or said final prospectus or said
amendment or supplement or any document incident thereto in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Holder.
(iv) The Holder will indemnify and hold harmless the
Company and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange
Act, each officer of the Company who signs the Registration
Statement and each director of the Company from and against
any and all such losses, claims, damages or liabilities
arising from any untrue statement in, or omission from, the
Registration Statement, any such preliminary or final
prospectus, amendment, or supplement or document incident
thereto if the statement or omission in respect of which
such loss, claim, damage or liability is asserted was made
in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the
Holder for use in connection with the preparation of the
Registration Statement or such prospectus or amendment or
supplement thereof.
(v) The reimbursements required by clauses (iii)
and (iv) shall be made by periodic payments during the
course of the investigation or defense as and when bills are
received or expenses incurred; provided, however, that to
the extent that an indemnified party receives periodic
payments for legal or other expenses during the course of an
investigation or defense, and such party subsequently
received payments for such expenses from any other parties
to the proceeding, such payments shall be used by the
indemnified party to reimburse the indemnifying party for
such periodic payments. Any party which proposes to assert
the right to be indemnified under clause (iii) or (iv) will,
promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of
which a claim is to be made against any indemnified party
hereunder, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a
copy of all papers served, but the failure to so notify such
indemnifying party of any such action, suit or proceeding
shall not relieve the indemnifying party from any obligation
which it may have to any indemnified party hereunder unless
and only to the extent that the indemnifying party is
prejudiced by said lack of notice. In case any such action,
suit or proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party for any
legal or other expense, other than reasonable costs of
investigation subsequently incurred by such indemnified
party in connection with the defense thereof. The
indemnified party shall have the right to employ its own
counsel in any such action, but the reasonable fees and
expenses of such counsel shall be at the expense of such
indemnified party, when and as incurred, unless (A) the
employment of counsel by such indemnified party has been
authorized by the indemnifying party, (B) the indemnified
party has reasonably concluded (based on advice of counsel),
that there may be legal defenses available to it that are
different from or in addition to those available to the
indemnifying party, (C) the indemnified party shall have
reasonably concluded (based on advice of counsel) that there
may be a conflict of interest between the indemnifying party
and the indemnified party in the conduct of defense of such
action (in which case the indemnifying party shall not have
the right to direct the defense of such action on behalf of
the indemnified party), or (D) the indemnifying party shall
not in fact have employed counsel to assume the defense of
such action within 15 days after receipt of notice of such
action. An indemnifying party shall not be liable for any
settlement or any action or claim effected without its
consent.
(vi) If the indemnification provided for in this
Paragraph 14 is unavailable to any indemnified party
hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the
indemnifying party and indemnified parties in connection
with the actions that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct
or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed
to include, subject to the limitations set forth herein, any
legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
(vii) The Company and the Holder agree that it would
not be just and equitable if contribution pursuant to clause
(vi) were determined by pro rata allocation or by any other
method of allocation that does not take account of the
equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding any other provision
hereof, in no event shall the contribution obligation of the
Holder be greater in amount than the excess of (A) the
dollar amount of proceeds received by the Holder upon the
sale of the securities giving rise to such contribution
obligation over (B) the dollar amount of any damages that
the Holder has otherwise been required to pay by reason of
the untrue or alleged untrue statement or omission or
alleged omission giving rise to such obligation. No person
guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
(viii) Neither the filing of the Registration
Statement by the Company pursuant to this Agreement nor the
making of any request for prospectuses by the Holder shall
impose upon the Holder any obligation to sell his, her or
its Registrable Securities.
(ix) The Holder, upon receipt of notice from the
Company that an event has occurred which requires a post-
effective amendment to the Registration Statement or a
supplement to the prospectus included therein, shall
promptly discontinue the sale of his, her or its Registrable
Securities until the Holder receives a copy of a
supplemented or amended prospectus from the Company, which
the Company shall provide as soon as practicable after such
notice.
15. MAILING OF NOTICES, ETC. All notices and other
communications from the Company to the Holder of this Warrant
shall be mailed by first-class certified mail, postage prepaid,
to the address furnished to the Company in writing by the last
Holder of this Warrant who shall have furnished an address to the
Company in writing.
16. HEADINGS, ETC. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise
affect the meaning hereof.
17. CHANGE, WAIVER, ETC. Neither this Warrant nor any term
hereof may be changed, waived, discharged or terminated orally
but only by an instrument in writing signed by the party against
which enforcement of the change, waiver, discharge or termination
is sought.
17. GOVERNING LAW. This Amended and Restated Series B
Warrant shall be construed and enforced in accordance with the
laws of the State of New York.
LOGIMETRICS, INC.
By:
-------------------------------
Dated: March 7, 1996
Attest:
- -------------------------------
[To be signed only upon exercise of Warrant]
To LOGIMETRICS, INC.:
The undersigned, the Holder of the within Amended and
Restated Series B Warrant, hereby irrevocably elects to exercise
the purchase right represented by such Warrant for, and to
purchase thereunder, shares of Common Stock of
LOGIMETRICS, INC. and herewith makes payment of $
therefor, and requests that the certificates for such shares be
issued in the name of, and be delivered to, , whose
address is .
Dated:
- -------------------------------
-------------------------------
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
Address:
-------------------------------
-------------------------------
[To be signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto the right represented
by the within Amended and Restated Series B Warrant to purchase
the shares of the Common Stock of LOGIMETRICS, INC.
to which the within Amended and Restated Series B Warrant
relates, and appoints attorney to
transfer said right on the books of LOGIMETRICS, INC. with full
power of substitution in the premises.
Dated:
- -------------------------------
-------------------------------
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
Address:
-------------------------------
-------------------------------
In the presence of
- -------------------------------
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the 7th day of March, 1996 (the
"Effective Date"), by and between LOGIMETRICS, INC., a corporation
organized and existing under the laws of the State of Delaware and duly
qualified to do business as a foreign corporation in the State of New York
(the "Company"), and RICHARD K. LAIRD, an individual residing at
1718 Bay Point Place, Point Pleasant, New Jersey 08742 (the "Executive").
The aforementioned are sometimes hereinafter referred to as the "Parties".
WHEREAS, the Company recognizes the Executive can effectively
contribute to the growth and success of the Company and desires to assure
the Executive's employment with the Company on a long-term basis; and
the Executive desires to be employed by the Company under the terms and
conditions contained herein; and
WHEREAS, the parties have determined that it is in their mutual
best interests to memorialize in writing their mutual understandings for the
Executive's employment with the Company.
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements of the parties herein contained, the
parties hereto agree as follows:
ARTICLE 1. REPRESENTATIONS OF THE COMPANY.
(a) Company Materials. Attached hereto as Exhibit A is a true
and correct copy as of the date hereof of the Private Placement
Memorandum, dated February 5, 1996 (the "PPM" and, together with the
Company's Proxy Statement, dated January 29, 1996, the "Company
Materials"), as in effect as of the date hereof. The Company shall provide
the Executive with any and all amendments to the PPM. The PPM and all
amendments thereto are true and complete in all material respects.
(b) Corporate Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and is validly authorized to do business as a foreign
corporation in the State of New York. Attached hereto as Exhibit B are
complete and correct copies of the Company's Certificate of Incorporation
and its By-Laws as presently in effect.
(c) Authorization. The Company has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Board of Directors of the Company
has duly approved and authorized the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby, and no other corporate proceedings on the part of the Company are
necessary to approve and authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by the Company
and this Agreement constitutes the valid and binding agreement of the
Company enforceable against it in accordance with its terms.
(d) No Violation. The Company is not in violation of, and
knows of no investigation currently pending or known to be threatened
which alleges a violation of, any applicable law, statute, order, rule,
regulation or ordinance promulgated, or judgment entered, by any Federal,
State, local or foreign court or governmental authority relating to the
Company or its business or property. The Company is not subject to any
material injunction, judgment or judicial or regulatory decree or consent
order.
(e) Financial Statements. The Financial Statements of the
Company included in the PPM are true and correct as of the date thereof,
have been prepared in accordance with generally accepted accounting
principles applied on a basis consistent throughout the periods reflected
therein (except as reflected in the notes thereto), and accurately reflect the
financial condition of the Company and its operations for the periods
covered by said Financial Statements. Since the date of said Financial
Statements the Company has experienced no material or adverse changes
in its financial conditions or operations.
(f) Compliance with Law. The Company is in compliance in
all material respects with all laws, regulations and orders applicable to its
business, including without limitation, all applicable environmental laws
and building zoning laws, ordinances and regulations applicable to its
plants, structures and equipment or any properties owned, leased or
operated by the Company. The Company has not received any notification
that it is in violation of any laws, regulations or orders described above.
(g) Composition of Board of Directors. The Board of Directors
of the Company shall, as of the Effective Date, be comprised of the
following individuals: Lawrence I. Schneider, Richard K. Laird, Alfred
Mendelsohn, Murray H. Feigenbaum, Norman M. Phipps and Henry N.
Schneider.
(h) Shareholders of the Company. The Company Materials set
forth, as of the dates referenced therein, the true and correct number of
shares held by any person, entity or group known to the Company to be
the beneficial holder of 5% or more of the outstanding Common Stock.
There are no voting arrangements with respect to the shares of the
Company except as described in the Company Materials.
(i) Shares, Warrants and Options Outstanding. The Company
Materials set forth, as of the dates referenced therein, the capitalization of
the Company. Exhibit C hereto sets forth a complete listing of all options
authorized, issued and outstanding to purchase or otherwise acquire shares
of the Company and all warrants or other agreements to purchase or
otherwise acquire shares of stock or other voting securities of the
Company and the persons to whom such are issued and the terms thereof.
(j) Directors and Officers Liability Insurance. Set forth in
Exhibit D hereto is a true and correct copy of the binder issued by Meeker
Sharkey, insurance brokers, Cranford, NJ, on behalf of Zurich Insurance
Company as to the Officers Liability Insurance Policy currently in force
and effect or which will be in effect as of the Effective Date.
(k) SEC Documents. The Company has delivered to the
Executive a true and complete copy of each report, schedule, registration
statement and definitive proxy statement filed by the Company with the
Securities and Exchange Commission ("SEC") under the Securities Act of
1933 (the "Securities Act") or the Securities Exchange Act of 1934 (the
"Exchange Act") since December 31, 1993 (the "Company SEC
Documents"). As of their respective dates, the Company SEC Documents
complied in all material respects with the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and regulations
of the SEC thereunder applicable to such Company SEC Documents.
(l) Other Information. No representations or warranties by the
Company in this Agreement, and none of the information or documents
furnished or to be furnished by the Company to the Executive pursuant to
this Agreement or in connection with the transactions contemplated under
this Agreement (including, without limitation, all items referred to on
Schedules or Exhibits attached hereto) contain or will contain at the time
of their delivery any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
ARTICLE 2. REPRESENTATIONS OF THE EXECUTIVE. The
Executive represents that he has full power and authority to execute and
deliver this Agreement and to enter into the transactions contemplated
hereby. The Executive's service hereunder will not conflict with, or result
in a breach of, any agreement, understanding, order, judgment or other
obligation to which the Executive is presently a party or by which he may
be bound. The Executive is not subject to, or bound by, any covenant
against competition, confidentiality obligation or any other agreement,
order, judgment or other obligation which would conflict with, restrict or
limit the performance of the services to be provided by him hereunder.
The Executive knows of no reason why he would not be insurable at
regular rates. This Agreement has been duly executed and delivered by
the Executive and constitutes a valid and binding Agreement of the
Executive and is enforceable against him in accordance with its terms.
ARTICLE 3. RELIANCE ON REPRESENTATIONS. The
foregoing representations and warranties have been made by each of the
parties to the other as a material inducement for each of the parties to
enter into this Agreement, knowing and intending that each such party
shall rely thereon in entering into the transactions contemplated hereby.
ARTICLE 4. APPOINTMENT OF EXECUTIVE AS
CHAIRMAN, PRESIDENT, CEO, DIRECTOR AND TERM.
(a) Employment. The Company hereby employs the Executive
as the Chairman, President and Chief Executive Officer of the Company.
(b) Status. On the Effective Date, the Company will take all
action necessary to appoint the Executive as a director of the Company.
During the term of this Agreement, so long as the Executive continues to
be the Chief Executive Officer of the Company, the Company shall use its
best efforts to cause the Executive to be elected as a Director of the
Company and to amend the By-Laws to require that the individual in the
Company holding the title of Chairman and President be a member of the
Board of Directors with full voting power.
(c) Term of Appointment. The Executive shall be employed
by the Company for an initial period expiring on June 30, 2000 and
commencing with the Effective Date hereof as Chairman, President and
CEO of the Company and shall continue as such until terminated as
provided in Article 9 hereof or until this Agreement expires.
ARTICLE 5. DUTIES OF THE EXECUTIVE.
(a) Duties. The Executive shall have such duties, authorities
and responsibilities as are set forth in the By-Laws of the Company with
respect to the office of the Chairman, President and Chief Executive
Officer, as such By-Laws may be amended from time to time (the By-
Laws of the Company as may hereafter be amended being hereinafter
sometimes referred to as "By-Laws"), and shall have such other duties,
authorities and responsibilities as may be assigned to him from time to
time by the Board of Directors of the Company. Without limiting the
generality of the foregoing, the Executive shall be the Chairman, President
and Chief Executive Officer of the Company with general charge and
supervision of the affairs of the Company.
(b) Exclusivity. During the term of this Agreement, and except
for illness, incapacity, vacations in accordance with Article 7(e) hereof and
other reasonable absences, the Executive shall devote substantially 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 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 in any material way with the business of
the Company, its subsidiaries and affiliates.
ARTICLE 6. COMPENSATION.
(a) Salary. For services rendered by the Executive during the
period beginning with the Effective Date and ending on June 30, 1996
("First Fiscal Year"), the Executive shall be paid an initial base salary at
an annual rate of $150,000 (the "Base Salary"), payable in such
installments and at such regular intervals (not less than equal monthly
installments) as are consistent with the normal payroll practices of the
Company with respect to its executive officers, subject to such withholding
for any Federal, State and local taxes. For periods subsequent to the First
Fiscal Year, the annual base salary shall be in such amounts, but never less
than the initial annual base salary, as shall be established by the Board of
Directors after first consulting with the Executive and taking into account
such factors as the Board of Directors and the Executive may deem
appropriate, including but not limited to, cost of living factors, increased
responsibility, the Executive's performance, profitability of the Company
and demands on the Executive's time to carry out his responsibilities. Any
increase in annual base salary may never be decreased thereafter.
(b) Signing Bonus. On the Effective Date, the Company shall
pay to the Executive a one-time bonus of $200,000 (net of any required
withholdings).
(c) Performance Bonus. In addition to the Base Salary provided
under Article 6(a), the Executive shall be entitled to a cash performance
bonus in respect of each fiscal year (excluding the First Fiscal Year)
during the term of this Agreement in the event that the Company meets or
exceeds certain performance criteria (the "Performance Targets") to be
mutually established through good faith negotiations between the Board of
Directors and the Executive no later than sixty (60) days immediately
preceding the commencement of the fiscal year for which such
performance criteria are being established (the "Target Year"). It is the
mutual intention of the parties that such bonus arrangements will provide
for a minimum bonus equal to the Executive's Base Salary as in effect at
the commencement of the Target Year in the event that the Company
meets the Performance Targets for the Target Year and that such
arrangements will provide for an increased bonus in the event that the
Company's performance materially exceeds the Performance Targets for
the Target Year. The Company's fiscal year currently is July 1 through
June 30 of the following year.
(d) Stock Option Grants. On the Effective Date, the Company
shall issue to the Executive initial stock options to purchase Common
Stock in the amounts and at the exercise prices and other conditions as set
forth in the Option Schedule 1 attached hereto and made a part hereof (the
"Options"). The Options shall expire ten (10) years from the date of grant
unless exercised prior thereto or earlier terminated in accordance with
Article 9 hereof. The Executive and the Company shall enter into a
mutually acceptable stock option agreement relating to the Options. The
Options shall vest as provided herein and shall not be transferable by the
Executive except pursuant to the laws of descent and distribution. Upon
receipt of not less than two business days' notice in connection with any
exercise of Options by the Executive, the Company shall provide the
Executive with an interest-free loan in an amount up to, but not exceeding,
the aggregate exercise price of the Options being exercised by the
Executive. The Executive shall use the proceeds of such loan solely for
the purpose of paying the aggregate exercise price of the Options being
exercised. Each such loan shall mature and be payable under the earliest
of (i) five years from the date of such loan, (ii) the date specified in
Article 9 following the termination of the Executive's employment, and
(iii) the sale by the Executive of the underlying Common Stock; provided,
however, that in the event that less than all of such shares of Common
Stock are sold by the Executive, the amount to be repaid by the Executive
shall be appropriately pro rated to reflect the number of shares actually
being sold. In no event shall the Company have any obligation to make
such loans to the Executive from and after the date notice is given, either
by the Executive or by the Company, that Executive's employment is
being terminated for any reason.
(e) Registration of Shares. In the event that any of the
Company's shares of stock or other equity shall be registered with the SEC
under either the Securities Act or the Exchange Act or any other similar
legislation, the shares of stock of the Company issued or to be issued to
the Executive pursuant to the Options and the shares of stock represented
by the Options shall be registered at no cost to the Executive.
(f) Adjustments upon Change in Capitalization. In the event
that the number of issued and outstanding shares of Common Stock is
increased, decreased, changed into or exchanged for a different number or
kind of shares or securities after the Effective Date through merger,
consolidation, combination, exchange of shares, other reorganization,
recapitalization, reclassification, stock dividend, stock split or reverse stock
split, an appropriate and proportionate adjustment shall be made by the
Company in the number and kind of shares as to which any unexercised
Options are then exercisable. Any such adjustment shall be made without
change in the aggregate purchase price applicable to the unexercised
Options but with a corresponding adjustment in the price for each share or
other unit of any security covered thereby. In making any adjustment
pursuant to this Article 6(f), any fractional shares shall be disregarded.
ARTICLE 7. BENEFITS.
(a) Standard Executive Benefits Package. In addition to the
Base Salary, the Performance Bonus and the Options, the Executive will
be entitled to participate in any medical, life insurance, disability insurance
or retirement plans that may be provided by the Company from time to
time to its executive employees during the term of this Agreement as
recommended to the Board of Directors by the Executive and as approved
by the Board of Directors and subject to conditions with respect to vesting
of benefits under such plans, and subject to any provisions permitting
amendment or termination thereof.
(b) Key Man Insurance. The Executive agrees that if requested
by the Board of Directors, "Key Man" life insurance policy may be issued,
such policy covering the life of the Executive, the beneficiaries of which
shall be determined by the Board of Directors.
(c) Supplemental Life Insurance. The Company shall purchase
a policy insuring the life of the Executive in an amount of not less than
two million dollars ($2,000,000) at no cost to the Executive with the
beneficiary to be designated by the Executive and the policy to be owned
by the Executive, provided, however, that the cost of payment of premiums
toward such policy shall be treated as additional income to the Executive,
consistent with requirements of the Internal Revenue Code, and the
premiums therefor shall be paid by the Company. In the event that the
Executive is receiving severance benefits under this Agreement, the
Company shall continue to pay the premiums on such supplemental life
insurance. Such supplemental life insurance policy shall contain standard
clauses regarding waiver of premium in the event of disability of the
Executive and shall contain accidental death and dismemberment insurance
provisions coverage of three (3) times the amount of the primary insurance
in force and effect under such policy.
(d) Company Car. Recognizing the Executive's need for an
automobile for business purposes, the Executive shall be provided with an
automobile of the Executive's choice, including all related maintenance,
repairs, insurance and other costs including car telephone installation and
mobile telephone communication facilities subject to a monthly cap of
$1,000.
(e) Vacation. The Executive shall be entitled to vacation as
follows: for each of the calendar years 1996 and 1997, four (4) weeks
paid vacation and for each of the calendar years 1998, 1999 and thereafter,
five (5) weeks paid vacation.
(f) Annual Health Examination. The Company will provide
and pay for an annual comprehensive preventative health maintenance
examination for the Executive at a medical facility or facilities and by
doctors designated by the Executive.
ARTICLE 8. BUSINESS EXPENSES. During the term hereof, the
Executive shall be entitled to be reimbursed for all reasonable, customary
and ordinary expenses incurred by him in the course of his duties
hereunder 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.
ARTICLE 9. TERMINATION.
(a) In the event that during the term of this Agreement the
Company terminates the Executive's employment other than as a result of
the Executive's death, Permanent Disability or for "Good Cause" or the
Executive terminates his employment for "Good Reason", the Company
shall, as liquidated damages or severance pay, or both pay the Executive
an amount equal to $750,000 (net of any required withholdings) in
monthly installments over a period of twelve (12) months from the
effective date of such termination (the "Severance Period"). In such an
event, all of the Options outstanding and unexercised at the effective date
of termination (the "Termination Date") shall become immediately and
fully exercisable by the Executive at the Termination Date until the earlier
of (i) the scheduled expiration date of such Options or (ii) the end of the
two-year period immediately following the Termination Date and all loans
made to the Executive pursuant to Article 6(d) hereof shall become due
and payable no later than the end of such period. In addition, earned but
unpaid Base Salary as of the date of termination of employment shall be
payable in full. Group hospitalization, health and dental care insurance
shall continue through the end of the Severance Period. For purposes
hereof, any termination of the Executive's employment by the Company
shall be approved by a majority of the entire Board of Directors and shall
not be effective until 30 days after the Company has given notice of
termination to the Executive.
(b) In the event that during the term of this Agreement the
Company terminates the Executive's employment as a result of a
Permanent Disability, the Company shall, as liquidated damages or
severance pay, or both pay the Executive an amount equal to the Base
Salary as in effect at the time of such termination in monthly installments
over the Severance Period, such payments shall be offset by any amounts
otherwise paid to the Executive under the Company's disability program
generally available to other employees In such an event, all of the Options
which have not vested on or prior to the Termination Date shall be
forfeited and all vested Options shall be exercisable by the Executive or
his personal representative until the earlier of (i) the scheduled expiration
date of such options or (ii) the end of the one-year period immediately
following the Termination Date and all loans made to the Executive
pursuant to Article 6(d) hereof shall become due and payable no later than
the end of such period. In addition, earned but unpaid Base Salary as of
the date of termination of employment shall be payable in full and the
Executive shall be entitled to the bonus award he would have received
pursuant to Article 6(c) had he been employed throughout the year in
which such termination of employment occurs only. Group hospitalization,
health and dental care insurance shall continue through the end of the
Severance Period.
(c) In the event that the Executive's employment terminates due
to the death of the Executive, the Company shall, as liquidated damages
or severance pay, or both, pay to the person or persons designated by the
Executive (provided such designation complies with applicable law) an
amount equal to the Base Salary as in effect at the time of such
termination in monthly installments over the Severance Period. In such an
event, all of the Options which have not vested on or prior to the
Termination Date shall be forfeited and all vested Options shall be
exercisable by the Executive's personal representative until the earlier of
(i) the scheduled expiration date of such Options or (ii) the end of the one-
year period immediately following the Termination Date and all loans
made to the Executive pursuant to Article 6(d) hereof shall become due
and payable no later than the end of such period. In addition, earned but
unpaid Base Salary as of the date of termination of employment shall be
payable in full. However, notwithstanding the other provisions of this
Agreement, no other payments shall be made, or benefits provided, by the
Company under this Agreement except for benefits payable under the
Retirement Plan and benefits that he is already entitled to 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) In the event that the Executive's employment terminates due
to a termination for Good Cause or the Executive terminates employment
with the Company for reasons other than Good Reason, Permanent
Disability or retirement pursuant to the Company's retirement plan (the
"Retirement Plan"), earned but unpaid Base Salary as of the date of
termination of employment shall be payable in full. In such an event, all
of the Options which have not vested on or prior to the Termination Date
shall be forfeited and all loans made to the Executive pursuant to Article
6(d) hereof shall become due and payable no later than the end of the
nine-month period immediately following the Termination Date. However,
notwithstanding the other provisions of this Agreement, no other payments
shall be made, or benefits provided, by the Company under this Agreement
except for benefits payable under the Retirement Plan and benefits that he
is already entitled to under the terms of employee benefit programs
maintained by the Company or its affiliates for its employees and except
as otherwise required by law.
(e) In the event that a Change in Control occurs during the term
of this Agreement, the Executive shall have the right, upon not less than
thirty (30) days' prior written notice to the Board of Directors, to terminate
his employment for any reason effective on or prior to the first anniversary
of the Change in Control. In the event that the Executive exercises such
right, the Company shall, as liquidated damages or severance pay, or both
pay the Executive an amount equal to $750,000 (net of any required
withholdings) in monthly installments over the Severance Period. In such
event, all of the Options outstanding and unexercised at the Termination
Date shall become immediately and fully exercisable by the Executive at
the Termination Date until the earlier of (i) the scheduled expiration date
of such Options or (ii) the end of the two-year period immediately
following the Termination Date and all loans made to the Executive
pursuant to Article 6(d) hereof shall become due and payable no later than
the end of such period. In addition, earned but unpaid Base Salary as of
the date of termination of employment shall be payable in full. However,
notwithstanding the other provisions of this Agreement, no other payments
shall be made, or benefits provided, by the Company under this Agreement
except for benefits that he is already entitled to under the terms of
employee benefit programs maintained by the Company or its affiliates for
its employees and except as otherwise required by law.
(f) For purposes of this Agreement, the following terms have
the following meanings:
(i) The term "Good Cause" shall mean (A) the
Executive's conviction of any felony or a misdemeanor involving fraud,
dishonesty or breach of trust, (B) the Executive's willful engagement in
gross misconduct in the performance of his duties, (C) a material breach
by the Executive of any representation or warranty of the Executive
contained herein, or (D) the Executive's continuing to be in material
breach of this Agreement for more than thirty (30) days after being
notified in writing by the Company of such breach provided the Company
has given such notice to the Executive within thirty (30) days of the Board
of Directors first becoming aware of the facts constituting such breach.
(ii) The term "Good Reason" shall mean (A) the
Company's continuing to be in material breach of this Agreement for more
than thirty (30) days after being notified in writing by the Executive of
such breach provided the Executive has given such notice to the Company
within thirty (30) days of the Executive first becoming aware of the facts
constituting such breach, or (B) any failure to elect or re-elect or to
appoint or reappoint the Executive to the office of Director, Chairman,
President and Chief Executive Officer.
(iii) The term "Permanent Disability" shall mean
the Executive, in the opinion of his attending physician, shall be rendered
incapable of complying with the terms, conditions and provisions on his
part of this Agreement by reason of or medically determined physical or
mental impairment that can be expected to result in death or that can be
expected to last for a continuous period of no less than twelve (12)
months.
(iv) A "Change in Control" of the Company shall
mean (A) any "person" (as such term is used in Section 13(d) and 14(d)
of the Exchange Act) (other than a person who, on the Effective Date and
after giving effect to the transactions contemplated by the Company
Materials, is the beneficial owner of 10% or more of the Common Stock,
together with their respective affiliates and accounts managed by the
foregoing) is or becomes the "beneficial owner" (as defined in Rule 13(d)-
3 under the Exchange Act) directly or indirectly of securities of the
Company representing more than fifty percent (50%) of the combined
voting power of the Company's voting securities; or (B) there is a merger
or consolidation of the Company in which the Company does not survive
as an independent public company; or (C) the sale by the Company of all
or substantially all of its assets in one transaction or a series of related
transactions; or (D) during any period of two (2) consecutive years during
the term of this Agreement, individuals who at the beginning of such
period constitute the Board of Directors cease for any reason to constitute
at least a majority thereof, unless the election of each Director who is not
a Director at the beginning of such period has been approved in advance
by Directors representing at least a majority of the Directors then in office
who were Directors at the beginning of the period.
(g) Death and Severance Benefits. In the event of the death of
the Executive before or during the period that the Executive is entitled to
receive any severance benefits hereunder, the Executive's estate shall be
entitled to the unpaid balance of any severance benefits to which the
Executive is entitled hereunder. As a means of funding the obligation
under this Article, the Company may maintain at its own expense a term
policy insuring the life of the Executive.
ARTICLE 10. REIMBURSEMENT OF CERTAIN EXPENSES.
In the event that during the term of this Agreement the Company
terminates the Executive's employment other than as a result of the
Executive's death, Permanent Disability or for Good Cause or the
Executive terminates his employment for Good Reason or following a
Change in Control in accordance with the provisions of Article 9, the
Company shall, in addition to its other obligations hereunder, reimburse or
pay on the Executive's behalf, the reasonable out-of-pocket expenses
directly incurred by the Executive in effecting such termination (including,
but not limited to, the reasonable fees and disbursements of counsel,
accountants and other advisers retained by the Executive), subject to an
aggregate cap of $15,000, upon presentation by the Executive of
appropriate documentation of such expenses; provided, however, that if in
connection with any Change in Control or other termination of his
employment the Executive institutes proceedings to compel performance
by the Company of its obligations hereunder or to seek to obtain or
enforce any right or benefit provided by this Agreement and the Executive
substantially prevails on the merits in connection with such proceedings,
such cap shall not apply to the Executive's reasonable out-of-pocket
expenses (including, but not limited to, the reasonable fees and
disbursements of counsel, accountants and other advisers retained by the
Executive) incurred in connection therewith.
ARTICLE 11. NON-COMPETE OBLIGATION. Upon the
termination of the Executive's employment for any reason (other than a
termination by the Company without Good Cause or a termination by the
Executive for Good Reason), the Executive agrees that for a period of one
(1) year from the date of termination of his employment with the Company
he will not alone or as a member of a partnership, association or joint
venture or as a key employee, officer, director or stockholder of any
corporation or in any other capacity engage in any activity which is
competitive with the business of the Company as actively engaged in by
the Company at the time of termination by the Executive, provided that the
foregoing provision shall not be deemed to prohibit the Executive from
purchasing for investment any securities or interests in any publicly-owned
organization which is competitive with the business of the Company as
actively engaged in by the Company at the time of termination by the
Executive so long as his investment in any such organization does not
exceed two percent (2%) of its outstanding capital stock of any corporation
engaged in or controlling any such business having more than five hundred
(500) shareholders or does not exceed three percent (3%) of its outstanding
capital stock of any corporation engaged in controlling any such business
having less than five hundred (500) shareholders.
ARTICLE 12. SECRECY OBLIGATION. Without the express
prior written consent of the Company, the Executive shall not disclose or
use at any time other than on the Company's behalf, either during or
subsequent to his employment with the Company, any secret or
confidential information, knowledge or data of the Company. Upon
termination of his employment, the Executive shall turn over to the
Company all notes, memoranda, notebooks, drawings or other documents,
compiled by or delivered to him concerning any product, apparatus or
process manufactured, used or developed or investigated by the Company
during the period of his employment and which contains any secret or
confidential information. Notwithstanding the foregoing, nothing in this
Agreement shall prohibit or limit either the Executive's use of information
(including, but not limited to ideas, concepts, know-how, techniques and
methodologies): (i) previously known to him; (ii) independently developed
by him; (iii) acquired by him from a third party which is not to the
Executive's knowledge under an obligation to the Company not to disclose
such information; or (iv) which is or becomes publicly available through
no breach by the Executive of this Agreement.
ARTICLE 13. INDEMNIFICATION. On the Effective Date the
Company and the Executive shall enter into a mutually acceptable
Indemnity Agreement and the Company shall maintain such Indemnity
Agreement in full force and effect during the term of this Agreement.
ARTICLE 14. SUCCESSORS; BINDING AGREEMENT.
(a) The obligations of the Company and the Executive under
this Agreement shall survive the termination or expiration of the term of
this Agreement. This Agreement shall be binding upon and inure to the
benefits of the parties hereto and their respective successors, heirs, assigns
and personal representatives. In the event the Company wishes to engage
in (i) any merger or consolidation in which it is not the surviving entity
thereof, or (ii) any sale of all or substantially all of its assets to any third
party, the Company shall require as a condition thereof that the Company's
obligations hereunder be expressly assumed by such successor or purchaser
in writing.
ARTICLE 15. TAXES. The Company shall pay to the Executive
the amount of any excise taxes imposed on the Executive under
Section 4999 of the Internal Revenue Code as currently written or any
amendments thereto by reason of payments or benefits received by the
Executive under the other provisions of this Agreement.
ARTICLE 16. ARBITRATION. All disputes or controversies or
claims arising out of or relating to this Agreement, including, but not
limited to, a breach thereof or a refusal to perform the whole or part of
this Agreement or a refusal to submit any existing dispute or controversy
as to termination of this Agreement or termination of the employment of
the Executive hereunder shall be submitted to arbitration pursuant to the
revised statutes of New Jersey Section 2A:24-I et seq. and in accordance
with the following terms and conditions:
(a) Any arbitration proceedings shall be conducted in Newark,
New Jersey before three (3) arbitrators selected by the Executive and the
Company pursuant to the Employment Resolution Rules of Arbitration of
the American Arbitration Association;
(b) If either party elects to proceed to arbitration hereunder, that
party shall first have filed a demand for expedited arbitration, to be
conducted within thirty (30) days of the filing and shall have served a
written notice on the other party hereto by certified mail, demanding such
arbitration and specifying the facts and circumstances which are the basis
for its action, including the names of witnesses and copies of any
documents to be relied upon;
(c) The expense of the arbitration proceeding shall be shared
equally by the parties and each party shall bear its own legal expenses and
those of the witnesses to the hearing (subject to the provisions of Article
10 hereof) and provided, further, that if the Executive prevails on the
merits in such arbitration, the Company shall reimburse the Executive for
the Executive's arbitration expenses in connection with such arbitration
proceedings, including reasonable attorney's fees;
(d) At the request of either party all arbitration proceedings
shall be recorded by a Certified Court Reporter and each party shall have
the right in any such arbitration proceedings to full discovery and to
subpoena witnesses in accordance with the discovery rules and procedures
of the Courts of the State of New Jersey including discovery rules and
procedures of the United States District Court for the District of New
Jersey and each party hereto and the arbitrators shall have the right to avail
themselves of the benefits and shall observe the obligations under such
rules and procedures under the supervision of the arbitrators or a majority
of them and in accordance with the time frames and constraints set forth
by the arbitrators or a majority of them conducting the arbitration;
(e) The arbitrators' decision shall be issued within ten (10) days
of the close of the hearing, shall be in writing and shall contain findings
of fact, conclusions of law and the reasons for the arbitration decision and
shall be signed by all arbitrators or the majority decision shall be signed
by a majority of the arbitrators and the minority decision shall be signed
by the dissenting arbitrator;
(f) Judgment upon any award rendered may be entered in any
Court having appropriate jurisdiction and the parties hereto expressly
consent to having all such judicial proceedings occur in the Superior Court
of the State of New Jersey, Essex County;
(g) Such arbitration proceedings shall be subject to appeal to the
Superior Court of the State of New Jersey in Essex County and either
party to the arbitration shall be entitled to appeal on the basis of errors of
law or findings of fact that are not supported by the evidence and such
other grounds as may be appropriate for the appeal of the arbitration
decision, including failure to follow the procedures set forth in this Article.
ARTICLE 17. MISCELLANEOUS PROVISIONS.
(a) Entire Agreement. This Agreement constitutes the entire
Agreement between the parties in connection with the subject matter
hereof, and may be changed only by the written consent of the parties
hereto.
(b) Assignment. This Agreement may not be assigned by a
party hereto without the prior written consent of the other party; provided,
however, that the Company shall have the right to assign this Agreement
to any purchaser of all or substantially all of the Company's assets;
provided, that, such assignment shall not release the Company from its
obligations hereunder unless the Executive expressly agrees.
(c) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New
Jersey.
(d) Notices. Other than as specifically provided herein, all
notices required or permitted to be given under this Agreement shall either
be delivered personally or be given in writing and delivered by certified
mail, return receipt requested, to the Company's principal office to the
attention of the Secretary, or the Executive's home address as first set forth
hereinabove. Each such notice so mailed shall be deemed to have been
given seven (7) days after the date of mailing. Any notice given hereunder
shall state in reasonable detail the factual basis underlying such notice.
(e) Paragraph Headings. The paragraph headings contained in
this Agreement are for reference purposes only and shall not effect in any
way the meaning or interpretation of this Agreement.
(f) Waiver. The waiver by either party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a
waiver of any other or subsequent breach by said party.
(g) Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be ineffective as to
such jurisdiction to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, or affecting the
validity or enforceability of such provision in any other jurisdiction.
(h) Counterparts. This Agreement may be executed in as many
counterparts as may be deemed necessary or convenient, and by the
different parties hereto on separate counterparts each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and month and year first above written.
--------------------------------
Richard K. Laird, Executive
LOGIMETRICS, INC.
By:
--------------------------------
Norman M. Phipps
Director, on behalf of the Board of Directors
Exhibits to Employment Agreement
Exhibit A
Private Placement Memorandum
Exhibit B-1
Certificate of Incorporation of LogiMetrics, Inc.
Exhibit B-2
By-Laws of LogiMetrics, Inc.
Exhibit C
Shares, Warrants and Options Authorized, Issued and Outstanding
Persons to Whom Such are Issued
Terms and Conditions of Warrants and Options
Exhibit D
Insurance Binder
Option Schedule 1
Number of Exercise
Year Vested Options Price
----------- --------- --------
Immediate 125,000 $0.40
End of Fiscal Year 1996 125,000 $0.40
End of Fiscal Year 1997 125,000 $0.40
End of Fiscal Year 1998 125,000 $0.40
End of Fiscal Year 1999 250,000 $3.20
December 31, 1999 250,000 $4.00
-------
Total 1,000,000
=========
NORTH FORK BANK
FIFTH RESTATED AND AMENDED
REVOLVING CREDIT NOTE
The within is a restatement and amendment and
continuation of that certain Amended and Restated
Revolving Credit and Term Loan Agreement originally made
between Apple Bank for Savings and Logimetrics, Inc.
dated May 19, 1992, previously assigned by Apple Bank for
Savings to North Fork Bank pursuant to an Assignment and
Assumption Agreement dated December 18, 1992; previously
restated and amended pursuant to a Restated and Amended
Revolving Credit Note dated November 18, 1993; previously
restated and amended pursuant to a Second Restated and
Amended Revolving Credit Note dated February 22, 1995;
previously restated and amended pursuant to a Third
Restated and Amended Revolving Credit Note dated June 30,
1995; and previously restated and amended pursuant to a
Fourth Restated and Amended Revolving Credit Note dated
October 16, 1995.
BORROWER: LOGIMETRICS, INC.
PRINCIPAL: $2,200,000 Date: March 7, 1996
PROMISE TO PAY: The undersigned (the "Borrower"), for value
received, does hereby promise to pay to the order of NORTH FORK
BANK (the "Bank") at its offices at 245 Love Lane, Mattituck, New
York 11952, or at any of its branches, the sum of TWO MILLION TWO
HUNDRED THOUSAND ($2,200,000) DOLLARS plus interest thereon from
the date hereof as set forth herein.
RATE AND PAYMENT: The Borrower shall pay said sum, or such lesser
amount as may then be the aggregate unpaid principal balance of all
loans made by the Bank to the Borrower hereunder, (each a "Loan"
and collectively the "Loans") on or before October 31, 1997 (the
"Maturity Date").
The Borrower also promises to pay interest (computed on the basis
of a 360 day year for actual days elapsed) at said office on the
unpaid principal amount hereof from time to time outstanding at the
rate of two (2%) percent per annum in excess of that rate stated by
the Bank to be its Prime Rate from time to time in effect, payable
monthly in arrears on the first day of each month. Prime Rate as
referred to herein shall refer to the rate of interest determined
or announced by the Bank from time to time as its Prime Rate and
the Prime Rate is not necessarily the lowest rate of interest
charged by the Bank on loans and other credit relationships. Each
change in the Prime Rate shall effect a simultaneous and
corresponding change in the interest rate hereunder without notice
to the Borrower. Interest shall be payable monthly on the first
day of each month commencing on the first such day to occur after
the date hereof and upon payment in full of the unpaid principal
amount hereof.
Wherever any payment to be made under this Note is required to be
paid on a date that is a Saturday, Sunday or public holiday, or the
equivalent for banks under the laws of the State of New York, such
payment may be made on the next succeeding business day, and such
extension of time shall in such case be included in the computation
of interest due.
All payments due under the Note shall be made by automatic debit
from an account maintained by the Borrower for such purpose at the
Bank in which the Borrower shall maintain balances sufficient to
pay each monthly payment due to the Bank under the Loan. In the
event that the money maintained in such account is insufficient for
any payment due under this Note, the Bank may charge any account of
the Borrower for any payment due to the Bank under this Note.
The Bank may charge any account of the Borrower for any payment due
to the Bank hereunder.
DEFAULT INTEREST RATE: The unpaid principal sum due under this
Note shall bear interest at a rate equal to five (5%) percent above
the Rate set forth above on and after the occurrence of any event
of default and until the entire principal sum hereof has been fully
paid, both before and after the entry of any judgment with respect
to such event, but in no event shall the rate either before or
after the occurrence of any event of default exceed the highest
rate of interest, if any, permitted under applicable New York or
Federal Law. Such rate of interest shall continue until such time
as any event of default that may be cured by the Borrower is cured
to the satisfaction of the Bank, at which time the previously
stated interest rate shall re-commence. In no event shall the rate
either before or after the occurrence of any such default exceed
the highest rate of interest, if any, permitted under applicable
New York or Federal law.
RIGHT OF OFFSET: If any payment is not made on time, or if the
entire balance becomes due and payable and is not paid, all or part
of the amount due may be offset out of any account or other
property which the Borrower has at the Bank or any affiliate of the
Bank without prior notice or demand.
LATE CHARGES: The Borrower will pay a charge of five (5%) percent
of the amount of any payment which is not made within ten (10) days
of its respective due date, or, if applicable, which cannot be
debited from its account due to insufficient balance on the debit
date.
SECURITY: This Note is secured by:
(1) a security interest in and assignment and pledge of all
monies, deposits, or other sums now or hereafter held by the Bank
on deposit, in safekeeping, transit or otherwise, at any time
credited by or due from Bank to the Borrower, or in which the
Borrower shall have an interest; and
(2) a continuing first lien against all assets of the
Borrower as set forth, in part, in that certain Restated and
Amended General Security Agreement dated of even date herewith.
In consideration of the granting of the Loans evidenced by this
Note, the Borrower hereby agrees as follows:
REVOLVING CREDIT COMMITMENT:
(a) The Loans evidenced by this Note are available in
one or more advances during the period which commences on the date
hereof and ends on October 31, 1997 (the "Credit Period") in an
aggregate principal amount up to, but not exceeding at any time the
outstanding principal sum of Two Million Two Hundred Thousand
($2,200,000) Dollars (the "Commitment"). During the Credit Period,
the Borrower may use the Commitment by borrowing, prepaying in
whole or in part and reborrowing, on a revolving basis, all in
accordance with the terms and conditions hereof; provided, however,
that each Loan or prepayment be in a minimum amount of $10,000;
(b) Notwithstanding anything to the contrary set forth
herein, the outstanding principal balance of the Loans shall at no
time exceed the lesser of the Commitment or the aggregate amount
available to the Borrower under the following Borrowing Base (as
such amount shall fluctuate from time to time):
(i) an amount equal to eighty (80%) percent of
the Borrower's "Eligible Accounts Receivable", which
shall be defined as all accounts receivable of the
Borrower less uncollectible accounts and/or accounts
remaining unpaid after a date which is ninety (90) days
after the invoice date of said account receivable; plus
(ii) an amount equal to fifty (50%) percent of
the Borrower's "Eligible Inventory" on hand (said fifty
(50%) percent not to exceed One Million ($1,000,000)
Dollars). Eligible Inventory shall include only raw
materials, unfinished inventory, components and finished
goods;
(c) The Borrower shall submit to the Bank at the time of
each request for a Loan, but not less than one time per month, a
Borrowing Base Certificate confirming the calculation of the
Borrower's Eligible Accounts Receivable and Eligible Inventory and
calculating the amount available to the Borrower hereunder. Said
Borrowing Base Certificate shall be signed by an authorized
representative of the Borrower;
(d) The date and amount of each Loan and of each payment
of principal shall be maintained by the Bank in its books and
records at the time of each Loan or payment. Absent manifest error
on the part of the Bank, all such notations shall be presumed to be
correct and the aggregate net unpaid amount of Loans set forth
therein shall be presumed to be the principal balance hereof;
(e) Each request for a Loan shall be subject to the
satisfaction of the following conditions precedent:
(i) The Borrower shall have given the Bank
notice of such request, setting forth the amount of the
Loan requested and the date thereof. In addition to the
aforementioned, the Borrower shall submit to the Bank at
the time of each request, but in any event not less than
one time per month, a completed Borrowing Base
Certificate in the form annexed hereto as Exhibit "A"
satisfactory in form and substance to the Bank. Such
notice may be written or oral and shall be sufficient if
received by 1 p.m. of the date the Loan is requested. If
the request is oral, it shall be thereafter confirmed in
writing delivered by the Borrower to the Bank;
(ii) No Event of Default, or event which would
be an Event of Default but for the giving of notice or
the passage of time or both, has occurred and is
continuing; and all of the representations and warranties
made by the Borrower herein shall be true and correct in
all material respects on and as of the date of such
request as if made on and as of such date;
(f) The outstanding principal balance of the Loans shall
at no time exceed the amount of the Commitment;
(g) The Borrower acknowledges and represents that the
principal amount of $1,524,988.76 together with interest thereon
is outstanding under the terms hereof on the date hereof without
offset, defense or counterclaim.
CONDITIONS PRECEDENT:
The Borrower shall satisfy the following conditions
precedent including delivery to the Bank of the following:
(a) An executed copy of this Note;
(b) The Bank shall continue to maintain its first
perfected security interest in certain assets of the Borrower (the
"Collateral") pursuant to the general security agreement (the
"Security Agreement") as reaffirmed of even date herewith;
(c) A copy of the resolutions passed by the Borrower's
Board of Directors certified by its Secretary or Assistant
Secretary as being in full force and effect on the date of this
Agreement, authorizing the loan herein provided for, the execution,
delivery and performance of this Note and any other instrument or
agreement required hereunder and containing a certificate of
incumbency as to the person or persons authorized to execute and
deliver the same; and
(d) All other documents reasonably required by the Bank
and/or its counsel in order to evidence and/or secure the Bank's
position as set forth herein.
REPRESENTATIONS AND WARRANTIES: The Borrower hereby represents and
warrants to the Bank that:
(a) The Borrower is duly organized, validly existing and
in good standing under the laws of the State of its formation and
is qualified to do business and in good standing under the laws of
each state where its failure to so qualify would have a material
adverse effect on its business, operations or properties;
(b) This Note, the Security Agreement and all other
documents executed and delivered herewith have been duly
authorized, executed and delivered and constitute the valid and
legally binding obligations of the Borrower, enforceable in
accordance with their respective terms, including the granting to
the Bank of a first perfected security interest in the Collateral;
(c) The execution and delivery of this Note, the
Security Agreement and all other documents executed and delivered
herewith and performance hereunder and thereunder, will not violate
any provision of law;
(d) There are no actions or proceedings pending before
any court or governmental authority, bureau or agency, with respect
to or threatened against or affecting the Borrower, or any
Subsidiary, which if determined adversely would have a material
adverse effect on the business, the assets or the financial
condition of the Borrower or any Subsidiary. As used herein, the
term "Subsidiary" or "Subsidiaries" means any corporation or
corporations of which the Borrower alone, or the Borrower and/or
one or more of its Subsidiaries, owns, directly or indirectly, at
least a majority of the securities having ordinary voting power for
the election of directors;
(e) The Borrower is not in default under, or in
violation of, any term of any agreement, ordinance, resolution,
decree, bond, note, indenture, order or judgment to which it is a
party or by which it is bound, or by which any of the properties or
assets owned by or used in the conduct of its business is affected,
which default or violation may have a material adverse effect on
its business, assets or financial condition. The operations of the
Borrower comply in all material respects with all laws, ordinances
and regulations applicable to it;
(f) The Borrower is not a party to or bound by, nor are
any of the properties or assets owned by it or used in the conduct
of its business affected by any agreement, ordinance, resolution,
decree, bond, note, indenture, order or judgment, or subject to any
charter or other corporate restriction, which materially and
adversely affects its business, assets or financial condition;
(g) All balance sheets, profit and loss statements and
other financial information heretofore furnished to the Bank are
complete and present fairly the financial condition of the Borrower
and its Subsidiaries as at the dates thereof and for the periods
covered thereby, including contingent liabilities of every kind,
which financial conditions have not materially adversely changed
since the date of the most recently dated balance sheet of the
Borrower heretofore furnished to the Bank;
(h) No part of the proceeds of the loan which is
evidenced by this Note will be used directly or indirectly for the
purpose of purchasing or carrying, or for payment in full or in
part of indebtedness which was incurred for the purpose of
purchasing or carrying, any margin stock as such term is defined in
Sec. 221.3 of Regulation U of the Board of Governors of the Federal
Reserve System;
(i) The Borrower and its Subsidiaries are in compliance
in all material respects with the Employees Retirement Income
Security Act of 1974 ("ERISA") and all rules and regulations
thereunder. Neither the Borrower nor any of its Subsidiaries has
any unfunded vested liability under any type of plan described in
Section 4021(a) of ERISA ("Pension Plan") and no reportable event,
as set forth in Section 4043(b) of ERISA, has occurred or is
continuing with respect to any Plan.
FINANCIAL STATEMENTS: The Borrower shall deliver to the Bank:
(a) Annually, as soon as available, but in any event
within one hundred twenty (120) days after the last day of each
fiscal year, audited financial statements, including balance sheets
as of the last day of the fiscal year and statements of income and
retained earnings and changes in financial condition for such
fiscal year each prepared in accordance with generally accepted
accounting principles, consistently applied ("GAAP") for the period
and prior periods by independent Certified Public Accountants
satisfactory to the Bank;
(b) As soon as available, but in any event within forty-
five (45) days after the end of each fiscal quarter, internally
prepared financial statements of the Borrower each prepared in
accordance with GAAP and jobs-in-progress reports for said period
and prior periods;
(c) Within a reasonable time after a written request
therefor, such other financial data or information as the Bank may
reasonably request from time to time;
(d) At the same time as it delivers the financial
statements required under the provisions of subsections (a) and (b)
hereof, a certificate signed by the President or the chief
financial, or accounting, officer of the Borrower, to the effect
that no Event of Default hereunder or material default under any
other agreement to which the Borrower or any Subsidiary is a party
or by which it is bound, or by which any of its properties or
assets may be affected, and no event which, with the giving of
notice or the lapse of time, or both, would constitute such an
Event of Default, has occurred;
(e) On a monthly basis, no later than the tenth (10th)
day after each such month, the Borrowing Base Certificate
referenced herein and backlog reports and accounts receivable
agings of the Borrower.
AFFIRMATIVE COVENANTS: The Borrower will, and with respect to the
agreements set forth in subsections (a) through (f) hereof, will
cause each Subsidiary to:
(a) With respect to its properties, assets and business,
maintain insurance against loss or damage, to the extent that
property, assets and businesses of similar character are usually so
insured by companies similarly situated and operating like
properties, assets or businesses with responsible insurance
companies satisfactory to the Bank, said insurance to indicate the
Bank as an additional insured and loss payee;
(b) Duly pay and discharge all taxes or other claims
which might become a lien upon any of its properties except to the
extent that such items are being in good faith appropriately
contested;
(c) Maintain, preserve and keep its properties in good
repair, working order and condition, and make all reasonable
repairs, replacements, additions, betterments and improvements
thereto;
(d) Conduct its business in substantially the same
manner and in substantially the same fields as such business is now
carried on and conducted;
(e) Comply with all statutes, rules and regulations and
maintain its corporate existence;
(f) Permit the Bank to make or cause to be made,
inspections and audits of any books, records and papers of the
Borrower and of any Subsidiary and each endorser hereof and to make
extracts therefrom at all such reasonable times and as often as the
Bank may reasonably require;
(g) Immediately give notice to the Bank that an Event of
Default has occurred or that an event which, with the giving of
notice or lapse of time, or both, would constitute an Event of
Default, has occurred and specifying the action which the Borrower
has taken and proposes to take with respect thereto;
(h) In addition to the aforementioned, the Borrower
agrees that the following financial covenants are covenants upon
which the Bank relies in the extension of the obligation evidenced
hereby and that any violation or default under same shall
constitute an Event of Default under the terms hereof:
(1) at June 30, 1996, the Borrower shall
maintain a Tangible Net Worth equal to the greater of
(a) $4,500,000, or (b) the sum of $4,500,000 and any net
profit after taxes for the fiscal year ending June 30,
1996 (as calculated in accordance with GAAP) less any
preferred dividends (as such shall have been declared
during such fiscal year). At each fiscal year end
thereafter, the Borrower shall maintain a Tangible Net
Worth equal to the greater of (a) the required Tangible
Net Worth required hereunder for the immediately
preceding fiscal year, or (b) the sum of said required
Tangible Net Worth and any net profit after taxes for the
fiscal year then ending (as calculated in accordance with
GAAP) less any preferred dividends (as such shall have
been declared during such fiscal year). For purposes
hereof "Tangible Net Worth" shall mean, at any date, (i)
the net book value of assets (other than patents, patent
rights, trademarks, trade names, franchises, copyrights,
licenses, permits, goodwill and other intangible assets
classified as such in accordance with GAAP) after all
appropriate adjustments in accordance with GAAP
(including, without limitation, reserves for doubtful
receivables, obsolescence, depreciation and amortization)
plus (ii) subordinated indebtedness, in each case
computed in accordance with GAAP;
(2) As of each June 30 and December 31 of
each fiscal year, commencing with June 30, 1996, the
Borrower shall maintain an excess of Current Assets to
Current Liabilities of not less than 2.75 to 1.0. For
purposes hereof, "Current Assets" shall be defined as the
aggregate amount of all current assets of the Company and
its Subsidiaries including prepaid items such as
insurance, taxes, interest, commissions and rents as may
be properly classified as such in accordance with GAAP,
other than goodwill and such other assets as are properly
classified as "intangible assets" or deferred assets. In
determining the value of assets hereunder, investments in
Persons other than Subsidiaries shall be taken at cost or
fair market value, whichever is less. For purposes
hereof, "Current Liabilities" shall be defined as the
aggregate amount of all current liabilities of the
Company and its Subsidiaries determined in accordance
with GAAP;
(3) As of each June 30 and December 31 of
each fiscal year, commencing June 30, 1996, the Borrower
shall maintain Working Capital of not less than
$5,500,000. For purposes hereof, Working Capital shall
be defined as Current Assets less Current Liabilities;
(4) As of each June 30 and December 31 of
each fiscal year, commencing June 30, 1996, the Borrower
shall maintain a ratio of Total Liabilities (calculated
in accordance with GAAP excluding debt pursuant to the
Debentures as hereinafter defined) to Tangible Net Worth
of not more than 1.25 to 1.0;
(5) the Borrower shall maintain a Debt
Service Coverage ratio of not less than 1.05 : 1 at
fiscal year end June 30, 1996 and 1.20 : 1 at fiscal year
end June 30, 1997. For purposes hereof "Debt Service
Coverage" shall be defined as earnings before interest
taxes, depreciation and amortization for the fiscal year
ending on the date of determination divided by the sum of
current maturities of long term debt plus interest
expense whether paid or accrued plus preferred dividends
declared during such fiscal year (as all of the
aforementioned are calculated in accordance with GAAP).
COMPENSATING BALANCE AND DEFICIENCY FEE AGREEMENT: If at any
time during the term hereof, the aggregate average monthly ledger
balance maintained in the non-interest deposit accounts of the
Borrower at the Bank are less than $175,000, the Borrower shall pay
to the Bank an additional fee equal to (a) the difference between
$175,000 and the aggregate average monthly ledger balance
maintained in the non-interest bearing deposit accounts of the
Borrower at the Bank, multiplied by (b) a fixed rate (the
"Deficiency Rate") equal to four (4%) percent in excess of the
Bank's Prime Rate, based on a 360 day year and actual number of
days elapsed. The $175,000 Compensating Balance requirement set
forth herein is intended as an aggregate requirement for all
obligations of the Borrower to the Bank. The Deficiency Rate shall
be established on the first day of each January and July and shall
be applicable for the immediately ensuing six (6) month period.
The fee defined herein shall be due and payable within fifteen (15)
days following the end of each calendar quarter and shall be
debited by the Bank from any account maintained by the Borrower at
the Bank. The Borrower shall maintain sufficient funds in said
accounts to permit such debit.
Nothing contained herein shall be deemed to require the undersigned
to maintain Demand Deposit Balances at the Bank. The
aforementioned is intended as a fee only and is neither intended,
nor to be construed as, an imposition of interest or other charge.
NEGATIVE COVENANTS: The Borrower will not, and will not permit any
Subsidiary to:
(a) Create, incur, assume or suffer to exist any
liability for borrowed money, except (i) amounts outstanding under
the Borrower's twelve (12%) percent Convertible Senior Subordinated
Debentures, (ii) amounts outstanding under the Borrower's Amended
and Restated twelve (12%) percent Convertible Subordinated
Debentures (the aforementioned are collectively referred to herein
as the "Debentures") (iii) indebtedness to the Bank; (iv) existing
debt as reflected on the most recent balance sheet provided to the
Bank and further incurred through the date of this Agreement, which
further incurred debt has been acknowledged by the Borrower to the
Bank in writing prior to the execution hereof; and (v) other
indebtedness for borrowed money (whether or not constituting a
refinancing of existing indebtedness) so long as such indebtedness
is not secured by collateral securing repayment of this Loan and
the incurrence of which will not cause a default hereunder. The
Borrower agrees to provide the Bank an opportunity to finance any
additional borrowing needs in excess of $100,000 during the term of
this Note;
(b) enter into any merger or consolidation (where the
Borrower is not the surviving entity) or liquidate, wind-up or
dissolve itself or sell, transfer or lease or otherwise dispose of
all or any substantial part of its assets;
(c) lend or advance money, credit or property to or
invest in (by capital contribution, loan, purchase or otherwise)
any firm, corporation, or other person where any event of default
has occurred and is continuing or where such transaction would
cause an event of default hereunder;
(d) create, assume or permit to exist, any mortgage,
pledge, lien or encumbrance of or upon or security interest in, any
of its property or assets now owned or hereafter acquired except
(i) mortgages, liens, pledges and security interests in favor of
the Bank; (ii) subordinate liens incidental to the Debentures;
(iii) other liens, charges and encumbrances incidental to the
conduct of its business or the ownership of its property and assets
which were not incurred in connection with the borrowing of money
or the obtaining of advances or credit and which do not materially
impair the use thereof in the operation of its business; (iv) liens
for taxes or other governmental charges which are not delinquent or
which are being contested in good faith and for which a reserve
shall have been established in accordance with generally accepted
accounting principles; (v) liens granted to secure purchase money
financing of equipment, provided such liens are limited to the
equipment financed; and (vi) liens granted to refinance
unencumbered equipment provided such liens are limited to the
equipment refinanced and the incurrence of which will not cause a
default hereunder or in any other loan agreements or notes with the
Bank;
(e) assume, endorse, be or become liable for or
guarantee the obligations of any other person except by the
endorsement of negotiable instruments for deposit or collection in
the ordinary course of business;
(f) declare or pay any preferred dividends where any
Event of Default has occurred and is continuing;
(g) (i) terminate any Pension Plan so as to result in
any material liability to The Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA (the
"PBCG"), (ii) engage in or permit any person to engage in any
"prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1954, as amended)
involving any Pension Plan which would subject the Borrower to any
material tax, penalty or other liability, (iii) incur or suffer to
exist any material "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, involving any Pension
Plan, or (iv) allow or suffer to exist any event or condition,
which presents a material risk of incurring a material liability to
the PBCG by reason of termination of any Pension Plan.
COLLATERAL SECURITY:
(a) As collateral security for the payment of any and
all sums owing under this Note and all other obligations, direct or
contingent, joint, several or independent, of the Borrower and of
any Subsidiary and each endorser hereof now or hereafter existing,
due or to become due to, or held, or to be held by, the Bank,
whether created directly or acquired by assignment or otherwise
(all of such obligations, including this Note, are hereinafter
called the "Obligations"), the Borrower hereby grants to the Bank
a lien on and security interest in any and all deposits or other
sums at any time credited by or due from the Bank to the Borrower,
whether in regular or special depository accounts or otherwise, and
any and all monies, securities and other property of the Borrower,
and the proceeds thereof, now or hereafter held or received by or
in transit to the Bank from or for the Borrower, whether for
safekeeping, custody, pledge, transmission, collection or
otherwise, and any such deposits, sums, monies, securities and
other property, may at any time after the occurrence of any Event
of Default be set-off, appropriated and applied by the Bank against
any of the Obligations whether or not such Obligations are then due
or are secured by any collateral, or, if they are so secured,
whether or not such collateral held by the Bank is considered to be
adequate and with respect to all collateral security the Bank shall
have all the rights and remedies available to it under the Uniform
Commercial Code of New York and other applicable law;
(b) This Note is also secured by the Collateral.
EVENTS OF DEFAULT: If any one or more of the following events
("Events of Default") shall occur the Borrower shall be in default
hereunder and, at the option of the Bank, the entire unpaid balance
of the principal of and interest on the Obligations shall
immediately become due and payable:
(a) Failure to pay any amount required by this Note
within ten (10) days of its respective due date, or any other
obligation owed to the Bank by Borrower, or, if applicable, failure
to have sufficient funds in its account for loan payments to be
debited on the due date;
(b) Failure to perform or keep or abide by any negative
or financial covenant set forth herein contained in this Note, or
any other document or instrument given to the Bank in connection
with this loan;
(c) Failure to perform or keep or abide by any other
term, covenant, or condition contained in this Note, or any other
document or instrument given to the Bank in connection with this
Loan, said failure continuing for a period of thirty (30) days
after written notice thereof;
(d) Payment Default by the Borrower or any declared
default pursuant to the Debentures;
(e) The Borrower makes an assignment for the benefit of
creditors or admits in writing its inability to pay its debts
generally as they become due; or an order, judgment or decree is
entered adjudicating the Borrower as bankrupt or insolvent; or any
order for relief with respect to the Borrower is entered under the
United States Bankruptcy Code; or the Borrower petitions or applies
to any tribunal for the appointment of a custodian, trustee,
receiver or liquidator of the Borrower or of any substantial part
of the assets of the Borrower, or commences any proceeding relating
to the Borrower under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction; or any such petition or application is filed, or
any such proceeding is commenced, against the Borrower and either
(i) the Borrower by any act indicates its approval thereof,
consents thereto, or acquiesces therein or (ii) such petition,
application or proceeding is not dismissed within sixty (60) days;
(f) The happening of any event which, in the judgment of
the Bank, adversely affects the Borrower's ability to repay or the
value of any collateral;
(g) If any material written representation or material
statement made to the Bank by the Borrower is untrue when made;
(h) The occurrence of a default under any other document
or instrument given to the Bank in connection with this loan;
(i) Failure to provide any financial information on
request or permit an examination of books and records;
(j) In the event that any person or "group" (as defined
in Rule 13d-5 promulgated under the Exchange Act), other than SFM
Group, Ltd. or Phipps, Teman & Company, L.L.C., acquires or
otherwise obtains the right (whether by contract, through the
ownership of securities or pursuant to any proxy or consent
arrangement, voting trust or otherwise) to appoint, elect or cause
the election of a majority of the Board of Directors of the
Company;
(k) if any order is entered by any court or tribunal, at
law or in equity, by or against any of the Obligors for the
appointment of any receiver or any trustee for any of the Obligors
and said Order is not discharged within sixty (60) days from the
entry thereof.
ATTORNEYS FEES: In the event the Bank retains counsel with respect
to enforcement of this Note or any other document or instrument
given to the Bank, the Borrower agrees to pay the Bank's reasonable
attorneys fees (whether or not an action is commenced and whether
or not in the court of original jurisdiction, appellate court,
bankruptcy court, or otherwise).
SUBSEQUENT AGREEMENTS: The Borrower shall be bound by any
agreement extending the time or modifying the above terms of
payment made by the Bank without notice to the Borrower, and the
Borrower shall continue to be liable to pay all amounts due
hereunder, but at an interest rate not exceeding the rate set forth
herein, according to the terms of any such agreement of extension
or modification.
MISCELLANEOUS:
(a) Only those agreements, representations and
warranties made expressly herein shall survive the delivery of this
Note. The Borrower waives trial by jury, set-off and counterclaim
of any nature or description in any litigation in any court with
respect to, in connection with, or arising out of, this Note or any
instrument or document delivered pursuant hereto or the validity,
protection, interpretation, collection or enforcement hereof;
(b) No modification or waiver of or with respect to any
provision of this Note, or consent to any departure by the Borrower
from any of the terms or conditions hereof, shall in any event be
effective unless it shall be in writing and signed by the Bank, and
then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or
demand on the Borrower in any case shall, of itself, entitle it to
any other or further notice or demand in similar or other
circumstances;
(c) Each and every right granted to the Bank hereunder
or under any other document delivered hereunder or in connection
herewith, or allowed it by law or equity, shall be cumulative and
may be exercised from time to time. No failure on the part of the
Bank or the holder of this Note to exercise, and no delay in
exercising, any right shall operate as a waiver thereof, nor shall
any single or partial exercise of any right preclude any other or
future exercise thereof or the exercise of any other right;
(d) In the event that this Note is placed in the hands
of an attorney for collection by reason of any default hereunder,
the Borrower agrees to pay reasonable attorney's fees so incurred.
The Borrower promises to pay all reasonable out-of-pocket expenses
of any nature as soon as incurred whether in or out of court and
whether incurred before or after this Note shall become due at its
maturity date or otherwise and costs which the Bank may deem
necessary or proper in connection with the satisfaction of the
indebtedness or the administration, supervision, preservation,
protection (including but not limited to maintenance of adequate
insurance) of or the realization upon the collateral;
(e) The Borrower hereby waives presentment, demand for
payment, protest, notice of protest, notice of dishonor, and any or
all other notices or demands except as otherwise expressly provided
for herein;
(f) All accounting terms not otherwise defined in this
Note shall have the meanings ascribed thereto under generally
accepted accounting principles;
(g) Delay or failure of the Bank to exercise any of its
rights under this Note shall not be deemed a waiver thereof. No
waiver of any condition or requirement shall operate as a waiver of
any other or subsequent condition or requirement. The Bank or any
other holder of this Note need not present it before requiring
payment. The Borrower waives trial by jury, offset, and
counterclaim with respect to any action arising out of or relating
to this Note. This Note may not be modified or terminated orally.
This Note shall be governed by the laws of the State of New York
without regard to its conflicts of laws rules. The Borrower
irrevocably consents to the jurisdiction and venue of the New York
State Supreme Court, Suffolk County in any action concerning this
Note. This Note is binding upon the Borrower, its heirs,
successors and assigns;
(h) The Borrower expressly warrants and represents that
no statements, agreements or representations, whether oral or
written, have been made by the Bank, or by any employee, agent or
broker of the Bank with respect to the obligation or debt evidenced
by this Note. The Borrower further expressly warrants and
represents that (i) no oral commitment has been made by the Bank to
extend or continue any credit to the Borrower or any party other
than as expressly stated herein or in those certain documents
executed in connection herewith, (ii) no representation or
agreement has been made by or with the Bank, or any employee, agent
or broker of the Bank, to forebear or refrain in any way from
exercising any right or remedy in its favor hereunder or otherwise
unless expressly set forth herein, and (iii) the Borrower has not
and will not rely on any commitment to extend or continue any
credit, nor on any agreement to forebear or refrain from exercising
rights or remedies unless such commitment or agreement shall be in
writing and duly executed by an authorized officer of the Bank.
NOTICES: All notices, requests and other communications pursuant
to this Note shall be in writing, either by letter (delivered by
hand or sent by certified mail, return receipt requested) or
telegram, addressed as follows:
(a) if to the Borrower:
Logimetrics, Inc.
121-03 Dupont Street
Plainview, New York 11803
Attention: Murray H. Feigenbaum, President
(b) if to the Bank:
North Fork Bank
275 Broad Hollow Road
Melville, New York 11747
Attention: Joseph Walsh, Vice President
Any notice, request or communication hereunder shall be
deemed to have been given when deposited in the mails, postage
prepaid, or in the case of telegraphic notice, when delivered to
the telegraph company, addressed as aforesaid. Any party may
change the person or address to whom or which the notices are to be
given hereunder, but any such notice shall be effective only when
actually received by the party to whom it is addressed.
IN WITNESS WHEREOF, the Borrower has signed this Note the
7th day of March, 1996.
LOGIMETRICS, INC.
By: _________________________
Murray H. Feigenbaum
President
STATE OF NEW YORK)
) ss.:
COUNTY OF SUFFOLK)
On this 7th day of March, 1996, before me personally came
Murray H. Feigenbaum, to me known, who, being by me duly sworn, did
depose and say that he has an address at c/o LOGIMETRICS, INC.,
121-03 Dupont Street, Plainview, New York 11803, that he is the
President of LOGIMETRICS, INC., the corporation described in, and
which executed, the foregoing instrument; and that he signed his
name thereto by order of the Board of Directors of said
corporation.
_________________________
NOTARY PUBLIC
EXHIBIT "A"
BORROWING BASE CERTIFICATE
The undersigned hereby certifies that:
1. The undersigned has performed and complied in all
respects with the agreements, covenants and conditions of those
certain loan agreements dated March 6, 1996 between North Fork Bank
and the undersigned; and
2. On the date hereof, there exists no event of default or
default as defined in the aforementioned agreements, and no
material adverse change has occurred to the financial condition of
the Borrower between March 6, 1996 and the date hereof; and
3. The following information relating to the Borrowing Base
as defined in the agreement is true and accurate and represents
fairly and completely the status of the stated information as of
the date hereof.
Eligible Inventory _____ x 50% ____
Eligible Accounts Receivable _____ x 80% ____
Total Eligible Inventory and Accounts Receivable
Less Outstanding Loan (A) ----------------
Remaining Eligibility (B)
(A + B not to exceed the sum of $2,200,000) ================
LOGIMETRICS, INC.
By: ___________________________
Murray H. Feigenbaum
President
For Bank use only
Received by: ______________________
Approved by: ______________________
Other: ____________________________
NORTH FORK BANK
FURTHER RESTATED, INCREASED AND AMENDED TERM LOAN NOTE
The within is a restatement and amendment and
continuation of that certain prior Amended and Restated
Term Note between Apple Bank for Savings and Logimetrics,
Inc., said Note having been previously assigned by Apple
Bank for Savings to North Fork Bank pursuant to an
Assignment and Assumption Agreement dated December 18,
1992; said Note having been previously restated and
amended pursuant to a Restated and Amended Term Loan Note
in the principal amount of $358,322 dated November 18,
1993.
BORROWER: LOGIMETRICS, INC.
PRINCIPAL: $800,000 Date: March 7, 1996
PROMISE TO PAY: The undersigned (the "Borrower"), jointly and
severally if more than one signer, does hereby promise to pay to
the order of NORTH FORK BANK (the "Bank") at its offices at 245
Love Lane, Mattituck, New York 11952, or at any of its branches,
the sum of EIGHT HUNDRED THOUSAND ($800,000) DOLLARS plus interest
thereon, from the date hereof in the manner set forth below.
RATE AND PAYMENT: The unpaid principal balance hereof shall bear
interest at that rate equal to one and one-half (1%) percent per
annum in excess of that rate stated by the Bank to be its Prime
Rate from time to time in effect, payable monthly in arrears
commencing on April 1, 1996 and on the 1st day of each month
thereafter. In addition to the aforementioned payments of
interest, the Borrower shall pay to the Bank thirty-two (32) equal
consecutive monthly payments of principal each in the amount of
Thirteen Thousand Three Hundred Thirty-Three and 33/100
($13,333.33) Dollars commencing on May 1, 1996 and on the 1st day
of each month thereafter together with a final payment of all
outstanding principal, interest and/or related charges on December
31, 1998, which shall be the maturity date of this Note.
Wherever any payment to be made under this Note is required to be
paid on a date that is a Saturday, Sunday or public holiday, or the
equivalent for banks under the laws of the State of New York, such
payment may be made on the next succeeding business day, and such
extension of time shall in such case be included in the computation
of interest due.
The Bank may charge any account of the Borrower for any payment due
to the Bank hereunder.
All payments due under the Note shall be made by automatic debit
from an account maintained by the Borrower for such purpose at the
Bank in which the Borrower shall maintain balances sufficient to
pay each monthly payment due to the Bank under the Loan. In the
event that the money maintained in such account is insufficient for
any payment due under this Note, the Bank may charge any account of
the Borrower for any payment due to the Bank under this Note.
Payments shall be applied first to interest on unpaid principal
balances to the date payment is received by the Bank and then to
reduction of principal. If the interest rate is based on the
Bank's announced Prime Rate, the interest rate shall change when
the Prime Rate changes and nothing herein shall prevent the Bank
from loaning money at less than Prime on such terms and conditions
as it deems advisable. Interest shall be calculated on a 360 day
year and actual number of days elapsed.
PREPAYMENT: Prepayment in whole or in part may be made at any time
without penalty.
DEFAULT INTEREST RATE: The unpaid principal sum due under this
Note shall bear interest at a rate equal to five (5%) percent above
the Rate set forth above on and after the occurrence of any event
of default and until the entire principal sum hereof has been fully
paid, both before and after the entry of any judgment with respect
to such event, but in no event shall the rate either before or
after the occurrence of any event of default exceed the highest
rate of interest, if any, permitted under applicable New York or
Federal Law. Such rate of interest shall continue until such time
as any event of default that may be cured by the Borrower is cured
to the satisfaction of the Bank, at which time the previously
stated interest rate shall re-commence. In no event shall the rate
either before or after the occurrence of any such default exceed
the highest rate of interest, if any, permitted under applicable
New York or Federal law.
RIGHT OF OFFSET: If any payment is not made on time, or if the
entire balance becomes due and payable and is not paid, all or part
of the amount due may be offset out of any account or other
property which the Borrower has at the Bank or any affiliate of the
Bank without prior notice or demand.
LATE CHARGES: The Borrower will pay a charge of five (5%) percent
of the amount of any payment which is not made within ten (10) days
of its respective due date, or, if applicable, which cannot be
debited from its account due to insufficient balance on the debit
date.
SECURITY: This Note is secured by:
(1) a security interest in and assignment and pledge of all
monies, deposits, or other sums now or hereafter held by the Bank
on deposit, in safekeeping, transit or otherwise, at any time
credited by or due from Bank to the Borrower, or in which the
Borrower shall have an interest; and
(2) a continuing first lien against all assets of the
Borrower as set forth, in part, in that certain Restated and
Amended General Security Agreement dated of even date herewith.
CONDITIONS PRECEDENT:
The Borrower shall satisfy the following conditions
precedent including delivery to the Bank of the following:
(a) An executed copy of this Note;
(b) The Bank shall continue to maintain its first
perfected security interest in certain assets of the Borrower (the
"Collateral") pursuant to the general security agreement (the
"Security Agreement") as reaffirmed of even date herewith;
(c) A copy of the resolutions passed by the
Borrower's Board of Directors certified by its Secretary or
Assistant Secretary as being in full force and effect on the date
of this Agreement, authorizing the loan herein provided for, the
execution, delivery and performance of this Note and any other
instrument or agreement required hereunder and containing a
certificate of incumbency as to the person or persons authorized to
execute and deliver the same; and
(d) All other documents reasonably required by the
Bank and/or its counsel in order to evidence and/or secure the
Bank's position as set forth herein.
REPRESENTATIONS AND WARRANTIES: The Borrower hereby represents and
warrants to the Bank that:
(a) The Borrower is duly organized, validly existing and
in good standing under the laws of the State of its formation and
is qualified to do business and in good standing under the laws of
each state where its failure to so qualify would have a material
adverse effect on its business, operations or properties;
(b) This Note, the Security Agreement and all other
documents executed and delivered herewith have been duly
authorized, executed and delivered and constitute the valid and
legally binding obligations of the Borrower, enforceable in
accordance with their respective terms, including the granting to
the Bank of a first perfected security interest in the Collateral;
(c) The execution and delivery of this Note, the
Security Agreement and all other documents executed and delivered
herewith and performance hereunder and thereunder, will not violate
any provision of law;
(d) There are no actions or proceedings pending before
any court or governmental authority, bureau or agency, with respect
to or threatened against or affecting the Borrower, or any
Subsidiary, which if determined adversely would have a material
adverse effect on the business, the assets or the financial
condition of the Borrower or any Subsidiary. As used herein, the
term "Subsidiary" or "Subsidiaries" means any corporation or
corporations of which the Borrower alone, or the Borrower and/or
one or more of its Subsidiaries, owns, directly or indirectly, at
least a majority of the securities having ordinary voting power for
the election of directors;
(e) The Borrower is not in default under, or in
violation of, any term of any agreement, ordinance, resolution,
decree, bond, note, indenture, order or judgment to which it is a
party or by which it is bound, or by which any of the properties or
assets owned by or used in the conduct of its business is affected,
which default or violation may have a material adverse effect on
its business, assets or financial condition. The operations of the
Borrower comply in all material respects with all laws, ordinances
and regulations applicable to it;
(f) The Borrower is not a party to or bound by, nor are
any of the properties or assets owned by it or used in the conduct
of its business affected by any agreement, ordinance, resolution,
decree, bond, note, indenture, order or judgment, or subject to any
charter or other corporate restriction, which materially and
adversely affects its business, assets or financial condition;
(g) All balance sheets, profit and loss statements and
other financial information heretofore furnished to the Bank are
complete and present fairly the financial condition of the Borrower
and its Subsidiaries as at the dates thereof and for the periods
covered thereby, including contingent liabilities of every kind,
which financial conditions have not materially adversely changed
since the date of the most recently dated balance sheet of the
Borrower heretofore furnished to the Bank;
(h) No part of the proceeds of the loan which is
evidenced by this Note will be used directly or indirectly for the
purpose of purchasing or carrying, or for payment in full or in
part of indebtedness which was incurred for the purpose of
purchasing or carrying, any margin stock as such term is defined in
Sec. 221.3 of Regulation U of the Board of Governors of the Federal
Reserve System;
(i) The Borrower and its Subsidiaries are in compliance
in all material respects with the Employees Retirement Income
Security Act of 1974 ("ERISA") and all rules and regulations
thereunder. Neither the Borrower nor any of its Subsidiaries has
any unfunded vested liability under any type of plan described in
Section 4021(a) of ERISA ("Pension Plan") and no reportable event,
as set forth in Section 4043(b) of ERISA, has occurred or is
continuing with respect to any Plan.
FINANCIAL STATEMENTS: The Borrower shall deliver to the Bank:
(a) Annually, as soon as available, but in any event
within one hundred twenty (120) days after the last day of each
fiscal year, audited financial statements, including balance sheets
as of the last day of the fiscal year and statements of income and
retained earnings and changes in financial condition for such
fiscal year each prepared in accordance with generally accepted
accounting principles, consistently applied ("GAAP") for the period
and prior periods by independent Certified Public Accountants
satisfactory to the Bank;
(b) As soon as available, but in any event within forty-
five (45) days after the end of each fiscal quarter, internally
prepared financial statements of the Borrower each prepared in
accordance with GAAP and jobs-in-progress reports for said period
and prior periods;
(c) Within a reasonable time after a written request
therefor, such other financial data or information as the Bank may
reasonably request from time to time;
(d) At the same time as it delivers the financial
statements required under the provisions of subsections (a) and (b)
hereof, a certificate signed by the President or the chief
financial, or accounting, officer of the Borrower, to the effect
that no Event of Default hereunder or material default under any
other agreement to which the Borrower or any Subsidiary is a party
or by which it is bound, or by which any of its properties or
assets may be affected, and no event which, with the giving of
notice or the lapse of time, or both, would constitute such an
Event of Default, has occurred;
(e) On a monthly basis, no later than the tenth (10th)
day after each such month, the Borrowing Base Certificate
referenced herein and backlog reports and accounts receivable
agings of the Borrower.
AFFIRMATIVE COVENANTS: The Borrower will, and with respect to the
agreements set forth in subsections (a) through (f) hereof, will
cause each Subsidiary to:
(a) With respect to its properties, assets and business,
maintain insurance against loss or damage, to the extent that
property, assets and businesses of similar character are usually so
insured by companies similarly situated and operating like
properties, assets or businesses with responsible insurance
companies satisfactory to the Bank, said insurance to indicate the
Bank as an additional insured and loss payee;
(b) Duly pay and discharge all taxes or other claims
which might become a lien upon any of its properties except to the
extent that such items are being in good faith appropriately
contested;
(c) Maintain, preserve and keep its properties in good
repair, working order and condition, and make all reasonable
repairs, replacements, additions, betterments and improvements
thereto;
(d) Conduct its business in substantially the same
manner and in substantially the same fields as such business is now
carried on and conducted;
(e) Comply with all statutes, rules and regulations and
maintain its corporate existence;
(f) Permit the Bank to make or cause to be made,
inspections and audits of any books, records and papers of the
Borrower and of any Subsidiary and each endorser hereof and to make
extracts therefrom at all such reasonable times and as often as the
Bank may reasonably require;
(g) Immediately give notice to the Bank that an Event of
Default has occurred or that an event which, with the giving of
notice or lapse of time, or both, would constitute an Event of
Default, has occurred and specifying the action which the Borrower
has taken and proposes to take with respect thereto;
(h) In addition to the aforementioned, the Borrower
agrees that the following financial covenants are covenants upon
which the Bank relies in the extension of the obligation evidenced
hereby and that any violation or default under same shall
constitute an Event of Default under the terms hereof:
(1) at June 30, 1996, the Borrower shall
maintain a Tangible Net Worth equal to the greater of
(a) $4,500,000, or (b) the sum of $4,500,000 and any net
profit after taxes for the fiscal year ending June 30,
1996 (as calculated in accordance with GAAP) less any
preferred dividends (as such shall have been declared
during such fiscal year). At each fiscal year end
thereafter, the Borrower shall maintain a Tangible Net
Worth equal to the greater of (a) the required Tangible
Net Worth required hereunder for the immediately
preceding fiscal year, or (b) the sum of said required
Tangible Net Worth and any net profit after taxes for the
fiscal year then ending (as calculated in accordance with
GAAP) less any preferred dividends (as such shall have
been declared during such fiscal year). For purposes
hereof "Tangible Net Worth" shall mean, at any date, (i)
the net book value of assets (other than patents, patent
rights, trademarks, trade names, franchises, copyrights,
licenses, permits, goodwill and other intangible assets
classified as such in accordance with GAAP) after all
appropriate adjustments in accordance with GAAP
(including, without limitation, reserves for doubtful
receivables, obsolescence, depreciation and amortization)
plus (ii) subordinated indebtedness, in each case
computed in accordance with GAAP;
(2) As of each June 30 and December 31 of
each fiscal year, commencing with June 30, 1996, the
Borrower shall maintain an excess of Current Assets to
Current Liabilities of not less than 2.75 to 1.0. For
purposes hereof, "Current Assets" shall be defined as the
aggregate amount of all current assets of the Company and
its Subsidiaries including prepaid items such as
insurance, taxes, interest, commissions and rents as may
be properly classified as such in accordance with GAAP,
other than goodwill and such other assets as are properly
classified as "intangible assets" or deferred assets. In
determining the value of assets hereunder, investments in
Persons other than Subsidiaries shall be taken at cost or
fair market value, whichever is less. For purposes
hereof, "Current Liabilities" shall be defined as the
aggregate amount of all current liabilities of the
Company and its Subsidiaries determined in accordance
with GAAP;
(3) As of each June 30 and December 31 of
each fiscal year, commencing June 30, 1996, the Borrower
shall maintain Working Capital of not less than
$5,500,000. For purposes hereof, Working Capital shall
be defined as Current Assets less Current Liabilities;
(4) As of each June 30 and December 31 of
each fiscal year, commencing June 30, 1996, the Borrower
shall maintain a ratio of Total Liabilities (calculated
in accordance with GAAP excluding debt pursuant to the
Debentures as hereinafter defined) to Tangible Net Worth
of not more than 1.25 to 1.0;
(5) the Borrower shall maintain a Debt
Service Coverage ratio of not less than 1.05 : 1 at
fiscal year end June 30, 1996 and 1.20 : 1 at fiscal year
end June 30, 1997. For purposes hereof "Debt Service
Coverage" shall be defined as earnings before interest
taxes, depreciation and amortization for the fiscal year
ending on the date of determination divided by the sum of
current maturities of long term debt plus interest
expense whether paid or accrued plus preferred dividends
declared during such fiscal year (as all of the
aforementioned are calculated in accordance with GAAP).
COMPENSATING BALANCE AND DEFICIENCY FEE AGREEMENT: If at any
time during the term hereof, the aggregate average monthly ledger
balance maintained in the non-interest deposit accounts of the
Borrower at the Bank are less than $175,000, the Borrower shall pay
to the Bank an additional fee equal to (a) the difference between
$175,000 and the aggregate average monthly ledger balance
maintained in the non-interest bearing deposit accounts of the
Borrower at the Bank, multiplied by (b) a fixed rate (the
"Deficiency Rate") equal to four (4%) percent in excess of the
Bank's Prime Rate, based on a 360 day year and actual number of
days elapsed. The $175,000 Compensating Balance requirement set
forth herein is intended as an aggregate requirement for all
obligations of the Borrower to the Bank. The Deficiency Rate shall
be established on the first day of each January and July and shall
be applicable for the immediately ensuing six (6) month period.
The fee defined herein shall be due and payable within fifteen (15)
days following the end of each calendar quarter and shall be
debited by the Bank from any account maintained by the Borrower at
the Bank. The Borrower shall maintain sufficient funds in said
accounts to permit such debit.
Nothing contained herein shall be deemed to require the undersigned
to maintain Demand Deposit Balances at the Bank. The
aforementioned is intended as a fee only and is neither intended,
nor to be construed as, an imposition of interest or other charge.
NEGATIVE COVENANTS: The Borrower will not, and will not permit any
Subsidiary to:
(a) Create, incur, assume or suffer to exist any
liability for borrowed money, except (i) amounts outstanding under
the Borrower's twelve (12%) percent Convertible Senior Subordinated
Debentures, (ii) amounts outstanding under the Borrower's Amended
and Restated twelve (12%) percent Convertible Subordinated
Debentures (the aforementioned are collectively referred to herein
as the "Debentures") (iii) indebtedness to the Bank; (iv) existing
debt as reflected on the most recent balance sheet provided to the
Bank and further incurred through the date of this Agreement, which
further incurred debt has been acknowledged by the Borrower to the
Bank in writing prior to the execution hereof; and (v) other
indebtedness for borrowed money (whether or not constituting a
refinancing of existing indebtedness) so long as such indebtedness
is not secured by collateral securing repayment of this Loan and
the incurrence of which will not cause a default hereunder. The
Borrower agrees to provide the Bank an opportunity to finance any
additional borrowing needs in excess of $100,000 during the term of
this Note;
(b) enter into any merger or consolidation (where the
Borrower is not the surviving entity) or liquidate, wind-up or
dissolve itself or sell, transfer or lease or otherwise dispose of
all or any substantial part of its assets;
(c) lend or advance money, credit or property to or
invest in (by capital contribution, loan, purchase or otherwise)
any firm, corporation, or other person where any event of default
has occurred and is continuing or where such transaction would
cause an event of default hereunder;
(d) create, assume or permit to exist, any mortgage,
pledge, lien or encumbrance of or upon or security interest in, any
of its property or assets now owned or hereafter acquired except
(i) mortgages, liens, pledges and security interests in favor of
the Bank; (ii) subordinate liens incidental to the Debentures;
(iii) other liens, charges and encumbrances incidental to the
conduct of its business or the ownership of its property and assets
which were not incurred in connection with the borrowing of money
or the obtaining of advances or credit and which do not materially
impair the use thereof in the operation of its business; (iv) liens
for taxes or other governmental charges which are not delinquent or
which are being contested in good faith and for which a reserve
shall have been established in accordance with generally accepted
accounting principles; (v) liens granted to secure purchase money
financing of equipment, provided such liens are limited to the
equipment financed; and (vi) liens granted to refinance
unencumbered equipment provided such liens are limited to the
equipment refinanced and the incurrence of which will not cause a
default hereunder or in any other loan agreements or notes with the
Bank;
(e) assume, endorse, be or become liable for or
guarantee the obligations of any other person except by the
endorsement of negotiable instruments for deposit or collection in
the ordinary course of business;
(f) declare or pay any preferred dividends where any
Event of Default has occurred and is continuing;
(g) (i) terminate any Pension Plan so as to result in
any material liability to The Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA (the
"PBCG"), (ii) engage in or permit any person to engage in any
"prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1954, as amended)
involving any Pension Plan which would subject the Borrower to any
material tax, penalty or other liability, (iii) incur or suffer to
exist any material "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, involving any Pension
Plan, or (iv) allow or suffer to exist any event or condition,
which presents a material risk of incurring a material liability to
the PBCG by reason of termination of any Pension Plan.
COLLATERAL SECURITY:
(a) As collateral security for the payment of any and
all sums owing under this Note and all other obligations, direct or
contingent, joint, several or independent, of the Borrower and of
any Subsidiary and each endorser hereof now or hereafter existing,
due or to become due to, or held, or to be held by, the Bank,
whether created directly or acquired by assignment or otherwise
(all of such obligations, including this Note, are hereinafter
called the "Obligations"), the Borrower hereby grants to the Bank
a lien on and security interest in any and all deposits or other
sums at any time credited by or due from the Bank to the Borrower,
whether in regular or special depository accounts or otherwise, and
any and all monies, securities and other property of the Borrower,
and the proceeds thereof, now or hereafter held or received by or
in transit to the Bank from or for the Borrower, whether for
safekeeping, custody, pledge, transmission, collection or
otherwise, and any such deposits, sums, monies, securities and
other property, may at any time after the occurrence of any Event
of Default be set-off, appropriated and applied by the Bank against
any of the Obligations whether or not such Obligations are then due
or are secured by any collateral, or, if they are so secured,
whether or not such collateral held by the Bank is considered to be
adequate and with respect to all collateral security the Bank shall
have all the rights and remedies available to it under the Uniform
Commercial Code of New York and other applicable law;
(b) This Note is also secured by the Collateral.
EVENTS OF DEFAULT: The Bank may declare the entire unpaid balance
of this Note due and payable on the happening of any of the
following events:
(a) Failure to pay any amount required by this Note
within ten (10) days of its respective due date, or any other
obligation owed to the Bank by Borrower, or, if applicable, failure
to have sufficient funds in its account for loan payments to be
debited on the due date;
(b) Failure to perform or keep or abide by any negative
or financial covenant set forth herein contained in this Note, or
any other document or instrument given to the Bank in connection
with this loan;
(c) Failure to perform or keep or abide by any other
term, covenant, or condition contained in this Note, or any other
document or instrument given to the Bank in connection with this
Loan, said failure continuing for a period of thirty (30) days
after written notice thereof;
(d) Payment Default by the Borrower or any declared
default pursuant to the Debentures;
(e) The Borrower makes an assignment for the benefit of
creditors or admits in writing its inability to pay its debts
generally as they become due; or an order, judgment or decree is
entered adjudicating the Borrower as bankrupt or insolvent; or any
order for relief with respect to the Borrower is entered under the
United States Bankruptcy Code; or the Borrower petitions or applies
to any tribunal for the appointment of a custodian, trustee,
receiver or liquidator of the Borrower or of any substantial part
of the assets of the Borrower, or commences any proceeding relating
to the Borrower under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction; or any such petition or application is filed, or
any such proceeding is commenced, against the Borrower and either
(i) the Borrower by any act indicates its approval thereof,
consents thereto, or acquiesces therein or (ii) such petition,
application or proceeding is not dismissed within sixty (60) days;
(f) The happening of any event which, in the judgment of
the Bank, adversely affects the Borrower's ability to repay or the
value of any collateral;
(g) If any material written representation or material
statement made to the Bank by the Borrower is untrue when made;
(h) The occurrence of a default under any other document
or instrument given to the Bank in connection with this loan;
(i) Failure to provide any financial information on
request or permit an examination of books and records;
(j) In the event that any person or "group" (as defined
in Rule 13d-5 promulgated under the Exchange Act), other than SFM
Group, Ltd. or Phipps, Teman & Company, L.L.C., acquires or
otherwise obtains the right (whether by contract, through the
ownership of securities or pursuant to any proxy or consent
arrangement, voting trust or otherwise) to appoint, elect or cause
the election of a majority of the Board of Directors of the
Company;
(k) if any order is entered by any court or tribunal, at
law or in equity, by or against any of the Obligors for the
appointment of any receiver or any trustee for any of the Obligors
and said Order is not discharged within sixty (60) days from the
entry thereof.
ATTORNEYS FEES: In the event the Bank retains counsel with respect
to enforcement of this Note or any other document or instrument
given to the Bank, the Borrower agrees to pay the Bank's reasonable
attorneys fees (whether or not an action is commenced and whether
or not in the court of original jurisdiction, appellate court,
bankruptcy court, or otherwise).
SUBSEQUENT AGREEMENTS: The Borrower shall be bound by any
agreement extending the time or modifying the above terms of
payment made by the Bank without notice to the Borrower, and the
Borrower shall continue to be liable to pay all amounts due
hereunder, but at an interest rate not exceeding the rate set forth
herein, according to the terms of any such agreement of extension
or modification.
MISCELLANEOUS:
(a) Only those agreements, representations and
warranties made expressly herein shall survive the delivery of this
Note. The Borrower waives trial by jury, set-off and counterclaim
of any nature or description in any litigation in any court with
respect to, in connection with, or arising out of, this Note or any
instrument or document delivered pursuant hereto or the validity,
protection, interpretation, collection or enforcement hereof;
(b) No modification or waiver of or with respect to any
provision of this Note, or consent to any departure by the Borrower
from any of the terms or conditions hereof, shall in any event be
effective unless it shall be in writing and signed by the Bank, and
then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or
demand on the Borrower in any case shall, of itself, entitle it to
any other or further notice or demand in similar or other
circumstances;
(c) Each and every right granted to the Bank hereunder
or under any other document delivered hereunder or in connection
herewith, or allowed it by law or equity, shall be cumulative and
may be exercised from time to time. No failure on the part of the
Bank or the holder of this Note to exercise, and no delay in
exercising, any right shall operate as a waiver thereof, nor shall
any single or partial exercise of any right preclude any other or
future exercise thereof or the exercise of any other right;
(d) In the event that this Note is placed in the hands
of an attorney for collection by reason of any default hereunder,
the Borrower agrees to pay reasonable attorney's fees so incurred.
The Borrower promises to pay all reasonable out-of-pocket expenses
of any nature as soon as incurred whether in or out of court and
whether incurred before or after this Note shall become due at its
maturity date or otherwise and costs which the Bank may deem
necessary or proper in connection with the satisfaction of the
indebtedness or the administration, supervision, preservation,
protection (including but not limited to maintenance of adequate
insurance) of or the realization upon the collateral;
(e) The Borrower hereby waives presentment, demand for
payment, protest, notice of protest, notice of dishonor, and any or
all other notices or demands except as otherwise expressly provided
for herein;
(f) All accounting terms not otherwise defined in this
Note shall have the meanings ascribed thereto under generally
accepted accounting principles;
(g) Delay or failure of the Bank to exercise any of its
rights under this Note shall not be deemed a waiver thereof. No
waiver of any condition or requirement shall operate as a waiver of
any other or subsequent condition or requirement. The Bank or any
other holder of this Note need not present it before requiring
payment. The Borrower waives trial by jury, offset, and
counterclaim with respect to any action arising out of or relating
to this Note. This Note may not be modified or terminated orally.
This Note shall be governed by the laws of the State of New York
without regard to its conflicts of laws rules. The Borrower
irrevocably consents to the jurisdiction and venue of the New York
State Supreme Court, Suffolk County in any action concerning this
Note. This Note is binding upon the Borrower, its heirs,
successors and assigns;
(h) The Borrower expressly warrants and represents that
no statements, agreements or representations, whether oral or
written, have been made by the Bank, or by any employee, agent or
broker of the Bank with respect to the obligation or debt evidenced
by this Note. The Borrower further expressly warrants and
represents that (i) no oral commitment has been made by the Bank to
extend or continue any credit to the Borrower or any party other
than as expressly stated herein or in those certain documents
executed in connection herewith, (ii) no representation or
agreement has been made by or with the Bank, or any employee, agent
or broker of the Bank, to forebear or refrain in any way from
exercising any right or remedy in its favor hereunder or otherwise
unless expressly set forth herein, and (iii) the Borrower has not
and will not rely on any commitment to extend or continue any
credit, nor on any agreement to forebear or refrain from exercising
rights or remedies unless such commitment or agreement shall be in
writing and duly executed by an authorized officer of the Bank.
NOTICES: All notices, requests and other communications pursuant
to this Note shall be in writing, either by letter (delivered by
hand or sent by certified mail, return receipt requested) or
telegram, addressed as follows:
(a) if to the Borrower:
Logimetrics, Inc.
121-03 Dupont Street
Plainview, New York 11803
Attention: Murray H. Feigenbaum, President
(b) if to the Bank:
North Fork Bank
275 Broad Hollow Road
Melville, New York 11747
Attention: Joseph Walsh, Vice President
Any notice, request or communication hereunder shall be
deemed to have been given when deposited in the mails, postage
prepaid, or in the case of telegraphic notice, when delivered to
the telegraph company, addressed as aforesaid. Any party may
change the person or address to whom or which the notices are to be
given hereunder, but any such notice shall be effective only when
actually received by the party to whom it is addressed.
IN WITNESS WHEREOF, the Borrower has signed this Note the
7th day of March, 1996.
LOGIMETRICS, INC.
By: Murray H. Feigenbaum
_________________________
Murray H. Feigenbaum, President
STATE OF NEW YORK)
) ss.:
COUNTY OF SUFFOLK)
On this 7th day of March, 1996, before me personally came
Murray H. Feigenbaum, to me known, who, being by me duly sworn, did
depose and say that he has an address at c/o LOGIMETRICS, INC.,
121-03 Dupont Street, Plainview, New York 11803, that he is the
President of LOGIMETRICS, INC., the corporation described in, and
which executed, the foregoing instrument; and that he signed his
name thereto by order of the Board of Directors of said
corporation.
/s/ Laura L. Lowy
_________________________
NOTARY PUBLIC
LAURA L. LOWY
Notary Public, State of New York
No 4881967
Qualified in Suffolk County
Commission Expires Dec 29, 1996
FURTHER
RESTATED AND AMENDED
GENERAL SECURITY AGREEMENT
The within is a restatement and amendment of that certain
Amended and Restated Security Agreement originally made
between Logimetrics, Inc. and Apple Bank for Savings
dated May 19, 1992 and previously assigned by Apple Bank
for Savings to North Fork Bank pursuant to an Assignment
and Assumption Agreement dated December 18, 1992; said
agreement having been previously restated and amended
pursuant to a Restated and Amended General Security
Agreement dated November 18, 1993 and February 22, 1995,
respectively.
AGREEMENT made this 7th day of March, 1996 by the undersigned
to NORTH FORK BANK, having an office at 245 Love Lane, Mattituck,
New York 11952 (the "Bank").
1. Definitions.
The term "Obligations" shall include all indebtedness,
obligations, liabilities, and guarantees of any kind of the
undersigned to the Bank (and also to others to the extent of
participations or interests therein of the Bank), now existing or
hereafter arising, and whether direct or indirect, acquired
outright, conditionally or as collateral security from another,
absolute or contingent, joint or several, secured or unsecured, due
or not due, contractual or tortious, liquidated or unliquidated,
arising by operation of law or otherwise, whether or not of a
nature presently contemplated by the parties or subsequently agreed
to by them.
The term "Collateral" shall include all personal property
and fixtures in which the undersigned has or shall have an
interest, now or hereafter existing or acquired, and wherever
located, tangible or intangible, including but not limited to all
present and hereafter existing or acquired accounts, accounts
receivable, contract rights, general intangibles, equipment, goods,
inventory (raw materials, components, work-in process, finished
merchandise and packing and shipping materials), personal property
made available to the undersigned by the Bank (or its agent or
bailee) pursuant to a trust receipt or other security agreement the
effect of which is to continue the Bank's security interest
therein, money, instruments, documents, chattel paper, securities,
deposits, patents and patent rights, credits, claims and demands
against the Bank, and all proceeds, products, returns, additions,
accessions and substitutions of and to any of the foregoing.
All other terms used herein which are defined in the
Uniform Commercial Code of the State of New York shall have the
meanings therein stated.
2. Grant of Security Interest.
In consideration of the loan of (a) Two Million Two
Hundred Thousand ($2,200,000) Dollars pursuant to a Fifth Restated
and Amended Revolving Credit Note dated of even date herewith and
(b) $800,000 pursuant to a Further Restated and Amended Term Note
dated of even date herewith extended by the Bank to the undersigned
and of one or more loans, advances, or other financial
accommodations at any time made or extended by the Bank to the
undersigned, or to any person, firm, or corporation whose
obligations or liabilities are guaranteed at any time by the
undersigned to the Bank, the undersigned hereby grants to the Bank
a valid and binding first security interest in the Collateral, as
security for the payment, performance, and observance by the
undersigned of the Obligations. The undersigned hereby transfers
and delivers to the Bank all Collateral which the Bank is required
to take possession of in order to perfect its security interest,
and agrees to transfer and deliver to the Bank all Collateral which
the Bank is required to take possession of in order to perfect its
security interest therein, promptly upon the acquisition by the
undersigned after the date hereof of any interest in such
Collateral. The undersigned agrees that the Bank has sole
discretion with regard to the making of any loans, advances, or
other financial accommodations to the undersigned or any such other
person, firm, or corporation, and that nothing herein shall
obligate the Bank with respect thereto.
3. Warranties and Agreements. The undersigned warrants and
agrees that:
(a) Collateral location and use. The undersigned's
chief place of business, its financial books and records relating
to the Collateral, and the Collateral, are located and/or based at
the address set forth at the foot of this Agreement. The
undersigned will not relocate any of the Collateral from said
location without the proper written consent of the Bank. The
Collateral was and/or will be acquired by the undersigned solely
for use in its business at said location, and the Collateral is not
and shall not be used for any other use.
(b) Existing liens, security interests, and
encumbrances. Except for the security interest granted herein, the
undersigned is the legal owner of all interest in the Collateral
and shall keep the Collateral free and clear of liens, security
interests, or encumbrances, and will not assign, sell, mortgage,
lease, transfer, pledge, grant a security interest in, encumber or
otherwise dispose of or abandon any part or all of the Collateral
without the prior written consent of the Bank, except for (i)
the sale from time to time in the ordinary course of business of
the undersigned of such items of Collateral as may constitute all
or part of the business inventory of the undersigned and (ii) that
certain subordinate security interest to be granted by the
undersigned to the holder(s) of (i) the Borrower's twelve (12%)
percent Convertible Senior Subordinated Debentures (the
"Debentures"). Any default by the undersigned under or with
respect to any such security instrument or obligations secured
thereby shall constitute an event of default under this Agreement.
(c) Taxes, compliance with laws. The undersigned
will make due and timely payment or deposit of all taxes,
assessments, or contributions required by law which may be lawfully
levied or assessed with respect to any of the Collateral and will
execute and deliver to the Bank, on demand, appropriate
certificates attesting to the timely payment or deposit of all such
taxes, assessments or contributions. The undersigned will use the
Collateral for lawful purposes only, and with all reasonable care
and caution, and in conformity with all applicable laws, ordinances
and regulations. At its own cost and expense the undersigned will
keep the Collateral in proper order, repair, and condition.
(d) Inspection. The Bank shall at all times have
free access to and the right of inspection of any part or all of
the Collateral and any records of the undersigned (and the right to
make extracts from such records), and the undersigned shall deliver
to the Bank the originals or true copies of such papers and
instruments relating to any or all of the Collateral as the Bank
may request at any time.
(e) Collateral to remain personal property. The
Collateral is now and shall be and remain personal property,
notwithstanding the manner in which the Collateral or any part
thereof shall be now or hereafter affixed, attached or annexed to
real property. The undersigned will obtain and deliver to the
Bank such instruments as may be requested by the Bank pursuant to
which any person with an interest in any real estate upon which any
part of all of the tangible Collateral is now or may hereafter be
located consents to the security interest granted herein, disclaims
any interest in the tangible Collateral as fixtures, waives in
favor of the Bank all right to distrain or levy upon the Collateral
for rent due or to become due from the undersigned, and authorizes
the Bank to enter upon any premises of the undersigned at any time
and to remove the Collateral.
(f) Insurance. The undersigned, at its own cost
and expense, will insure the Collateral in the name of and with
loss or damage payable to the undersigned and the Bank, as their
interests may appear, against loss or damage by fire and extended
coverage, theft, burglary, pilferage, bodily injury and such other
risks as the Bank may require, with such companies and in such
amounts as may be required by the Bank at any time in its sole
discretion. All such policies shall provide for ten days' minimum
written notice of cancellation to the Bank, and the undersigned
shall deliver to the Bank the original or duplicate policies, or
certificates or other evidence satisfactory to the Bank, of
compliance with the foregoing insurance provisions. The
undersigned assumes all responsibility and liability arising from
the use of the Collateral, either for negligence or otherwise, by
whomsoever used, employed or operated, and will defend, indemnify
and save the Bank harmless from any and all claim, loss or damage
to persons or property caused by the Collateral or by its use and
operation.
(g) Maintain security interests, reports. In
addition to all other provisions hereof, the undersigned will from
time to time at the sole expense of the undersigned, perform any
and all steps and/or procedures requested by the Bank at any time
to perfect and maintain the Bank's security interest in the
Collateral, including but not limited to transferring any part or
all of the Collateral to the Bank or any nominee of the Bank
(including warehouses), placing and maintaining signs, appointing
custodians, executing and filing financing statements and notices
of lien, delivering to the Bank documents of title representing the
Collateral or evidencing the Bank's security interest in any other
manner acceptable to and requested by the Bank. If requested by
the Bank, the undersigned will from time to time execute and
deliver to the Bank assignments of accounts in form satisfactory to
the Bank, but should the undersigned fail in any one or more
instances to execute and deliver any such assignments of accounts,
such failure shall not constitute a waiver or limitation of the
within security interest in all of the Collateral (including said
accounts) which shall remain in full force and effect.
At the request of the Bank, the undersigned
shall deliver to the Bank all original documents evidencing the
sale and delivery of merchandise or the performance of labor or
services which created any account, including but not limited to
all original contracts, orders, invoices, bills of lading,
warehouse receipts and shipping receipts, together with all
collateral security and/or guarantees or other contracts of
suretyship held by the undersigned in respect of the accounts,
together with assignments of any of the foregoing where requested
by the Bank.
If at any time any part or all of the
Collateral shall be in the possession or control of any of the
undersigned's bailees, agents, or processors, the undersigned will
notify such persons of the Bank's security interest therein and
upon the Bank's request, the undersigned will instruct such persons
to hold all such Collateral for the Bank's account and subject to
the Bank's instructions and the undersigned will obtain and deliver
to the Bank such instrument(s) requested by the Bank pursuant to
which such persons consent to the security interest granted herein,
disclaim any interest in the Collateral, waive in favor of the Bank
all liens upon and claims to the Collateral or any part thereof,
and authorize the Bank at any time to enter upon and remove the
Collateral from any premises upon which the same may be located.
(h) Further documentation. The undersigned shall,
at its sole cost and expense, simultaneously herewith and upon the
request of the Bank, at any time and from time to time, execute and
deliver to the Bank one or more financing statements pursuant to
the Uniform Commercial Code, and any other papers, documents or
instruments required by the Bank in connection herewith. The
undersigned hereby authorizes the Bank to execute and file, at any
time and from time to time, on behalf of the undersigned, one or
more financing statements with respect to all or any part of the
Collateral, the filing of which is advisable, in the sole judgment
of the Bank, pursuant to the law of the State of New York, although
the same may have been executed only by the Bank as secured party.
The undersigned also irrevocably appoints the Bank, its agents,
representatives and designees, as the undersigned's agent and
attorney-in-fact, to execute and file, from time to time, on behalf
of the undersigned, one or more financing statements with respect
to all or any part of the Collateral.
(i) Bona fide accounts. The undersigned warrants
to the Bank that each of the debtors named in any account has legal
capacity to contract and is indebted to the undersigned in the
amount indicated in the books and records of the undersigned and in
any assignments executed and delivered to the Bank; that each
account is bona fide and arises out of the sale and delivery of
merchandise and/or the performance of labor or services.
(j) Collection of accounts. Upon an event of
default as hereinafter defined, where the Bank so requests, all
bills and statements sent to any customer or any account shall
state that said account has been assigned to the Bank and is
payable only to the Bank. The Bank may endorse the name of the
undersigned on all notes, checks, drafts, bill of exchange, money
orders, commercial paper of any kind whatsoever, and any other
document received in payment of or in connection with accounts or
otherwise, and the Bank or any officer or employee thereof, is
hereby irrevocably constituted and appointed the agent and
attorney-in-fact for the undersigned for the foregoing purpose, and
to receive, open and dispose of all mail addressed to the
undersigned, and to notify the Post Office authorities to change
the address for the delivery of mail addressed to the undersigned
to such address(es) as the Bank may designate. Any bank or trust
company is hereby irrevocably authorized to permit the Bank to
deposit the proceeds of accounts so endorsed and to withdraw the
same without inquiry as to the circumstances of endorsement or as
to the purpose of withdrawal, and without being required to answer
for the application by the Bank of the monies so withdrawn. The
proceeds of accounts, received by the Bank, shall be applied to the
Obligations but shall not constitute payment thereof until so
applied, it being agreed that the order and method of such
application shall be in the discretion of the Bank.
(k) Settlement of accounts. The Bank is authorized
and empowered to compromise or extend the time for payment of any
of the Collateral, for such amounts and upon such terms as the Bank
may determine, and to accept the return of goods represented by any
of the Collateral, all without notice to or consent by the
undersigned and without discharging or affecting the obligations of
the undersigned hereunder.
(l) Payment of debtor's obligations, reimbursement.
The Bank may in its discretion, for the account and expense of the
undersigned (i) pay any amount or do any act which is required to
be paid or done by the undersigned under this Agreement (including
but not limited to the repair and insuring of Collateral and
payment of taxes) and which the undersigned fails to do or pay as
herein required, (ii) pay any sums due and owing by the undersigned
to the landlord(s) of any premises where any Collateral is located,
and (iii) pay or discharge any lien, security interest or
encumbrance in favor of anyone other than the Bank which covers or
affects the Collateral or any part thereof. The undersigned will
promptly reimburse and pay the Bank for any and all sums, costs,
fees, and expenses which the Bank may pay or incur by reason of
defending, protecting or enforcing the security interest herein
granted or the priority thereof or in enforcing payment of the
Obligations or in discharging any lien or claim against the
Collateral or any part thereof or in the exchange, collection,
compromise or settlement of any of the Collateral or receipt of the
proceeds thereof or for the care of the Collateral, by litigation
or otherwise, and with respect to either the undersigned, account
debtors, guarantors of the undersigned and other persons, including
but not limited to all court costs, collection charges, travel, and
reasonable attorneys' fees (not less than 15 percent of the
outstanding Obligations where permitted by applicable law) and all
reasonable expenses (including reasonable counsel fees) incident to
the enforcement of payment of any obligations of the undersigned by
any action or participation in, or in connection with, a case or
proceeding under chapters 7, 11 or 13 of the Bankruptcy Code, or
any successor statute thereto. All sums paid and all costs,
expenses and liabilities incurred by the Bank pursuant to the
foregoing provisions, together with interest thereon at the rate of
twelve (12%) percent per annum, shall be added to and become part
of the Obligations secured hereby.
4. Transfer of Collateral.
Upon an event of default as hereinafter defined, at
its discretion the Bank may, whether or not any of the Obligations
be due, in its name or in the name of the undersigned or otherwise,
notify any account debtor or the obligor on any instrument to make
payment to the Bank, demand, sue for, collect or receive any money
or property at any time payable or receivable on account of or in
exchange for, or make any compromise or settlement deemed desirable
by the Bank with respect to, any of the Collateral, but shall be
under no obligation to do so, and/or the Bank may extend the time
of payment, arrange for payment in installments, or otherwise
modify the terms of, or release any of the Collateral, without
thereby incurring responsibility to, or discharging or otherwise
affecting any liability of, the undersigned. At any time the Bank
may assign, transfer and/or deliver to any transferee of any of the
Obligations any or all of the Collateral, and thereafter the Bank
shall be fully discharged from all responsibility with respect to
the Collateral so assigned, transferred and/or delivered. Such
transferee shall be vested with all the powers and rights of the
Bank hereunder, with respect to such Collateral, but the Bank shall
retain all rights and powers hereby given with respect to any of
the Collateral not so assigned, transferred or delivered.
5. Defaults.
The occurrence of any one or more of the following
events shall constitute an event of default by the undersigned
under this Agreement:
(a) if at any time the Bank shall, in its
discretion, consider the Collateral or any part thereof
unsatisfactory or insufficient, and the undersigned shall fail on
demand furnish other Collateral or make payment on account,
satisfactory to the Bank;
(b) if the undersigned or any obligor, maker,
endorser, acceptor, surety or guarantor of, or any other party to
any of the Obligations or the Collateral (the same, including the
undersigned, being collectively referred to herein as "Obligors")
shall default in any way under the Obligations (or of any
instruments evidencing the same) or of any terms or conditions of
this Agreement or the Collateral;
(c) if any warranty, representation or statement of
fact made herein or furnished to the Bank at any time by or on
behalf of the undersigned proves to have been false in any material
respect when made or furnished;
(d) in the event of loss, theft, substantial damage
or destruction of any of the Collateral, or the making of any levy
on, seizure or attachment of any of the Collateral;
(e) if the undersigned shall execute or file a
certificate or other instrument evidencing the legal change of name
of the undersigned without furnishing the Bank at least ten days'
prior written notice thereof;
(f) in the event any of the Obligors shall be
dissolved;
(g) if any of the Obligors shall be party to a
merger or consolidation where said Obligor is not the surviving
entity without the prior written consent of the Bank;
(h) if any of the Obligors shall fail to maintain
its corporate existence in good standing;
(i) if any of the Obligors shall default in the
observance or performance of any term, covenant or agreement
contained herein or in any instrument, document or agreement
delivered by any of the Obligors to the Bank;
(j) if any of the Obligors shall make or send
notice of an intended bulk transfer, or fail, after demand, to
furnish any financial information or to permit the inspection of
books or records of account;
(k) The Obligor makes an assignment for the benefit
of creditors or admits in writing its inability to pay its debts
generally as they become due; or an order, judgment or decree is
entered adjudicating the Obligor as bankrupt or insolvent; or any
order for relief with respect to the Obligor is entered under the
United States Bankruptcy Code; or the Obligor petitions or applies
to any tribunal for the appointment of a custodian, trustee,
receiver or liquidator of the Obligor or of any substantial part of
the assets of the Obligor, or commences any proceeding relating to
the Borrower under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction; or any such petition or application is filed, or
any such proceeding is commenced, against the Obligor and either
(i) the Obligor by any act indicates its approval thereof, consents
thereto, or acquiesces therein or (ii) such petition, application
or proceeding is not dismissed within sixty (60) days;
(l) if any of the Obligors shall voluntarily or
otherwise suspend or interrupt the transaction of its usual
business;
(m) if any Order is entered by any court or
tribunal, at law or in equity, by or against any of the Obligors
for the appointment of any receiver or any trustee for any of the
Obligors and said Order is not discharged within sixty (60) days
from the entry thereof;
(n) if any governmental authority or any court or
other tribunal shall take possession or jurisdiction of any
substantial part of the property of, or assume control over the
affairs or operations of, or a receiver shall be appointed of, any
substantial part of the property of any of the Obligors and said
action is not discharged within sixty (60) days.
6. Remedies on Default.
Upon the occurrence of any one or more of the
aforementioned events of default or at any time thereafter, the
Bank may, without notice to or demand upon the undersigned, declare
any or all of the Obligations immediately due and payable and the
Bank shall have the following rights and remedies in addition to
all rights and remedies of a secured party under the Uniform
Commercial Code or other applicable statute or rule, in any
jurisdiction in which enforcement is sought, all such rights and
remedies being cumulative and not exclusive:
(a) Collateral. The Bank may, at any time and from
time to time, with or without process of law and with or without
the aid and assistance of others, enter upon any premises in which
the Collateral or any part thereof may be located and, without
resistance or interference by the undersigned, take possession of
the Collateral; and/or dispose of all or any part of the Collateral
on any premises of the undersigned; and/or require the undersigned
to assemble and make available to the Bank all or any part of the
Collateral at any place and time designated by the Bank which is
reasonably convenient to the Bank and the undersigned; and/or
remove all or any part of the Collateral from any premises on which
any part thereof may be located for the purpose of effecting
preservation or sale or other disposition thereof; and/or sell,
resell, lease, assign and deliver, or otherwise dispose of, the
Collateral or any part thereof in its existing condition or
following any commercially reasonable preparation or processing, at
public or private proceedings, in one or more parcels at the same
or different times with or without having the Collateral at the
place of sale or other disposition for cash, upon credit or for
future delivery, and in connection therewith the Bank may grant
options, at such place or places and time or times and to such
persons, firms or corporations as the Bank deems best, and without
demand for performance or any notice or advertisement to the
undersigned of the place and time of any public sale or of the
place and time after which any private sale or other disposition
may be made, and/or liquidate or dispose of the Collateral or any
part thereof in any other commercially reasonable manner.
If any of the Collateral is sold by the Bank
upon credit or for future delivery, the Bank shall not be liable
for the failure of the purchaser to purchase or pay for the same
and, in the event of any such failure, the Bank may resell such
Collateral. The undersigned hereby waives all equity and right of
redemption. The Bank may buy any part or all of the Collateral at
any public sale and if any part of all of the Collateral is of a
type which is the subject of widely distributed standard price
quotations the Bank may buy at private sale, all free from any
equity or right of redemption which is hereby waived and released
by the undersigned, and the Bank may make payment therefor (by
endorsement without recourse) in notes of the undersigned to the
order of the Bank in lieu of cash to the amount then due thereon
which the undersigned hereby agrees to accept.
The Bank may apply the cash proceeds actually
received from any sale or other disposition to the reasonable
expenses of retaking, holding, preparing for sale, selling, leasing
and the like, to reasonable attorney's fees (not less than 15
percent of the outstanding Obligations where permitted by law) if
this Agreement or any of the Obligations is referred to an attorney
for enforcement, to all legal expenses, court costs, collection
charges, travel and other expenses which may be incurred by the
Bank in attempting to collect the Obligations or to enforce this
Agreement and realize upon the Collateral, or in the prosecution or
defense of any action or proceeding related to the subject matter
of this Agreement; and then to the Obligations in such order and as
to principal or interest as the Bank may in its sole discretion
determine; and the undersigned shall at all times be and remain
liable and, after crediting the net proceeds of sale or other
disposition as aforesaid, will pay the Bank on demand any
deficiency remaining, including interest thereon and the balance of
any expenses at any time unpaid, with any surplus to be paid to the
undersigned, subject to any duty of the Bank imposed by law to the
holder of any subordinate security interest in the Collateral known
to the Bank.
(b) Bank deposits, balances, etc. The Bank may
appropriate, set off and apply for the payment of any or all of the
Obligations, any and all balances, sums, property, claims, credits,
deposits, accounts, reserves, collections, drafts, notes, or other
items or proceeds of the Collateral in or coming into the
possession of the Bank or its agents and belonging or owing to the
undersigned, without notice to the undersigned, and in such manner
as the Bank may in its sole discretion determine.
(c) Proceeds. Any of the proceeds of the
Collateral received by the undersigned shall not be commingled with
other property of the undersigned, but shall be segregated, held by
the undersigned in trust for the Bank as the exclusive property of
the Bank, and the undersigned will immediately deliver to the Bank
the identical checks, moneys or other proceeds of Collateral
received, and the Bank shall have the right to endorse the name of
the undersigned on any and all checks, or other forms of remittance
received, where such endorsement is required to effect collection.
The undersigned hereby designates, constitutes and appoints the
Bank and any designee or agent of the Bank as attorney-in-fact of
the undersigned, irrevocably and with power of substitution, with
authority to receive, open and dispose of all mail addressed to the
undersigned, to notify the Post Office authorities to change the
address for delivery of mail addressed to the undersigned, to such
address as the Bank may designate; to endorse the name of the
undersigned on any notes, acceptances, checks, drafts, money orders
or other evidences of payment or proceeds of the Collateral that
may come into the Bank's possession; to sign the name of the
undersigned on any invoices, documents, drafts against account
debtors of the undersigned, assignments, requests for verification
of accounts and notices to debtors of the undersigned; to execute
any endorsements, assignments, or other instruments of conveyance
or transfer; and to do all other acts and things necessary and
advisable in the sole discretion of the Bank to carry out and
enforce this Agreement. All acts of said attorney or designee
shall not be liable for any acts of commission or omission nor for
any error of judgment or mistake of fact or law. This power of
attorney being coupled with an interest is irrevocable while any of
the Obligations shall remain unpaid.
7. Liability Disclaimer.
Under no circumstances whatsoever shall the Bank be
deemed to assume any responsibility for or obligation or duty with
respect to any part or all of the Collateral, of any nature or kind
whatsoever, or any matter or proceedings arising out of or relating
thereto. The Bank shall not be required to take any action of any
kind to collect or protect any interest in the Collateral,
including but not limited to any action necessary to preserve its
or the undersigned's rights against prior parties to any of the
Collateral. The Bank shall not be liable or responsible in any way
for the safekeeping, care or custody of any of the Collateral, or
for any loss or damage thereto, or for any diminution in the value
thereof, or for any act or default of any agent or bailee of the
Bank or the undersigned, or of any carrier, forwarding agency or
other person whomsoever, or for the collection of any proceeds, but
the same shall be at the undersigned's sole risk at all times. The
undersigned hereby releases the Bank from any claims, causes of
action and demands at any time arising out of or with respect to
this Agreement or the Obligations, and any actions taken or omitted
to be taken by the Bank with respect thereto, and the undersigned
agrees to defend and hold the Bank harmless from and with respect
to any and all such claims, causes of action and demands. The
Bank's prior recourse to any part of all of the Collateral shall
not constitute a condition of any demand for payment of the
Obligations or of any suit or other proceeding for the collection
of the Obligations.
8. Nonwaiver.
No failure or delay on the part of the Bank in
exercising any of its rights and remedies hereunder or otherwise
shall constitute a waiver thereof, and no single or partial waiver
by the Bank of any default or other right or remedy which it may
have shall operate as a waiver of any other default, right or
remedy or of the same default, right or remedy on a future
occasion.
9. Waivers by Debtor.
The undersigned hereby waives presentment, notice of
dishonor and protest of all instruments included in or evidencing
any of the Obligations or the Collateral and any and all other
notices and demands whatsoever (except as expressly provided
herein) whether or not relating to such instruments. In the event
of any litigation at any time arising with respect to any matter
connected with this Agreement or the Obligations, the undersigned
hereby waives the right to a trial by jury and the undersigned
hereby waives any and all defenses, rights of setoff and rights to
interpose counterclaims of any nature.
10. Modification.
No provision hereof shall be modified, altered or
limited except by a written instrument expressly referring to this
Agreement and to the provision so modified or limited, and executed
by the party to be charged.
11. Authorization.
The execution and delivery of this Agreement has
been authorized by the Board of Directors of the undersigned and by
any necessary vote or consent of stockholders of the undersigned.
12. Binding Effect.
This Agreement and all Obligations of the
undersigned hereunder shall be binding upon the successors or
assigns of the undersigned, and shall, together with the rights and
remedies of the Bank hereunder, inure to the benefit of the Bank
and its successors, endorsees and assigns.
13. Severability.
If any term of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity of all other terms
hereof shall in no way be affected thereby.
IN WITNESS WHEREOF, the undersigned has executed or caused
this Agreement to be executed in the State of New York on March 7,
1996.
LOGIMETRICS, INC.
By: Murray H. Feigenbaum
_________________________
Murray H. Feigenbaum
President
The chief place of business, the location of the books and
records pertaining to the Collateral and the location of the
Collateral of Logimetrics, Inc. is 121-03 Dupont Street, Plainview,
New York.
